California Special District by California Special Districts Association

CA SPECIAL

DISTRICT Publication of the California Special Districts Association

The new world of economic development: Interview with Larry Kosmont

Volume 11, Issue 1, Jan - Feb 2016

FEATURE Generating a properous future

Offering Creative Legal Solutions for Special Districts for More Than 70 Years

BUILDING STRONG COMMUNITIES. Nossaman is a full service public agency law firm based in California. Our strategic partnerships with public, private, and governmental agencies provides us a unique perspective on the law. We know the land. The law. The courts. And the lawmakers.

Nossaman proudly serves as CSDA Bond Counsel, and also provides counsel to special districts in areas such as Municipal Finance, Public Agency Law, Water, Environmental, Land Use, Infrastructure, Employment, Insurance Recovery, Public Policy, and Eminent Domain. You define success. Together, we make it happen. MAKING IT HAPPEN.

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Volume 11, Issue 1 • January - February 2016

Contents

Ask the Experts:

Conflicts of interest

The new world of economic development

Generating a prosperous future

Interview with Larry Kosmont, Kosmont Companies

4 CEO’s Message CalTRUST: Solid investment options for special districts 5 Professional Development Register for two great events: Special Districts Legislative Days and GM Leadership Summit; Professional Development calendar 6 CSDA News New resource for members - California Public Records Act Compliance manual; Labor law posters still available; Invite a non-member to experience CSDA; Congratulations to the SDLA graduates

Community Connections

Sunridge Park: A park for children of all abilities

12 In Brief Port of Hueneme becomes first California port to join green marine; Soda Springs using recycled water for snow; Health care districts talk cannabis; Sanitation plant to store power in Tesla batteries; Water district partners with Arrowhead; Hospital renovates; Air district facility features new mural

32 Legal Brief Top six tips for public agencies on prevailing wage in 2016

28 Solutions and Innovations Scaling Up

40 What’s So Special Singing in the shower Metropolitan Water District of Southern California

34 Managing Risk Workplace safety 36 Money Matters The intelligent approach to energy efficiency

Printed on recycled paper. California Special District – January-February 2016

CA SPECIAL

Officers William Nelson, President Orange County Cemetery District

CEO’s message

Vincent Ferrante, Vice President Moss Landing Harbor District Arlene Schafer, Secretary Costa Mesa Sanitary District Greg Orsini, Treasurer McKinleyville Community Services Districtt Steve Perez, Past President Rosamond Community Services District

Members of the Board Joel Bauer, West Side Cemetery District Stanley Caldwell, Mt. View Sanitary District Ralph Emerson, Garberville Sanitary District Peter Kampa, Saddle Creek Community Services District Jo MacKenzie, Vista Irrigation District Elaine Magner, Pleasant Valley Recreation & Park District Noelle Mattock, El Dorado Hills Community Services District Shane McAffee, Greater Vallejo Recreation District Ginger Root, Country Club Sanitary District Timothy Ruiz, P.E., East Niles Community Services District Fred Ryness, Burney Water District Sherry Sterrett, Pleasant Hill Recreation and Park District Kathy Tiegs, Cucamonga Valley Water District

CSDA Staff Neil McCormick, Chief Executive Officer Megan Hemming, Professional Development Director Cathrine Lemaire, Member Services Director Kyle Packham, Advocacy & Public Affairs Director Todd Winslow, Publications Director Rick Wood, Finance & Administration Director Emily Cha, Staff Assistant Nick Clair, Legislative Analyst Bernice Creager, Public Affairs Specialist Marcus Detwiler, Legislative Assistant Sharon Foster, Professional Development Assistant Dillon Gibbons, Legislative Representative Christina Lokke, Senior Legislative Representative Charlotte Lowe, Executive Assistant Jimmy MacDonald, Legislative Representative Chris Palmer, Public Affairs Field Coordinator Lindsey Spaletta, Receptionist Cassandra Strawn, Member Services Specialist Dane Wadlé, Public Affairs Field Coordinator James Wilfong, Senior Designer Nicole Zajic, Editor For editorial inquiries, contact Nicole Zajic at 877.924.2732 or nicolez@csda.net. For advertising inquiries, contact Diana Granger, Granger Marketing Works, at (530) 642-0111 or granger@cwo.com. 1112 I Street, Suite 200 Sacramento, CA 95814 t: 916.442.7887 f: 916.442.7889 toll-free: 877.924.2732 www.csda.net A proud California Special Districts Alliance partner

CalTRUST: Solid investment options for special districts

CSDA’s

endorsed program provider, CalTRUST, continues to shine as a great way for districts of all types, large and small, to diversify their investment portfolio. In fact, this local government, joint investment pool has grown significantly in recent years, reaching over $2.4 billion in assets with special districts now representing one-third of the CalTRUST program! So why are districts and other local governments, like cities and counties, choosing to be part of this program? 1. Safety - As public agencies, districts have a responsibility to safeguard the public’s money. The CalTRUST funds are designed specifically with this in mind. They provide instant diversification of the investments, professional portfolio and risk management, and are a highly cost-efficient approach to investing local government funds with easy and transparent reporting. CalTRUST accounts comply with all limits and restrictions placed on local investments in California. 2. Liquidity and Flexibility – Direct access to funds when districts need them is critical. CalTRUST offers participants an opportunity to choose 4

Neil McCormick

between money market, short-term, and/or medium-term funds to manage their districts’ cash flow based on their specific needs. Districts can also set up specific accounts to manage reserves or special project funds at no additional costs. CalTRUST options fit the liquidity and financial management needs of your district. 3. Yield - The CalTRUST funds are managed by professionals at Wells Fargo Asset Management who seek as high a yield as possible, consistent with the preservation of principal by investing in high-quality, fixed-income securities while keeping safety and liquidity at the forefront. Further, year after year, CalTRUST consistently outperforms LAIF! In addition to the above, and another one of the main reasons CSDA is a partner in CalTRUST, is that the program embodies one of the core pillars of what most of CSDA’s efforts are all about - local control. The CalTRUST program is fully governed by local government peers who have the best interests of local agencies and local dollars in mind. As I see it, this is truly what makes CalTRUST “special” to special districts. I encourage you to learn more about this valuable program and how it can benefit your district by visiting www.caltrust.org. You can also call me directly at 916.442.7887.

Highlight

March

2GREATEVENTS

March 9

WORKSHOP

Human Resources Boot Camp for Special Districts, Vista

March 10

WORKSHOP

Financial Management for Special Districts, Vista

March 15

WEBINAR

Grassroots Advocacy and Public Outreach

March 17

WEBINAR

Completing Statement of Economic Interest – Form 700

March 24

WEBINAR

Conflict of Interest and When One Must Step Aside

March 28

SAFETY/CLAIMS EDUCATION DAY

SDRMA Safety/Claims Education Day, Newport Beach

April 5

WEBINAR

How to Prepare for Your District’s Annual Audit

April 7

WEBINAR

New Developments in the Brown Act

April 12

WORKSHOP

Staying in Compliance: Understanding Special District Laws, Sacramento

April 13

WORKSHOP

Board Secretary/Clerk Foundations, Sacramento

April 14

WEBINAR

Legislative Round-Up

April 20

WORKSHOP

Supervisory Skills for the Public Sector, Rancho Cucamonga

April 20

WEBINAR

Compensation Earnable - Making Sure Your District’s Practices Comply with CalPERS

April 26

WEBINAR

Technology and the Public Records Act

April 28

WEBINAR

Best Practices in Agenda Preparation and Taking/ Recording Minutes

April Register now! Special Districts Legislative Days and GM Leadership Summit Registration is now available for two popular CSDA conferences. The first, Special Districts Legislative Days, will be held in Sacramento on May 17 and 18. The event offers attendees the opportunity to meet with legislators, key issue experts, and California’s leaders to hear first-hand about the latest legislative proposals directly affecting the delivery of essential local services. Explore how decisions are really made in the Capitol and how you can influence outcomes. The second, CSDA’s 2016 General Manager Leadership Summit, will be held June 12 -14 at the Resort at Squaw Creek in Olympic Valley. We will be offering the optional pre-conference workshop “So You Want to Be a General Manager?” again this year. This popular career-focused session sells out every year so early registration is encouraged. With powerful keynote presentations, high level breakout sessions, and unparalleled networking opportunities, this is one conference senior special district staff should make time to attend. Find more information about both of these conferences, including registration and hotel information, at www.csda.net.

California Special District – January-February 2016

CSDA NEWS New Resource for Members California Public Records Act Compliance Manual

California Special Districts Association Districts Stronger Together

California Public Records Act Compliance Manual

The newest addition to CSDA’s collection of free, downloadable publications is a guide to understanding the California Public Records Act (CPRA). This 35-page manual includes a summary of CPRA and how it applies to special districts, as well as dozens of helpful compliance tips. CSDA thanks contributor Donald Davis, Esq. and the firm Burke, Williams and Sorensen. To download your copy of the California Public Records Act Compliance Manual, visit the Free Resources/Publications section of www.csda.net. For a hard copy of the manual, contact CSDA member services. for Special Districts

A GUIDE TO UNDERSTANDING THE CALIFORNIA PUBLIC RECORDS ACT

2015 CA Public Records Act Guide.indd 1

12/14/15 1:50 PM

Congratulations to the Graduates

CSDA’s Special District Leadership Academy Congratulations to the over 70 attendees of the Special District Leadership Academy Conference, sponsored by CSDA and SDRMA. Attendees at this conference have demonstrated their commitment to good governance in special districts by completing all four modules of the Special District Leadership Academy. The next SDLA conference will be held July 10-13 in Napa. Let’s hear it for the first 2016 graduates!

Labor Law Posters Still Available Your agency could be fined for not posting the most current state and federal employment notices in an area that is frequented by employees. To make it easy to comply, the CSDA Bookstore is now selling 2016 California & Federal Employment Notices posters at a very affordable price. Enjoy special member pricing of $25 (plus shipping and tax) for each laminated poster. In addition, if any other mandatory updates become effective during the year, CSDA will email you the updated section. To place your order online, visit the CSDA Bookstore at www.csda.net or contact CSDA member services.

Invite a Non-Member to Experience CSDA Do you know a district that is missing out on the benefits of CSDA membership? Tell them about our free 90-day trial membership program. This is a limited time offer and participants must sign up by March 31, 2016 to get the full 90 days free. Visit the CSDA website for details.

High Performing District Checklist Available through Special District Leadership Foundation In response to the California State Auditor’s High-Risk Local Agency Audit Program, SDLF has developed a High Performing District Checklist. The checklist highlights special district best practices in finance and human resources. These best practices work to prevent waste, fraud, abuse, and mismanagement. The goal of the checklist is to empower your district to proactively demonstrate its commitment to high standards, rather than waiting for or being put in a position to react to any criticisms. In addition to developing the checklist, SDLF created an expanded online version, which provides additional tools and references related to many items on the list. Find the checklist at www.sdlf.org, under Checklists.

Your Community. Your Services. Your District! We are happy to announce the launch of our new public outreach campaign, Districts Make the Difference.

This campaign is centered on the concept that special districts go beyond providing important services to their communities. They make a difference in the lives of their residents and help our state thrive. The goal is to bridge the gap between special districts and the essential services that millions of Californians value. The first step is to visit DistrictsMaketheDifference.org. This new website features a simple-to-use toolkit filled with public awareness videos, web banners, posters, factsheets, and other materials that can be easily downloaded.

Follow, like, subscribe, share!

MAKE THE

DistrictsMaketheDifference.org DistrictsMaketheDifference.org

MOVERS & SHAKERS The McFarland Recreation and Park District announces the appointment of Jeff Nickell, MA as district manager.

Placer County Water Agency Treatment Plant Operator Deren Ross retired after 27 years of service. Andy Hamilton was recently promoted to drinking water operations manager. Barry Jantz, CEO of the Grossmont Healthcare District, was elected to serve as 2016-17 chair of the San Diego County Taxpayers Association Board of Directors. Best Best & Krieger announces attorneys Joseph Byrne and Lauren Strickroth were promoted to partner with the firm. Richard T. Egger, who serves as the firm’s general counsel, was elected to Best Best & Krieger’s Executive Committee. Mesa Water District is now represented by its Public and Government Affairs Manager Stacy Taylor on the Association of California Water Agencies (ACWA) State Legislative Committee. Taylor additionally serves on ACWA’s Communications Committee to develop and implement comprehensive, statewide communications and outreach to support ACWA’s and its member agencies’ public information and education programs.

Levi Fuller, wastewater treatment plant operations supervisor for Dublin San Ramon Services District, has been named 2015 Supervisor of the Year by the San Francisco Bay Section of the California Water Environment Association, the leading training and certification organization in California for the wastewater industry. Camarillo Health Care District Chief Executive Officer Kara Ralston has been reappointed to the California Health Professions Education Foundation Board of Trustees, where she has served since 2013. Kings River Conservation District announces Paul G. Peschel as its new general manager. Palomar Health Care District received the Distinguished Practice Award from CEP America, a leading provider of acute care management solutions. The award recognized the district for its achievements in providing faster emergency care, reducing re-admissions, and increasing patient satisfaction. Contra Costa Water District’s board president, Joseph L. Campbell, has retired from the board after 24 years of service. Calaveras Consolidated Fire Protection District Chief Jason Robitaille recently received the California State Firefighters Association’s Presidential Hall of Fame Award. It is the highest award given by the 18,000-member organization. The Mission Springs Water District (MSWD) Board of Directors elected veteran member Nancy Wright as president of the board for the second consecutive term. The Ironhouse Sanitary District elected Doug Scheer as president of the board and Susan Morgan as vice president. CSDA and Cucamonga Valley Water District Director Kathleen J. Tiegs was elected to the position of President of the Association of California Water Agencies for the 2016-2017 term.

movers and shakers Does your district have an individual recently appointed as general manager or a top staff position? Have you recently elected a new board president? Have any district personnel been appointed to other community boards or positions? Email your district’s movers and shakers to Nicole Zajic, editor, at nicolez@csda.net and we will include them in our next issue!

Mario Iglesias

Craig Armstrong

Dan Allen Gaddis

Nipomo Community Services District approved a contract with Mario Iglesias as general manager. Iglesias has 32 years of experience in the utility industry. The district’s board also elected Director Craig Armstrong as the board president and Director Dan Allen Gaddis as the board vice president. The Vista Irrigation District board of directors elected Richard Vásquez as its president and Marty Miller as its vice president for 2016 at its annual organizational meeting.

The Dublin San Ramon Services District Board of Directors elected D.L. (Pat) Howard as president and Richard Halket as vice president for 2016.

The Santa Clara Valley Water District Board of Directors unanimously voted to appoint John Varela to fill its District 1 seat, vacated by Dennis Kennedy. The Vallecitos Water District Board of Directors elected Mike Sannella to serve as president and Craig Elitharp to serve as vice president for 2016.

Director of Environmental Services Orange County Sanitation District, Fountain Valley, CA With offices located conveniently in Orange County off the 405 freeway, the Orange County Sanitation District (OCSD) is the third largest wastewater treatment agency west of the Mississippi River. OCSD is seeking a candidate for the executive-level Director of Environmental Services position to oversee the activities and operations of the new Environmental Services Department, which include environmental compliance, laboratory services, the ocean monitoring program, and source control operations. The ideal candidate will have a proven track record in operational optimization, sound financial management, and customer satisfaction; and embrace the highly visible position with outstanding leadership, strategic business planning and organizational skills. The position requires a bachelor’s degree with major coursework in environmental science, environmental engineering, or a related field; and ten years of increasingly responsible experience, including three years of management and administrative responsibility. For additional information and to apply, visit: http://www.ocsd.com/ jobs. The closing date is Friday, March 11, 2016. The OCSD is seeking a candidate who can begin working on July 1, 2016.

California Special District – January-February 2016

Ask theExperts We have a board member who is interested in teaching a class for us. The total amount paid would amount to $3,000 for an hour. We have not received any other applications for instructors of this class. Is this a conflict of interest/legal? Are there any concerns for consideration?

California has a strong public policy against public officials having any conflicts of interest, which is intended to protect the public from situations in which an official could be tempted to consider personal interests while carrying out public business. Even when an official has good intentions or is offering a good deal, the action is prohibited if it runs afoul of the strict letter of the law.

Do you have a question for any of our CSDA experts? If so, send your question to Nicole Zajic, editor, at nicolez@csda.net.

The primary conflict laws are the Political Reform Act of 1974 (“PRA”) and Government Code Section 1090 et seq., which prohibit officials from participating in government decisions in which they are personally financially interested. The rules are applied strictly with the goal of avoiding even the appearance of impropriety. The consequences for violations are harsh, including criminal penalties and a ban on future office holding, so it is important to understand these restrictions and err on the side of caution.

Section 1090 Essentially, Section 1090 prohibits public officials from being personally financially interested in contracts made in their public capacity. Clearly a government agency

hiring a teacher is making a contract with the instructor, so hiring a board member immediately raises the specter of Section 1090. Since the board member would be paid $3,000 for teaching, s/he indisputably has a personal financial interest in the contract. Some exceptions allow a contract to be made if the personal interest comes within a specific list of “remote interests” or “non-interests.” Some of these exceptions apply to income from another government entity, but not to situations involving a contract with the official’s own agency. With no applicable exception, the contract to hire a board member to teach is prohibited. Abstention One unique aspect of Section 1090 is that board members are conclusively presumed to have “made” all contracts executed by their board or an agency under their jurisdiction. This means that abstaining from negotiating or voting on the contract does not solve the conflict. The entire board is prohibited from making the contract. (Complete abstention by an interested public employee may resolve a conflict.)

Rule of Necessity With no other applicants to teach the course, it is tempting to assume the board member should be allowed to teach the class. A limited rule of necessity ensures that essential government functions can be performed despite a conflict, but this rule applies only to essential services – such as nighttime service station services and mortuary services – when no other source is available. Teaching this class would not be a “necessity” that overcomes the conflict prohibition. Because the proposal violates Section 1090, analysis under the PRA is unnecessary (but would have the same result).

personal interest and abstention from any involvement in the proceedings may resolve an otherwise prohibited conflict. Davina Harden is senior counsel with Atkinson, Andelson, Loya, Ruud & Romo. Ms. Harden represents California public entities in all aspects of employment law. Her areas of expertise include public employee rights, conflicts of interest, employment discrimination and sexual harassment, and transactional matters, including negotiating, drafting, and reviewing agreements. Ms. Harden also conducts investigations into allegations of employee wrongdoing on behalf of employers, as well as advising employers on the conduct of their own investigations.

Complying with conflict prohibitions can be difficult and even limit an agency’s ability to take certain actions, offer particular services, or get the best price. However, protecting the public from possible self-interest by public officials has been deemed more important than these potential inconveniences. Conflict rules are technical and fact-based, so it is vital to consult a conflict expert as soon as an issue arises. There are situations in which early steps such as making a record of the official’s

District Snapshots Clovis Veterans Memorial District commemorated the events of December 7, 1941 with its 74th Pearl Harbor Remembrance Ceremony. The event paid tribute to the victims and survivors of the attack. Three Pearl Harbor survivors were present at the event.

California Special District – January-February 2016

For more information on this topic be sure to check out the upcoming webinar “Abstentions and Disqualifications – Conflicts of Interest and When One Must or Should Step Aside” on Thursday, March 24. Visit www.csda.net to register.

In Brief Port of Hueneme Becomes the First California Port to Join Green Marine The Port of Hueneme, overseen by Oxnard Harbor District, and ranked in the top 11 percent of all U.S. Ports for general cargo flow, has signed on as a participant in Green Marine, the largest voluntary environmental program for the maritime industry in North America. Green Marine’s environmental program makes it possible for ports, terminal operators, and shipping lines to voluntarily reduce their environmental footprint through a comprehensive program that addresses key environmental issues and criteria using 11 performance indicators including air emissions, community impacts, environmental leadership, and much more. Membership in Green Marine requires that members demonstrate year-over-year meaningful improvements in measurable ways to maintain their Green Marine certification. Green Marine is transparent with all results independently verified and made public. “We’re absolutely delighted to welcome Hueneme as the first port from California to join the Green Marine program,” said David Bolduc, Green Marine’s executive director. “We have no doubt that the administration of this deepwater port will enhance our membership by sharing its environmental initiatives and best practices.” The Port recently christened the first stage of its wharf 1 shore side power program, the largest single emissions reduction program in Ventura County history. Over the next 30 years, the electrification of the Port’s wharf 1 will reduce PM by 92 percent, NOx by 98 percent and CO2 by 55 percent. A second stage allowing additional ships to simultaneously plug in is expected to be completed early next year. “In addition to providing shore power to ships at berth, the port is also pursuing aggressive energy audits leading toward yet more positive environmental impacts,” said the Port’s CEO and Executive Director Kristin Decas.

Soda Springs Using Recycled Water for Snow Soda Springs Mountain Resort is ramping up for the winter with a unique approach to ensure enough snow remains on the mountain for skiers this season. The resort will lead the region as the first ski area in California to make snow using recycled water. This innovation is the result of a shared vision and partnership with Donner Summit Public Utility District (DSPUD). “Snowmaking using recycled water provides a resource that supports a consistent and more predictable operating season, which has been a challenge with the lack of natural snowfall and available water for snowmaking in previous years,” said Amy Ohran, general manager of Soda Springs Mountain Resort. Soda Springs Mountain Resort and DSPUD have partnered to develop this innovative solution in response to a lack of potable water available for snowmaking. In order to meet regulated discharge requirements, DSPUD recently completed a $24 million project converting its treatment process from a chlorination/de-chlorination system to a stateof-the-art, UV disinfection process, resulting in highly treated, pathogenfree, crystal clear water that is cleaner than surface water. “Our recent plant upgrades presented us an opportunity that would allow the district to fulfill two key benefits – preserve drinking water supplies and provide an alternate source for snowmaking to one of our valued customers. It’s a win-win for our community,” according to Tom Skjelstad, general manager of DSPUD. There is another benefit. The snow that is made is effective water storage in the winter that will be released back into the ground and surface water flows as the snow melts. The South Yuba River is the direct benefactor of the runoff. The water used for snowmaking is frequently tested and is safe for human contact as regulated by the Regional Water Quality Control Board in consultation with the California Department of Public Health.

Air District Facility Features New Mural The auditorium at San Luis Obispo County Air Pollution Control District is now home to a mural depicting an artist’s vision of clean air. The Community’s Vision of Clean Air Mural is the work of local Cal Poly art student Lauren Goldenberg. Goldenberg won a competition the district held in the fall of 2015. Artists were given the challenge of designing a mural that would showcase the artist’s creativity and design while celebrating the efforts of the district to keep area air clean. “The mural depicts several well-known landmarks throughout the county and fully represents the beauty and uniqueness of our area in a creative and artistic way,” says a spokesperson with the district. The mural includes the slogan, “Protecting blue skies for a healthy community.”

Got news? California Special District wants to hear about newsworthy people, projects, events and accomplishments in your district. To submit a news item for In Brief, contact Nicole Dunn at nicoled@csda.net or (877) 924-2732.

Sources: Cucamonga Valley Water District, Donner Summit Public Utility District, Griffin Public Relations, Napa Valley Register, Oxnard Harbor District, Sonoma West Times

Health Care Districts Talk Cannabis Five community health care districts, convened together as the Northern California Health Care Authority (NCHCA), recently met to discuss how they may – or whether they should – enter the medical marijuana business. The districts’ hospitals treat patients regularly who suffer chronic and pain conditions and benefit from the effects marijuana provides. NCHCA Chair Bill Boerum, a director for Sonoma Valley Health Care District, brought the issue to the table, believing it to be timely due to new California legislation that requires state and local governments to put new permit, taxing, and regulations in place for the medical marijuana industry. “We deal in medicine, so I thought it was an appropriate discussion,” says Boerum. “I think we can lend credence as conventional health care providers.” The board reached a consensus, however, that the concept was too premature. Says one member, E.J. Neil, of the North Sonoma County Healthcare District, “There were too many holes.” Neil cites unresolved conflicts with federal laws as an issue. “The legislation still has 100 questions. Bottom line is the Feds could come in any time and wreck our day.” Boerum plans to keep the issue on the authority’s mind, “If possible, I think we should try to get out in front of this issue. Right now, we don’t have to be drawing any conclusions.”

Sanitation Plant to Store Power in Tesla Batteries Napa Sanitation District (NSD) entered into an agreement with Tesla to store “green” energy for use at strategic times during the day. The district has a Tesla battery storage facility, which it received at no cost from Tesla, and will be using as a test run for at least the next five years. Tesla and the district will split energy savings from the project, which are estimated at $110,000 annually. The batteries will store energy created by NSD’s cogeneration plant at times of the day when PG&E costs are at the lowest. At times when the costs peak, the district will then use the green electricity that was stored. “Ultimately it saves us money,” says General Manager Tim Healy. “We’ll be storing self-produced energy to be used during peak energy times.” The Tesla batteries are estimated to store two megawatt hours of electricity produced by cogeneration – this is enough energy to power an average home for 67 days, or to power the NSD’s wastewater treatment plant for three hours.

California Special District – January-February 2016

Water District Partners with Arrowhead to Increase Local Water Supply The Cucamonga Valley Water District (CVWD) has partnered with Arrowhead® Brand Mountain Spring Water to construct a groundwater treatment project within the Cucamonga groundwater basin that will increase the availability and reliability of local water supplies. “Our area continues to face severe drought and we need to find new ways to meet the need for water,” said Martin Zvirbulis, CVWD general manager. “That’s why we are extremely pleased to pursue this new water supply opportunity with the help of Arrowhead. The value of local water supplies cannot be overstated and the more water we can develop locally, the more diverse our water supply portfolio becomes. Arrowhead’s investment has a direct benefit to the community: it reduces our reliance on more expensive sources of water imported from Northern California and it will help offset a significant portion of the project’s cost,” said Zvirbulis. The total cost of the project is estimated to be $4.7 million, of which Nestlé Waters has pledged a total of $1 million dollars over the next eight years, beginning in 2015. CVWD will be responsible for managing, constructing, and operating the project.

Hospital Renovates Main Patient Tower Patients are now being treated in state-of-the-art, upgraded rooms on all five floors of the East Tower of Sharp Grossmont Hospital, overseen by Grossmont Hospital District. The renovations were financed through Proposition G, a bond measure sponsored by GHD and approved by East County voters in June 2006. Each renovated floor of the East Tower has 37 patient beds for a total of 148 beds. Among the improvements: patient-bed utility headwalls were replaced with advanced units; new Americans with Disability Act (ADA) and bariatric accessible rooms were retrofitted; and nurses are now using newly configured central work stations with upgraded lighting and finishes. Mechanical, electrical and plumbing systems were also modernized with new lighting throughout the floors. Five existing elevators were upgraded with mechanical and cosmetic improvements. Private restrooms were also upgraded. The project included a seismic retrofit of the East Tower, which will bring it into compliance with current California Building Code earthquake standards.

The new world of economic development Interview with Larry Kosmont, Kosmont Companies Infrastructure. Itâ&#x20AC;&#x2122;s something critical to the lives of Californians, and a huge part of local government efforts. And it also costs money. California Special District spoke with Larry Kosmont, of Kosmont Companies, to discuss what tools exist for special districts who want to finance infrastructure and improve their communities. Kosmont is the president and CEO of Kosmont Companies, which he founded in 1986. Kosmont Companies is an industry leader in public/private real estate transactions, economic development, and public finance. Kosmont has assisted hundreds of local government agencies in public finance and real estate matters ranging from large-scale economic development programs to sitespecific real estate strategies and projects. Here, he tells us what tools are out there to finance infrastructure, how those tools can be used, and how special districts can partner with others to make their infrastructure goals a reality. What has been your experience working with local government in California? Our company specializes in working with local government in what we call public-private transactions. Those are transactions that tend to occur between the private sector investment/development community and the public sector. We also work, of course, on what we call public-public projects, where special districts, cities, and counties - or the state - work cooperatively on regional or sub-regional infrastructure.

I think we are in a new world now. We have these new districts that have been created by California law called enhanced infrastructure financing districts (EIFDs).

Our firm focuses on three things: real estate, economic development, and public finance. We work as an advisor to special districts and other local governments, and our main thrust and priority as a firm is to improve the quality of services through a series of initiatives that include economic development, public finance, and the delivery of infrastructure. We tend to focus on the kinds of projects that can really turn the future around for a city, county, or special district.

According to your firm, in a post-redevelopment, postrecession California, creative economic development is more critical than ever to the prosperity of local governments. Why is that? It’s simple. The state of California, as you know, has just gotten out of its own economic dilemma. But our state relies on one or two primary sources of income - sales tax and income tax - to balance a 100-plus billion dollar budget. So they are of no help to special districts, cities, and counties. What I often say is, in local government we’re on our own to make sure we can afford the cost of delivering service and delivering the quality of life our residents want. The primary way I know to do that is through economic development the inducement of private investments that ultimately make the local economy strong and enables our constituents to pay taxes and live a healthy life. In other words, the investment in local community comes through public projects and through public-private projects. It’s not going to come from state assistance.

What are some creative ways special districts can approach the issue of economic development? I think we are in a new world now. We have these new districts that have been created by California law called enhanced infrastructure financing districts (EIFDs) and community reinvestment act districts (CRIA). These are different creatures than redevelopment. They use tax increment but they don’t use the

California Special District – January-February 2016

school tax increment. They use local government tax increment and fees to generate a financing source for infrastructure. The focus, and this is where special districts come in, is no longer on building shopping centers - what redevelopment did in many cases. It is on putting in infrastructure that then translates into engaging the private sector to invest. The message to special districts now is that you have willing partners out there in the form of cities, counties, and private sector developers and investors who are going to be willing to look at infrastructure projects as a convergence of investment priority. If a special district and a city can come together in an enhanced infrastructure program, and they deliver infrastructure, whether it’s water, roadways, etc., the private sector would theoretically be willing to invest in its property and bring on a commercial building or a mixed use plan. Then that would in turn bring the tax dollars to provide the tax increment that funds the district that’s looking to install the infrastructure. The difference with these new districts, which were approved by the Legislature, is they motivate local government to work together. If you think Continued on page 16

“I think there’s no higher calling in terms of a career than public service, which is a chance to make a difference in people’s lives and improve the world. - Jack Lew

You serve others and LCW is honored to serve you.

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New world of economic developmnet [continued] about redevelopment, that was based more on a “silo” approach. Each city had its own redevelopment agency and they took all other new tax increment from other districts (including schools) and the county to make it work for them. That doesn’t happen anymore. Under the EIFDs, the cities have to go to the county and the special districts and say, “Do you want to come into this district? If you throw in your tax increment, or in the case of a district, your fees, which is now allowed under the law, we’ll together start installing infrastructure.” The next step is then to go to the private sector and induce them to make an investment in this district. It’s a whole new world out there.

How do they work and how can special districts use them? How they work is very interesting. A city or a county, as a lead agency (it can’t be a special district today but I’m hoping the law gets modified at some point), can say they would like to form a financing district and the first thing they do is look at the potential infrastructure they’d like to install and the development opportunities that might be there. They then engage a firm like Kosmont Companies to do an initial study of an EIFD. That study has three elements to it: what are the large or significant pieces of land that could be developed, which are the infrastructure elements that this area needs, and who should be the partners involved? That last element is a question of resources. How much increment could the county throw in? How much could the city throw in? How much fee or increment support could a district throw in? And those conversations lead to a very streamlined process where the lead agency, usually the city, creates a public facilities authority. The special districts and counties that say yes to participating in the district, typically become board members of the public facilities authority (PFA) that manages the new district. The PFA approves an Infrastructure Financing Plan (IFP). The IFP is the playbook for the EIFD. The lead agency then files the new EIFD district tax role with the county, which establishes the eligibility for the EIFD to collect future “tax increment,” and that district stays in place for 45 years or more. Once filed, the PFA for the EIFD can go to work on the infrastructure financing plan, including any public-private real estate projects that are necessary to generate new tax increment for the district. It is essential to point out that school/education districts cannot be part of an EIFD, nor can any of their tax increment be used. That’s how they basically work. The way for special districts to use EIFDs productively is to take a look at all the capital improvements on their long-term capital improvement plan (CIP) that have gone unfunded, which have beneficial local government impact, and approach a city or county considering an EIFD. Let the city or county know that you want certain infrastructure projects as part of the of infrastructure financing plan (IFP) for the prospective EIFD, and that if included, the district will approve committing some portion of its annual increment or fee base.

Can EIFDs divert a special district’s property tax increment without the district’s consent? They cannot. This is the beautiful thing about EIFDs, as opposed to redevelopment agencies - where if a city could support the declaration of blight through a primarily selfgoverned review process, they could actually take a district’s or a school’s or a county’s increment for a period of time - usually about 30 to 40 years. In this case, that can’t happen without an affirmative action of the district board to cooperate and be part of an EIFD. So it’s a voluntary, cooperative process. The special district can negotiate what’s on that infrastructure financing plan list and if they believe they’re getting enough out of it, they can then make a determination as to how much they want to contribute as a member of the public facilities authority, and they can serve on the public facilities authority board.

What are some reasons why a special district would choose to partner with other local governments in establishing an EIFD?

going to have tax increment unless two things happen: 1) private sector investment is induced in the newly created EIFD district so tax increment comes online from the value of those projects. 2) You have enough tax increment (and/or district fees) from those projects to be able to pay for the infrastructure through a bond issue. Most cities in California get about 10 cents of every property tax dollar paid. Many only get five or six cents. A minority of cities receive over 15 to 20 cents. When Kosmont has run the models for EIFDs, unless a city can get 15 - 20 cents minimum of tax increment, in most cases that city won’t be able to put together a viable EIFD without other cooperating agencies. So if you are a city that has five cents tax increment take, you essentially have to go to a special district or county because you need more dedicated tax increment to be committed to the EIFD over a specified period of time. Basically the statute states, that if a city or county is going to form a district, they can do it on their own. However, since a lead city or county can’t ever take the school’s share of property tax, and also cant unilaterally take any other public agencies fees or taxes, as stated previously, in order to have enough tax increment to make a difference, a lead city or county will likely be compelled to find voluntary local government partners. Because the EIFD’s lead agency cannot impose their “tax increment” will on

It’s all about the tax increment. Here’s the thing about these EIFDs, the strength is that they have a broad base of the kinds of projects they can build. Projects can be industrial, affordable housing, mixed-use, wastewater, groundwater, light, high-speed rail, civic infrastructure, parks and open space, roads and bridges, and the list goes on. It’s a very big palette. But a city (or county) wouldn’t make a decision to create one of these EIFDs, unless that city or county had enough resources to get the desired infrastructure projects done. So if the city is the lead, the reason that a local city will want to go to a special district or county and ask, “please join us,” is about the resources. You aren’t

California Special District – January-February 2016

other public agencies this creates a robust and opportunistic environment in which a special district, a county, and a city can find a way to work cooperatively to get infrastructure done that actually induces private investment and improves the local economy (new taxes and jobs). You and I know that if a special district has more ratepayers, life is better for them. If a city has more tax and job generators, life is better for them. If a county has the same, better for them as well. The reason I’m really enthusiastic about this, as a former city manager, and as a former MWD board member, I can tell you that I have never seen a period in California where it was implicit and explicit in the law that everyone cooperate. Accordingly, I think EIFDs have the potential to change the public sector dialog dramatically. Continued on page 18

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New world of economic development [continued] Can special districts that don’t receive a share of the property tax participate in an EIFD?

about using an EIFD to get some of these things done. Because if we get these done together it benefits all of us. The city will induce private investment that yields taxes and jobs, and we benefit because it gets fee payers. As a result, we can be a willing partner under the right conditions.” I wouldn’t wait for the call to come from the city. The special district can be an instrumental player in this equation. You have the technical expertise, and you have the fees or taxes that your district can put in. So in a way, the district comes bearing gifts, which is always a good thing to get started.

Yes. There are two applicable EIFD laws. The first basically enabled the authorization of EIFDs - that was effective in January 2015. A year later, effective January 2016, Assembly Bill 313 was approved. It enables special districts to contribute non-property tax revenue, so now both a special district’s property tax (if applicable) and fee revenue are eligible for contribution into an EIFD.

What are some examples of local governments exploring creating an EIFD?

I also believe special districts have a unique opportunity to fix or improve the existing relationships between certain cities and counties that were somewhat bruised over the years of redevelopment. Because redevelopment hasn’t been as much of a scorched earth issue with special districts as it has been between counties and cities, districts can encourage agencies to work together and thus be a catalytic leader in this dialog.

We are in our baby step years with the EIFDs. The interesting thing is a prior version of infrastructure financing districts (IFDs) has been on the statutory books in California for 30 years. They required a vote by constituents to create this district and a vote to issue bonds. Under the old IFD, there were very few projects actually done (maybe a couple over a 30 year period). Under the new rules for EIFDs, there are dozens of communities that are now looking at using EIFDs.

The redevelopment formation process basically fueled city and county arguments about tax increment, basically because the law let cities take it from the county (this happened to some districts as well). Even though redevelopment dissolution is well underway, those are wounds that are going to take a while to heal. And now that we have this new EIFD legislation that’s sort of the “United Nations” version of community development with a perspective that is largely based on “let’s all come together and work collaboratively” – it doesn’t mean administrators involved in the process feel good about that. I think special district managers and executives have a unique opportunity to bridge the gap and say “we want to be a part of this and despite differences in the past, let’s all work together because there is so much at stake, especially if we figure out a way to apply for Cap and Trade and other state funds for these projects.”

For example, Kosmont is working with the city of Laverne, in the Laverne Old Town area, potentially in a partnership with a special district, a county, and some non-profit members, like the University of Laverne, to explore a transportation-oriented district. Because of the implementation of a Gold Line station, there is a need to change land uses and introduce mixed-use and pedestrian-oriented projects that interact favorably with the transit line. That’s one clear example where the city may partner with other public agencies to change and improve infrastructure around the built and transit environment in Laverne. There are many other cities looking at similar kinds of programs and they are just getting started.

What are some tips for special districts that are interested in partnering with their cities and counties in establishing an EIFD?

What is a community revitalization and investment authority? How can a special district benefit?

Special districts should move their periscope up and engage in a series of conversations with their local city and county managers. There’s often a series of regional or sub-regional projects that have become obstinate stumbling blocks over the years. For example, it might be an intersection or overpass, or a water or sewer line - the type of infrastructure projects that have held an area back from reaching its potential because a major arterial or connectivity item couldn’t be installed, improved, or extended.

A community revitalization and investment authority (CRIA) is a new form of redevelopment that uses tax increment - again, no school districts - that must pass certain key eligibility tests before creating a CRIA. EIFDs and CRIAs can install regional infrastructure projects. One key difference between the two is that by law, a CRIA focuses on affordable housing - 25 percent of the tax increment raised must go to affordable housing. So in general, cities that consider formation of a CRIA, will likely have as a priority mixed-used and/or affordable housing, as opposed to pure infrastructure projects and public-private commercial development deals (office, retail, industrial).

These circumstances exist all over California; where significant hurdles to open up economic development sit because there is a key piece of infrastructure that could not find a way to get funded. As a special district, you know what those are and that if left to your capital budget alone, the project won’t happen because there is no funding miracle out there. Take that list out and call your local city manager and say: “Let’s sit down and talk

The primary test for a CRIA is that 80 percent of land (calculated by census tract) designated for the new project area must have a median household income less than 80 percent of statewide

annual median income average. If the designated area meets this primary test, then it still must achieve three out of four conditions as follows: 1) non-seasonal unemployment rate higher than the statewide median by three percent, 2) crime rates have to be five percent higher than the statewide median, 3) make a finding that area contains deteriorated infrastructure or inadequate infrastructure, 4) make a finding that area has deteriorated commercial or residential structures. Once the host public agency has created the CRIA, it can pursue infrastructure and public-private projects, but once again, it must use 25 percent of the increment for

affordable housing. CRIAs can be formed by a city, a county, or a city and a county, or can be formed by a city, county, or special district - any combination of these local government members can form a joint powers agreement and initiate a CRIA.

What are some of the other relatively new tools special districts can use to pay for infrastructure? There is a combination of old and new tools available to special districts. The current new tools are the ones that we’ve talked about, wherein a county and/or city form an EIFD and/or CRIA, and can start to use tax increment to accomplish some of our infrastructure needs and requirements. These are the primary new economic development tools. There is a new source of money called Cap and Trade for these districts and the projects they promote. EIFD projects that reduce greenhouse gas emissions can apply for these funds, which represent over $1.5 billion dollars a year and rising. Here is how it works. The state as an overall direction is moving California to a carbon footprint reduced economy. State policy,

California Special District – January-February 2016

based on a series of legislative measures, is driving cities, counties, and special districts to install efficient water resource, emissions output, and energy conservation projects and programs. Through a series of recently approved statutes that increase energy efficiency requirements for both utilities and the private sector, as well as for buildings and automobiles, the state has placed a cap on emissions. The intent is to transition the economy to a “green” economy by reducing carbon footprint contributions. Cap and Trade is the strong-arm program for setting upward limits of pollution and energy use and charging for anything in excess. Cap and Trade is generating around 1.5 billion dollars a year in revenue and that could rise to 10 billion dollars. Continued on page 20

New world of economic development [continued] In the pursuit of greenhouse gas reduction goals, under certain conditions that money can be directed back to local governments for projects that 1) install sustainable infrastructure, 2) implement energy efficiency processes, whether public or private 3) cause improvements in the built environment so buildings are more efficient and less trips are needed to get to places and (4) induce affordable housing in transit served areas. This is a huge source of new money, and if an EIFD is structured strategically, it can apply for projects that are eligible for cap and trade funds. This whole process is in its infancy, and we are likely to see the loosening of Cap and Trade fund eligibility for local projects, which for now is still a bit stringent. As result, the state has not successfully allocated these funds to projects and there is quite a bit of carryover funding from 2015.

Special districts have a remarkable opportunity in this new world that I have come to call “Economic Development 2.0.” For example, special districts can be a leader in local conversations about creating an EIFD or CRIA district. long as they bargain for a list of infrastructure improvements they want. And they can apply as part of the district, and in conjunction with local governments for billions of dollars of assistance through the Cap and Trade program to be used for the EIFD Infrastructure Financing Plan. This is really the new world - new districts with access to tax increment potentially matched by other public funds (such as cap and trade), propelled by public agency cooperation. And if used properly these initiatives can be very effective in attracting private investment, which creates economic prosperity through “clean” jobs and project tax increment that comes back to pay for the installation of sustainable infrastructure that all local government agencies and their constituents desperately need.

While all of this amounts to a lot of change, overall I view it as very positive. Special districts have a remarkable opportunity in this new world that I have come to call “Economic Development 2.0.” For example, special districts can be a leader in local conversations about creating an EIFD or CRIA district. They can participate in those districts using their own funds as

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With money market reform slated to take effect October 2016, the CalTRUST Board of Trustees strategized with investment advisor Wells Fargo Asset Management on how to best address the needs of public agencies. After review of various options, the board approved the addition of the Wells Fargo Advantage Funds Government Money Market Fund - Select to the CalTRUST slate of products. This fund became available to all CalTRUST participants in October 2015 and has already proven to be a popular addition. In the first two months since its launch, the Government MMF attracted more than $117 million in assets. CalTRUST provides special districts and other local public agencies with several pooled investment options to help them reach their financial objectives. For more information, visit www.caltrust.org or call 888.422.8778.

California Special District â&#x20AC;&#x201C; January-February 2016

Generating a Prosperous Future By Karalee Browne, Sustainability Program Manager, Institute for Local Government

Many local leaders have found that by creating agencies that are more sustainable, they can help their communities succeed, flourish, and thrive â&#x20AC;&#x201C; in other words, become more prosperous. Sustainability is not simply about the environment. Sustainable organizations take practical steps to foster and maintain a high quality of life for their communities on an ongoing basis, which create long-term benefits. By taking advantage of opportunities to invest in energy efficiency, renewable energy, water supply, wastewater management, and other sustainability practices, special districts can improve the fiscal health of their organizations and the economic prosperity of the residents and businesses they serve.

East Bay Municipal Utility District

East Bay Municipal Utility District, known to many as EBMUD, is committed to providing reliable, high-quality drinking water and wastewater service through sustainable activities that avoid, minimize, or mitigate adverse effects to the environment and the public. The agency adopted a sustainability policy in 2008, which focuses on using resources in the most efficient way. The goal was to minimize waste; conserve energy and natural resources; promote longterm economic viability; and support the well-being of its employees, communities, and customers in a way that is beneficial to society. The sustainability policy was incorporated into the district’s strategic plan, which helped raise its importance and the emphasis placed on it by the entire staff. The district also developed and implemented a climate change monitoring and response plan to inform future water supply, water quality, and infrastructure planning. The plan set forth policies and programs aimed at reducing the district’s greenhouse gas emissions by 10 percent over the year 2000 baseline by 2015. In 2013, the district reported a 31 percent reduction of greenhouse gas emissions, exceeding their goal by three times, two years ahead of schedule. By 2040, EBMUD plans to slash direct emissions from activities such as fuel combustion by 50 percent compared to 2000 levels, and to be carbon free for indirect emissions. Much of the district’s greenhouse gas reduction came by using less energy. Energy use is one of the leading sources of greenhouse gas emissions. It usually takes a lot of energy to clean and deliver water, however EBMUD uses 89 percent less energy than the average California utility to deliver water. To do this, the district produces renewable energy from several sources, including hydropower, photovoltaic solar panels, and biogas cogeneration at its main wastewater treatment plant.

Turning Food into Energy

Energy is used to convey, pump, distribute, treat, and heat water, so saving water also conserves energy and reduces greenhouse gas emissions. EBMUD’s wastewater treatment plant, at the base of the Bay Bridge in Oakland, not only treats sewage, but takes discarded materials like food scraps from restaurants and supermarkets that usually go to the landfill, and converts them into renewable energy. For the past seven years, EBMUD has been perfecting a process to efficiently convert food scraps to renewable energy. Its pilot facility has converted 10 tons a day of restaurant food scraps to electrical power. Based on the success of the pilot project, EBMUD plans to grow this recycling program. Recycling food scraps at EBMUD supports local zero EBMUD Fisheries and Wildlife Biologist Jessica Purificato waste and landfill reduction lifts up a Red Legged Frog found during a project to restore goals and mandates. EBMUD numerous ponds in its watershed. uses natural microbial activity, called anaerobic digestion, to convert these food scraps into renewable energy called biogas. Restaurant and supermarket food scraps currently represent a small part of EMBUD’s revenue from wasted materials, however the district processes large quantities of fats, oils, and grease from The Institute for Local Government offers restaurants, liquid winery, brewery, and dairy a variety of resources, webinars and case processing residues and various other items examples to help agencies explore the from the food and beverage industry. In 2015, benefits of recycling projects and programs. the renewable electricity produced from biogas For more information and tips on how at the main wastewater treatment plant was to finance, site, and operate residential equivalent to 130 percent of the plant’s power and commercial recycling projects and needs. The gross revenue from this program programs in your community, visit (which includes tipping fees for the waste www.ca-ilg.org/recycling-resource-center. collection) now exceeds $1 million per month! Continued on page 24

Generating a prosperous future [continued]

EBMUD employee Andre Easley, right, discusses simple fixes for the most common leaks found inside and outside at an EBMUD booth at a hardware store in Alameda, CA. In celebration of the EPA’s National Fix a Leak Week held in March 2015, EBMUD partnered with local hardware stores to help customers eliminate water waste with their own hands.

Every Drop Counts

EBMUD provided rebates to more than 900 customers, which resulted in almost 1.8 million square feet of lawn being converted to sustainable landscape. During the drought, EBMUD expanded its recycled water program and began delivering large amounts of recycled water to the Oakland Airport. As a result of the district’s efforts, customers in its service territory surpassed the district’s goals, recording a 22 percent savings. “Our customers are among the most water conscientious in the state. EBMUD is weathering this drought due to their continued conservation. When we ask them to cut back, they deliver,” says Supervisor of Water Conservation Charles Bohlig.

Facing near record-low water supplies, EBMUD became the first large Bay Area water district to adopt a district-wide goal of 20 percent mandatory water reduction in an effort to align with the governor’s statewide goal. The district implemented strict limits on water use, and imposed a drought surcharge of up to 25 percent in order to pay for the costs of purchasing extra water supplies, additional conservation services, and enforcement of water use restrictions. EBMUD also adopted two ordinances, one aimed at stopping excessive water use that penalized households that used more than 1,000 gallons per day (four times the amount of an average residential household) and another aimed at stopping water theft.

Along with helping its customers reduce water usage through programs and education, the employees and leaders of the organization concentrated on internal improvements too. For example, district staff designed and constructed a new pipeline to carry recycled water from the second floor bathrooms in the district’s administration building to an Auxiliary Cooling Towne (ACT) mounted on the roof, allowing the unit to use a 50/50 mixture of potable and recycled water for an estimated 11 percent savings on the building’s annual water use. While they have suspended this activity, the district continues to use recycled water in the public bathroom in the lobby.

In addition to the new regulations, EBMUD implemented a variety of rebate programs and educational activities to help customers conserve water. Through its lawn conversion program, EBMUD provided rebates to more than 900 customers, which resulted in almost 1.8 million square feet of lawn being converted to sustainable landscape. In addition to the new regulations, EBMUD implemented a variety of rebate programs and educational activities to help customers conserve water. Through its lawn conversion program,

Driving Results

Transportation is the largest generator of greenhouse gas emissions in California. Recognizing this, EBMUD maintains a 70-vehicle hybrid-electric sedan fleet and has two plug-in electric hybrid vehicles. From water and energy conservation to fleet maintenance and habitat conservation, the district’s work in sustainability is comprehensive, intentional, and cross-cutting. The district’s work on climate change is an interdepartmental effort led by the Operations and Maintenance Department. EBMUD also has a Sustainability and Energy Committee that meets at least four times a year, in meetings open to the public, to discuss and decide on matters related to energy, sustainability, and natural resources. In June of 2015, East Bay Municipal Utility District issued the first-ever “green bonds” to finance $74 million of capital improvement projects. Green bonds are debt used to fund sustainable infrastructure. The district believes this is an emerging, valuable market and elected to be an early participant to stimulate its growth.

The Beacon Program The Beacon Program is a state-wide program that recognizes voluntary local action to address climate change and honors local governments saving energy, reducing greenhouse gas emissions, and adopting policies and programs that promote sustainability. To find out if your agency participates in the program, visit www.ca-ilg.org/BeaconProgram.

Sustainable Communities Learning Network (SCLN) The Sustainable Communities Learning Network (SCLN) helps its members access and share resources and tools that encourage agencies and communities to consider and apply economically, socially, and environmentally sustainable practices. This group is a place for staff to connect and exchange information, discuss best practices, seek feedback on project ideas, and discuss challenges. Group members are encouraged to start and contribute to discussions, ask questions, gather feedback through a poll, post job openings and upcoming events, connect with peers working locally and statewide, and discuss local leadership in addressing sustainability concerns. To join the SCLN LinkedIn Group, visit linkedin.com/groups/4444321.

Learn More

As indicated in the actions set forth by EBMUD, sustainability activities often result in economic savings, as well as environmental benefits and operational efficiencies. The Institute for Local Government’s Sustainability Best Practices Framework offers a variety of activities that special districts can take in 10 areas of sustainability ranging from energy efficiency to water conservation, and efficient transportation to community and individual action. The best practices draw from the practical experiences of local agencies throughout California that participate in the Beacon Program. They vary in complexity and are adaptable to fit the unique needs and circumstances of those who implement them. To access the Sustianability Best Practices Framework, visit: www. ca-ilg.org/sustainability-best-practicesframework.

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California Special District – January-February 2016

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Avantpage – Translation and interpretation services Bank of the West – CSDA branded purchasing card program designed for special districts California CAD Solutions – Digital mapping solutions CalTRUST – Pooled investment accounts eCivis – Grant research and management system Employee Relations – Employment background investigations, drug testing and employee hotline services PARS – Trust and services for OPEB Streamline – Website design system U.S. Communities -– Discounted purchasing forum for office supplies, technology products and more Utility Cost Management - Utility bill audits

CSDA members have access to exclusive programs delivered by our California Special Districts Alliance Partners: • CSDA Finance Corporation – visit www.csdafinance.net for tax-exempt municipal financing • Special District Risk Management Authority (SDRMA) – visit www.sdrma.org for cost-effective Workers’ Compensation, Property & Liability and Health Coverages

[Solutions & Innovations]

Scaling Up Julie Zimmerman, Chief Knowledge Officer, Management Partners

Photo credit: Jim Mosher - Long Ridge Open Space Preserve

In June of 2014, voters in parts of three San Francisco Bay Area counties approved Measure AA, a $300 million general obligation bond for the Midpeninsula Regional Open Space District (Midpen). It was a moment of joy for Midpen leaders, and a culmination of years of planning and hard work. But it was also the beginning of a new challenge: transforming the organization to enact the vision that voters had come out to support. In the wake of the Great Recession, many public agencies are all too aware of how to manage budget cuts and downsizing. Scaling up an organization that’s enjoying increased revenue is a happier prospect, but it too requires planning, deliberation, and sometimes seismic change. For

Midpen, a regional greenbelt system made up of more than 60,000 acres of land in 26 open space preserves, the planning had started during the recession, when leaders looked at revenue projections from property taxes and realized their ability to purchase land might soon be in jeopardy. “That was alarming,” says Midpen General Manager Steve Abbors, who joined the district in 2008. “Although I knew the economy would bounce back and there are cycles, it was a wake-up call that told me it was time to look at other revenue streams.”

While many agencies focused on maintaining services during the economic downturn, Midpen leaders used the time to plan for the future, so they would be ready to act once the economy picked up. That planning included board and staff deliberations as well as many different avenues for engaging the public. The discussions led to one major conclusion: Although the district’s mission had officially focused on three things – purchasing land, restoring that land, and making it accessible to the public – in reality the primary emphasis had long been on land purchases alone. There was broad agreement across all constituencies that the district should increase efforts to restore the land it owned and open it up to public use. Eventually a consensus also emerged that a general obligation bond was the best way to achieve Midpen’s goals. The non-profit Peninsula Open Space Trust – one of the many partner organizations that’s helped Midpen achieve its goals – ran the Measure AA campaign. It passed with 67.8 percent of the vote, just over the two-thirds needed. Measure AA is the secondlargest local parks funding measure ever passed in California, behind only a $500 million bond passed in 2008 by voters in Alameda and Contra Costa counties for the East Bay Regional Park District. With the new funding, leaders resisted the urge to simply increase what they’d already been doing. Measure AA transformed Midpen from essentially a startup organization to a mature one, and the new direction called for systemic changes to the way the district did business. Following a competitive Request for Proposals process, Midpen hired Management

Partners, a consulting firm with offices in San Jose and Costa Mesa that works with local governments and special districts, to survey the organization and identify what needed to change. “It became very clear that the way we developed simply wasn’t scalable,” Abbors says. “It would eventually collapse under its own weight. We had to create an organization that was scalable, and that’s where Management Partners really helped us understand what we needed to do to become a mature organization. They looked at the organization, interviewed staff, began to identify standards to work by and gaps in the organization. The time invested in change management is so important, because that’s when you bring everybody along.” For instance, Midpen had no full-time chief financial officer, but the terms of the general-obligation bonds increased the need for fiscal accountability. There was also no one in charge of engineering and construction, a big need if the district wanted to increase the number of projects it completes. Midpen delved into its information systems, its project delivery processes, its staffing and organization chart, making sure everything was in place to enable the changes Measure AA was designed to support. Engaging employees in the process was also a crucial step in the undertaking. The process involved comprehensive interviews and focus groups with staff to get their ideas and engage them in transforming the organization and, as they’d engaged the public in planning for the future, included them in every step. “You can’t over-emphasize the value of engaging all the staff to get early input and later buy-in,” says Management Partners Senior Manager Nancy Hetrick. “The decisions ultimately came from leadership, but having involvement from across the organization has long-term success implications.” Hetrick also credits the leadership of Midpen for understanding the need to change without bringing preconceived notions of what change would look like. And they resisted the urge to launch new projects immediately after the vote, understanding that a pause to examine the organization and identify needed changes would pay off in the long run.

California Special District – January-February 2016

“It’s important to be able to prioritize the change and consider how fast and how much to grow,” Hetrick says. “When we got in there, we found they didn’t have the organizational infrastructure to grow. Internal support and administrative functions aren’t sexy, and they’re not the first areas that come to mind with investing in new priorities. But they are critical to enabling sustainable growth, and Midpen’s ability to prioritize and plan will ensure systems and practices are in place to support their growth.” Managing the growth hasn’t been without bumps in the road. Creating new positions and hiring new staff has meant that long-time employees had to give up or share responsibilities. New processes require giving up the way things have always been done and learning new ways of accomplishing the agency’s mission. But the result is an organization that’s better equipped to manage the public’s resources, with a focus on delivering the projects that the public has prioritized. “It is very different, but we’re still working with the same people and they are driven and engaged,” says Midpen Assistant General Manager Ana Ruiz. “We have a new project delivery process, from initiation and approval to closeout. We have new policies, because many were outdated or had gaps. We have new IT and business processes, new record-keeping, we’ve integrated data and changed our communications protocol. What’s really good is that we have an actual road map and know where we want to go. It’s very deliberate and we know where we’re going. It’s not just changing to change.”

[Community Connections]

Sunridge Park: A Park for Children of All Abilities Cordova Recreation and Park District staff

Cordova Recreation and Park District celebrated the opening of Sunridge Park in June 2014. This six and a half acre park is the first in the district to include an inclusive “play for all” children’s playground. This unique neighborhood park is a socially inclusive amenity designed to promote social interaction between children of all ages, while seeking to remove physical and social barriers. Custom features in the park include a socially inclusive playground, picnic facilities with specially designed benches and tables, and a sand play area. Based on feedback from community meetings and outreach, other park amenities were also included, such as a soccer-field sized open recreational space, restroom facilities, a splash pad, a custom seek and find grass maze, and a quarter-mile walking path. 30

Share your community connections Is your district interacting with the community in a new and original way? California Special District wants to know about it! Contact Nicole Zajic at nicolez@csda.net or (877) 924-2732.

River-West Investments was the owner and builder of the park throughout design and construction. River-West hired O’Dell Engineering to design the park in March 2012. CRPD park planners had seen presentations by Landscape Architect Chad Kennedy about inclusive play and decided it would be a great concept for the park. The park was designed upon seven principles to help promote full participation in recreation. These principles were adapted from the Seven Principles of Universal Design and the 7 Principles of Inclusive Playground DesignTM. They are: 1. Be Fair – Designed for equitable use 2. Be Included – Designed for flexibility in use 3. Be Smart – Designed to be simple and intuitive 4. Be Independent – Designed with perceptible information 5. Be Safe – Designed to be tolerant of error 6. Be Active – Designed to require low sustained physical effort 7. Be Comfortable – Designed with the appropriate size and space for approach and use The park’s play areas were created by following the above principles, with attention to children and their abilities to participate independently and with others. They were designed to encourage equality of play opportunity and full recreational participation and independence, and to accommodate the needs and abilities of children, adults, and seniors. The play areas were not only designed to promote physical inclusion, but also to encourage the assimilation of social and sensory experiences in recreation. Based on a socially inclusive audit performed by the design team, the playground area alone provides a minimum of 104 inclusive play opportunities across the entire spectrum of child developmental needs (25 percent physical/23 percent cognitive/22 percent social/16 percent proprioceptive and vestibular/13 percent sensory). The design does not stop at the traditional senses of sight, sound, taste, touch, and smell, but also supports proprioceptive and vestibular senses, or body positioning and movement and balance and Continued on page 46

California Special District – January-February 2016

Legal Brief Top 6 Tips for Public Agencies on Prevailing Wage in 2016 By Deborah Wilder, Contractor Compliance and Monitoring, Inc.

Every year seems to bring new changes and obligations for public agencies in the arena of public works and prevailing wages. Here are the top six tips for agencies to remain compliant with prevailing wage obligations for 2016. 1. Review contract language. Have your general specifications reviewed and updated to include any new changes in prevailing wage or public works language. No offense to local agency counsel, but most of them know about municipal law or land use or public administration. Few of them keep up on all the prevailing wage changes and updates. Spend an hour or two with a knowledgeable attorney or consultant in the field and make sure your contracts are up to date. Examples: Penalties for wage violation increased from $50 per worker per day to $200 per worker per day in 2012. Yet, many contracts still list the lower level of penalty. In 2015, SB 854 mandated new mandatory language be included in all public works contracts over $1,000 (even purchase orders or task orders). 2. Review agency’s filing of PWC-100 forms. In June 2014, the California Legislature passed Senate Bill 854 and mandated the immediate implementation of an agency’s obligation to file a PWC-100 form for each and every project over $1,000. This includes service and maintenance work as well as capital improvement construction work.

3. Protocol for PWC-100 forms in 2016. Effective January 2016, contractors were to submit certified payrolls for all projects electronically through the Department of Industrial Relations eCPR system. Even though the DIR has temporarily suspended the eCPR system for contractors, agencies still have the obligation to file (and have filed) a PWC-100 form for all public works projects that are currently underway (even those that began before June 2014). In some instances, this may mean that an agency will need to file a PWC-100 for a project that started over a year ago. At this juncture, every public works project over $1,000 must file a PWC-100 form (exception for PLA project and those audited by Legacy LCPs) 4. Are you checking for registered contractors? Only contractors registered as “public works contractors” may work on a public works project. That includes individuals or businesses, which must meet prevailing wage requirements. This applies to the sole proprietor who is the on-call plumber under a maintenance contract. This is the landscape business that maintains your parks. This includes a surveyor, a trucking company, and a temporary labor service that refers workers to a contractor on your project. Even though some of these entities do not have to be licensed by the California Contractors State Licensing Board (CSLB,) the work they perform on an agency project, land, or building makes them subject to prevailing wage, which makes them subject to the registration requirements. You may not allow an individual sole proprietor or a business that is not registered to perform public works. A contractor must register and pay $300 prior to bid. If they are low bidder, you can only allow them to work if they immediately register with the DIR and pay an additional penalty of $2,000. 5. Are Notices of Completion being filed? SB 854 also provids that public agencies file Notices of Completions on all projects. This allows the DIR statute of limitation of 18 months to begin. Why is this important? A prime contractor remains liable

Want to learn more? Deborah Wilder’s webinar presentation “Prevailing Wage Updates for 2016” is now available “On-Demand.” Visit the On-Demand Webinars section of www.csda.net for details.

for wages (and in some cases penalties) for its subcontractor work on the project up to 18 months after a Notice of Completion is filed. If the agency does not file a Notice of Completion, it continues to expose a prime contractor to increased liability. A Notice of Completion also has other legal consequences that public agencies should consider, i.e. it shortens the time in which stop notices can be filed. 6. What is your agency’s level of prevailing wage compliance? Labor Code Section 1726 requires that a public agency be cognizant of prevailing wage violations and either report the violation to the DIR through a formal complaint process or conduct their own internal investigation and take appropriate corrective action. In August 2014 the DIR published this on its website:

All awarding bodies continue to share responsibility to monitor and enforce compliance on public works and should review the Labor Commissioner’s precautionary notice. What does that mean? It does not mean that you have to collect certified payrolls and review every day, worked by every employee, of every contractor, on every public works project. It also does not mean that you can put prevailing wage language in the contract and then ignore the contractors’ obligation to pay prevailing wage. The extent of compliance, review, and enforcement is broad, but bears discussion within your organization to determine what level of compliance your agency will implement.

Small to mid-sized public agencies are especially challenged by these requirements because of lack of resources or limited staff. Taking a few hours to review the agency’s obligation and establishing a protocol for all public works projects or categories of projects (perhaps one protocol for capital projects and another for maintenance/service contracts) will go a long way to meeting these requirements. Deborah Wilder is a licensed attorney and the president of Contractor Compliance and Monitoring, Inc. (CCMI). CCMI is a business affiliate member of CSDA and provides prevailing wage and labor compliance services to public agencies throughout California. Contact her at dwilder@ccmilcp.com or 650-522-4403.

The Best Legal Resource for Your District BBKnowledge brought to you by Best Best & Krieger Sharing our knowledge of emerging issues in public agency law

Visit www.bbknowledge.com By BEST BEST& KRIEGER LLP

California Special District – January-February 2016

anaging Risk

Workplace Safety Work-Related Factors That May Increase the Risk of Violence • Working with the public. • Handling money, valuables, or prescription drugs (e.g. cashiers, pharmacists).

• Carrying out inspection or enforcement duties (e.g. government employees).

• Providing service, care, advice, or education (e.g. health care staff, teachers).

• Working with unstable or volatile persons (e.g. social services or criminal justice system employees).

• Working in premises where alcohol is served (e.g. food and beverage staff).

With the recent tragic events in San Bernardino, SDRMA members have been inquiring about what exactly the employer’s duty is to provide a safe workplace. Understanding the potential sources of workplace violence is a key step in the process to a safer workplace. A key issue for all employers in California, both public and private, is keeping employees safe at the workplace. Under OSHA’s General Safety Clause, it states in part: (a) Each employer - (1) Shall furnish to each of their employees employment and a place of employment which are free from recognized hazards that are causing or are likely to cause death or serious physical harm to his employees.

Types of Workplace Violence • Violence by strangers. • Violence by customers or clients. • Violence by co-workers. • Violence by personal relations/domestic violence.

A proud California Special Districts Alliance partner.

• Working alone, in small numbers (e.g. store clerks, real estate agents), or in isolated or low traffic areas (e.g. washrooms, storage areas, utility rooms). • Working in community-based settings (e.g. nurses, social workers, and other home visitors). • Having a mobile workplace (e.g. taxicab). • Working during periods of intense organizational change (e.g. strikes, downsizing).

Preventative Measures Preventive measures generally fall into three categories: workplace design, administrative practices, and work practices. Workplace design considers factors such as workplace layout, use of signs, locks, or physical barriers, lighting, and electronic surveillance. • Building security is one instance where workplace design issues are very important. • Positioning the reception area or service counter so that it is visible to fellow employees or members of the public passing by. • Positioning office furniture so that the employee is closer to a door or exit than the customer so the employee cannot be cornered. • Installing physical barriers, e.g. pass-through windows or bullet-proof enclosures. • Using coded cards or keys to control access to the building or certain areas within the building. • Using adequate exterior lighting around the workplace and near entrances. • Strategically placing fences to control access to the workplace.

Officers

Special District Risk Management Authority 1112 I Street, Suite 300 Sacramento, CA 95814 tel: 800.537.7790 www.sdrma.org

David Aranda, President, Mountain Meadows Community Services District Jean Bracy, Vice President, Mojave Desert Air Quality Management District Ed Gray, Secretary, Chino Valley Independent Fire District

Members of the Board

Muril Clift, Cambria Community Services District Sandy Raffleson, Herlong Public Utility District Mike Scheafer, Costa Mesa Sanitary District Robert Swan, Groveland Community Services District

Administrative practices are decisions you make about how you do business. For example, certain administrative practices can reduce the risks involved in handling cash. You should consider: • Keeping cash register funds to a minimum. • Using electronic payment systems to reduce the amount of cash available. • Varying the time of day that you empty or reduce funds in the cash register. • Installing and using a locked drop safe. • Arranging for regular cash collection by a licensed security firm. Work practices include all the things you do while you are doing the job. People, who work away from a traditional office setting, for example home care providers, can adopt many different work practices that will reduce their risk. For example; • Prepare a daily work plan, so that you and others know where and when you are expected somewhere. • Identify a designated contact at the office and a back-up. • Keep your designated contact informed of your location and consistently adhere to the call-in schedule. • Use the “buddy system,” especially when you feel your personal safety may be threatened. • Do not enter any situation or location where you feel threatened or unsafe.

Personal Workplace Security Keys: • Keep your purse, wallet, keys, or other valuables with you at all times or locked in a drawer or closet. • Check the identity of any strangers who are in your office. If anyone makes you uncomfortable, inform security or management immediately.

California Special District – January-February 2016

Consultants

Lauren Brant, Public Financial Management Ann Siprelle, Best Best & Krieger, LLP David McMurchie, McMurchie Law John Alltop, Bickmore Risk Services & Consulting Charice Huntley, River City Bank James Marta, CPA, Auditor Karl Snearer, Apex Insurance Agency Doug Wozniak, Alliant Insurance Services, Inc.

• Don’t stay late if you’ll be alone in the office.

Create a buddy system for walking to parking lots or public transportation after hours, or ask a security guard to escort you. • Report any broken or flickering lights, dimly lit corridors, broken windows, and doors that don’t lock properly. • If you notice signs of potential violence in a fellow employee, report this to the appropriate person. Immediately report any incidents of sexual harassment. • Know your company’s emergency plan. If your company does not have such a plan, volunteer to help develop one. • If the company does not supply an emergency kit, keep your own emergency supplies (flashlight, walking shoes, water bottle, nonperishable food, etc.) in a desk drawer. • Mark your equipment with identification numbers, and keep an updated inventory list (with photos, if possible) in a home safe or a bank safe-deposit box. It’s a good idea to keep backups of your work in a secure, separate location as well.

SDRMA Staff

Gregory S. Hall, ARM, Chief Executive Officer C. Paul Frydendal, CPA, Chief Operating Officer Dennis Timoney, ARM, Chief Risk Officer Ellen Doughty, ARM, Chief Member Services Officer Debra Yokota, Claims Manager Heather Thomson, CPA, Finance Manager Wendy Tucker, Member Services Manager Danny Pena, Senior Claims Examiner Alana Batzianis, Senior HR/Health Benefits Specialist Dan Berry – Senior Member Services Specialist Jennifer Ng, Claims Examiner I Shawn Vang, Accountant Rajnish Raj, Accounting Technician Rachel Saldana, Administrative Assistant

This is not a complete list of preventative measures a district can take to help ensure the safety of all personnel. Each agency should review its security measures in conjunction with a review of the Emergency Action Plan as well as the Injury Illness Prevention Plan (IIPP) to evaluate individual risks. You may also want to contact your local law enforcement agency to inquire what services they can provide regarding your agency’s safety plan. Learn more about preventing workplace violence with CSDA’s On-Demand webinar, “Workplace Violence Prevention.”

Visit www.csda.net and go to the “On-Demand Webinars” section.

Special Districts need more than just a surface approach to Risk Management. That’s why we offer in-depth analysis and services:

We into the data.

Actuarial Services • Maximum Exposure Analysis • Self-Insurance Analysis • Department Insurance Cost Allocations • GASB 45 (OPEB) Studies Safety and Loss Control Services Outsourced Risk Manager Insurance Coverage Reviews EPL Consulting and Training Compare JPA to Commercial Insurance Options

For more information visit www.Bickmore.net or contact Rick Brush at 800.541.4591 or rbrush@bickmore.net.

Money Matters The Intelligent Approach to Energy Efficiency By Michael Kerkorian, Utility Cost Management LLC

On October 7, 2015, Governor Brown signed Senate Bill 350, which requires California to double the savings realized from energy efficiency and conservation by the end of 2030. In addition, the new law mandates that half of the state’s electricity must be generated from renewable sources within the same time frame. Clearly, for the next 15 years and potentially much longer, California will continue to be at the forefront of national and international efforts to reduce energy consumption and curb greenhouse gas emissions. Special districts, as well as other public entities, will

CSDA F C

A proud California Special Districts Alliance partner.

be expected to lead the way in achieving the state’s goals. This will create tremendous opportunities for savings, but also many challenges as special districts must navigate an incredibly broad, ever-changing, and technical field. Special districts’ goal in pursuing energy efficiency and renewables should not be to implement any project, but instead to implement only the best projects – in other words, those projects that offer the greatest return on investment and the shortest payback periods. The additional effort necessary to closely scrutinize and evaluate projects is time well spent, because it can help districts avoid costly mistakes and ensure they receive the “biggest bang for their buck” on limited energy-related investments. Following are some recommendations on how this can be achieved:

Officers

Jo MacKenzie, President, Vista Irrigation District Paul Hughes, Vice President, South Tahoe Public Utilities District Steve Perez, SDA ,Secretary, Rosamond Community Services District Leslie Keane, Treasurer, Orange County Cemetery District

CSDA F C

CSDA Finance Corporation 1112 I Street, Suite 200 Sacramento, CA 95814 tel: 877.924.CSDA www.csdafinance.net

Members of the Board

Don Humphrey, Livermore Area Recreation and Park District John Martin, Tehachapi-Cummings County Water District Matthew McCue, Mission Springs Water District

• As a first step, ensure utility rates are minimized. An efficiency project that looks attractive when electricity is valued at $0.20 per kWh may not make sense if a customer should be paying only $0.12 per kWh. Reducing rates is a quick and painless way to lower costs and ensure that efficiency opportunities are being evaluated properly.

Consultants

Rick Brandis, Brandis Tallman, LLC David McMurchie, McMurchie Law Scott Boroczi, BNY Mellon Trust Co., NA William Morton, Municipal Finance Corporation Albert Reyes, Nossaman, LLP Saul Rosenbaum, Prager & Co., LLC Nicole Tallman, Brandis Tallman, LLC

CSDAFC Staff

Neil McCormick, CEO Cathrine Lemaire, Program Manager Charlotte Lowe, Executive Assistant Rick Wood, Finance Manager

Low Interest Rates Still Available through CSDA Finance Corporation

• Compare among different energy solutions, rather than within a single solution. Sometimes customers become enamored with a particular energy technology, then limit themselves by considering only that option. For example, if a customer decides that it wants to install solar generation, but does not evaluate how the investment in solar compares to other opportunities such as lighting, HVAC, or controls, then it may end up implementing a less-than-optimal solution. • Perform critical, objective analyses of vendor proposals. One of the biggest problems with the way energy efficiency projects are sold is that customers are taking advice from, and receiving calculations from, the firms that are hoping to sell them the equipment. Obviously, this is a conflict of interest, and it often leads to projects that are oversized or, worse yet, projects that are completed that should never have left the drawing board. We recommend that customers perform their own in-depth, independent analyses to determine which projects to pursue. • Use dynamic financial modeling to assess project risks. Many efficiency projects must be evaluated over lengthy time periods, often 10 years, 15 years, or longer. It is impossible to know how financial variables will change so far into the future, so assumptions must be made to calculate projected returns. It is critical that customers use dynamic analyses that allow them to look at projects under best-case and worst-case scenarios, and to understand how certain assumptions influence overall returns. Only in this way can customers understand the financial risks associated with each opportunity. Continued on page 38

For special districts and other local agencies, now is a very good time to consider moving ahead with planned capital improvement projects or refinancing prior debt. In 2015, the CSDA Finance Corporation facilitated financings totaling more than $20 million for special district projects and purchases. Below are some examples of recently closed financings: Rancho Simi Recreation & Park District Administration building - $7,500,000 Emerald Bay Service District Capital projects - $5,000,000 Feather River Recreation & park District Refinancing - $4,000,000 Bodega Bay Public Utility District System improvements - $3,955,000 East Niles Community Services District Land purchase - $285,000 Aromas Water District Solar installation - $280,000 If your agency has a financing need, now is the time to take advantage of interest rates before they go up. Contact the CSDA Finance Corporation for a no-obligation quote today – 877.924.2732 or www.csdafinance.net.

California Special District – January-February 2016

Money matters [continued] • Understand the utility providers’ rate structures to maximize project returns. A frequently overlooked way to improve project returns is to leverage specific tariff and rate provisions to maximize savings. For example, in some cases customers become eligible for special rate programs, or can be reclassified into a different rate class, simply by reducing a small portion of their energy load, rather than a more substantial and costly portion of their load. In other cases, superior returns can be achieved by focusing on eliminating only a customer’s “high-cost” electricity, while leaving less expensive electricity usage unchanged. Equipment vendors have little or no knowledge of these opportunities, and have no incentive to learn, because often they result in smaller investments in energy efficiency equipment. • Consider many available financing options. Customers often cite “inadequate funds” as one of the chief obstacles to implementing energy efficiency projects. This is surprising, because in California today there are many attractive financing options, especially for public entities. For example, the state’s major utilities offer interest-free loans of up to $250,000 per meter for qualifying efficiency projects. For larger projects, the California Energy Commission periodically offers loans up to $3 million at rates as low as one percent. Various vendors and financing companies will advance funds at slightly higher rates. There are pros and cons that must be evaluated for each of the various options, but the bottom line is that financing is available to help projects get implemented. • Take advantage of rebates and incentives whenever they are available. For many years, California’s utilities and regulators have offered rebates and incentives to encourage the adoption of energy efficient technologies. With the aggressive efficiency goals set in SB 350, the availability of these discounts, and their potential impact, is likely to increase for the foreseeable future.

• Verify actual savings for at least the first year after an energy efficiency project is completed. In many cases, customers have only a vague idea of how their energy efficiency measures are performing. This can be a costly oversight, because vendors should be held accountable for achieving the reductions promised in their proposals. Additionally, before approving new energy efficiency investments, customer decisionmakers rightly will want accurate information on the impact of prior decisions. As a result, any organization hoping to make significant progress in reducing energy consumption must have a system in place that adequately verifies past results. Energy efficiency projects are significant, complex investments that justify considerable fact-finding, evaluation, and analysis. It is not enough simply to issue an RFP and then select a qualified vendor, because the vendor typically is focused on selling and installing a particular solution, rather than maximizing the customer’s return on every energy dollar spent. Focusing on maximizing returns is the intelligent way to pursue energy efficiency, and will be critical in helping California meet the ambitious goals laid out in SB 350. Without this focus, the state’s utility customers, including special districts, will get less than they should from their energy efficiency investments. Michael Kerkorian is the founder and Managing Member of Utility Cost Management LLC (UCM), a Fresno-based firm that has reduced utility costs by more than $150 million for thousands of California utility customers since 1991. UCM is an Endorsed Affiliate of CSDA, and has worked with more than 90 CSDA member districts since 2008.

Utility Cost Management (UCM) has generated millions in refunds and ongoing savings for special districts by reducing electricity charges. UCM’s services include an in-depth review of rates and tariffs on electricity bills to identify costsaving and refund opportunities. They work on a contingency fee basis and are compensated only when their clients realize savings or refunds. UCM offers CSDA members a 16 percent savings on their analysis and recovery services.

Nail down your districtâ&#x20AC;&#x2122;s financing needs in 2016! www.csdafinance.net

A proud California Special Districts Alliance partner. California Special District â&#x20AC;&#x201C; January-February 2016

[What’s so special]

Singing in the Shower To help spread the message about water conservation, The Metropolitan Water District of Southern California (Metropolitan) wanted to make sure to engage with as many members of the community as possible. One way they sought to do so was creating its own streaming radio stations. The stations had one main theme – water – and, because the goal was conservation, every song was under five minutes long, in order to help community members time their showers. California Special District asked Metropolitan to discuss the stations, their effectiveness, and the other ways it worked to spread a message of conservation as widespread and as innovatively as possible. Tell us about the Water Lover’s station on Pandora. What is it designed to do? What music is played on the station? By carving out a relatively modest piece of our overall “Let’s All Take a Turn” water conservation advertising budget, Metropolitan Water District was able to create two water lover music playlists, one for Pandora Radio and one for Uforia, a Spanish language streaming station. The two services ran for about six weeks in the late summer and reached thousands of listeners. The idea was two-fold: to create stations with about 100 songs that all had something to do with water – everything from Waterfalls (TLC), Set Fire to the Rain (Adele), Bridge Over Troubled Water (Simon & Garfunkel), Purple Rain (Prince), Water Runs Dry (Boyz II Men), Have You Ever Seen the Rain (Creedence Clearwater Revival), and many more. The second part was to make sure all these songs were less than five minutes long so we could encourage people to finish their showers before the song ends as a way to save water during the historic drought.

Sue Blake Jan Sims Executive Metropolitan’s Manager, Director External Affairs Group

Metropolitan Water District of Southern California Established: Size: Population:

1928 Serves 26 member public agencies in Los Angeles, Ventura, Orange, Riverside, San Bernardino, and San Diego counties 19 million

It was a win-win for Metropolitan because advertising on these channels cost less than a traditional media buy on radio stations and reached a large audience, making it an extremely good value. We were able to optimize and measure by total listenership, length of listening session and skip rates, all of which exceeded the baseline metrics and industry standards with nearly half a million impressions. As an added bonus, the campaign also generated an enormous amount of press coverage and earned media, ranging from stories in the LA Times to Ad Age to the University of Southern California’s Daily Trojan newspaper.

How did the idea for the station develop?

Location: Regional water wholesaler to Southern California Website: www.mwdh2o.com Budget: $1.5 billion

Southern Californians replace their thirsty lawns with beautiful California-friendly landscapes. Once fully implemented, this will remove 175 million square feet of turf – or about 3,000 football fields. In the end, that alone will save 70 million gallons of water a day. We have similarly impressive programs for business and other high-volume water users. In our media campaign, we unleashed a lot of creative energy to attract attention and cut through the clutter. For example, our television commercial transformed several everyday home and business settings into a clever set of stories about water

Our multi-lingual advertising campaign used traditional media including television commercials, live radio reads, and billboards. But Metropolitan knew it had to reach further and get its message to more culturally and regionally diverse audiences of all ages. We looked for creative ways to do that using digital, social, and online advertising. Many of our staff members use streaming music to listen to their favorite artists, and from that evolved the idea of a Pandora station that featured only songs about water. By taking advantage of the targeting capabilities of streaming music services we were able to reach listeners by age, cities, lifestyle, and listening habits. This presented a unique way to reach culturally diverse millennials and baby boomers throughout Southern California where the water saving message was essential to meet the state’s first-ever mandates in water reductions. To our knowledge this is the first time a water agency has used Pandora and Uforia to spread the water-saving message.

What are other innovative ways the district is encouraging water conservation? There is so much progress to talk about. Metropolitan and its member agencies are leading the state in innovative ideas, programs, and planning. These efforts have helped Southern Californians dramatically reduce water usage over the past two decades. One of the biggest programs this past year was our rebates. In late spring, the board approved $450 million to fund the nation’s largest water conservation program. In addition to helping the region’s residents and businesses pay for new water saving toilets, washers, and sprinkler devices, we helped tens of thousands of

California Special District – January-February 2016

Continued on page 42

PREVAILING WAGE & LABOR COMPLIANCE     

SB 854 Training State/Federal Funded Projects Review Certified Payroll Contractor/Subcontractor Compliance Apprenticeship Compliance

Ask us a question for free with CSDA’s Consultant Connection COOK{ RRR|>N?<|I@O >JINPGO<IO~>JII@>ODJI www.ccmilcp.com  650-522-4403  info@ccmilcp.com  CSDA Member

Singing in the Shower [continued] conservation, including a cat that turned off the faucet while his owner was brushing her teeth. Another way we boosted the visibility of the campaign was by covering the iconic giant rooftop sign on Randy’s Donuts in Inglewood with the centerpiece red knob of our Turn campaign and inviting the community to make pledges to use less water (and get a free delicious donut!) The event featured the best of both communication worlds – person-to-person coupled with widespread media coverage to promote understanding of Metropolitan’s water conservation program. But these are just a few of the examples. People can find out more on our website or by contacting us.

The district is working on a plan for what may be the largest recycled water program in the world. What would the program entail, if approved? We are exploring the potential of a water purification project to reuse water to recharge regional groundwater basins. It’s a partnership with the Sanitation Districts of Los Angeles County and the initial phase, if approved by both boards, would see the construction of a 1 million-gallon-per-day demonstration project at the plant site. The first full-scale operational phase would

produce about 67,000 acre-feet of recycled water per 42

year and construct about 30 miles of distribution lines to replenish groundwater basins in Los Angeles and Orange counties. It represents a new, drought-proof supply for Southern California and since groundwater supplies are about one-third of our region’s overall water needs, this is a big opportunity.

What’s the status of the program plans now? Both the Metropolitan and Sanitation Districts boards have approved an agreement for feasibility studies and the demonstration project. Later this year both boards will consider approval for construction of the full-scale demonstration project.

Are there any other water conservation plans the district is working on? Metropolitan is squarely focused on an “all of the above” strategy for meeting the water needs of this growing region. There’s no single answer, no silver bullet. We need to look at everything – conservation, recycling, groundwater management, watershed protection, desalination, shoring up our imported supplies from the Colorado River and the California WaterFix that improves conveyance and protects the ecosystem in the Sacramento-San Joaquin Delta. It’s an exciting and challenging time for Metropolitan and we are poised and prepared to continue leading with sound policies, investments, planning, and innovation.

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Community Connections [continued]

spatial orientation, respectively. The play area supports the integration of all senses necessary to support a childâ&#x20AC;&#x2122;s developmental growth. All seven senses were considered in all aspects of the park design, including colors, textures, planting selections, equipment, and shade and picnic structures. There are graduated levels of physical options and activities promoting pressure, stretching, jumping, spinning, and balance to promote physical development. There are strategically-placed multi-use equipment, bucket swings, shade structures, and sitting locations to promote social interaction and inclusion. Playground elements include interactive language panels with braille, therapeutic rings, and a Nature Discovery Play House. Completely accessible swings have been provided for children

with spinal disabilities. Also, the entire main playground structure is connected by ADA ramps, and barriers were carefully avoided. Custom benches, picnic tables, and tiered sand beds were designed to meet the social and physical needs of all user groups. Next to the structure is a space for children to create music. Sensory musical elements such as contrabass chimes, tuned drums, and a Pegasus instrument provide for exploratory musical play and musical therapy.

supports, and river rock building facades were incorporated. Custom shade structures and grass and animal art in the walls and hidden throughout the park were added to mirror the area wildlife. Larger shrubs and perennials were also added to the seed mix to provide habitat and feeding sinks for voles and other wildlife. This was observed to be particularly effective as many species of birds, reptiles, and mammals have been noted throughout the park.

The park is also adjacent to a preserved area of natural landscape and was designed to emulate Northern Californiaâ&#x20AC;&#x2122;s foothill landscape. Native plant species and no-mow grasses were planted and local boulders, salvaged redwood logs and nature-themed design features including sandblasted grasses, mounded hills, cattail

Sunridge Park received the 2014 Innovative Project of the Year award for a large district by the California Special Districts Association (CSDA) and the 2015 Award of Distinction for an Outstanding New Facility award for a large district by the California Association of Recreation and Park Districts (CARPD).

PRSRT STD U.S. Postage PAID Permit No. 316 Sacramento, CA

158617CWW_CSDA_object_advert_1_22_Linop.pdf

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