Twelve-month status report on LAFCo Municipal Service Review (MSR) recommendations for the Knights Landing Community Services District (CSD) and update regarding the feasibility of a regional CSD 

Receive status updates from staff and the CSD General Manager. Direct staff to re-evaluate in one year CSD management for the feasibility of a regional CSD with no LAFCo update required.

None.

The MSR for the Yolo CSDs was adopted on January 28, 2021. At this hearing, the Commission directed staff to return in six months with a status report on the CSD's implementation of LAFCo's MSR recommendations. At the July 22, 2021 meeting, LAFCo directed staff to return in 12 months with an update on: (1) the status of MSR recommendations for the Knights Landing CSD; and (2) the feasibility of a regional CSD.

A table listing the recommendations and status information for the Knights Landing CSD is attached. Leo Refsland, the General Manager for both Knights Landing and Madison CSDs will be in attendance for this discussion.

The Knights Landing CSD was the CSD of greatest concern in the MSR and LAFCo helped broker a shared services contract with the Madison CSD to provide general manager services, which began in July 2020. In the last 18 months, Knights Landing CSD has increased revenue via a rate increase, reduced expenses, and stabilized its finances. Board member training, engagement, and stabilization has also improved significantly. The General Manager reports that during COVID, the CSD lost roughly 10% of its revenue each month because it could not shut off people's water for unpaid bills. Special districts were not recipients of state funding to compensate for this loss. But now, revenues are back on track. 

In March 2021, Leo Refsland also became the General Manager of the Cacheville CSD via contract but soon discovered three CSDs was too much to oversee effectively. So in July 2022, the Cacheville CSD instead began contracting with the Yolo County Flood Control and Water Conservation District (YCFCWCD) staff for general manager services. This transition is currently in process. 

Due to COVID, taking on three CSDs, and suffering a significant health setback, Mr. Refsland was unable to advance a strategic conversation regarding potential CSD consolidation with each of the CSD boards. Currently, there are a number of moving pieces to this puzzle:

• The new YCFCWCD contract for Cacheville CSD may turn out to be an effective service model, potentially worthy of expanding to more CSDs;
• The Esparto CSD has a new general manager that may be more open to providing services and/or consolidation; 
• Continued work to advance the Knights Landing CSD; and 
• LAFCo's adopted MSR Update schedule has the CSDs scheduled for study in two years, during fiscal year 2024/25.

Staff recommends LAFCo request staff to re-evaluate the situation in one year and begin outreach conversations with the CSD boards of directors about the upcoming FY 2024/25 CSD MSR and governance recommendations including the feasibility of a regional CSD. The Knights Landing CSD is stable and additional LAFCo updates before the 2024/25 MSR are not needed.