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Utility Alternatives Study

Updated January 24, 2019

The City recently undertook a study to investigate possible alternative structures for the City's water and wastewater utility services. The study was undertaken because over the last decade it has become increasingly more complex and costly to provide water and wastewater services. Many cities have opted for alternatives to continuting to provide these services themselves. In April 2016, the City Council directed staff to submit a request to the Orange County Local Agency Formation Commission (LAFCO) to conduct a Municipal Services Review (MSR) for its determination and recommendations for a restructuring of the City's water and wastewater utilities by annexing the City's utilities to one of the nearby special districts (South Coast Water District, Moulton Niguel Water District, or Santa Margarita Water District). The application was submitted to LAFCO in August 2016, and the final MSR was approved by the LAFCO Commission on October 10, 2018. The final focused MSR is available at the following link HERE.

The following is a summary of the restructuring options considered by the City Council and the City's Utilities Commission.

The City Council established four goals to guide the consideration of a change in organization for the City's utilities:

1. Bring rate stability or rate relief to  utility customers.

2. Continue high levels of customer service

3. Continue representation for San Juan Capistrano residents, and

4. Protect the City's substantial investment in utility infrastructure.


At the direction of City Council, the San Juan Capistrano Utilities Commission drafted evaluation criteria for the Council's use when considering the feasibility of proposals submitted by public water and wastewater service providers interested in serving San Juan Capistrano. At its regularly scheduled public meeting on July 8, 2016, the Commission adopted its selection criteria. These criteria were then considered by the City Council at its meeting on August 2, 2016, at which time the City Council approved a revised version. 

A summary of the criteria as approved and modified by direction of the City Council is provided at the following link HERE. These criteria, along with an application for a Municipal Services Review were submitted to the Orange County Local Agency Formation Commission (LAFCO) on August 22, 2016, for its review and evaluation. 


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