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sustainable, and affordable provision, sale, management and delivery of surface water,
groundwater, and recycled water for municipal, industrial, domestic, and other purposes
at retail and wholesale throughout SCV Water and to do so in a manner that promotes
the sustainable stewardship of natural resources in the SCV. The boundary of SCV Water
is codified in the Act and is the same as the former CLWA boundary as of December 31,
2017. Consistent with the requirements of SB 634, LAFCO will confirm the SCV Water
boundary in its determination on the application for conditions.

As described in more detail below, the Act creates a specific governance structure for
SCV Water, including details of board composition and elections, boundaries for electoral
divisions, and provisions for decision-making, among others. The Act also gives SCV
Water a large number of specific powers and authorities, including the central authority
to acquire and sell water at retail and wholesale throughout SCV Water’s entire service
territory. The Act also gives SCV Water authorities and powers from the County Water
District Law (commencing with Section 30000 of the Water Code).

LAFCO’s Role is Defined by SB 634
The Act defines a specific role for the Local Agency Formation Commission of Los
Angeles County (LAFCO). Specifically, Section 29 of the Act requires SCV Water to
submit an application for conditions (Application for Conditions) on or before January 31,
2018 to LAFCO, which must include a copy of the Act, a map and description of the
boundaries of SCV Water, and a plan for providing services (Plan) that includes
information described in Government Code section 56653, if applicable. The Act also
requires the Plan to address Valencia Water Company (VWC) and requires VWC be
dissolved and its assets, property, liabilities, and indebtedness be transferred to SCV
Water.

Section 29(b) of the Act requires LAFCO to hold a public hearing within 60 days of the
submittal of SCV Water’s Application for Conditions. LAFCO is further required to prepare
a written report that may include terms and conditions for the new entity. Any specific
conditions in the written report must not conflict with provisions of the Act and must be
consistent with Government Code Sections 56853 and 56886. The Act also prohibits
LAFCO from imposing a condition that would require a protest proceeding or election.
Within 30 days of the public hearing, the Act requires LAFCO to approve a final written
report.

In addition to the above, SCV Water must, as part of its Application for Conditions, submit
a list of the functions and classes of service that were exercised by CLWA and NCWD as
of December 31, 2017. LAFCO is required to certify such functions and classes of service
and any that are not certified by LAFCO must be approved by LAFCO before they may
be exercised by SCV Water in the future.

SCV Water Plan for Services Page 5