GHAD MEETING AGENDA PACKET - Laserfiche WebLink

Page 2 of 4 neighborhood reveals hillside areas that are unsuitable for housing due to underlying geologic issues that are costly for a developer to address. These unsuitable areas are set aside as open spaces. The developer is then obligated to construct drainage infrastructure and similar features designed to lessen the likelihood of landslides and address the impact should a landslide occur. GHAD formation also requires a Plan of Control that identifies the drainage infrastructure to be monitored and maintained and assigns expected costs for this work. The Plan of Control also recommends a reserve account funded by the developer to be used in the event damage occurs. The City Council has been designated as the Board of Directors for each GHAD and is responsible for oversight of GHAD funding to ensure assessments are only utilized as prescribed in the Plan of Control. The Board must also authorize annual assessment increases based on submitted Engineer’s Reports. Due to California Proposition 218 from November 1996, assessment increases must follow the escalation clause within each Plan of Control, limiting the increases to not more than two percent each year. This procedure requires the Board of Directors to: 1. Convene as the Board for the Laurel Creek, Moller Ranch, Lemoine Ranch, and Oak Tree Farm GHADs. 2. Adopt a resolution approving the Engineer's Reports for each GHAD; approving and declaring the Board's intention to assess the properties within the GHADs for the costs to operate and maintain the infrastructure. 3. Set June 18, 2024, as the date of the public hearing for the Board to hear protests concerning the proposed assessments. 4. Direct the Clerk of the Districts to mail a notice of the public hearing to the owners of real property located within each GHAD. DISCUSSION The annual assessments can be adjusted yearly according to the Construction Cost Index (CCI) for the San Francisco Bay Area as published by Engineering News Record (ENR), a nationwide construction trades magazine. Because the CCI exceeded two percent during the past year (7.8%), the Engineer’s Reports recommend a two percent assessment increase for each GHAD. The table below lists (A) the number of parcels within each GHAD that are subject to assessment, (B) the proposed assessment amount for the coming year, (C) the projected total revenue, (D) the anticipated operational expenses, (E) the excess revenue to be deposited to reserve accounts, and (F) the total current fund reserve. The reserve assumes a significant repair of the hillside slopes will be needed once every 10 years. For the upcoming year, a portion of each reserve account will be utilized to fund a deferred maintenance project based on deficiencies discovered during bi-annual monitoring. Although the reserve accounts will continue to have positive balances, needed upgrades to drainage infrastructure will eventually deplete the reserves such that supplemental funding may be needed in the future to respond to a significant geologic event. To address this, staff will develop a plan intended replenish the reserve funds which will likely include an increase in the proposed annual assessment. Page 4 of 30