Agenda Item No: L.1
AGENDA REPORT
DATE: June 17, 2025
TO: Chair and Board
FROM: David Gassaway, PVMMD District Manager
SUBJECT: Resolution PVMMD 2025-02 PW Approving FY 2025 -2026 PVMMD Budget and Assessments
Approving the Fiscal Year 202 5-2026 Budget and Ordering the Levy and Collection of the Fiscal Year 2025-2026 Assessments for the Paradise Valley Maintenance and Monitoring District
Funding Source: $103,400; Paradise Valley Maintenance and Monitoring District Fund
Contact: Chris Lewis, (707) 428-7089
RECOMMENDED ACTION
Hold public hearing and adopt resolution.
STATEMENT OF ISSUE
The adoption of this resolution will approve the fiscal year (FY) 202 5-2026 budget and provide for the levy and collection of the annual assessments within Paradise Valley Area “I,” “K,” and “L” for geologic monitoring, inspection, and repair within the Paradise Valley Maintenance and Monitoring District (PVMMD or District).
DISCUSSION
Background
The City adopted Resolution No. 2010-188 and formed the PVMMD, a geologic hazard abatement district, in accordance with Division 17 of the California Public Resource Code (PRC), to fund the prevention, mitigation, abatement, and con trol of geologic hazards in the Paradise Valley development areas known as “I ,” “K,” and “L.” There is a total of 288 residential units in these areas.
On July 5, 2022, the PVMMD Board adopted Resolution No. PVMMD 2022 -01 approving an updated Plan of Control, Reserve Fund Study, and Engineer’s Report for the District.
The initial Plan of Control was adopted in 2010 prior to the development of the properties within the District, and the updated document reflects the present nature and scope of District services.
The original Reserve Fund Study, developed in 2018, established a target reserve fund balance of $1,700,000 (in FY 2017 -2018 dollars). The 2022 Reserve Fund Study incl uded updated metrics, resulting in a new target reserve fund balance of $1,570,000 (in FY 2022 -2023 dollars). After adjustments for inflation, the FY 2025-2026 target reserve fund balance is $1,713,558.
The new Engineer’s Report represents as -built condit ions and a re -evaluation of the special benefit analysis. The updated special benefit analysis resulted in a redistribution of costs among property owners and new maximum annual assessment rates for each residential product type.
Maximum Annual Assessment Rates and Consumer Price Index Reference
The maximum annual assessment rates are automatically adjusted annually to reflect the San Francisco-Oakland-Hayward Consumer Price Index (CPI) for All Urban Consumers.
Since the District’s formation, the maximum annual assessment rates for each new FY have been adjusted using the 12-month CPI from June-to-June of the two fiscal years immediately preceding the FY in which the adjusted maximum annual assessment rates take effect (e.g. the maximum annual assessmen ts rates for FY 2024 -2025 were adjusted using the 12 -month CPI from June 2023 to June 2024).
This practice causes administrative inefficiencies since the annual approval process for maximum assessment rates, assessment levies, and budget commences in early spring each year, and the Bureau of Labor Statistics does not publish the June-to-June CPI until July 15 of each year.
To eliminate inefficiencies, beginning with FY 2025-2026, the maximum annual assessment rates for each new FY will be adjusted using the annual CPI for the full calendar year immediately preceding the FY in which the adjusted maximum annual assessment rates take effect (e.g. the maximum annual assessments rates for FY 2025 -2026 will be adjusted using the annual CPI for the full 2024 calendar year).
The change to the CPI reference month and year is not co nsidered an “increase” (as defined by Government Code Section 53750) to the maximum annual assessment rates approved during the 2010 District formation. Therefore, no Proposition 218 balloting process is required.
Staff and the PVMMD Resident Ad Hoc Committee met on April 11, 2025. The Ad Hoc Committee supports the CPI reference change.
Based on the 2024 annual CPI of 2.76%, the adjusted FY 2025-2026 maximum annual assessment rates are as follows:
Development
Area
Development
Name Residential 'Product Type'
FY 2025-
2026
Maximum
Assessment
Number of
Residential
Units
I The Ridge Villas Apartments $159.35 30
I The Ridge Villas Apartments (Slope) $512.98 20
I The Ridge Cottages $198.64 14
I The Ridge Cottages (Slope) $517.34 6
K Estates Single-Family Residences $389.64 124
K Estates Single-Family Residences (Slope) $1,399.22 26 L Paradise 360 Single-Family Residences $198.64 58
L Paradise 360 Single-Family Residences (Slope) $567.55 10 Total Residential Units 288
FY 2025-2026 Budget, Levy, and Fund Balance
The proposed FY 2025 -2026 budget for operations and maintenance is $103,400 , and the FY 2025-2026 revenue is $100,542, which includes $83,894 of assessments and $16,648 of interest revenue.
The projected FY 2025-2026 year-end fund balance is $1,661,924, which is $51,634 less than the FY 2025-2026 target reserve fund balance of $1,713,558.
Although the total FY 2025 -2026 maximum assessment levy is $122,817, at the April 11, 2025, meeting with the PVMMD Reside nt Ad Hoc Committee, the City agreed to levy FY 2025 -2026 assessments for operations and maintenance expenses only. This will allow for a transition period during which PVMMD property owners may prepare to pay the necessary assessment rates (up to and including the maximum assessment rates) in future years to meet annual operations and maintenance expenses and the applicable target fund balance reserve amount.
The proposed FY 2025-2026 levy for each residential type is as follows:
Development
Area
Development
Name Residential 'Product Type'
FY 2025-
2026
Proposed
Levy
I The Ridge Villas Apartments
Villas Apartments (Slope) $159.35
I The Ridge Cottages
Cottages (Slope) $198.64
K Estates Single-Family Residences
Single-Family Residences (Slope) $389.64
L Paradise 360 Single-Family Residences
Single-Family Residences (Slope) $198.64
The proposed budget, assessments to be levied against each assessable parcel, and a description of the method used in formulating the assessments for FY 2025-2026 are included in the FY 2025- 2026 Supplement to the 2022 Engineer’s Report as Attachment 3.
The PRC Sections 26650 et seq. require the PVMMD Board to hold a public hearing and adopt the resolution attached to grant final approval of the FY 202 5-2026 budget and authorize the levy and collection of the FY 2025-2026 assessments as described above.
FINANCIAL IMPACT
The proposed FY 2025-2026 budget for PVMMD operations and maintenance is $103,400, which will be paid from the PVMMD Fund (Fund 186).
PUBLIC CONTACT/ADVISORY BODY RECOMMENDATION
Staff provided the proposed FY 2025-2026 budget and assessment levy to the PVMMD Resident Ad Hoc Committee on April 11, 2025. A notice w as mailed to all District property owners during the last week of May 2025 to notify them of the Board’s intent to levy FY 2025-2026 assessments, as required by Section 26652 of the PRC.
ALTERNATIVE ACTION
If the Board has any questions regarding the adoption of this resolution, this item may be rescheduled until the next board meeting. However, not approving this resolution may prevent the District from collecting assessments for the 2025-2026 tax year.
COORDINATED WITH
City Attorney’s Office
STAFF CONTACT
Chris Lewis, Sr. Management Analyst
(707) 428-7089
[email protected]
ATTACHMENTS
Attachment 2: Proposed Resolution
Attachment 3: Exhibit A
Attachment 3: FY 2025-2026 Supplement to the 2022 Engineer’s Report