ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915AOC1 C City of Santa Maria and County of Santa Barbara Richards Ranch Fiscal Impact Study Table 4
City Net Fiscal Impacts( annual recurring)
Richards Ranch Fiscal Impact Analysis
Fund Amount
General Fund
Property Tax 368,217
Property Tax In Lieu of VLF 288, 926
Sales and Use Tax 186, 435
Public Safety Tax 641
Franchises 41, 380
Business Licenses 2, 602
Property Transfer Tax 11, 467
Licenses, Permits& Fees 1, 310
Revenue from Other Agencies 2, 326
Recreation Programs 1, 850
Recreation Income 2, 964
Aquatics 2, 697
Other Misc. 713
Measure U Transaction and Use Tax 164, 260
Total General Fund Revenue 1, 075,787
Other Revenues
County Measure A N/ A
State Gas Tax 51, 503
Total Other Revenues 51,503
Total Revenues 1, 127,290
Expenditures
Police 552, 015
Fire 243,617
Public Works 31, 980
Recreation and Parks 141, 087
Community Development 16, 108
General Government 49,493
Total Expenditures 1, 034, 301
Net 92,989
Sources: The Natelson Dale Group, Inc.; Willdan Financial Services Willdan Financial Services, 2025
ShicWI LLDAN
FINANCIAL SERVICES
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915AOC1 C City of Santa Maria and County of Santa Barbara Richards Ranch Fiscal Impact Study Table 5 details the estimated revenues and expenditures from the project for the County of Santa Barbara. Although the analysis assumes annexation ( and therefor provision of primary services by the City of Santa Maria), there are still County expenditures that reflect County services provided to all residents within the County ( as opposed to certain County services, such as public protection, that are provided primarily to residents of unincorporated areas). As shown in Table 5, Willdan projects a surplus to the County of 276,000 annually, primarily from the retention of significant property tax revenues and the public safety sales tax.
10,( WI LLDAN
FINANCIAL SERVICES
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915AOC1C City of Santa Maria and County of Santa Barbara Richards Ranch Fiscal Impact Study Table 5
County Net Fiscal Impacts( annual recurring)
Richards Ranch Fiscal Impact Analysis
Fund Amount
General Fund
Property Tax 588, 439
Property Tax In Lieu of VLF 205, 683
Property Transfer Tax 11, 467
Fines, Forfeitures& Penalties 11, 265
Use of Money and Property 7, 619
Intergovernmental Revenue State 704
Intergovernmental Revenue Federal
Public Safety Sales Tax 80, 077
Total General Fund Revenue 905, 253
Expenditures
Policy and Executive 32,434
Public Safety 324, 151
Health and Human Services 109, 469
Community Resources and Public Facilties 84, 259
General Government and Support Services 75, 636
General County Programs 3, 481
Total Expenditures 629, 430
Net 275, 823
Sources: The Natelson Dale Group, Inc.; Willdan Financial Services Willdan Financial Services, 2025
W I LLDAN
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915AOC1 C City of Santa Maria and County of Santa Barbara Richards Ranch Fiscal Impact Study Project Demographics
Table 6 details the estimated residents and employees for the project. The model uses two different measures of population for the purposes or estimating fiscal impacts. The first, residents, is simply the number of residents living in the new units. This figure is used to estimate revenues that are allocated by population, such as gas tax, and for services that are primarily for residents, such as parks and recreation ( for the City) or health and human services ( for the County). As second measure, " service population," is the sum of residents and 50 percent of the estimated new employees. This measure is used for proportional estimates for revenues and expenditures that are expected to be impacted by both new residents and new businesses, such as police and fire protection. Willdan has increased the resident estimate from the Natelson report but the employee estimate remains unchanged.
Table 6
Project Population
Richards Ranch Fiscal Impact Analysis
Item Amount
Residents 1, 303
Empoyees 191
Employee Weighting Factor 50%
Total Service Population 1, 398
Sources: The Natelson Dale Group, Inc.; Willdan Financial Services Willdan Financial Services, 2025
Santa Maria Revenue Projections
Table 7 below details the revenue calculations for the City of Santa Maria. The table summarizes the City budget and provides an estimation methodology where appropriate.
In many cases the model assumes proportional growth in revenue, using the current ratio of revenue to population in the City to estimate the additional revenue from new development. In some case the methodology is " case study" in which case the calculation is provided on a subsequent table.
ShicWI LLDAN
FINANCIAL SERVICES
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915AOC1 C City of Santa Maria and County of Santa Barbara Richards Ranch Fiscal Impact Study Table 7
City of Santa Maria Revenue Calculation
Richards Ranch Fiscal Impact Analysis
Non- Recurring Methodology/ Units of Unit Revenue Projected Percent Item Revenue Recurring Not Projected Projected Measure Amount Factor Units Variable Amount Taxes
Property Secured 14, 304, 503 $ - $ - $ 14, 304, 503 Case Study N/ A N/ A N/ A N/ A 368, 217 Property Unescured 506, 424 - 506, 424 Not Projected N/ A N/ A N/ A N/ A N/ A In Lieu of VLF 10, 884, 750 10, 884, 750 Case Study N/ A N/ A N/ A N/ A 288, 926 Sales& Use 31, 793, 709 - 31, 793, 709 Case Study N/ A N/ A N/ A N/ A 186, 435 Sales& Use- Safety 394, 157 - 394, 157 Case Study N/ A N/ A N/ A N/ A 641 Franchises 4, 979, 094 - 4, 979, 094 Per Service Population 134, 608 36. 99 1, 398 80% 41, 380 Transient Occupancy 4, 273, 426 - 4, 273, 426 Not Projected N/ A N/ A N/ A N/ A N/ A Busincess License 818, 500 818, 500 Per Employee 48, 000 17. 05 191 80% 2, 602 Property Transfer 310, 896 - 310, 896 Case Study N/ A N/ A N/ A N/ A 11, 467 Subtotal Taxes 68, 265, 459 $ - $ 4, 779, 850 $ 63, 485, 609 899, 668 Licenses, Permits& Fees
Construction Permits 3, 070, 974 $ - $ 3, 070, 974 $ - Not Projected N/ A N/ A N/ A N/ A N/ A Taxi& Mobile Home Fees 24, 700 24, 700 Not Projected N/ A N/ A N/ A N/ A N/ A Criminal Fines& Penalties 157, 660 157, 660 Per Service Population 134, 608 1. 17 1, 398 80% $ 1, 310 Subtotal 3, 253, 334 $ - $ 3, 070, 974 $ 182, 360 1, 310 Revenue from Use of Money and Property
Interest Earned 2, 285, 796 $ - $ 2, 285, 796 $ - Not Projected N/ A N/ A N/ A N/ A N/ A Rental Income 673, 717 - 673, 717 Not Projected N/ A N/ A N/ A N/ A N/ A Subtotal 2, 959, 513 $ - $ 2, 959, 513 $ -
Revenue from Other Agencies
Motor Vehicle License Fees $ 112, 660 $ - $ - $ 112, 660 Per Capita 110, 608 1. 02 1, 303 1 1, 062 Homeowners' Tax Relief 50, 416 - 50, 416 Per Capita 110, 608 0. 46 1, 303 1 475 Property Tax In Lieu 94, 900 94, 900 Per Service Population 134, 608 0. 71 1, 398 1 789 Mandated Costs 43, 401 43, 401 Not Projected N/ A N/ A N/ A N/ A N/ A P. O. S. T. 43, 773 - 43, 773 Not Projected N/ A N/ A N/ A N/ A N/ A Other Subventions 141, 336 - 141, 336 Not Projected N/ A N/ A N/ A N/ A N/ A Subtotal 486, 486 87, 174 $ 399, 312 2, 326
Charges for Service
Recreation Programs 196, 260 $ - 196, 260 Per Capita 110, 608 1. 77 1, 303 1 1, 850 Recreation Income 314, 478 - 314, 478 Per Capita 110, 608 2. 84 1, 303 1 2, 964 Aquatics 286, 200 286, 200 Per Capita 110, 608 2. 59 1, 303 1 2, 697 Zoning& Subdivision Fees 690, 950 690, 950 Not Projected N/ A N/ A N/ A N/ A N/ A Law Enforcement 979, 921 979, 921 Not Projected N/ A N/ A N/ A N/ A N/ A Fire Services 1, 686, 005 - 1, 686, 005 Not Projected N/ A N/ A N/ A N/ A N/ A Engineering Reimbursements 677, 699 - 677, 699 Not Projected N/ A N/ A N/ A N/ A N/ A Comm. Dev. Reimbursements 312, 400 312, 400 Not Projected N/ A N/ A N/ A N/ A N/ A Weed Abatement Not Projected N/ A N/ A N/ A N/ A N/ A
Services Rendered Other Agencies 1, 085 - 1, 085 Not Projected N/ A N/ A N/ A N/ A N/ A Eng. Plan Check& Inspections 853, 981 853, 981 Not Projected N/ A N/ A N/ A N/ A N/ A Impacted Soils 100, 000 100, 000 Not Projected N/ A N/ A N/ A N/ A N/ A Subtotal 6, 098, 979 $ 1, 544, 931 $ 3, 757, 110 $ 796, 938 7, 511 Other Revenue
Prior Year& Damage Recovery $ 3, 000 $ - $ 3, 000 Not Projected N/ A N/ A N/ A N/ A N/ A Sale of Real Property 4, 250 4, 250 Not Projected N/ A N/ A N/ A N/ A N/ A Sale of Maps, Plans and& Other 134, 660 134, 660 Not Projected N/ A N/ A N/ A N/ A N/ A Other Misc. Revenue 85, 746 - 85, 746 Per Service Population 134, 608 0. 64 1, 398 1 713 OperatingTransfers In 4, 627, 624 - 4, 627, 624 Not Projected N/ A N/ A N/ A N/ A N/ A Cost Allocation Transfers 4, 917, 037 - 4, 917, 037 Not Projected N/ A N/ A N/ A N/ A N/ A Subtotal 9, 772, 317 $ - $ 9, 686, 571 $ 85, 746 713
Measure U
Measure U Tax 26, 715, 000 $ - $ - 26, 715, 000 Case Study N/ A N/ A N/ A N/ A 164, 260 Interest Income 171, 354 - 171, 354 Not Projected N/ A N/ A N/ A N/ A N/ A Subtotal 26, 886, 354 $ - $ 171, 354 $ 26, 715, 000 164, 260 Total General Fund 117, 722, 442 $ 1, 544, 931 $ 24, 512, 546 $ 91, 664, 965 1, 075, 787 Other Fund Revenues
County Measure ASales Tax 7, 456, 129 - 7, 456, 129 Not Estimated N/ A N/ A N/ A N/ A N/ A State Gas Tax 5, 464, 920 5, 464, 920 Per Capita 110, 608 49. 41 1, 303 80% 51, 503 Total Other Fund Revenues 51, 503
Grand Total Revenues 1, 127, 290
Source: The Natelson Dale Group, Inc.; Willdan Financial Services Willdan Financial Services, 2025
WILLDAN
FINANCIAL SERVICES
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915AOC1 C City of Santa Maria and County of Santa Barbara Richards Ranch Fiscal Impact Study Santa Maria Expenditures
Table 8 estimates the expenditures by the City of Santa Maria. For each expenditure item the model calculates the future expenditures from the current ratio of costs on a per capita or per service population basis.
Table 8
City of Santa Maria Expenditure Calulation
Richards Ranch Fiscal Impact Analysis
Methodology/ Units of Unit Revenue Projected Percent
Item Expenditures Measure Amount Factor Units Variable Amount Public Safety
Police 53, 137, 621 Per Service Population 134, 608 395 1, 398 100% 552, 015 Fire 23, 450, 833 Per Service Population 134, 608 174 1, 398 100% 243, 617 Subtotal Public Safety 76, 588, 454 795, 632
Public Works 3, 848, 022 Per Service Population 134, 608 29 1, 398 80% 31, 980 Recreation& Parks 14,970, 631 Per Capita 110, 608 135 1, 303 80% 141, 087 Community Development 1, 938, 203 Per Service Population 134, 608 14. 40 1, 398 80% $ 16, 108 Subtotal 20, 756, 856 189, 175
General Government
Mayor& Council 210, 816 Per Service Population 134, 608 1. 57 1, 398 25% 548 City Attorney 1, 816, 868 Per Service Population 134, 608 13. 50 1, 398 25% 4,719 City Manager 13, 045, 242 Per Service Population 134, 608 96. 91 1, 398 25% 33, 880 Finance 3, 984, 369 Per Service Population 134, 608 29. 60 1, 398 25% 10, 348 SubtotalGeneralGovernment $ 19, 057, 295 49,494
Grand Total Expenditures 116, 402, 605 1, 034, 301
Source: The Natelson Dale Group, Inc.; Willdan Financial Services Willdan Financial Services, 2025
ShicWI LLDAN
FINANCIAL SERVICES
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915AOC1 C City of Santa Maria and County of Santa Barbara Richards Ranch Fiscal Impact Study County of Santa Barbara Revenues
Table 9 below details the revenue calculations for the County of Santa Barbara. The table summarizes the County budget and provides an estimation methodology where appropriate. In many cases the model assumes proportional growth in revenue, using the current ratio of revenue to population in the County to estimate the additional revenue from new development. In some case the methodology is " case study" in which case the calculation is provided on a subsequent table.
Table 9
County of Santa Barbara Revenue Calculation
Richards Ranch Fiscal Impact Analysis
Methodology/ Units of Unit Revenue Projected Percent
Item Revenue Measure Amount Factor Units Variable Amount Property Tax 333, 963, 000 Case Study N/ A N/ A N/ A N/ A 805, 589 Licenses, Permits and Franchises 3, 597, 600 N/ A( unincorporated only) N/ A N/ A N/ A N/ A N/ A Fines, Forfeitures& Penalties 5, 554, 000 Per Service Population 551, 543 10. 07 1, 398 80. 00% 11, 265 Use of Money and Property 3, 756, 500 Per Service Population 551, 543 6. 81 1, 398 80. 00% 7, 619 Intergovernmental Revenue- State
Motor Vehicle In Liue In Excess $ 300, 000 Per Capita 444, 500 0. 67 1, 303 80% 704 Homeowners' Tax Relief 685, 000 Not Estimated N/ A N/ A N/ A N/ A N/ A Stat Off Hwy Mtr. Veh LF 1, 000 Not Estimated N/ A N/ A N/ A N/ A N/ A Subtotal 986, 000 704
Intergovernmental Revenue- Federal 2, 159, 300 Not Estimated N/ A N/ A N/ A N/ A N/ A Charges for Services 21, 972, 700 Not Projected N/ A N/ A N/ A N/ A N/ A Misc Revenue 95, 000 Not Estimated N/ A N/ A N/ A N/ A N/ A Total General Fund Revenue 372, 084, 100 825, 176
Prop 172- Public Safety Sales Tax 48, 831, 700 Case Study N/ A N/ A N/ A N/ A 80, 077 Total Revenues 420, 915, 800 905, 253
Source: The Natelson Dale Group, Inc.; Willdan Financial Services Willdan Financial Services, 2025
ShicWI LLDAN
FINANCIAL SERVICES
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C City of Santa Maria and County of Santa Barbara Richards Ranch Fiscal Impact Study Countyof Santa Barbara Expenditures
Table 10 estimates the expenditures p itu res for the Countyof Santa Barbara. For each expenditure p itu re item the model calculates the future expenditures from the current ratio of costs on aper ca p ita orper servicepopulation basis.
Table 10
County of Santa Barbara Expenditure Calculation
Richards Ranch Fiscal Impact Analysis
Operating Recurring Methodology/ Units of Unit Revenue Projected Percent Item Expenditures Revenues Revenue Measure Amount Factor Units Variable Amount Policy& Executive
Board of Supervisors 4, 142, 600 $ 4, 142, 600 Per Service Population 551, 543 7. 51 1, 398 50% 5, 252 County Executive Office 62, 815, 700 53, 620, 700 9, 195, 000 Per Service Population 551, 543 16. 67 1, 398 50% 11, 656 County Counsel 12, 614, 200 366, 600 12, 247, 600 Per Service Population 551, 543 22. 21 1, 398 50% 15, 526 Subtotal General Government $ 79, 572, 500 $ 53, 987, 300 $ 25, 585, 200 32, 434 Public Safety
District Attorney 34, 344, 300 $ 13, 224, 100 $ 21, 120, 200 Per Capita 444, 500 47. 51 1, 303 50% 30, 956 Probation 70, 195, 300 44, 969, 700 25, 225, 600 Per Capita 444, 500 56. 75 1, 303 50% 36, 973 Public Defender 20, 289, 300 557, 200 19, 732, 100 Per Capita 444, 500 44. 39 1, 303 25% 14, 461 Court Special Services 12, 916, 000 5, 289, 300 7, 626, 700 Per Capita 444, 500 17. 16 1, 303 25% 5, 589 Fire 120, 928, 100 44, 103, 500 76, 824, 600 Per Service Population 551, 543 139. 29 1, 398 50% 97, 389 Sheriff( non custody ops) 109, 045, 400 49, 665, 600 59, 379, 800 Not Estimated N/ A N/ A N/ A N/ A N/ A Sheriff( custody ops) 90, 894, 900 22, 471, 000 68, 423, 900 Per Service Population 551, 543 124. 06 1, 398 80% 138, 784 Subtotal Public Safety 458, 613, 300 $ 180, 280, 400 $ 278, 332, 900 324, 151 Health& Human Services
Public Health 102, 583, 200 $ 87, 758, 600 $ 14, 824, 600 Per Capita 444, 500 33. 35 1, 303 100% 43, 457 Behavioral Wellness 175, 660, 900 171, 167, 600 4, 493, 300 Per Capita 444, 500 10. 11 1, 303 100% 13, 172 Social Services 222, 738, 400 205, 562, 700 17, 175, 700 Per Capita 444, 500 38. 64 1, 303 100% 50, 349 Child Support Services 11, 272, 000 11, 272, 000 Per Capita 444, 500 - 1, 303 100% - First 5, Children& Families 3, 723, 900 2, 873, 600 850, 300 Per Capita 444, 500 1. 91 1, 303 100% 2, 493 Subtotal Health& Human Services $ 515, 978, 400 $ 478, 634, 500 $ 37, 343, 900 109, 469 Community Resources& Public Facilities
Agricultural Commissioner/ W& M $ 7, 912, 800 $ 5, 804, 400 $ 2, 108, 400 Not Estimated N/ A N/ A N/ A N/ A N/ A Community Services 74, 837, 200 41, 925, 000 32, 912, 200 Per Service Population 551, 543 59. 67 1, 398 50% 41, 722 Planning& Development 29, 853, 200 22, 524, 600 7, 328, 600 Per Service Population 551, 543 13. 29 1, 398 50% 9, 290 Public Works 173, 327, 200 147, 100, 900 26, 226, 300 Per Service Population 551, 543 47. 55 1, 398 50% 33, 247 Subtotal Community Resources& P $ 285, 930, 400 $ 217, 354, 900 $ 68, 575, 500 84, 259 General Government& Spport Services
Auditor- Controller 10, 674, 500 $ 1, 407, 000 $ 9, 267, 500 Per Service Population 551, 543 16. 80 1, 398 50% 11, 748 Clerk- Recorder- Assessor 21, 695, 100 7, 042, 600 14, 652, 500 Per Service Population 551, 543 26. 57 1, 398 50% 18, 575 Debt Service 1, 246, 900 1, 384, 900 Not Estimated N/ A N/ A N/ A N/ A N/ A General Services 49, 964, 100 29, 303, 300 20, 660, 800 Per Service Population 551, 543 37. 46 1, 398 50% 26, 191 Human Resources 10, 572, 600 2, 598, 300 7, 974, 300 Per Service Population 551, 543 14. 46 1, 398 50% 10, 109 Information Technology 28, 240, 200 27, 232, 100 1, 008, 100 Per Service Population 551, 543 1. 83 1, 398 50% 1, 278 Treasurer- Tax Collector 9, 579, 200 3, 477, 800 6, 101, 400 Per Service Population 551, 543 11. 06 1, 398 50% 7, 735 Subtotal General Government $ 131, 972, 600 $ 72, 446, 000 $ 59, 664, 600 75, 636 General County Programs
General County Programs 11, 090, 700 8, 345, 100 2, 745, 600 Per Service Population 551, 543 4. 98 1, 398 50% 3, 481 Subtotal General Government $ 11, 090, 700 $ 8, 345, 100 $ 2, 745, 600 3, 481 Total Expenditures 1, 483, 157, 900 $ 1, 011, 048, 200 $ 472, 247, 700 629, 430 Source: The Natelson Dale Group, Inc.; Willdan Financial Services Willdan Financial Services, 2025
yfWi LLDAN
FINANCIAL SERVICES
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915AOC1 C City of Santa Maria and County of Santa Barbara Richards Ranch Fiscal Impact Study Sales Tax Revenues
Willdan has estimated the sales tax revenue that could be generated by the project, detailed in Table 11. For this analysis Willdan has calculated only the revenue from the commercial center. The Natelson analysis estimated both this revenue and the new taxable sales generated by new residents. Willdan believes this approach is too aggressive, as new stores do not themselves necessarily generate new sales and to any new sales to the City would come in significant part from the new residents. As a result, Willdan' s approach to sales tax in mixed- use projects is to calculate both the on- site sales and the resident- generated sales and use the higher figure in its analysis, but not both.
Table 11
Onsite Taxable Sales
Richards Ranch Fiscal Impact Analysis
Land Use Square Feet Sales/ SF Total Sales % Taxable( 1) Taxable Sales Commercial Center 93, 863 250 23,465,750 70. 00% 16, 426, 025 Mini Storage 101, 265 0 0 0 0
Total 195, 128 23,465,750 16,426,025
1) Not all establishments will sell goods, and not all goods sold will be taxable.
Source: The Natelson Dale Group, Inc.; Willdan Financial Services Willdan Financial Services, 2025
WI LLDAN
FINANCIAL SERVICES
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915AOC1 C City of Santa Maria and County of Santa Barbara Richards Ranch Fiscal Impact Study Table 12 calculates the revenue resulting from the onsite sales, both directly from the City' s one percent share of sales tax collections and an allocation of countywide pools.
Table 12
Estimated Sales Tax Revenue
Richards Ranch FiscaL Impact AnaLysis
Item Total
Total Taxable Sales 16, 426, 025
Local Sales Tax Rate 1. 0%
Sales Tax Revenue 164, 260
On- Site Sales Tax Revenue as a Shareo of Total Sales& Use Tax( 1) 86. 5% Estimated Sales Tax Revenue Allocation Generated by Base Sales Tax 22, 175 Total Revenue 186, 435
1) Accordingto HdL and Natelson, 12- 15% of a local jurisdiciton' s total sales and use tax revenue are derived from their share of countywide pools.
Source: The Natelson Dale Group, Inc.; Willdan Financial Services Willdan Financial Services, 2025
INIV1WILLDAN FINANCIAL SERVICES
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915AOC1C City of Santa Maria and County of Santa Barbara Richards Ranch Fiscal Impact Study The City of Santa Maria also has a local tax measure, Measure U, that collects an additional one percent of local taxable sales. Table 13 calculates the Measure U revenue generated by the project.
Table 13
Estimated Measure U Sales Tax Revenue
Richards Ranch Fiscal Impact Analysis
Item Total
Total On- Site Taxable Sales 16, 426, 025
Total Resident Santa Maria Taxable Expenditures
TotalTaxable Sales 16, 426, 025
Measure USalesTax Rate 1. 0%
Total Measure U Sales Tax Revenue 164, 260
Source: The Natelson Dale Group, Inc.; Willdan Financial Services Willdan Financial Services, 2025
W I LLDAN
FINANCIALSEaVICEs
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915AOC1 C City of Santa Maria and County of Santa Barbara Richards Ranch Fiscal Impact Study Table 14 calculates the 0. 5% public safety tax collected and the allocation between the County and the City.
Table 14
Estimated Public Safety Sales Tax Revenue
Richards Ranch Fiscal Impact Analysis
Item Total
Total On- Site Taxable Sales 16,426,025
Total Resident Santa Maria Taxable Expenditures
Total Taxable Sales 16,426, 025
Public Safety Sales Tax Rate 0. 5%
Total Public Safety Sales Tax Revenue 82, 130
County Revenue
County Share of Public SafetyTax 97.5%
County Public Safety Tax Revenue 80, 077
City Revenue
City Share of Public Safety Tax 0.8%
City Public Safety Tax Revenue 641
Source: The Natelson Dale Group, Inc.; Willdan Financial Services Willdan Financial Services, 2025
WfWI LLDAN
FINANCIAL SERVICES
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915AOC1 C City of Santa Maria and County of Santa Barbara Richards Ranch Fiscal Impact Study Property Tax Revenues
The most significant source of revenue from the development of the project is property tax revenue, which is calculated in the following tables. Table 15 details the allocation of the basis ad valorem tax of one percent of assessed value for the proposed project parcel, tax rate area 080-041. The two allocations relevant to the analysis are the Santa Barbara County General Fund, 0001, and the SB County Fire Protection District, 2280. As shown in Table 15, the analysis assumes that twenty-five percent of the general fund tax and fifty percent of the fire district tax will be allocated to the City, with the remainder retained by the County.
Table 15
PropetyTaxAllocation Factors
Richards Ranch Fiscal Impact Analysis
Post Annexation City County Share Post
District Name TRA 080- 041( 1) Allocation( 2) Annexation 0001 Santa Barbara County General Fund 0. 144139 25% 0. 10810425 2140 CSA5 0. 006563
2280 SB County Fire Protecton District 0. 168935 50% 0. 08446750 2400 SB County Flood Cntrl/ Wtr Cnsry 0. 002668
2510 Orcutt Flood Zn 3 0. 005465
2670 North County Lighting District 0. 008701
3050 Santa Barbara County Wtr Agency 0. 003431
3210 Santa Maria Public Airport Dist 0. 011144
3320 Santa Maria Cemetary Dist 0. 005800
4160 SB Mosquito/ Vector Dist 0. 000186
4500 Cachuma Resource Cnsry Dist 0. 000479
7401 Orcutt Union Elem Dist General 0. 235767
8301 Santa Maria Jt HS Dist General 0. 195338
9401 Allen Hancock CC Dist General 0. 051965
9801 County School Srvc Fund 0. 035912
9802 ERAF 0. 123508
Total( 3) 1. 000001 0. 19257175
1) Tax Rate Area
2) Analysis assumes that 25 percent of GF revenue and 50 percent of fire revenue go to City. 3) Figures from Natelson and should add up to exactly 1. Willdan has not had the opportunity to reconcile this number given the compressed time frame of the analysis. The difference is de minimus.
Source: The Natelson Group, Inc.; Santa Barbara CountyAuditor- Controller' s Office Willdan Financial Services, 2025
yfWi LLDAN
FINANCIAL SERVICES
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915AOC1 C City of Santa Maria and County of Santa Barbara Richards Ranch Fiscal Impact Study Table 16 calculates the property tax revenues for the project for the City and County based on the assessed value from Tables 2 and 3 and the allocation factors in Table 15.
Table 16
Estimated Property Tax Revenue
Richards Ranch Fiscal Impact Analysis
Item Amount
Estimated Project Assessed Value 305, 568,475
Base Ad Valorem Tax 1. 00%
Base Ad Valorem Revenue 3, 055,685
City General Fund Revenue, Post Annexation
CityGeneralFundPostERAFShareofAVlax 3.6%
Total City Property Tax Post Annexation 110, 111
City Fire District Revenue, Post Annexation
City Fire District Post ERAF Share 8.45%
City Fire District Property Tax Post Annexation 258, 106 County General Fund Revenue, Post Annexation
County General Fund Post ERAF Share of AVTax 10. 8%
Total County Property Tax Post Annexation 330, 333
County Fire District Revenue, Post Annexation
County Fire District Post ERAF Share of AVTax 8.45%
County Fire District Property Tax Post Annexation 258, 106 Source: The Natelson Dale Group, Inc.; Willdan Financial Services Willdan FinancialServices, 2025
WfWILLDAN FINANCIAL SERVICES
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915AOC1 C City of Santa Maria and County of Santa Barbara Richards Ranch Fiscal Impact Study In addition to the property tax factors, each jurisdiction receives additional revenue in lieu of vehicle license fee (VLF) revenue. This amount is calculated as a proportion of incremental additional assessed value applied to the previous year's VLF revenue. Table 17 calculates the incremental additional VLF swap revenue resulting from the development of the project for the City and the County.
Table 17
Estimated Vehicle License Fee( VLF)/ Propertylax Revenue Richards Ranch Fiscal Impact Analysis
Item Amount
Santa Barbara County
County VLF Swap Revenue( 2024) 74, 128, 000
County AV, FY2023- 24 110, 126, 900, 000
Project Value 305, 568, 475
Percentage Increase over Base AV 0. 28%
IncrementalAdditionalVLFSwapRevenue 205, 683
City of Santa Maria
City VLF Swap Revenue( 2024) 10, 884, 750
CityAV, FY2023- 24 11, 511, 734, 000
Project Value 305, 568, 475
Percentage Increase over Base AV 2. 65%
IncrementalAdditionalVLFSwapRevenue 288, 926
Source: The Natelson Dale Group, Inc.; Willdan Financial Services Willdan Financial Services, 2025
ShicWI LLDAN
FINANCIAL SERVICES
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915AOC1 C City of Santa Maria and County of Santa Barbara Richards Ranch Fiscal Impact Study The City and County collect transfer tax upon the sale of real estate, $ 1. 10 per$ 1, 000 of valuation, divided equally. The fiscal model assumes that for sale residential units will be sold every seven years, and the commercial properties (including rental apartments) every twenty years. Table 18 calculates the average annual revenue that would be received from these transactions.
Table 18
Estimated Property Transfer Tax Revenue
Richards Ranch Fiscal Impact Analysis
Item Residential( TH) Residential( APT) Commercial Total Estimated Property Value 60, 000, 000 191, 894, 895 53, 673, 580 305, 568, 475 Mean holding period( years) 7 20 20
Tax Rate( 1) 0. 055% 0. 055% 0. 055%
Annual Revenue 4,714 5, 277 1, 476 11, 467
1) The City and County Share a transfer tax of$ 1. 10 per$ 1, 000 of valuation.
Source: The Natelson Dale Group, Inc.; Willdan Financial Services Willdan Financial Services, 2025
Integral to the projection of the fiscal impacts of the project to the City and County is an assumption regarding the allocation of the property tax generated by the project. Consistent with the Natelson study, this analysis assumes a split between the City and County of 25%/ 75% for the general fund revenue and 50% each for the fire district revenue, for an overall allocation of 38%/ 62%. These calculations are included in Table 16, above. Additionally, Willdan has estimated the minimum property tax revenue needed for each municipality to be fiscally neutral ( a net impact of approximately $ 0, or " breakeven"). Table 19 calculates the minimum property tax allocation for the City and County to achieve breakeven. As shown in Table 19, City must receive at least 30 percent of the property tax revenue to remain fiscally neutral, and the County must receive at least 33 percent of the property tax revenue to remain fiscally neutral. yfWi LLDAN
FINANCIAL SERVICES
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915AOC1 C City of Santa Maria and County of Santa Barbara Richards Ranch Fiscal Impact Study Table 19
Property Tax" Breakeven" Analysis
Richards Ranch Fiscal Impact Analysis
Item Amount
Estimated Project Assessed Value 305, 568, 475
Base Ad Valorem Tax 1. 00%
Base Ad Valorem Revenue 3, 055, 685
GF Allocation TRA 080- 041 14. 41%
Revenue 440,443
Fire District Allocation TRA 080- 041 16. 89%
Revenue 516,212
Total Combined GF and FD Allocation TRA080- 041 31. 31% Revenue 956, 655
CityBreakeven Estimate
City General Fund Revenue, Post Annexation
City General Fund Post ERAF Share of AV Tax 4. 32%
Total City Property Tax Post Annexation 132, 133
City Fire District Revenue, Post Annexation
City Fire District Post ERAF Share 5. 07%
City Fire District Property Tax Post Annexation 154,864 Resulting City Fiscal Impact 11, 769
Percentage Allocation of Project Property Tax Revenue 30% CountyBreakeven Estimate
County General Fund Revenue, Post Annexation
County General Fund Post ERAF Share of AV Tax 4. 76%
Total County Property Tax Post Annexation 145,346
County Fire District Revenue, Post Annexation
County Fire District Post ERAF Share of AV Tax 5. 57%
County Fire District Property Tax Post Annexation 170,350 Resulting County Fiscal Impact 3,081
Percentage Allocation of Project Property Tax Revenue 33% Source: The Natelson Dale Group, Inc.; Willdan Financial Services Willdan Financial Services, 2025
ShicWI LLDAN
FINANCIAL SERVICES
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C Los GATOS- PROPOSAL FOR STUDY 1( FISCAL CONDITION) AND STUDY 2( FISCAL IMPACT) APPENDIX F: NHA' s REQUIRED MUNICIPAL ADVISOR DISCLOSURES N HA I ADVISORS Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C Los GATOS— PROPOSAL FOR STUDY 1( FISCAL CONDITION) AND STUDY 2( FISCAL IMPACT) Fiduciary Duty
NHA Advisors, LLC (" NHA") is registered as a Municipal Advisor with the U. S. Securities and Exchange Commission (" SEC") and Municipal Securities Rulemaking Board (" MSRB"). As such, NHA has a fiduciary duty to the Town and must provide both a Duty of Care and a Duty of Loyalty that entail the following.
Duty of Care:
a) exercise due care in performing its municipal advisory activities; b) possess the degree of knowledge and expertise needed to provide the Town with informed advice;
c) make a reasonable inquiry as to the facts that are relevant to the Town' s determination as to whether to proceed with a course of action or that form the basis for any advice provided to the Town; and
d) undertake a reasonable investigation to determine that NHA is not forming any recommendation on materially inaccurate or incomplete information; NHA must have a reasonable basis for:
i. any advice provided to or on behalf of the Town;
ii. any representations made in a certificate that it signs that will be reasonably foreseeably relied upon by the Town, any other party involved in the municipal securities transaction or municipal financial product, or investors in the Town securities; and iii. any information provided to the Town or other parties involved in the municipal securities transaction in connection with the preparation of an official statement.
Duty of Loyalty:
NHA must deal honestly and with the utmost good faith with the Town and act in the Town' s best interests without regard to the financial or other interests of NHA. NHA will eliminate or provide full and fair disclosure ( included herein) to the Town about each material conflict of interest ( as applicable). NHA will not engage in municipal advisory activities with the Town as a municipal entity, if it cannot manage or mitigate its conflicts in a manner that will permit it to act in the Town' s best interest.
Conflicts of Interest and Other Matters Requiring Disclosures As of the commencement date of the Project, there are no actual or potential material conflicts of interest, other than those potential conflicts noted below, that NHA is aware of that might impair its ability to render unbiased and competent advice or to fulfill its fiduciary duty. If NHA becomes aware of any material potential conflict of interest that arises after this disclosure, NHA will disclose the detailed information in writing to the Town in a timely manner.
Pursuant to MSRB Rule G- 42, on Duties of Non- Solicitor Municipal Advisors, Municipal Advisors are required to make certain written disclosures to clients which include, amongst other things, Conflicts of Interest and any Legal or Disciplinary events of NHA and its associated persons.
The following are potential conflicts of interest to be considered.
NHA represents that in connection with the issuance of municipal securities, NHA may receive compensation from the Town for services rendered, which compensation is contingent upon the successful closing of a transaction and/ or is based on the size of a transaction. Consistent with the NHA I ADVISORS Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C Los GATOS— PROPOSAL FOR STUDY 1( FISCAL CONDITION) AND STUDY 2( FISCAL IMPACT) requirements of MSRB Rule G- 42, N HA hereby discloses that such contingent and/ or transactional compensation may present a potential conflict of interest regarding NHA' ability to provide unbiased advice to enter into such transaction. The contingent fee arrangement creates an incentive for NHA to recommend unnecessary financings or financings that are disadvantageous to the Town, or to advise the Town to increase the size of the issue. This potential conflict of interest will not impair NHA' ability to render unbiased and competent advice or to fulfill its fiduciary duty to the Town.
NHA' fees under this potential agreement may be based on hourly fees of NHA' personnel, with the aggregate amount equaling the number of hours worked by such personnel times an agreedupon hourly billing rate. This form of compensation presents a potential conflict of interest because it could create an incentive for NHA to recommend alternatives that would result in more hours worked. This conflict of interest will not impair NHA' ability to render unbiased and competent advice or to fulfill its fiduciary duty to the Town.
NHA' fees under this potential agreement may be a fixed amount established at the outset of this potential agreement. The amount is usually based upon an analysis by the Town and NHA of, among other things, the expected duration and complexity of the transaction and the scope of services to be performed by NHA. This form of compensation presents a potential conflict of interest because, if the transaction requires more work than originally contemplated, NHA may suffer a loss. Thus, NHA may recommend less time- consuming alternatives, or fail to do a thorough analysis of alternatives. This conflict of interest will not impair NHA' ability to render unbiased and competent advice or to fulfill its fiduciary duty to the Town.
The fee paid to NHA increases the cost of investment to the Town. The increased cost occurs from compensating NHA for municipal advisory services provided.
NHA serves a wide variety of other clients that may, from time to time, have interests that could have a direct or indirect impact on the interests of another NHA client. For example, NHA serves as municipal advisor to other municipal advisory clients and, in such cases, owes a regulatory duty to such other clients just as it does to the Town. These other clients may, from time to time and depending on the specific circumstances, have competing interests. In acting in the interests of its various clients, NHA could potentially face a conflict of interest arising from these competing client interests. NHA fulfills its regulatory duty and mitigates such conflicts through dealing honestly and with the utmost good faith with the Town.
Gerald Craig Hill, the Managing Principal of NHA is currently serving as an outside director for the HdL Companies based in Diamond Bar, CA. HdL Companies is a software and professional services consulting company providing revenue data and collections information to local governments, potentially including NHA' s clients. HdL Companies have affiliates including, but not limited to, HdL Coren & Cone. From time to time, NHA utilizes the services of HdL Coren & Cone for its clients. NHA is mindful of this conflict of interest and fulfills its regulatory duty and mitigates such conflicts through dealing honestly and with the utmost good faith when this situation arises.
NHA does not have any affiliate that provides any advice, service, or product to or on behalf of the Town that is directly or indirectly related to the municipal advisory activities to be performed by NHA.
NHA has not made any payments directly or indirectly to obtain or retain NHA' municipal advisory business.
NHA has not received any payments from third parties to enlist NHA' recommendation to the Town of its services, any municipal securities transaction, or any municipal finance product.
NHA has not engaged in any fee- splitting arrangements involving NHA and any provider of investments or services to the Town.
NHA I ADVISORS Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C S14, 1
Los GATOS— PROPOSAL FOR STUDY 1( FISCAL CONDITION) AND STUDY 2( FISCAL IMPACT) NHA does not have any legal or disciplinary event that is material to the Town' s evaluation of the municipal advisory or the integrity of its management or advisory personnel.
NHA does not act as principal in any of the transaction( s) related to this potential agreement.
Legal Events and Disciplinary History
NHA does not have any legal events and disciplinary history on its Form MA and Form MA-I, which includes information about any criminal actions, regulatory actions, investigations, terminations, judgments, liens, civil judicial actions, customer complaints, arbitrations and civil litigation. The Town may electronically access NHA' most recent Form MA and each most recent Form MA- I filed with the Commission at the following website:
www. sec. gov/ edgar/ searchedgar/ companysearch. html
There have been no material changes to a legal or disciplinary event disclosure on any Form MA or Form MA- I filed with the SEC.
Recommendations
If NHA makes a recommendation of a municipal securities transaction or municipal financial product or if the review of a recommendation of another party is requested in writing by the Town and is within the scope of the engagement, NHA will determine, based on the information obtained through reasonable diligence of NHA whether a municipal securities transaction or municipal financial product is suitable for the Town. In addition, NHA will inform the Town of:
the evaluation of the material risks, potential benefits, structure, and other characteristics of the recommendation;
the basis upon which NHA reasonably believes that the recommended municipal securities transaction or municipal financial product is, or is not, suitable for the Town; and whether NHA has investigated or considered other reasonably feasible alternatives to the recommendation that might also or alternatively serve the Town objectives.
If the Town elects a course of action that is independent of or contrary to the advice provided by NHA, NHA is not required on that basis to disengage from the Town.
Municipal Securities Rulemaking Board Rule G- 10 Disclosure Pursuant to MSRB Rule G- 10, on Investor and Municipal Advisory Client Education and Protection, Municipal Advisors are required to provide certain written information to their municipal entity and obligated person clients which include the following:
NHA is currently registered as a Municipal Advisor with the SEC and MSRB.
Within the MSRB website at www. msrb. org, the Town may obtain the Municipal Advisory client brochure that is posted on the MSRB website. The brochure describes the protections that may be provided by the MSRB Rules along with how to file a complaint with financial regulatory authorities.
NHA I ADVISORS Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C Los GATOS- PROPOSAL FOR STUDY 1( FISCAL CONDITION) AND STUDY 2( FISCAL IMPACT) Record Retention
Effective July 1, 2014, pursuant to the SEC record retention regulations, NHA is required to maintain, in writing, all communication and created documents between NHA and the Town for five ( 5) years.
If there are any questions regarding the above, please do not hesitate to contact NHA.
NHA I ADVISORS Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C SEPTEMBER 22, TOWN OF LOS GATOS
2025
PROPOSAL FOR STUDY 3:
ASSET LIABILITY MANAGEMENT STUDY
PROVIDED IN RESPONSE TO
REQUEST FOR PROPOSALS DATED AUGUST 20, 2025:
FISCAL CONDITION ANALYSIS WITH FIVE- YEAR AND LONGTERM FORECAST, FISCAL IMPACT ANALYSIS, AND ASSET
LIABILITY MANAGEMENT STUDY
C‘
tNo
x , i
r
ILM603SUBMITTED BY
ill I
NHAjADVISORS
Financial & Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463 BA3 F- D38D- 4CDC- A1 D6- 2ABE915AOC1 C i Los GATOS— PROPOSAL FOR STUDY 3( ALM) AND OPTIONAL STUDY 4( WILDFIRE RISK MITIGATION) Table of Contents
1. COVER LETTER 1
2. COMPLETED CERTIFICATION FORMS 1
3. SCOPE COMMENTS AND METHODOLOGY 6
4. EXPERIENCE AND EXPERTISE 11
5. KEY PERSONNEL AND RESUMES 14
6. TIMELINE AND WORK PLAN 16
7. SAMPLES OF COMPARABLE PROJECTS 16
8. DISCLOSURE OF ABSENCE OF LITIGATION OR DISCIPLINE OVER LAST FIVE YEARS 17
9. REFERENCES 18
10. PRELIMINARY FEE SCHEDULES 20
11. STATEMENT OF INSURANCE COVERAGE 22
12. TOOLS, DATA SOURCES, AND USE OF AI 22
APPENDIX A: SAMPLE OF PENSION EXPENSE MODELING FOR THE CITY OF WALNUT CREEK APPENDIX B: SAMPLE OF WILDFIRE BUFFER ZONE BUDGET MODELING FOR THE GREATER PARADISE AREA APPENDIX C: RESUMES FOR ASSIGNED NHA TEAM
APPENDIX D: NHA' S REQUIRED MUNICIPAL ADVISOR DISCLOSURES NHA IADVISORS Financial& Policy Strategies,
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C 114,
Los GATOS— PROPOSAL FOR STUDY 3( ALM) AND OPTIONAL STUDY 4( WILDFIRE RISK MITIGATION)
1. COVER LETTER
September 22, 2025
Attn: Gitta Ungvari, Finance Director
Fi na nce@losgatosca. gov
Town of Los Gatos
110 E. Main Street
Los Gatos, CA 95030
RE: Request for Proposals for Study 3: Asset Liability Management Dear Ms. Ungvari,
NHA Advisors, LLC(" N HA") is pleased to submit this proposal to provide municipal advisory services to the Town of Los Gatos (the " Town") in relation to its Asset Liability Management (" ALM") Study requested as Task 3/ Study 3 in your August 20th RFP. Please note that NHA Advisors has also submitted as part of a team including Raftelis and Willdan for Task 1/ Study 1 and Task 2/ Study 2. Our role in that proposal is a Team Manager. For Task 3/ Study 3, NHA is the sole service provider. In addition to the scope requested in the Town' s RFP, we are also submitting an unsolicited proposal in this document for what we call Task 4- a funding plan for long- term wildfire risk mitigation for the Town.
NHA, as a registered municipal advisor and has an extensive practice in advising public agencies in California on asset/ liability issues for CalPERS, and for the long-term management of debt. We are also familiar with OPEB management issues for our client base.
With respect to our proposed Task 4/ Study 4, NHA is a leader statewide in the development of funding plans for climate change adaptation, including wildfire risk. Detailed background on our experience in CalPERS and debt management, as well as wildfire risk reduction funding, is contained in this proposal.
Collaboration is key to our approach: As with our proposal for Study 1 and Study 2, collaboration is key to our approach for Study 3. We see a key output of Study 3 as framing key scenarios to be analyzed by the completed Study 1 fiscal condition model. The future performance of CaIPERS can have a major impact, good or bad, on the fiscal condition of the Town. Major new development, including its infrastructure needs can have an equivalent impact. Finally, we see the use of the Study 1 model as a key tool in determining whether the Town' s current and future projected cash reserves are sufficient to handle Black Swan" events.
As noted in our cover letter for the combined Study 1 and Study 2 Proposal, NHA team staff have extensive and long-term experience in translating complex Cal PERS and debt burden analysis into decision support packages that are clear, actionable and accessible to governing bodies and the public. We have deep experience in multi-lateral negotiations between multiple stakeholders over both debt funding and financial management issues.
As requested in the RFP, we accept the provisions of the sample contract contained in the RFP. While we emphasize our team commitment to collaboration, we also will accommodate the Town individually selecting one of our team members for a particular task but not selecting other team members for their assigned tasks.
NHA I ADVISORS Page1
Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C Los GATOS— PROPOSAL FOR STUDY 3( ALM) AND OPTIONAL STUDY 4( WILDFIRE RISK MITIGATION) We are very pleased to deliver this proposal for the kind of integrated financial management work that we see as integral and pivotal for the future of Los Gatos, as well as so many other local governments in our teams collective client base.
We are proud of the reputation we have earned as a trusted municipal advisor and are excited about the potential to work with the Town.
As requested in the RFP, NHA provides the following statements as part of this cover letter:
Mark Northcross is the primary contact authorized to bind the firm.
NHA Advisors confirms acceptance of the Town' s Sample Consultant Services Agreement Please feel free to contact us directly with any questions regarding this proposal.
Thank you for your consideration.
Mark Northcross Mike Meyer
Principal Vice President
Mark@NHAadvisors. com Mike@NHAadvisors. com
415) 785- 2025 x2002 415) 785- 2025 x2004
NHA Advisors, LLC
4040 Civic Center Drive, Suite 200, San Rafael, CA 94903 NHA I ADVISORS Paget
Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C LOS GATOS— PROPOSAL FOR STUDY 3( ALM) AND OPTIONAL STUDY 4( WILDFIRE RISK MITIGATION)
2. COMPLETED CERTIFICATION FORMS
Conflict of Interest Statement
ATTACHMENI 1 - C: ONFLICT OF INTEREST STATEMENT
THIS FORM MIL- ST BE PRINTED OUT, COMPLETED AND SUBMITTED WITH THE
PROPOSAL
FISCAL CONDITION ANALYSIS WIIH FIVE- YEAR AND LONG- TERM FORECAST,
FISCAL IMP ACT ANALYSIS, AND ASSET LLABILITY MANAGEMENT STUDY The undersigned declares:
1We NHA Advisors LLC Insert Name) have the following financial, business, or other relationship with Town of Los Gatos that may have an impact upon the outcome of the contract. If none, please specify that no other relationships may have an impact on this contract or Project.
No other relationships may have an impact on this contract or Project.
LWe NHA Advisors LLC Insert Name) have the following current clients who may have a financial interest in the outcome of this contract. If none, please specify that no other clients may have a financial interest with an impact on this contract or Project.
To our knowledge, no other clients have a financial interest with an impact on this contract or Project.
Pursuant to Government Code section 1090 and any other laws, rules and regulations that may apply. the Proposer covenants that neither it, its subcontractors nor employees presently have an interest, and shall not acquire any interest, direct or indirect, financial or otherwise that would conflict in any manner or degree with contract awarded from this RFP. Proposer certifies that to the best of its knowledge, no one who has or will have any financial interest in the contract awarded from this RFP is an officer or employee ofthe Town. Through its submittal of a proposal. Proposer acknowledges that it is familiar with Section 87100 et seq. and Section 1090 et seq. of the Government Code of the State of California and will immediately notify the Town ifit becomes aware of any facts concerning the contract to be awarded that constitute a violation of said provisions.
Furthermore, ifthere is reason to believe that collusion exists among the Proposers. the Town may refuse to consider proposals from participants in such collusion. No person, firm, or corporation under the same or different name, shall make, file, or be interested in more than one proposal for the same work unless alternate proposals are called for. A person, firm, or corporation who has submitted a subproposal to a Proposer, or who has quoted prices on materials to a Proposer, is not thereby disqualified from submitting a sub- proposal or quoting prices to other Proposers. Reasonable ground for believing that any Proposer is NHA I ADVISORS Page1
Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C Los GATOS— PROPOSAL FOR STUDY 3( ALM) AND OPTIONAL STUDY 4( WILDFIRE RISK MITIGATION) interested in more than one proposal for the same work will cause the rejection of all proposals for the work in which a Proposer is interested. Ifthere is reason to believe that collusion exists among the Proposers_the Town may refuse to consider proposals from participants in such collusion. Proposers shall submit as part of their proposals documents the completed Non- Collusion Declaration provided herein.
L on behalf of the Proposer, declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct and that this declaration is executed on September 22, 2025 date]. at San Rafael city]. California state].
NHA Advisors LLC Principal
Proposer Name Person. Firm. Corp.) Title ofAuthorized Representative 4040 Civic Center Drive, Suite 200 Mark Northcross
Address Name ofAuthorized Representative
San Rafael, CA 94903
City. State. Zip
l
JIyP
9/ 22/ 2025
Date) Signed)
NHA I ADVISORS Page2
Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463 BA3 F- D38D- 4CDC- A1 D6- 2ABE915A0C1C Los GATOS— PROPOSAL FOR STUDY 3( ALM) AND OPTIONAL STUDY 4( WILDFIRE RISK MITIGATION) Non- Collusion Declaration
ATTACHMENT 2— NON-COLLUSION DECLARATION
THIS FORM MUST BE PRESTED OUT, COMPLETED AND SUBMITTED WITH THE
PROPOSAL
FISCAL CONDITION ANALYSIS WITH FIVE-YEAR AND LONG-TERM FORECAST,
FISCAL IMPACT ANALYSIS, AND ASSET LLABILITY MANAGEMENT STUDY The undersigned declares:
I am the Principal Insert Title] of NHA Advisors LLC Insert name of company, corporation, LLC, partnership or joint venture] the party making the foregoing proposal.
The proposal is not made in the interest of or on behalf of any undisclosed person, partnership, company. association, organization. or corporation. The proposal is genuine and not collusive or sham.
The Respondent has not directly or indirectly induced or solicited any other respondent to put in a false or sham proposal. The Respondent has not directly or indirectly colluded, conspired, connived, or agreed with any bidder or anyone else to put in a sham proposal, or to refrain from responding. All statements contained in the proposal are true.
Anyperson executing this declaration on behalf of a respondent that is a corporation. partnership, joint venture, limited liability company, limited liability partnership, or any other entity, hereby represents that he or she has full power to execute, and does execute, this declaration on behalfofthe respondent.
I declare under penalty of perjury under the laws ofthe State ofCalifornia that the foregoing is true and correct and that this declaration is executed on 912212025[ date]: at San Rafael [ city]. CA[ state].
By:
Name: Mark Northcros
Title: Principal
NHA I ADVISORS Page3
Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463 BA3 F- D38D- 4CDC- A1 D6- 2ABE915A0C1C Los GATOS— PROPOSAL FOR STUDY 3( ALM) AND OPTIONAL STUDY 4( WILDFIRE RISK MITIGATION) References
ATTACHMENT 3- REFERENCES
THIS FORM MUST BE PRINTED OUT, COMPLETED AID SUBJIITTED WITH THE
PROPOSAL
FISCAL CONDITION ANALYSIS WITH FIVE-YEAR AND LONG-TERM FORECAST,
FISCAL IMPACT ANALYSIS, AND ASSET LIABILITY MANAGEMENT STUDY List three( 3) references for work of a similar nature to the Services performed within the last five( 5) rears. Use additional sheets as necessary.
l
City of Ukiah 300 Seminary Avenue, Ukiah CA 95482
Name ofAgency Agency Address
Dan Buffalo Finance Director
Contact Name Contact Title
707) 463- 6220 dbuffalo@cityofukiah. com
Contact Telephone Contact Email Address
July 2016- Present One Time Bond Financing:$ 112, 500; Annual Updates$ 7,500 Contract Period Contract Amount
CaIPERS Pension Stakeholder Education. Cost Management Strategy Evaluation, UAL Restructuring( Lease Revenue Bond), Internal Pension Reserve Policy Analysis, ADP/ Fresh Start Analysis, Ongoing Stakeholder Updates Workshops Description of services performed including costs.
City of Walnut Creek 1666 North Main Street, Walnut Creek CA 94596 Name ofAgency Agency Address
Kirsten LaCasse Administrative Services Director
Contact Name Contact Title
925) 943- 5810 Iacasse@walnut- creek. org
Contact Telephone Contact Email Address
October 2024— March 2025 15, 000
Contract Period Contract Amount
CaIPERS Pension Stakeholder Education, Cost Management Strategy Evaluation, Customized Section 115 Trust Model, 115 Trust Deposit/Withdrawal Analysis, Policy Recommendations Description of services performed including costs.
3- City of Riverside 3900 Main Street, Riverside, CA 92522 Name ofAgency Agency Address
Edward Enriquez Assistant City ManagerfCFO and Treasurer Contact Name Contact Title
951) 826- 5553 eenriquez@riversideca. gov
Contact Telephone Contact Email Address
2018 to Present Pft- Futortang ccer.enasssaw,: an. TM. tin• na. cs12s, m,, w.raaXimp, soa- s1sC Contract Period Contract Amount
CaIPERS Pension Stakeholder Education. Cost Management Strategy Evaluation,$ 430 Million POB, Pension Policy Cevlopment, Customized Section 115 Trust Model, 115 Trust Depcsttlwithdrawal Analysis. Annual Stakeholder Updates. POB Performance Comparison.
CAPERS Challenge' Assistance( Ca1PER S Challenge I City Manager' s Office) N HA I ADVISORS Page4
Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463 BA3 F- D38D- 4CDC- A1 D6- 2ABE915A0C1C Los GATOS— PROPOSAL FOR STUDY 3( ALM) AND OPTIONAL STUDY 4( WILDFIRE RISK MITIGATION) See previous page
Description of services performed including costs.
I hereby certify that the Proposer performed the work fisted above.
Mark Northcross, Principal 9/ 222025
Signature ofProposer Name Date
Statement Regarding Insurance Coverage and Worker' s Compensation Insurance Acknowledgement Certificate
ATTACHMENT 4- STATEMENT REGARDING INSURANCE COVERAGE AND
WORKER' S COMPENSATION INSURANCE ACKNOWLEDGMENT CERTIFICATE
THIS FORM MUST BE PRINTED OUT, COMPLETED AND SUBMITTED WITH THE
PROPOSAL
FISCAL CONDITION ANALYSIS WITH FIVE- YEAR AND LONG- TERM FORECAST,
FISCAL IMPACT ANALYSIS, AND ASSET LIABILITY MANAGEMENT STUDY PROPOSER HEREBY CERTIFIES that the Proposer has reviewed and understands the insurance coverage requirements specified in the RFP. Should the Proposer be awarded a contract for Services, Proposer further certifies that the Proposer can meet the specified requirements for insurance, including insurance coverage of any subcontractors, and agrees to name the Town as additional insured for the Services specified.
By certifying this form. the Proposer also understands the Worker' s Compensation insurance requirement per the California Labor Code. Sections 1860 and 1861:
I am aware of the provisions of Section 3700 of the Labor Code. which require every employer to be insured against liability for worker' s compensation or to undertake self-insurance in accordance with the provisions of that code. and I will comply with such provisions before commencing the performance of the work of this contract.
Mark Northcross, NHA Advisors LLC
Name of Proposer( Person. Finn, or Corporation)
614/14h16,, c,--
Signature of Proposer' s Authorized Representative
Mark Northcross, Principal
Name& Title of Authorized Representative
September 22, 2025
Date of Signing
NHA I ADVISORS Page5
Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C wi Los GATOS— PROPOSAL FOR STUDY 3( ALM) AND OPTIONAL STUDY 4( WILDFIRE RISK MITIGATION)
3. SCOPE COMMENTS AND METHODOLOGY
As noted in our cover letter, we believe that the collaborative partnership of NHA Advisors, Raftelis and Willdan will ensure a truly comprehensive approach to executing all three requested studies in an integrated manner for the Town of Los Gatos. While NHA has similar experience to Raftelis in developing the type of long-range forecasting model that will be a core component for Study 1, the experience required for Study 3 is most in line with the qualifications of NHA, specifically related to debt management bonds, pension, OPEB) and capital funding strategies. As the # 1 ranked municipal advisor to California cities for bond funded capital projects, while also having served over 100 CalPERS members on pension cost management strategy and policy, NHA is well suited to carrying out Study 3, while seamlessly weaving in the various scenario impacts to the work being completed in Studies 1 and 2.
Study 3: ALM Study Scope Comments and Methodology
For our engagement related to the scope of services identified under Section E of the RFP, specifically under the " Study 3— Asset Liability Management ( ALM) Study" heading, NHA proposes the approach and timeline described below. As required by the RFP, this material can be considered as a stand- along proposal for NHA to prepare Study 3, should the Town choose to retain NHA, but not Raftelis and/ or Willdan.
Task 3. 1: Inventory& Evaluate Liabilities
Data Collection and Review— Review last 10 years of CalPERS actuarial reports, Section 115 Trust statements, and other internal documentation related to the Town' s recent track record of Additional Discretonary Payments and policy driven set asides ( as discussed here: Town Pension and OPEB Plans Information ( updated 10- 18- 2022) I The Los Gatos CA Official Site!) Model Development— Using data taken directly from CalPERS actuarial reports and the Cal PERS Pension Outlook Tool, NHA will develop a customized model for the Town that includes detailed amortization base analysis as well as a customized Section 115 Trust smoothing model. These models will assist in quickly analyzing the impacts of various ADP and/ or Section 115 trust strategies, with simple excel outputs that can be easily incorporated into the Long- Range Financial Modeling occu ring in Study 1.
CaIPERS ALM Study Update—The Town' s proposed schedule for this project dovetails perfectly with the CalPERS ALM study that will be completed this November. New actuarial assumptions discount rate, inflation, mortality, etc.) will be announced and by Deceember, should be able to be modeled out which will proviee the most accurate long term picture of the Town' s future pension liabilities.
Task 3. 2: Funding Needs and Risk Reduction Analysis:
Cost Management Strategy Analysis— once the " baseline" has been established using the fresh results of the CaIPERS ALM study, a variety of cost management strategies will be analyzed, including ADPs, Section 115 Smoothing and Fresh Start accelerated payment options. These scenarios will necessarily be informed by the results of the long-range forecasting model to better understand financial resources and constraints.
NHA I ADVISORS Page6
Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C Los GATOS— PROPOSAL FOR STUDY 3( ALM) AND OPTIONAL STUDY 4( WILDFIRE RISK MITIGATION) Funding Needs and Risk Reduction Analysis — as part of the cost management strategy evaluation, multiple scenarios related to future " downside risk" will be incorporated to see how these strategies might play out in the future if various assumptions aren' t met. NHA will frame scenarios for analysis using the Task 1/ Study 1 fiscal conditions model. These include potential recessionary scenarios, poor investment returns by CaIPERS, and significant changes to future actuarial assumptions, like the discount rate. The ability of new development to support infrastructure needs, as forecast by Willdan and the Task 1/ Study 1 model, will be evaluated.
Where appropriate, NHA will recommend potential revenue enhancements to address projected shortfalls. NHA is flexible as to what these scenarios look like and beyond our own recommendations, will be collaborating with Town Staff, Raftelis and Willdan to ensure cohesion between the 3 studies.
Stakeholder Engagement and Feedback( Optional)— NHA will be available to meet with staff and stakeholders as much as needed during the process. It may be helpful to have multiple meetings, with the initial ones focused on educating stakeholders about how the pension liability works, how the Town has been tackling it in the past, and what things might be impacting these costs moving forward. After" setting the table" with this basic education, subsequent meetings can be focused on the pros/ cons of various cost management strategies and the impact they might have on other key variables being assessed in these studies: namely, capital funding opportunities and reserve levels.
Task 3. 3: ALM Modeling:
ALM modeling for Fund Balance sustainabcility and Risk Exposure: NHA will work with Raftelis and Willdan to frame scenarios for " Black Swan" events to test fund balance sustainability and risk exposure. NHA will recommend mitigation measures, including revenue enhancements, for scenarios where the Town' s cash reserves are projected to be inadequate. For the start of a discussion about " Black Swan" scenarios, we offer the following suggestions:
o Sustained national economic downturn
o Major natural disaster, such as an earthquake or wildfire. Consider modeling fiscal impact with minimal FEMA support, based on current proposals from the Trump administration. o Sustained weak financial performance from CalPERS
o A reduction in the CaIPERS actuarial discount rate
We see two key elements for ALM modeling, both of which need to inform the Task 1 fiscal condition model:
o Potential long term cash flow impacts from the Town' s CalPERS obligations. Our task here, as we see it, is to develop a range of scenarios for such variable as CalPERS financial performance an a potential lowering of the CaIPERS actuarial discount rate for scenario analysis through the Task 1 fiscal condition model. As part of this analysis, NHA will offer options for revenue enhancements/ tax increases legally available for cities in California.
Capacity of the General Fund to fund or finance major future infrastructure needs. For this deliverable we will ( 1) discuss with Town staff their existing CIP and ( 2) and discuss with Town NHA I ADVISORS Pagel
Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C Los GATOS— PROPOSAL FOR STUDY 3( ALM) AND OPTIONAL STUDY 4( WILDFIRE RISK MITIGATION) staff the potential infrastructure needs for new development. Note that Activity 2 under the Task 1 Raftelis proposal includes analysis of the Town' s CIP. Based on the Task 2 Willdan fiscal impact model, we will determine how much of the infrastructure needs for new development can reasonably be expected to be funded through( 1) impact fees or( 2) directly by developers or (3) any long term fiscal surplus arising from new development. Where there are gaps, we will design scenarios, in conjunction with the Town' s current CIP, to run under the Task 1 fiscal condition model. We will look at both pay- go and long-term lease revenue bond financing options. As part of this analysis, NHA will offer options for revenue enhancements/ tax increases legally available for cities in California.
Task 3. 4 Reserve Guidance:
Reserve guidance, recommendations and policy refinements: Based on the results of the prior work, and feedback from staff and the Town' s stakeholders, NHA will provide strategy and policy recommendations that aim to secure long term sustainablity and risk mititgation, using future cash reserves as projected by the Task 1/ Study 1 model as a key metric.
We will use the outcomes from the Study 1 Fiscal Condition Analysis with Five-Year Forecast to determine the adequacy of the Town' s current cash reserves to meet the defined " Black Swan" events, and offer suggestions for increased reserved levels, if so indicated.
Task 3. 5 Execution ( As Needed)
To the extent that the Town needs assistance from NHA to help execute on a preffered strategy, NHA can spearhead those efforts on the Town' s behalf working directly with CalPERS, the Town' s Section 115 Trust provider and investment advisor, actuaries, and others.
Optional Study 4: Wildfire Risk Mitigation Consulting Scope Comments and Methodology
The following material is provided by NHA for an optional Study 4 as an unsolicited proposal. We believe that NHA can deliver a major value to the Town through developing a realistic funding plan for wildfire risk mitigation, primarily through the long-term reduction of what are called " ladder fuels" along the Town' s wildland urban interface (" WUI") with the Santa Cruz Mountains. As required by the RFP, this material can be considered as a stand- along proposal for NHA to prepare Study 4, should the Town choose to retain NHA, but not Raftelis and/ or Willdan.
Specific NHA Qualifications for Study 4- NHA is the leading municipal advisor in the State of California on funding for climate change adaptation. Since 2017 we have prepared funding plans for the following adaptation projects:
Resilient by Design, a nine Bay Area county-wide collaboration to develop sea level rise adaptation and funding plans, funded by the Rockefeller Foundation.
Funding Pathways for Adaptation to Climate Change in California. Describes public finance funding options for wildfire risk reduction, sea level rise adaptation, drought and extreme heat in California.
Prepared under a grant from the Resources Legacy Fund.
NHA I ADVISORS Page8
Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C Los GATOS— PROPOSAL FOR STUDY 3( ALM) AND OPTIONAL STUDY 4( WILDFIRE RISK MITIGATION) Municipal Advisor to the Town of Paradise. Assist the Town in funding recovery through funding wildfire risk mitigation at the parcel, community and regional levels. Developing a funding strategy for the recovery of downtown Paradise.
Oakland Alameda Adaptation Committee. Prepared a funding and governance plan for long term funding for sea level rise for the section of San Francisco Bay stretching from the Bay Bridge to the Oakland Airport.
Illustrative Statewide Budget for Wildfire Risk Mitigation. Prepared an illustrative budget for combined state, regional and local government intervention to reduce wildfire risk statewide, including cost estimates and potential public finance funding mechanisms. Prepared under a grant from the Resources Legacy Fund.
Paradise Recreation and Parks District. Preparing a funding plan for full implementation of a 30, 000- acre wildfire buffer zone around the greater Paradise community. The plan includes funding for acquisition of easements and/ or fee title for high priority parcels, as well as treatment costs. Polling for a parcel tax is part of the program, as well as grant applications to both FEMA and Cal Fire. The work is funded under a grant from the Governor' s Office of Planning& Research.
Framing Our Approach - The key element in our approach is to address the major disconnect between good wildfire risk reduction practices by both public agencies and property owners in California and the insurance industry. The bottom line and increasingly intense, political issue is tax payers and property owners losing coverage or receiving huge premium increases despite doing good risk mitigation work.
From our experience both in Paradise, and statewide, we see two major reasons for this:
a. There is a difference of opinion between the important " local knowledge" of community level fire safety professionals and the catastrophe modelers (" cat modelers") used by the insurance industry to determine risk from a windstorm-driven wildfire. The primary risk driving non-renewals and premium increases in California is that of a windstorm driven wildfire. To deliver not only more public safety to the Los Gatos community, but better insurance availability as well, the local knowledge is ideally supplemented by data from a cat model of a windstorm driven wildfire igniting in the Santa Cruz Mountains.
b. The information on wildfire risk mitigation work needs to be made available to cat modelers in a fully curated" way. That means it is regularly updated and verified as being accurate. It also means, ideally, that the data is available through a GIS on a parcel specific level. This needs implies two other major needs: regular inspections of parcels and a curated " data commons" for wildfire risk mitigation information. The biggest challenge for the data commons is maintaining confidentiality for homeowners.
Based on our extensive experience in Paradise in particular, we offer the following scope of services:
Task 4.1 Identify Treatment Areas of Highest Priority: Work with local fire safety professional to identify the areas in the Santa Cruz Mountains south of the Town that have the highest priority for treatment for wildfire fuel reduction on a long term basis. Support any ongoing work regarding Zone Zero", or a 5' defensible space zone around structures. Retrofit home hardening work for structures in the Town we believe to beyond the scope of this analysis. Both the scale and the N HA I ADVISORS Page9
Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C wi Los GATOS— PROPOSAL FOR STUDY 3( ALM) AND OPTIONAL STUDY 4( WILDFIRE RISK MITIGATION) level of funding needed, in our opinion, are beyond what is plausible for a public funding intervention.
o Task 4. 1a ( optional): Retain a " cat modeler" ( catastrophe modeler used by insurance companies) to model windstorm driven wildfire pathways from an ignition point south of Town into the Town. This work identifies priority parcels for treatment that might differ from local fire safety professionals.
Task 4. 2 Develop Annual Treatment Budget for Wildfire Risk Mitigation: Work with local fire safety professional to develop an annual budget for treatment for priority parcels. Local fire safety professionals will provide guidance on likely costs per acre for different types of treatment in the greater Santa Clara County area, types of treatment recommended and the appropriate recurrence interval for such treatment. In addition, based on work being done in other jurisdictions, such as the Marin Wildfire Prevention Authority and the Town of Paradise, prepare a budget for funding annual inspections of parcels within the proposed buffer zone, as well as parcels within the Town.
Task 4. 3 Present Preliminary Results: Present the preliminary results of Task 2 to senior management at the Town, and with approval from the Town, present the preliminary results to senior management at neighboring cities, such as the Cities of Monte Sereno, Saratoga, Los Altos Hills and San Jose. Based on NHA' s work on climate change adaptation in both the wildfire and sea level rise space, we believe regional collaboration between vulnerable public entities is the best pathway to success. Our goal would be to use the preliminary results of Task 2 as an illustration of what could be accomplished through regional collaboration for a wildfire buffer zone for Santa Clara County' s WUI along the Santa Cruz Mountains. o Task 4. 3a ( optional): If Task 3 results in strong interest from other neighboring cities, we will work with staff at all stakeholders to develop a non binding MOU on collaboration to develop a funded regional entity to deliver long term wildfire fuel reduction in the cities collective WUI with the Santa Cruz Mountains
Task 4.4 Funding Plan Development: Develop a funding plan to deliver the Task 2 budget. We will look at Prop 3 grants, FEMA Hazard Mitigation Grants, any potential General Fund support, and then solve for the level of a parcel tax required to fully fund the budget. o Task 4. 4a: ( optional). Develop both the cost analysis, similar to Task 2, and the funding analysis, as in Task 4.4, for other cities party to the potential non- binding MOU.
Task 4. 5 Present Refined Cost & Funding Plan: Present the combined cost and revenue budget to the Town and any parties to a potential non- binding MOU.
Task 4. 6 ( optional): Work with the Town and other stakeholders to determine how a " data commons" for wildfire risk mitigation work by the Town and/ or parties to the MOU could be established.
N HA I ADVISORS Page10
Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C Iltt
4_ci Los GATOS— PROPOSAL FOR STUDY 3( ALM) AND OPTIONAL STUDY 4( WILDFIRE RISK MITIGATION) Task 4. 7 ( optional): Retain a polling consultant to gauge the feasibility of any parcel tax required to deliver full funding for the wildfire buffer zone.
4. EXPERIENCE AND EXPERTISE
Firm Qualifications
NHA Advisors, LLC is an Independent Registered Municipal Advisor registered with the SEC and MSRB and headquartered in San Rafael, California. NHA has been providing municipal advisory services ( like the size and scope requested by the Town' s RFP) to California cities, special districts, and other public agencies since 2000 ( formerly known as Northcross Hill & Ach, Inc. from 2000-2011). NHA has provided comprehensive financial and consulting services to over 175 public agencies throughout California, with a primary focus on California cities. NHA' s bond and
consulting groups are currently working with public NHA Clients Served* agencies to develop project funding solutions,
financial policies, pension liability, fiscal sustainability and climate adaptation strategies.
NHA' s experience with California cities spans from
w BONDS
rural, small cities to major metropolitan agencies, CONSULTING o
which informs NHA of the problems facing public A •, ' BOTH agencies across the State and allows NHA to bring g
creative examples and solutions to our clients. We et • understand the time and staff resource constraints i
o
0 required to develop funding strategies and financing 94) plans and believe our holistic approach allows us to be 3 an " extension of staff" that will integrate with Town o staff to provide the best solution and process for t°
projects. Combined, the NHA team has over 190 years
of individual experience of providing these services.
V ii I
Regarding special consulting projects, NHA has A
1 I
developed eight specialized practice groups that focus
on key areas within municipal finance. These groups
enable us to provide guidance on a wide range of * Dots represent client engagements from 2012- Present M 4
k
w:..
Infrastruct. l Utilities
i;. -,
Hit i Continuing Disclosure
Oates I: I 1 Compliance
IIIII II 1
110114 '1; 1111 I
ItIli
i
Economic Energy& Climate
policy Development
Voter Approved
Development& P3 Change Revenue Measures
4 NHAIADVISORS Page11
Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C Los GATOS— PROPOSAL FOR STUDY 3( ALM) AND OPTIONAL STUDY 4( WILDFIRE RISK MITIGATION) municipal finance issues. Of particular note is our Pension and Fiscal Sustainability Practice Group, which has been actively engaged with agencies across California. A summary of this work is also included below.
Beyond bond financings, many clients rely on N HA for strategic financial planning, policy advice, and crosscollaboration with other engineers and consultants to support Town staff on a wide range of issues. NHA' s eight practice groups address critical financial expertise like revenue measures ( ad valorem, special tax, assessment and parcel taxes), voter- approval processes, budgetary projection work, as well as climate change impacts ( e. g., wildfire risks), pensions, P3/ economic development negotiations, and post- issuance compliance ( continuing disclosure and arbitrage rebate) to provide meaningful ideas and advice to our clients when those issues arise. Since 2018, NHA staff has completed over 400 advisory projects, many of which did not result in a financing. Our " extension of staff' style has become a core component of our services and a critical benefit to many of our public agency clients NHA has eight registered municipal advisors dedicated to California cities and special districts. NHA is led by Principals Craig Hill, Mark Northcross, and Eric Scriven, each of whom have 30+ years of public finance experience. The Principals are supported by three Vice Presidents, an Associate, and three Analysts (two of whom are in process of passing their Series 50 Licensing examination to become licensed Municipal Advisors). NHA professionals maintain their Series 50 License in good standing. NHA' s services to the Town will be provided through NHA' s sole office in San Rafael, California.
Pension Consulting and Community Engagement
Over the past 10 years, NHA' s Pension Group, led by Mike Meyer, has worked with more than 100 California public agencies, to help develop strategies and policy to better manage CalPERS liabilities.
The table below highlights some of the agencies we have recently worked with, and the type of services requested. Our expertise and services include technical quantitative analysis on historical trends and projected costs, sensitivity/ risk analysis and scenario modeling, translating options to address rising costs i. e., Section 115 Trust, UAL pay- downs ( ADPs), Hard and Soft Fresh Starts, pension bonds, etc.), and presenting findings and alternatives to elected officials, staff, and union representatives at public and informal meetings. NHA' s ability to translate complex information and be agile in meeting our clients' needs is one of our strongest attributes ( based on comments from existing clients). We expect that our skill in translating information will be helpful in properly engaging with the Los Gatos community during the duration of this project.
Mike Meyer has been a frequent speaker ( recently for CDIAC, CSMFO, Govinvest) on the subject of pension liability management and our Pension Group consistently publishes newsletters, called NHAlerts" when there is pertinent information that we feel our local agency clients and their stakeholders should be aware of. You can find our most recent NHAlert here: CaIPERS Beats Expectations Again I NHA Advisors.
Recent Work Product( Appendix A): NHA worked with the City of Walnut Creek in early 2025 to( 1) educate stakeholders about their CaIPERS pension liability, (2) provide stress testing scenario modeling to account for potential changes to the discount rate in the future, ( 3) develop a customized model that helped optimize the timing and amounts of Section 115 Trust deposits and withdrawals, and ( 4) review and support potential changes to the City' s pension funding policy. The presentation in Appendix A showcases our ability to translate the complex world of CalPERS and develop dynamic tools that allow for prudent, long term decision making by stakeholders.
NHA I ADVISORS Page12
Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C Los GATOS— PROPOSAL FOR STUDY 3( ALM) AND OPTIONAL STUDY 4( WILDFIRE RISK MITIGATION) NHA Pension Group Experience
NHA Pension Report( 8- Cost Management Strategy FOB Workshops/ Page Report Distilling Evaluation Process/ Evaluation Process CaIPERS Education/ Budget Historical Actuarial Report Workshops( Section 115 ( Pros/ Cons, Options and Workshops Trends) Trust, ADPs) Risks) POB( UAL Restructuring) Alameda, City of
Arcata, Cityof
Auburn, City
Calaveras Cnty. Water Dist.
Carmel- by-the- Sea, City of
Chico, aty of
Chula Vista, City of
Corcoran, City of
Corte Madera, Town of
El Cerrito, City of
El Monte, City of
Farmersville, City of
Fort Bragg, City of
Gilroy, City of
Grass Valley, City of
Grover Beach, City of
Hanford, City of
Hayward, City of
Lakeport, City of
Lancaster, Cityof
Lincoln, City of
Lompoc, City of
Martinez, City of
Monterey, City of
Morro Bay, City of
National City, City of
Newark, City of
North County Fire Prot. Dist.
Novato Sanitary District
Oroville, City of
Oxnard, City of
Palos Verdes Library District
Paso Robles, City of
Pittsburg, Cityof
Rialto, Cityof
Richmond, City of
Riverbank, City of
Riverside, City of
Salinas, City of
Sausalito, City of
San Carlos, City of
San Miguel Fire
Scotts Valley, City of
Sebastopol, City of
Selma, City of
Stanislaus Consolidated FPD
Torrance, City of
Ukiah, City of
Walnut Creek, City of
West Covina, City of
Winters, City of
Top- Ranked Municipal Advisor to Cities
Over the past five years ( since 2020), NHA has been the # 1 municipal advisor, by number of bond transactions for California cities ( Source: California State Treasurer as of July 15, 2025; excludes commercial paper and conduit financings; January 2020-present). Financing amounts have ranged from below $ 1, 000, 000 to over $ 400, 000, 000 and have included all methods of sale ( competitive sale, negotiated sale, and private placement). Our work in developing holistic funding plans to meet the infrastructure needs of our local agency clients will be extremely useful with helping the Town of Los Gatos evaluate the pros and cons or various capitalfunding tools available.
NHA I ADVISORS Page13
Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C 1: 19711
Los GATOS— PROPOSAL FOR STUDY 3( ALM) AND OPTIONAL STUDY 4( WILDFIRE RISK MITIGATION)
MUNICIPAL ADVISOR RANKINGS FOR CALIFORNIA CITIES
Transactions( January 2020- Present) 1
21 19
17 15
N H A
Urban PRAG Fieldman PFM KNN CSGAdvisors Wulff Harrell& Kosmont
ADVISORS
Futures Rolapp Group Public Finance Hansen Company Companies Source: California State Treasurer as of 7/ 15/ 2025; excludes commercial paper and conduit financings
5. KEY PERSONNEL AND RESUMES
NHA Team Assigned to the Town
NHA' s proposed project team will
consist of the following advisors: Mark
NHA Advisors, LLC
Northcross ( Principal), Mike Meyer Mark Northcross* Craig Hill Eric Scriven Vice President), and Matt DeFilippis Principal Managing Principal Principal Senior Analyst). Mark Northcross will
serve as the day-to- day relationship
Rob Schmidt Mike Meyer* Christian Sprunger
manager for the Town. An
Vice President Vice President Vice President
organization chart of the NHA team Matt DeFilippis*
identifying the staff assigned to the Associate
Town is shown to the right. Additional
members of NHA can be made
Adrian Gonzalez Kevin Ellis Mohamed Maxamed
available as expert resources to the
Analyst Analyst Analyst
Town as needed.
Assigned to Support The Town for this Engagement
All advisors providing financial
advisory services to the Town will be managed out of the San Rafael, CA office. All advisors providing financial advisory services to the Town will be available for the full duration of the contract. Information regarding each team member' s experience and qualifications is described below. Full resumes are included as Appendix C.
NHAIADVISORS Page14
Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C 14,
1 ,. 1
Los GATOS— PROPOSAL FOR STUDY 3( ALM) AND OPTIONAL STUDY 4( WILDFIRE RISK MITIGATION) Mark Northcross, Principal. Role: Lead Advisor
3 ) A -
lib
Mr. Northcross has more than 40 years of public finance experience in California. He is a leading advisor on climate change infrastructure and leads NHA' s alternative financing practice that focuses on " holistic" funding solutions, with special emphasis on SRF, WIFIA, Federal and State grants. Mr. Northcross has also managed the formation of CFDs for P3' s throughout the State since 1987 and is a leader in California in negotiating both public- private partnerships for both land- secured debt and redevelopment. He holds a B.A. in Social Sciences from the University of California, Irvine. He maintains his MSRB Series 50 License.
Mike Meyer, Vice President. Role: Project Manager
rl' igMr. Meyer has worked in public finance for 21 years, with over half of his time spent as an underwriter. Mr. Meyer manages NHA' s Pension and Fiscal Sustainability Group and has analyzed pensions and POB structuring solutions since 2006. He has worked on each of the firm' s pension consulting and POB engagements over the last five years, totaling $1. 7 billion in par. Mike is also an experienced generalist, having completed over 200 bond financings using all types of structures, including utility revenue, lease revenue, sales tax and transportation revenue, TABs, and land secured. Mr. Meyer holds a B. S. in Management Science, from the University of California, San Diego. He maintains his MSRB Series 50 License.
Matt DeFilippis, Senior Analyst. Role: Quantitative Support& Project Support Mr. DeFilippis will provide credit, quantitative, and research support to the assigned NHA team. Mr. DeFilippis has worked in public finance since 2021. Since then, he has ow s
1, provided project management and deal support on a variety of California financings totaling over $ 450 million in par. Mr. DeFilippis' recent projects have included educational workshops on pension cost management, general fund forecasting, and credit rating analysis. Mr. DeFilippis holds a B. A. in Applied Mathematics, from the University of California, Berkeley. He maintains his MSRB Series 50 License.
Subcontractors for Study 3 ( ALM Study)
None.
Subcontractors for Optional Study 4 ( Wildfire Risk Mitigation) Other than the potential of retaining a Geographic Information System (" GIS") mapping consultant for managing the parcel database as part of the wildfire buffer zone analysis and consulting, NHA does not plan to use any subcontractors for this engagement. NHA does not have a pre- selected GIS mapping consultant for this engagement and would coordinate with the Town for engaging any future consultant to ensure we comply with the Town' s bidding practices.
NHA I ADVISORS Page15
Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C Los GATOS— PROPOSAL FOR STUDY 3( ALM) AND OPTIONAL STUDY 4( WILDFIRE RISK MITIGATION)
6. TIMELINE AND WORK PLAN
Study 3 ( ALM Study) Timeline
Based on the scope of services identified in the Town' s RFP for Study 3( ALM Study), NHA proposes the following realistic schedule. This schedule assumes that the Town enters into contract negotiation and execution the week of September 29, 2025, as outlined in the RFP.
Task Estimated Completion Date
3. 1: Inventory & Evaluate Liabilities December 2025
3. 2: Funding Needs & Risk Reduction Analysis March 2026
3. 3: ALM Modeling March 2026
3. 4: Reserve Guidance April 2026
3. 5: Execution ( As Needed) TBD based on Desired Strategy Optional Study 4 ( Wildfire Risk Mitigation) Timeline
Based on the proposed Scope of Services identified in Section 3 of this Proposal for the Optional Study 4, we propose the following schedule for delivery of NHA' s services. This schedule assumes that the Town enters into contract negotiation and execution the week of September 29, 2025, as outlined in the RFP.
Task Estimated Completion Date
4. 1: Identify Areas of Highest Priority November 2025
4. 2: Develop Annual Treatment Budget for Wildfire Risk Mitigation December 2025
4. 3: Present Preliminary Results February 2026
4. 4: Funding Plan Development March 2026
4. 5: Present Refined Cost & Funding Plan April 2026
Consequently, we estimate that completion of the non- optional tasks will take about 6 months from the date of engagement. Below is a summary of the estimated timeline for the additional optional services identified under Study 4:
Optional Task 4. 1a ( Retain Cat Modeler) will take about S weeks, not counting going out to RFP.
Optional Task 4. 3a ( Develop MOU for Collaboration Across Cities) will take approximately S weeks from start to finish.
Optional Task 4. 4a ( Funding Plan for Other Cities pursuant to MOU) can proceed concurrently with Task 4.4.
Optional Task 4. 6 ( Data Commons Work) will take an additional 16 weeks, in our experience.
Optional Task 4. 7 ( Polling Consultant Engagement) will take an additional 12 weeks
7. SAMPLES OF COMPARABLE PROJECTS
Sample 1: Pension Expense Modeling for the City of Walnut Creek As mentioned above under Section 4, NHA worked with the City of Walnut Creek in early 2025 to ( 1) educate stakeholders about their CaIPERS pension liability, (2) provide stress testing scenario modeling to account for potential changes to the discount rate in the future, ( 3) develop a customized model that helped optimize the timing and amounts of Section 115 Trust deposits and withdrawals, and ( 4) review and support potential changes to the City' s pension funding policy. The presentation in Appendix A N HA I ADVISORS Page16
Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C Los GATOS— PROPOSAL FOR STUDY 3( ALM) AND OPTIONAL STUDY 4( WILDFIRE RISK MITIGATION) showcases our ability to translate the complex world of CalPERS and develop dynamic tools that allow for prudent, long-term decision making by stakeholders.
Sample 2: Wildfire Buffer Zone Budget Modeling for the Greater Paradise Area NHA prepared a detailed budget for annualized treatment costs and other expenses for a 30,000- acre community wildfire buffer zone for the greater Paradise area. Appendix B includes a slide deck prepared by NHA on funding the proposed Paradise Community Wildfire Buffer Zone.
8. DISCLOSURE OF ABSENCE OF LITIGATION OR DISCIPLINE OVER LAST FIVE YEARS There have been no instances in the last five years where a client terminated NHA Advisors midway through a contract for providing advisory/ consulting services.
There are no pending legal actions alleging violations of law against the firm, any partner of the firm, or any employee of the firm by any Federal or State regulatory agency.
No Conflicts of Interest and other Disclosures
NHA has not engaged in any finder' s fees, fee splitting, payments to consultants, or other contractual arrangements which would constitute a real or perceived conflict of interest.
NHA does not have an affiliation or relationship with any broker-dealer, nor has any NHA personnel who would provide advice to the Town been has associated with a broker-dealer firm within the two years preceding this RFP.
NHA has no known conflicts of interest in serving as the municipal advisor to the Town. NHA has no financial, business or other relationship with the Town. NHA has no current clients who may have a financial interest in the outcome of this contract. NHA is not suspended from practice in the State of California. Further, NHA, focused upon cities as our core mission / business, does not serve any other public entities and so are free from those potential direct conflicts of interest that some of our competitors have from serving two different public agencies with differing goals or direct conflicts.
NHA, under its fiduciary duty as a SEC- Registered Municipal Advisor, must deal honestly and with the utmost good faith with the Town and act in the Town' s best interests without regard to the financial or other interests of NHA. NHA will eliminate or provide full and fair disclosure to the Town about each material conflict of interest (as applicable). NHA will not engage in municipal advisory activities with the Town if it cannot manage or mitigate its conflicts in a manner that will permit it to act in the Town' s best interests.
As a general statement, NHA represents that in connection with the issuance of municipal securities, NHA may receive compensation from the Town for services rendered. If this compensation is contingent upon the successful closing of a transaction and/ or is based on the size of a transaction then, consistent with the requirements of MSRB Rule G- 42, NHA hereby discloses that such contingent and/ or bond sizedetermined transactional compensation may present a potential conflict of interest regarding NHA' s ability to provide unbiased advice to Town to enter into such transaction. This conflict of interest will not impair NHA' s ability to give unbiased and competent advice or to fulfill its fiduciary duty to the Town. If NHA becomes aware of any additional potential or actual conflict of interest after this disclosure, NHA will disclose the detailed information in writing to the Town in a timely manner. NHA will never be NHA I ADVISORS Page17
Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C Los GATOS— PROPOSAL FOR STUDY 3( ALM) AND OPTIONAL STUDY 4( WILDFIRE RISK MITIGATION) compensated based upon the size of a transaction. NHA has a duty to reasonably establish its fees in relation to metrics that are fair and understandable to our clients such as amount of firm resources deployed, complexity of the deal, breadth of services rendered, risks associated with completion, among many other considerations.
9. REFERENCES
NHA' s references will provide the Town with a frank, detailed evaluation of our approach and processes.
We encourage you to reach out for more information about how NHA approaches projects with a goal of providing an unparalleled level of municipal advisory and consulting services.
References for Study 3 ( ALM)
Reference: City of Ukiah
Contact: Dan Buffalo, Finance Director
Contact Address: 300 Seminary Avenue, Ukiah, CA 95482
Contact Phone& Email Address: ( 707) 463- 6220 I dbuffalo@citvofukiah. com Start & End Date of Services: July 2016- Present
CaIPERS Pension Stakeholder Education, Cost Management
Strategy Evaluation, UAL Restructuring ( Lease Revenue Bond), Internal Pension Reserve Policy Analysis, ADP/ Fresh Start Analysis, Ongoing Stakeholder Updates/ Workshops
Description of Services:
Fees Charged:
Pension Education, Stress Testing + Lease Revenue UAL
Restructuring Bond: $ 112, 500
Ongoing Annual Pension Update/ Cost Management Strategy Analysis: $ 5, 750-$ 7, 500
NHA I ADVISORS Page18
Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C Los GATOS— PROPOSAL FOR STUDY 3( ALM) AND OPTIONAL STUDY 4( WILDFIRE RISK MITIGATION) Reference: Walnut Creek
Contact: Kirsten LaCasse, Administrative Services Director Contact Address: 1666 North Main Street, Walnut Creek, CA 94596 Contact Phone& Email Address: ( 925) 943- 5810 1 lacasse@walnut- creek.org Start & End Date of Services: October 2024— March 2025
CaIPERS Pension Stakeholder Education, Cost Management
Strategy Evaluation, Customized Section 115 Trust Model, 115 Trust Deposit/ Withdrawal Analysis, Policy Recommendations Description of Services:
Fees Charged:
15, 000
Reference: Riverside
Contact: Edward Enriquez, Assistant City Manager/ CFO and Treasurer Contact Address: 3900 Main Street, Riverside, CA 92522
Contact Phone& Email Address: ( 951) 826-55531 [email protected] Start & End Date of Services: 2018 to Present
CaIPERS Pension Stakeholder Education, Cost Management
Strategy Evaluation, $ 430 Million POB, Pension Policy
Development, Customized Section 115 Trust Model, 115 Trust Deposit/ Withdrawal Analysis, Annual Stakeholder Updates, POB Performance Comparison, " CaIPERS Challenge" Assistance CaIPERS Challenge I City Manager's Office)
Description of Services:
Fees Charged:
Pension Obligation Bond ( POB): $ 125, 000
Pre- POB Consulting: $ 25, 000
Annual Pension Update/ Cost Management Strategy
Recalibration: $ 7, 500 to$ 15, 000
N HA I ADVISORS Page19
Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C Los GATOS— PROPOSAL FOR STUDY 3( ALM) AND OPTIONAL STUDY 4( WILDFIRE RISK MITIGATION) Reference for Study 4 ( Wildfire Risk Mitigation)
Reference: Paradise Recreation and Park District
Contact: Dan Efseaff, District Manager
Contact Address: 6626 Skyway, Paradise CA 95969
Contact Phone& Email Address: ( 530) 872- 6393 I [email protected] Start & End Date of Services: 2023 to Present
Community Wildfire Buffer Zone Funding Plan for the Greater Paradise Region
Description of Services:
Fees Charged:
85, 000 (funded in part through OPR Grant)
10. PRELIMINARY FEE SCHEDULES
Fee Schedule for Study 3 ( ALM Study):
For work described in this proposal' s Section 3 ( Scope Comments and Methodology) for Study 3 ( ALM Study), NHA proposes to a compensation structure based on time and materials required at the hourly rate schedule shown below. We propose a not-to-exceed budget for these services of$ 50,000. The table below provides the itemized fee proposal as requested in the RFP and provides a " low-end" estimate and a " high- end" estimate based on our experience on other projects.
Study 3( ALM Study)- Budget Worksheet
Blended Estimated Hours Estimated Budget Estimated Hours Estimated Budget Task
Hourly Rate* ( Low End) Low End) High End) High End)
3. 1: Inventory& Evaluate Liabilities 285 35. 0 9, 975 45. 0 12, 825
3. 2: Funding Needs& Risk Reduction Analysis 285 35. 0 9, 975 60. 0 17, 100
3. 3: ALM Modeling 285 35. 0 9, 975 45. 0 12, 825
3. 4: Reserve Guidance 285 18. 0 5, 130 25. 0 7, 125
3. 5: Execution( As Needed) TBD TBD TBD TBD TBD
Total Low- End $ 35, 055 Total High- End $ 49, 875
Estimate Estimate
Blended hourly rate assumes the following approximate allocations of work among NI-IA staff.:principal20% vice president 30%,support staff 50% In- Person Meetings ( Upon Request) — NHA will be available to attend virtual meetings and conference calls at the hourly rates shown above and the budget shown above factors in the time for virtual meetings and conference calls in order to deliver the study to the Town. In the event that the Town requests inperson meetings, NHA proposes a travel fee of$ 1, 500 ( per attendee) for each in- person meeting.
Fixed Fee Fee
Engagement/ Administrative Setup
Contract, Insurance, etc.)
500
NHA I ADVISORS Page20
Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C Los GATOS— PROPOSAL FOR STUDY 3( ALM) AND OPTIONAL STUDY 4( WILDFIRE RISK MITIGATION) Professional Services ( Hourly)
2025
Rates( 1) c2a
Principal 360
Director J Senior Vice President 335
Vice President 310
Assist. Vice President I Sr. Associate 285
Associate 260
Senior Analyst 230
Analyst 205
Administrative 130
1) Hourly rates will escalate by 3% annually each January 1st( rounded to the nearest five dollars based on the
prior year' s rounded amount).
2) Effective hourly rates shown in invoices may be reduced to incorporate non- billable time.
Fee Schedule for Optional Study 4 ( Wildfire Risk Mitigation):
For work described in this proposal' s Section 3 ( Scope Comments and Methodology) for Optional Study 4 Wildfire Risk Mitigation Consulting), NHA proposes to be compensated based on time and materials required at the hourly rates shown in the section directly above. We propose a not-to- exceed budget for these services of $ 45, 000. This budget is specific the Tasks 4. 1, 4. 2, 4. 3, 4. 4 and 4. 5 discussed in that section and excludes the optional tasks in that scope. Should the Town desire the optional tasks, below is a summary of the budget for those tasks:
Optional Task 4. 1a ( Retain Cat Modeler): The cost to retain a cat modeler would be a separate budget, based on the proposals received from cat modeling firms.
Optional Task 4. 3a ( Develop MOU for Collaboration Across Cities): Time and Materials, subject to a fee cap of$ 15,000
Optional Task 4.4a ( Funding Plan for Other Cities Pursuant to MOU): Time and Materials, subject to a fee cap of$ 10,000
Expenses for Optional Study 4
Our$ 45, 000 fee cap for the non-optional tasks already includes$ 6, 000 potential expenses for retaining a consultant to prepare GIS layers for parcels within the proposed wildfire buffer zone, including priority treatment parcels.
NHA I ADVISORS Page21
Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C Los GATOS— PROPOSAL FOR STUDY 3( ALM) AND OPTIONAL STUDY 4( WILDFIRE RISK MITIGATION)
11. STATEMENT OF INSURANCE COVERAGE
As summarized in the table below, NHA meets the insurance requirements in the Town' s Sample Consultant Services Agreement. NHA will maintain this coverage for the term of the contract if selected by the Town for this engagement.
Coverage Type
Town' s Requirements
NHA' s Coverage
in Sample CSA
Valley Forge Insurance Company
Carriers N/ A
Hartford Casualty Insurance Company
Underwriters at Lloyd' s, London
General Liability
per occurrence)
2M 2M
General Liability
Not specified 4M
aggregate)
Auto Liability 1M ( per accident) 1M ( per accident)
Worker' s Comp (per
occurrence)
1M 1M
Professional Liability 1M per occurrence 1M per occurrence/$ 2M aggregate
12. TOOLS, DATA SOURCES, AND USE OF Al
Our pension advisory practice utilizes multiple data sources, including data taken directly from CaIPERS actuarial reports and the CaIPERS Pension Outlook Tool. This data provides inputs into our proprietary models that we have developed over years of pension consulting and advisory experience. Validation of the accuracy of these tools is extremely important to us and we review the output of these models regularly as part of each engagement.
As noted above, we will retain a consultant to prepare GIS layers for priority treatment parcels. Here is a link to the GIS layers website our consultant prepared for Paradise:
https:// experience. arcgis. com/ experience/ 767e8d 6173de49efb4978e142b00c523 NHA uses an Enterprise Artificial Intelligence(" Al") in a limited capacity. We use an enterprise subscription vs Open Web Al) to maintain privacy of our documents and control on the outputs. To date, we have not used Al as a tool to generate or develop any of our models, since most of our models were developed years before the advent of Al. Generally speaking, we approach the use of AI in any consulting or financing engagements with healthy dose skepticism while also seeking strategic ways we can benefit our clients through improving our efficiency on projects. We recognize that there is a concerted marketing effort underway across the globe to promote widespread Al adoption, but we also recognize that Al is a tool, not a replacement for an experienced advisory staff. Any outputs of Al must be thoroughly vetted and reviewed before being incorporated into any body of work to minimize the impact from any hallucinations" in Al outputs producing a flawed product.
NHA I ADVISORS Page22
Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C Los GATOS— PROPOSAL FOR STUDY 3( ALM) AND OPTIONAL STUDY 4( WILDFIRE RISK MITIGATION) APPENDIX A: SAMPLE OF PENSION EXPENSE MODELING FOR THE CITY OF
WALNUT CREEK
N HA I ADVISORS Page23
Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C 3/ 20/ 2025
PENSION TRUST & RESERVE ANALYSIS AND USE POLICY
CITY COUNCIL
MARCH 18, 2025
1 Pension Trust& Reserve Use Strate
Considerations
nsion Program Review
Historical and Projected CaIPERS Costs
TODAY' S
DISCUSSION ost Management Strategy Overview
Section 115 Trust Analysis
Scenarios
Takeaways and Recommendation
Proposed Policy Language
2 1
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C 3/ 20/ 2025
REQUESTED ACTION
Accept the report and adopt a
Provide Feedback Resolution establishing the Pension
Trust and Reserve Use Policy
3 THINGS TO CONSIDER....
When do we use?
How much do we use?
What latitude should the policy provide?
How can we be mindful of using one- time dollars for ongoing costs? How do we balance use with other reserves?
4 2
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C 3/ 20/ 2025 Michael Meyer
Vice President
Pension Group Manager
THE NHA Craig Hill
ADVISORSManaging
Principal
TEAM Matt DeFilippis
Senior Analyst
Adrian Gonzalez
Analyst
5 CITY OF WALNUT CREEK CITY OF
CALPERS PENSION PROGRAM REVIEW AND IC "
r "'°
WALNUT
t CREEK
COST MANAGEMENT STRATEGY ASSESSMENT
NHAIADVISORS
Financial& Policy Strategies.
Delivered.
MARCH 18, 2025
6 3
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C 3/ 20/ 2025 Today' s Discussion
I. Background on CaIPERS Costs
II. Historical and Projected CaIPERS Costs
III. Cost Management Strategy Overview
Iv. City' s Section 115 Trust
I. Overview
II. Objectives
III. Analysis
AT 7 NHA I ADVISORS
7 I. BACKGROUND ON CALPERS COSTS
s
4
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C 3/ 20/ 2025 City of Walnut Creek CaIPERS Summary
The City has a $ 155M CaIPERS Unfunded Accrued Liability ( UAL), as of 6/ 30/ 2024, per the CaIPERS Pension Outlook Tool projections Miscellaneous Plan: $ 82M I Safety Plan: $ 73M
City has been proactive in addressing rising pension costs
28. 7M in the Section 115 Trust as of 9/ 30/ 2024
1. 9M in the General Fund Pension Reserve
Effective funded ratio increases when including these assets The City makes two types of payments to CaIPERS: Normal Cost & UAL wCREALL. r
9 NHAIADVISORS
CREEK
a„
9 Normal Cost = Annual Cost for Current Employees
Amount needed to fund
future retirement benefits
Employee
based on actuarial Contributions
calculations ( life expectancy,
payroll increases, etc.) Employer Assumptions
ontributions Used
Benefits are funded as they
are earned
Normal
Maintains the long- term Cost
stability of the pension
Calculation
system
CREE
wni
K::
r 10
NHAIADVISORS
e wiN: oe' µeo.
10 5
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C 3/ 20/ 2025 Unfunded Accrued Liability (UAL)
Shortfall between the promised City of Walnut Creek
pension benefits and the funds CaIPERS Pension Funded Status currently available in the CaIPERS $ sso
system to pay for those benefits ° $ soo
2 $
450
Shortfall( UAL):
Increases or decreases based on
400
155 Million
CaIPERS investment returns
350
Impacts amortized over 20 years 300
Accrued
Irregular payment shape as UAL 250 521Liability:
comprised of over 30 layers; each with $
200
Market Value of
Million
its own term/ shape CaIPERS Assets:
150 367 Million
Funded Ratio 100
Market Value of Assets 50
70 3%
Accrued Liability 0
Source: Ca? 4ERS Lenslm Outlook Tool. Assumes9. 3% Investment returns In N20L3- 24.
CEpK 11
NHAIADVISORS
11 Discount Rate & Asset Liability Management (" ALM")
An assumed rate of return; a way to assess the risk of
Discount Rate CaIPERS' investment portfolio
The interest rate charged on the City' s UAL debt
Occurs every four years to balance the expected cost of pension payments with the expected investment returns Asset Liability • Review of CaIPERS' investment portfolios and retirement Management plan liabilities ( based on demographic& economic factors, including membership, payroll growth,
retirement ages, inflation, and life expectancy) —,
gar 2025 ALM Study in progress 12
NHAIADVIISORS
Da—
cxsr
12 6
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C 3/ 20/ 2025 Historical PERS
Returns
5- Year: 6. 6%
Why CaIPERS Costs Have Trended Higher 10- Year: 6. 2%
20- Year: 6. 7%
Then ( late 1990s)... Now ... 30- Year. 7. 7%
Robust investment returns ( 10%+) Sluggish investment returns ( not meeting assumptions)
Retirement plans were" SuperAssumptions have changed/ grown Funded" through the late 1990s more conservative
Earnings on funds were more than Discount Rate: 8. 25% 7. 00% -3 6.80% adequate to cover retirement costs
Inflation rate( prices going up)
Super funded status induced
Mortality rates ( people living longer) widespread retirement benefits enhancements.... Shorter, more conservative
amortizations
Past funding policies led to
contribution holidays and " free"
benefit improvements
g cwxeex
13 NHAIADVISORS
13 CaIPERS Historical Preliminary Investment Returns ( Time- Weighted)
25. 0%
20. 7% 21. 3%
20. 0%
18 8% 18A%
15. 0% 12. 2% 11. 9%
11. 1% Ell 10. 0%
9. 3%
5. 0%
1. 0% 0. 6%
5. 0% 2. 9%
10. 0%
15. 0%
6. 1%
AnnuaI Return - Target Discount Rate
20. 0%
25. 0%
23. 6%
30. 0%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 ArNUT 14
NHAIADVISORS
Da-.
14 7
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C 3/ 20/ 2025 How CaIPERS Benefits Get Funded
Pre- 2008
Ca! PERS CaIPERS CaIPERS
Investment
earnings used to investment earnings employers members
make up a higher
percentage of
total contributions
UNITED s'1'. 1' 1' 1111 As investments
underperform
assumptions,
employers must
make up the
difference, unless
the additional
CaIPERS Pension Buck: a 20- year Average( as of June 30, 2024) costs are
negotiated with
employees
15 NHAIADVISORS
15 City' s CaIPERS Retirement Plans
2 Main CaIPERS plans; Miscellaneous & Safety
Miscellaneous: 1, 352 covered members; $ 82M UAL
Safety: 285 covered members; $ 73M UAL
PEPRA ( effective 2013) helpful to manage long term pension costs for new employees
Enacted revised benefit levels for new plan members
Higher employee contribution rates mean more normal cost is being paid by the employee
However, 98% of current UAL comes from Classic plans and is not impacted by PEPRA
16 NHAIADVISORS
16 8
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C 3/ 20/ 2025 Historical & Projected PEPRA Transition
Classic vs. PEPRA % of Payroll
60 4 Total Classic Payroll Total PEPRA Payroll
2 $ 50
79. 6%
40 33. 0%
27. 696
I II
WALM19'
CREEK
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eeporm.
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ays
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Projected NHAIADVISORS
inane!
V
O
Poi
i
enw, m.
zozo- zoz4) of aeerommateb 4.? percentage eomts per year. 17 II. HISTORICAL AND PROJECTED CALPERS COSTS
1s
9
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C 3/ 20/ 2025 History of the City' s UAL Balance & Funded Ratio
Funded Ratio includes Section 115 Trust Assets& General Fund Pension Reserve UAL eFunded Ratio( Includes Section 115 Trust Assets& General Fund Pension Reserve) 180
160
159 164 155
138 U
140
s
73. 7% 7c. o
120 129 123
100
s0
102
60 40
20 2018 2019 2020 2021 2022 2023 2024
Ca1PER5 Returns: 8. 4% 6. 5% 5. 0% 22. 4% 7. 5% 6. 1% 9. 3%( Prelim) sp eprFFin 19
NHAIADVISO RNS
19 CaIPERS Funded Ratio Comparison ( As of June 30, 2023) Funded Ratio Includes Trust Assets & Pension Reserves
80%
70. 1% 71. 1% 72. 9%
70%
60%
60. 6% 164M UAL
176M UAL 294M UAL
261M UAL 166M UAL
50% Assets:
Assets: Assets: Section 115
40q
Assets: Assets: Section 115 Section 115 Trust($ 25M)
Section 115 Section 115 Trust($ 0) Trust($ 46M) Pension 30%
Trust($ 0) Trust($ 0) Reserve
1. 9M)
20%
10%
0%
Concord Antioch Livermore Pleasanton Walnut Creek
arNUT Source Camees Act..? RePo. andatyaun« edfnannm. mrernenm 20
NHAIADVISO RS
20 10
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C 3/ 20/ 2025 Historical & Projected CaIPERS Payments ( UAL + Normal Cost) UAL+ Normal Cost 25
payments projected to
increase from $ 18M to 20
23M (+ 24%) by FY 2032
City' s UAL payments rising $ 15 — 1 I
to$ 16. 6M by FY 2032 Hypothetical UAL Payments*
28% higher than FY 2025 $ 10
93% FY 2023- 24 Returns)
UAL payment($ 13M) 1111 IlIlIllIllIll 11111 Annual Normal Cost 5 contributions going Normal Cost
forward projected to range
A
between$ 5. 4M and 0
CO m o + N CO V In to N CO al 0 + N CO v In to N CO al 0 + N CO v In
7. 5 M through FY 2045 00 NNNNNNNNNN 0 0 0 0 0 0 0 0 0 0 0 0•zr 0•zr 0•zr 0•zr 0
N N N N N N N N N N N N N N N N N N N N N N N N N N N N Source: Cd4FRSAQua1d Vduuhc Repo25& Cd4FRS Pension OUHook Tool CRE.EKf etusth <
v2OL3- za nvesouene. em. ne of s3% and 6. 8% m asouene
21 NHA ADVISORS
CREEK returns thereafter. o,,,,,,, e
21 III. COST MANAGEMENT STRATEGY OVERVIEW
22 11
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C 3/ 20/ 2025 Pension Cost- Management Strategies — Not Mutually Exclusive Prepay UAL early in Fiscal Year (= 3. 3% discount) 3 City Does This Negotiate Cost Sharing With Employees
New employees already governed by lower cost/ benefit PEPRA plans Negotiate cost sharing of the City' s share
Use Cash Reserves to Pay Extra
Section 115 Pension Trust— Separate trust solely dedicated to pension City' s annual UAL cost and Normal Cost can be supplemented with the Section 115 Trust
Additional Discretionary Payments (" ADPs")— direct payments to CaIPERS to reduce UAL Can be funded with Section 115 or annual surplus ( not recommended at this time given City' s projected budget deficits)
wALNCF 23 NHAI ADVISORS
CRF: F 1:
23 IV. CITY' S SECTION 115 TRUST
OVERVIEW, OBJECTIVES & ANALYSIS
24 12
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C 3/ 20/ 2025 Section 115 Pension Trust - Overview
What is it? Restricted Account for pension
Advantages:
Potential Higher Investment Returns in Managed Account
Longer- Term Benefit: Trust funds can grow over time and pay off a large% of UAL in the future Shorter-Term Benefit: Apply funds to " smooth" payment spikes in UAL and/ or Normal Cost Flexibility— more investment options than CaIPERS and the City can decide when and how to use
Potential shock absorber for volatility from CaIPERS investment performance & assumption changes
Disadvantages:
Doesn' t directly reduce UAL until funds are transferred to CaIPERS Requires reserves/ surplus contributions to build account balance Investment risk( dependent on type of investment portfolio)
NHAIADVISORS
g
WNW 25
25 Section 115 Trust — City' s Objectives
VOLATILITY MITIGATION: Mitigate budgeting impacts of
increasing/ fluctuating pension costs
LEVEL LOWER ANNUAL PAY e Trust judiciously to
flatten the pension curve (" mountain peak")
LIQUIDITY: Maintain (don' t fully deplete) minimum trust balance to protect against future unknowns
26 NHAIADVISORS
Da-.
26 13
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C 3/ 20/ 2025 Section 115 Pension Trust & Pension Reserve
City' s Section 115 Pension Trust has$ 28. 7 million of assets as of 9/ 30/ 2024 Balanced investment objective: 50% Equity/ 50% Fixed Income
10. 89% investment return for FY 2024; 5. 87% investment return since inception( FY 2019) Historical Contributions: Total =$ 19, 876, 600
August 2018:$ 13, 895, 400
April 2019:$ 2, 989,000
July 2019:$ 2, 992, 200
General Fund Pension Reserve has$ 1. 9M
Key Considerations for City
Is it time to stop growing trust?
Timing and size of optimal withdrawals
How would a discount rate change or recession change the strategy? fNHAIADVISORS Auur 27
27 Section 115 Trust — Customized Modeling & Analysis
Using a customized model that can be updated periodically Model out various scenarios using CaIPERS Pension Outlook Tool Estimating withdrawals from the Trust to create different payment smoothing strategies
Scenarios
1— STATUS QUO; 9. 3% FY 2023- 24 Returns, 6. 8% Returns After, No Assumption Changes
2— DISCOUNT RATE REDUCTION; CaIPERS lowers discount rate from 6. 8% to 6. 5% 3— DEFICIT MITIGATION; Withdrawals from Trust to mitigate City' s forecasted deficits
p° rr 28
NHAIADVISORS
28 14
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C 3/ 20/ 2025 Scenario # 1 — STATUS QUO
18 Assumptions:
16 i- •` •` CaIPERS Discount Rate: 6. 8%
t\ \ kt\ x
no change)
14 \`\\-\ 1 \\\ N7
N •• ' ` IS CaIPERS Investment Returns:
12 1 1 1 1 1 1 1 1 1 • 9. 3% in FY 2023- 24; 6. 8%
slo
Net Payments thereafter
Smoothing Level:$ 12. 1M
8 6 I
I I I I I I
I I I I I I I
Beginning Trust Balance:
28. 7M ( as of 9/ 30/ 2024)
4 I I I
LIe
IeItsI I I I I I I I I
r
Additional Trust Contributions:
IIIIIIIII IIIIII 1 Trust Annual Investment 2
s- 111111111 I I I I I I I ' Earnings: 5. 28%
Ending Trust Balance: $ 0
AI.NROT 29 NHAIADVISORS
29 Scenario #2 — DISCOUNT RATE REDUCTION
6. 5% CaIPERS Discount Rate — UAL Increase from $ 155M to$ 175M 20 Assumptions:
0 18 1 `„ CaIPERS Discount Rate: 6. 5%
16 —\- :- - `•
CaIPERS Investment Returns:
14 =
N. `
I I I\ • ' •
9. 3% in FY 2023- 24; 6. 5%
thereafter
12 Net Payments
sl0
Smoothing Level:$ 13. 7M Trust Balance: $ 28. 7M ( as of 8 I
I I I I I I
I .• II II 9/ 30/ 2024)
6 I i
L' Pa'
ments I I . II Additional Trust Contributions:
4 2
I I I I I I I • I • I I I I % Trust Annual Investment
I I I I I II Ili Earnings: 5. 28%
C C
C
C
C C C C C C C . Ending Trust Balance: $ 0
ArN T 30
NHAIADVISORS
0.-.
30 15
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C 3/ 20/ 2025 Scenario #3 — DEFICIT MITIGATION
Withdrawals from Trust to Mitigate City's Forecasted Deficits ( Moderate Recession) Assumptions:
Moderate Recession FY2027
Net Operating Results After Funding Reserves (% ot GF Expenditures) Assumes net operating results 3000%
um% from City' s Moderate Recession
9A0% financial forecast
6U0%
3. DD% FY 2026- 27 Recession: 18- month
spar
j $
18. 9) • 513. 5) Ell 1111 s0.5) WO
50. 3 52. 3 $ 3. 4 , downturn; 3- year recovery
3. Wx
3. DD% 2% Property Tax; - 6. 25% Sales
Tax& TOT; - 5% Other Revenues
3100% Assumes Trust offsets 100% of
FY3026 R3037 K1028 FY2029 FY2D30 FY3033 FV2033 FY2033 P0034 FY3035 deficits through FY 2034 and a
portion of the deficit in FY
2035, before exhausted
REE T
31 NHAI AD VISO RNS
31 Comparison of Trust Deposits and Withdrawals
Scenario# 1( Status Quo) Scenario# 2( Discount Rate Reduction) Scenario# 3( Deficit Mitigation) Fiscal Year Deposits to Trust Withdrawals from Trust Deposits to Trust Withdrawals from Trust Deposits to Trust Withdrawals from Trust 2026 0 1, 317, 707 0 0 0 3, 100, 000
2027 0 2, 124, 510 0 2, 306, 566 0 6, 800, 000
2028 0 2, 724, 510 0 2, 896, 566 0 8, 900, 000
2029 0 4, 164, 510 0 4, 306, 566 0 7, 800, 000
2030 0 4, 344, 510 0 4, 496, 566 0 3, 500, 000
2031 0 4, 484, 510 0 4, 636, 566 0 0
2032 0 4, 454, 510 0 4, 606, 566 0 0
2033 0 4, 334, 510 0 4, 486, 566 0 0
2034 0 3, 734, 510 0 3, 886, 566 0 3, 500, 000
2035 0 3, 384, 510 0 3, 546, 566 0 723, 598
2036 0 2, 784, 510 0 2, 956, 566 0 0
2037 0 1, 704, 510 0 1, 886, 566 0 0
2038 0 0 0 0 0 0
2039 0 0 0 0 0 0
2040 0 0 0 0 0 0
2041 0 0 0 0 0 0
2042 0 0 0 0 0 0
2043 0 0 0 0 0 0
2044 0 0 0 0 0 0
Total 0 39, 557, 314 0 40, 012, 229 0 34, 323, 598
WALNUT 32
NHA ADVISORS
32 16
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C 3/ 20/ 2025
QUESTIONS
7 aobi
i
re1 lie
t1
I
a •
4 n /Alp
wnTiL' NHAIADVISORS
33 KEY TAKEAWAYS
The trust is intended to be used.
Pension costs are projected to increase through 2033;
decrease beginning in 2034.
City's healthy Section 115 Trust balance and reserve can be leveraged over the next 10- 12 years.
Staff recommends adopting a policy for the use of
pension resources.
34 17
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C 3/ 20/ 2025
PROPOSED POLICY KEY PROVISIONS
Only using the
Balance use of the Avoid relying on one- Pension Resources Pension Resources time funds for
during deficit years to
with other reserves
maintain ongoing expenses service levels
General Fund Continue pre- paying Take steps to ensure
surpluses may be pension liabilities that the Pension
deposited into the when feasible to Resources last until at trust achieve cost savings least FY 2034
35 RECOMMENDED ACTION
Accept the report and
adopt a Resolution
Provide Feedback establishing the
Pension Trust and
Reserve Use Policy
36 18
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C 3/ 20/ 2025 421±.4
4,
1 m1011 AO
kicr AR‘' 01, 4111
t
QUESTIONS? V.
II\
IIII)
r ft
r
air
37 BACK-UP SLIDES
BEYOND THIS
POINT
38 19
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C 3/ 20/ 2025
OBJECTIVES, POLICIES AND PRINCIPALS
Objectives:
Mitigate budget impacts of increasing and fluctuating pension costs in a sustainable manner.
Use the pension resources judiciously to flatten the curve of rising pension costs.
Ensure the trust lasts at least until pension costs are projected to begin decreasing( estimated by CaIPERS to be 2034 perAttachment I)
Be mindful of using one-time funds for ongoing costs; minimize withdrawals with a long-term plan for• the use of the trust.
Balance the use of the trust with other reserves during challenging economic conditions, when appropriate.
39 OBJECTIVES, POLICIES AND PRINCIPALS ( CONTINUED)
Policies and Guiding Principles:
The Pension Resources may be utilized during fiscal years in which a structural deficit is present to ensure the continuation of existing service levels, and not to enhance or increase services.
The trust would not be used to offset pension costs in years in which there is a structural surplus.
Pension Resources will be used in a fiscally responsible manner.While the pension resources would be budgeted as a funding source, the amount withdrawn from the trust will be determined at year-end based on actual revenues compared to actual expenditures in the General Fund. To maximize investment earnings and ensure judicious use of the funding, only the amount budgeted, or actual amount needed to close the gap, whichever is less, would be withdrawn from the trust.
In any fiscal year in which there is a year-end surplus in the General Fund, Council may choose to deposit some or all of the year-end surplus in the trust. 40 20
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C 3/ 20/ 2025
OBJECTIVES, POLICIES AND PRINCIPALS ( CONTINUED)
Policies and Guiding Principles:
The Pension Resources are intended to be used under this policy through FY2034, when pension costs are projected to begin to decrease. At that time, all remaining funds, if any, would remain in the trust to offset future pension costs or until the City Council provides further direction.
The City will continue to pre- pay the Unfunded Actuarial Liability( UAL) payment annually, when feasible, to achieve budgetary savings from the discount offered by CaIPERS ( half of the discount rate percentage).
In any fiscal year in which there is a year-end surplus in the General Fund, Council may choose to deposit some or all of the year- end surplus in the trust
The Pension Resources are intended to be used under this policy through FY2034, when pension costs are projected to begin to decrease. At that time, all remaining funds, if any, would remain in the trust to offset future pension costs or until the City Council provides further direction.
The City will continue to pre- pay the Unfunded Actuarial Liability( UAL) payment annually, when feasible, to achieve budgetary savings from the discount offered by CaIPERS ( half of the discount rate percentage). 41 mos
APPENDIX - ADDITIONAL RESOURCES
42 21
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C 3/ 20/ 2025 Classic vs. PEPRA Pension Example Comparison
Employee# 1 is a Classic member and Employee# 2 is a PEPRA member— both have served for 25 years and have a final average compensation of$ 125K
Employee# 2 will have a lower pension than Employee# 1 due to a lower benefit factor, and will also retire at 57 years old instead of 50 years old like the Classic member The City will save money from PEPRA' s lower pension amount and because PEPRA' s pension may be paid out for a shorter amount of time due to retirement occurring 7 years later compared to Classic The difference in pension between Classic and PEPRA is even more apparent at higher compensation levels, as there is a pensionable compensation limit of approximately$ 175K for PEPRA and$ 330K for Classic Service XBenefit Final Annual
Credit Factor Compensation ! Pension
Employee# 1( Classic}
25 Years x 3. 0% @ 50 x 125, 000 93, 750
Employee# 2 ( PEPRA}
25 Years x 2. 7% @ 57 X 125, 000 84,375
C\ istr 43
N HA ADVISORS
xt. ti ras
43 Cost of PEPRA vs. No PEPRA
PEPRA is projected to lower Normal Cost and UAL costs for the City Projected Normal Cost Projected UAL Balance
u, $
14 u,$ 180
0 0 $160 12
140
10 IL$
120 -
Cn
0 0 0
w w w
m00
w
0 w w w w w w w w w w w w
MNo PEPRA . . PEPRA MNo PEPRA , PEPRA
ppgrAr souA.: Comeas Pe on outlook root assumes no PEPRA implementation 44 NHA IADVISORS CREEK 009E bo. P. o/ mom.
l•..`" s...
44 22
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C 3/ 20/ 2025 Additional Discretionary Payment (" ADP")
What is it? City makes ADP directly to CaIPERS and CaIPERS eliminates payments associated with the portion of the UAL paid off, essentially giving the City credit at the discount/ interest rate ( currently 6. 8%) Advantages:
Reduced UAL/ higher CaIPERS funding ratio
Reduced future payments
Broader, less restrictive CaIPERS investment portfolio has potential for higher returns Disadvantages:
Requires reserves/ surplus to fund
Re- investment and market timing risk with ADP funds
Less budgetary flexibility and investment control ( vs. Section 115 Trust option) gp°jp 45
NHA! ADVISORS
45 Section 115 Trust vs. CaIPERS ADP Comparison
OPTION Section 115 Trust CaIPERS ADP
Reduced UAL& UAL Payments
with CaIPERS
No Yes
Reduced Pension Liability in No ( Show up as an asset on the Financial Report( ACFR) City' s financial statements)
Yes
Control of Investment
Strategy
Yes No
Funds Managed By Trust Administrator CaIPERS
Flexibility in Uses Yes No
Enhanced Budgetary
Flexibility
Yes Na
Immediate; Length of time
Varies; Depends on when City varies based on which
Savings
utilizes funds to pay liabilities amortization component is paid off
g
WALNUT 46
NHAIADVISORS
46 23
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C Los GATOS— PROPOSAL FOR STUDY 3( ALM) AND OPTIONAL STUDY 4( WILDFIRE RISK MITIGATION) APPENDIX B: SAMPLE OF WILDFIRE BUFFER ZONE BUDGET MODELING FOR THE
GREATER PARADISE AREA
N HA I ADVISORS Page24
Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C 1 C
DRAFT BUDGET AND POTENTIAL PARCEL TAX ANALYSIS
FOR WILDFIRE BUFFER ZONE FOR THE GREATER PARADISE
AREA
PRELIMINARY ESTIMATES ON HOW TO FUND BOTH ACQUISITION OF A WILDFIRE BUFFER ZONE AND
LONG- TERM TREATMENT
N HA I ADVISORS
Financial & Policy Strategies.
Delivered.
July 30, 2025
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C Our Goals for this Analysis
Define sustainable, long- term wildfire fuel reduction funding Identify major cost drivers
Recommend tax structure to meet funding needs
Outline governance for funding + operations
Set timeline for governance setup and tax measure
sti,r
1 c)
2 N HA I ADVISORS Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C Constraints on the Analysis
Wide variation in treatment costs per acre
No consensus on best treatment by region/ vegetation/ topography No proven link between mitigation spending and insurance benefits No regional governance entity ready to implement large- scale buffer zone 1111010Sts
3 N HA I ADVISORS Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C A Draft Budget for Wildfire Risk Reduction for the Greater Paradise Area: Background
PRPD has worked with both the Butte Fire Safe Council and Xyloplan to develop a list of priority parcels for wildfire fuel reduction Targeted parcels protect structures in the Paradise, Concow and Magalia areas The Xyloplan parcels are the result of a comprehensive fire spread model based on wind- storm patterns
The Butte Fire Safe Council parcels are based on local knowledge of local fire safety professionals I1,
The PRPD team merged both parcel lists to come up with an approximately 900 parcel combined list comprising nearly 3, 000 acres.
Nevertheless, the original study in 2023 funded by The Nature Conservancy identified about 30,000 acres of area on the periphery of Paradise, Concow and Magalia that may require treatment
The prioritization process enables a more cost- efficient budget to be developed for long term wildfire risk mitigation
4 N HA I ADVISORS Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C Determining Treatment Costs for Target Parcels
Multiple sources on treatment costs per acre for different treatments, landscape, and topography:
CalFire
Butte Fire Safe Council
County of Plumas
Sierra Nevada Conservancy
California Air Resources Board and many others
There is no consensus regionally or statewide on treatment types, recurrence intervals or treatment costs for different climate zones and types of terrain Approach: use relatively high treatment costs per acre, and lower ( more frequent) recurrence intervals for a conservative budget 5 N HA I ADVISORS Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C A Wide Rang of Treatment Cost Estimates
6, 000
5, 000
4,000
3, 000
2, 000
1, 000 11
44b 44
0 46
iill
e
I
56 4\
be'
l
iI,4l 0% yy
b'c• . Cc\•
1 l•i
l0,5.c4
I
tG
Ja`••%` 4a` . ` ate\ C,,`,
G QJ a i
4z b,
1/ 40-
c c,
IPa a
4 1,
Q
ry
CalFire ( Forest) CalFire ( Shrubland) CalFire ( Herbaceous) CalFire ( Woodland) 2C Land ECO Firestorm Paul Roen
Atlas IN Bella GE Forestry Mountain View Reforestation
Professional Slahbusting BK& Son Red Mtn. Butte County
Plumas County SNC ( High)
6 N HA I ADVISORS Strategies. For more detailed cost estimates, see Appendix. Financial& Policy Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C Prevailing wage, Prescribed Burn and Grazing, First Treatment Prevailing wage likely to add 20% to costs for state/ local wildfire treatments First- time treatment costs r'j2. 5x higher than long- term CalFire provides a liability insurance policy of $2 million for each prescribed burn
In the very unlikely event of an " escape", for a prescribed burn on private land, this limit is inadequate
While prescribed burns, notwithstanding the shortage of experienced staff, are scalable on public property, such burns are not scalable on private property Grazing, where appropriate, is a very effective low- cost treatment but scalability is uncertain
For purposes of a draft budget, we assume no prescribed burns and minimal grazing
7 NHAIADVISORS
Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463 BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C Treatment Costs and Recurrence Interval Assumptions Used in this Analysis
Emergent
Developed Developed Developed Developed
Evergreen
Open Low Medium High 5hrubland
Grassland/ Mixed Deciduous Herbaceous Fallow
Forest Pasture Forest Forest Vietlands/ Woody Cropland
Space Intensity Intensity Intensity
Wetlands
Treatment
Acres 1, 238. 66 143.28 33. 01 5. 41 0. 99 1, 190. 43 295. 54 2. 13 27.11 11. 86 1. 15 Cost per
acre 3, 000 1, 000 1, 000 1, 000 1, 000 2, 500 800 3, 000 3, 000 800 Treatment
cost for land
use category 3, 715, 981 143, 279 33. 010 5. 408 988 2. 976. 063 236. 434 6. 397 81. 331 921 Recurrence
Interval 5 5 3 3 3 5 3 5 5 5 3
Annualized
treatment
costs 743, 196 28, 656 11. 003 1, 803 329 595. 213 78. 811 1. 279 16.266 307 8 N HA ! ADVISORS
Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C Treatment Cost Overview
Treatment costs are on the high side of the range
Recurrence intervals are on the low side of the range
Annualized costs are about $ 1. 5 million/ year
These annual costs do not include administration — we estimate this at 500, 000/ yea r
Consequently, we estimate that annual operating cost budget to be $ 4. 5 million/ year for the first 5 years, and then about $ 2 million per year thereafter
These figures do not include any inflation assumptions
9 NHA I ADVISORS Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C Administrative Costs
Fully scaled treatment for 600+ acres per year ( 3, 000 acres on a 5- year recurrence interval) requires administrative organization The treatment crews need management, prescribed burns need liability insurance
Acquisition of easements or fee title for nearly 3, 000 acres will require experienced property negotiators, similar to those used for ROW acquisition There will be legal expenses for acquisitions of easements or fee title If eminent domain needs to be used, this can be an expensive process so NHAIADVISORS
Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C Operational Cost Assumptions
Annualized Treatmenmt
Costs (long term) 1, 477,168
First time treatment costs
multiplier mud 2. 5
LAnnualized
first time —
treatment costs 3, 692,921
Annual Administrative Costs
kilo 500, 000
pi Combined long term
treatment and
administrative costs 1, 977, 168
Combined treatment and
administrative costs for first
5 years 4, 192, 921
11 NHA I ADVISORS Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C Target Parcel Acquisition Cost Assumptions
PRPD retained Integra Realty to do a high- level appraisal of the costs of acquiring access to the circa 900 target parcels for treatment While PRPD and Butte Fire Safe Council have had good experience using " good will" to gain access for treatment, we do not believe that a long term fully scaled budget should rely on 100% good will to provide access to key parcels on a regular basis There are three options for securing access
Purchase of fee title
Purchase of an easement c014' AIN
Long-term access to a parcel through the good will of the parcel owner Integra valued both fee title and easement acquisition costs, establishing a range from low to high for such costs
12 N HA I ADVISORS Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C Parcel Access Acquisition Cost Assumptions
Integra Cost Estimates
Fee Title Easement
Low 20, 187, 713 8, 075, 085
High 39, 906, 818 15, 962, 727
Total Access Acquisition Cost Budget,
Including Goodwill
Per cent Cost ( low) Cost ( high)
Acquisition 25% 5, 046, 928 9, 976, 705
Easement 65% 5, 248, 805 10, 375, 773
Good will 10aic
Total 100% 10, 295, 734 20, 352, 477
Annualized
over 5 years 2, 059, 147 4, 070, 495
13 NHAIADVISORS
Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C Why Debt Financing for Access Acquisition and First Treatment Costs?
Costs for both access acquisition and first-time treatment costs make annual funding need much higher in the first 5 years
Assumes all 3, 000 acres are " acquired" for access purposes in the first 5 years Assumes all 3, 000 acres receive a treatment, likely their first treatment, in the first 5 years.
Expenses funded on " pay- go" basis means the annual tax requirements are much higher over the first 5 years
Ballot approval will require disclosure of the highest potential tax, not an " average" tax over the life of the exaction
The higher tax for the first 5 years will result in more " no" votes on a ballot measure Debt Financing
Spreads costs evenly over time
Steadier tax rate
More electable measure
Bottom line: debt financing makes a tax measure more electable 14 NHAIADVISORS
Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C Debt Financing Assumptions
No Grant Funding 50% Grant Funding
Low Cost Scenario High Cost Scenario Low Cost Scenario High Cost Scenario Extra first time treatment costs 18, 001, 812
I
18, 001, 812 18, 001, 812 18, 001, 812
Access acquisition cost 10, 295, 734 20, 352, 477 10, 295, 734 20, 352, 477 Grant Funding Amount 14, 148, 773 19, 177, 145
Total to be financed 28, 297, 546 38, 354, 289 14, 148, 773 19, 177, 145 Annual Interest Rate 6. 5% 6. 5% 6. 5% 6. 5%
Annual debt service for first 5
years 3, 460, 000 4, 340, 000 2, 210, 000 2, 320, 000
Annual debt service for next 15
years 1, 980, 000 2, 870, 000 730, 000 840, 000
Assumes all bonds are issued with a taxable interest rate., Debt service is higher in the first 5 years because the higher initial treatment costs are being funded by the bond issue. This means no treatment costs are funded on a " pay-go" basis over the first 5 years.
15 NHAIADVISORS
Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C Use of Grants
FEMA and Prop 4 grants could significantly reduce access acquisition and firsttime treatment costs, further reducing both the debt required and the annual budget
There is uncertainty over the future of the FEMA BRIC program Cal OES recommends that we consider applying for FEMA grants for access acquisition in a phased or " batched" process
Several Prop 4 authorizations can potentially be used to fund either access acquisition or first-time treatment costs
16 NHAIADVISORS
Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C Tax Levy Options
Local jurisdictions may raise funds, with voter approval, through the following mechanisms:
scalubility to meet
Voter up prowl Tax Levy sensiterityto Land use, paltel annual funding Tax Levy Option requirement Key legal constraints size, vutnerability, etc reyuirernerrts Governance Requirement Maximum sensitivityof all potential tag:
Needs to be structured to allow both measures. Any objectively measurable Any jurisdiction can create Mello- Roos/ parcel tax by 2; 3 vole of voters in capital funding through bonds and metric can be used except for assessed and administer a Mello Boa rdlCouncilvote area to be taxed an nualmainte' lance valuation Fully scalable Roos district Maximum sensitivityof all potential tax
Simple majority of Needs to be structured to allow both measures. Any objectivety measurable AnyjuriJiction can create Mello- Roo s/ parceltaxby voters in area to be capital funding through to nds a nd metric can be used except for assessed and administer a Mete citizen circulated petition taxed annual maintenance valuation Fully scalable Roos district Can only be used for
Ad valorem tax to r general. 2/ 3 vote olvoters in Tax levy is based solely on assessed Assessed valua lion is the only access acquisition, not Can be authorized by any obligation bonds area to be taxed value. No other factors can be used parameter for annual maintenance local government entity Assessment levy must be directly pro
rata to levelol special benefit received
Majority protest or Must be solely for spec ial benefir. by each parcel Defining this for wildfire parcel owners within Community scale forkisnot luelreduct ion in the community would Can be authorized by any Assessment District district considered' specialbenefit'. be very difficult. Not scalable local government entity Tax levy is based solely on taxable
sales within retail outlets within the Tax base may be too it dedicated solely to taxing jut isdiction. Only County of small- gross taxable Only the County or the Sate staxdedeatedto widfirerisirreduction, Butte has the authority within the Gross taxable sales is the only sale are about$ 150 lownolParadise have this wildfire risk reduction 213 vote isrequired area otthe prioritized parcels parameter milton/ year power Tax levy is based solely on taxable
sales within retail out Lets within the Tax base may be too taxinTgjurisdiction. Only County of small- gross taxable Only the County or the Sate stax for generat Butte has the a uthori ty w it hi n the Gross taxable sales iS the only sale are about 5150 TownolParadise have this purposes Simple nlaj [ ity area of the prioritized parcels parameter in power Tax levy is based solely on gross room
IC ve nues on hotelimoteb VH Rs within Tax base may be too Transient occupancytaot Ii dedicated solely to the taxingjur isdition. Onty County of small- gross room Only the County or the dedicated to wildfire Hsk wildfire risk reduction. Butte has the authori ty wit hi n the Gross room revenues is tlxonly revenue is about S3 TavnolParadise have this reduction 213vote is required areaofthe prioritized parcels] parameter million, year paver 17 NHA ADVISORS
i
Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C A Parcel Tax is Better than a Sales Tax or TOT increase The tax base for both sales tax and TOT in the Town of Paradise ( where nearly all the outlets producing sales and TOT are located) is too small to support the projected annual budget requirement
Only a parcel tax (otherwise known as a Mello Roos tax) allows for great flexibility in how the tax is levied on a given parcel ( land use, parcel size, vegetation, vulnerability, etc.
Sales Tax Trensient Occupancy Tax
Annual budget required with Annual budget required with debt but no grants: 4, 000, 000 debt but no grants: 4. 000, 000 Approximate annual gross Approximate annual gross room
taxable sales in Town of revenue in Tiown of Paradise 3. 000. 000 Paradise 150, 000, 000 TOT tax rate required to fully
Sales tax rate required to fully fund budget 133. 3%
fund budget 2. 7% Current TOT tax rate in Town 6. 00%
Current com bined sales tax rate New combined tax rate 139. 3% in Town 8. 75%
New combined tax rate 11. 4%
18 NHAIADVISORS
Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C What is the potential tax base for a parcel tax?
Four public entities overlap the general area where the prioritized parcels for treatment are located:
Paradise Recreation and Parks District — 21,869 parcels Paradise Unified School District — 20, 639 parcels
Town of Paradise — 11, 978 parcels
Paradise Irrigation District — 11, 788
While we believe that the actual boundaries for any tax to fund treatment for the prioritized parcels will need to be carefully considered, for purposes of this analysis, we will use the parcel count for PRPD
We included unsecured parcels as well as secured parcels because the unsecured parcels oftentimes represent leasehold estates
All parcel count figures are from the County of Butte for FY 2023- 2024 19 NHAIADVISORS
Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C Scenario Design
The key determinants of long- term annual costs are shown below:
Level of grant support
Whether or not debt is issued
Whether access acquisition costs are on the " low" or " high" side of the range determined by Integra
If bonds are issued, whether the bonds can be issued on a tax exempt or taxable basis Since we determined that the overall difference in annual budget requirements resulting from the use of tax- exempt interest rates vs. taxable interest rates was less than 5%, we are just showing the taxable interest rate scenarios
20 NHAIADVISORS
Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C Scenarios Modeled for a Draft Budget
Low Access Acquisition High Access Acquisition
Grants Debt Grants Debt
None None None None
50% None 50% None
INIk\-
414)
None First 5 Years None First 5 Years
50% First 5 Years 50% First 5 Years
21 N HA I ADVISORS Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A. 0C1C Scenario 1 Estimated Cash Flows: Low Acquisition Costs, No Grant Funding, No Debt
Year 1 2 3 4 5 6 7 8 9 10
Acquisition/ easement
cost Ai 2, 059, 147 2, 059. 147 2, 059, 147 2, 059, 147 2, 059, 147 Operational 3, 692, 921 3, 692, 921 3, 692, 921 3, 692, 921 3, 692, 921 1, 477, 168 1, 477, 168 1, 477, 168 1, 477, 168 1, 477, 168 Administration 500, 000 500, 000 500, 000 500, 000 500, 000 500, 000 500, 000 500, 000 500, 000 500, 000 Total 6, 252, 067 6, 252, 067 6252, 067 6, 252, 067 6, 252, 067 1, 977, 168 1, 977, 168 1, 977, 168 1, 977, 168 1, 977, 168 Number of taxable II
parcels 21, 869 21, 869 21. 869 21, 869 21369 21. 369 21, 869 21, 869 21, 869 21. 869 Average annual
tax/ parcel 286 286 286 286 286 90 90 90 90 90
Annual budget requirement ranges from about $ 2 million/ year to $6. 25 million/ year 22 NHA I ADVISORS Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 84638A3F- D38D- 4CDC- A1D6- 2ABE915A. 0C1C Scenario 2 Estimated Cash Flows: Low Acquisition Costs, 50% Grant Funding, No Debt
Year 1 2 3 4 5 6 7 8 9 10
Acquisition/ easement
cost 2, 059, 147 2, 059, 147 2, 059, 147 2, 059, 147 2, 059, 147 Operational 3, 692, 921 3, 692, 921 3, 692, 921 3, 692, 921 3, 692, 921 1, 477, 168 1, 477, 168 1, 477, 168 1. 477, 168 1, 477, 168 Overhead/ Admin 500, 000 500. 000 500, 000 500, 000 500, 000 500, 000 500, 000 500, 000 500, 000 500, 000 Less grant funding 2, 876. 034 2, 876, 034 2, 876. 034 2, 876. 034 2, 876. 034 ----- Total 3, 376, 034 3, 376, 034 3, 376, 034 3, 376, 034 3, 376, 034 1, 977, 168 1, 977, 168 1, 977, 168 1, 977, 168 1, 977, 168 Number of taxable
parcels 21, 869 21, 869 21, 869 21, 869 21, 869 21, 869 21. 869 21, 869 21, 869 21. 869 Average annual
tax/ parcel 154 154 le 154 154 154 90 90 90 90 90
I
Annual budget requirement ranges from about $ 2 million/ year to $3. 4 million/ year 23 NHA I ADVISORS Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463B©. 3F- D38D- 4CDC- A1D6- 2ABE915A. 0C1C Scenario 3 Estimated Cash Flows: Low Acquisition Costs, No Grant Funding, Debt for First 5 Years Costs
Year 1 2 3 4 5 6 7 8 9
Annual Debt Service 3A57. 075 3, 455, 475 3, 457, 050 3, 456, 150 3, 457, 450 1, 980, 300 1, 980, 250 1, 981, 950 1, 980, 075 Acquisition/ easement
cost
Operational 1, 477, 168 1, 477. 168 1, 477, 168 1. 477, 168 Overhead/ Admin 500. 000 500, 000 500, 000 500. 000 500. 000 500, 000 500, 000 500, 000 500, 000 Total 3, 960, 000 3, 955, 475 3, 957, 050 3, 956, 150 3, 957, 450 3, 960, 000 3, 957, 418 3. 959, 118 3, 957, 243 Number of taxable
parcels 21, 869 21, 869 21, 869 21, 869 21, 869 21. 869 21, 869 21, 869 21, 869 Average annual
tax/ parcel 181 181 181 181 181 181 181 181 181
Annual budget requirement is about $ 4 million/ year
24 NHA I ADVISORS Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463B©. 3F- D38D- 4CDC- A1D6- 2ABE915A. 0C1C Scenario 4 Estimated Cash Flows: Low Acquisition Costs, 50% Grant Funding, Debt Financing for First 5 Year' s Costs
Year 1 2 3 4 5 6 7 8 9
Years 10
through 20
Annual Debt Service 2. 210. 600.00 2. 212. 075. 00 2. 213. 025. 00 2. 213. 125. 00 2. 212. 050. 00 734. 475. 00 735. 950.00 736. 125. 00 735. 000. 00 735, 475 Acquisition/ easement
cost
Operational 1, 477, 168 1, 477, 168 1, 477, 168 1, 477, 168 1, 477, 168 Overhead/ Admin 500, 000 500. 000 500. 000 500. 000 500. 000 500, 000 500, 000 500, 000 500, 000 500, 000 Total 2, 710, 600 2, 712, 075 2, 713, 025 2, 713, 125 2, 712, 050 2, 711, 643 2, 713, 118 2, 713, 293 2, 712, 168 2. 712. 643 Number of taxable
parcels 21, 869 21. 869 21. 869 21. 869 21, 869 21, 869 21, 869 21. 869 21. 869 Average annual
tax/ parcel 124 124 124 124 124 124 124 124 124 124
Annual budget requirement is about $ 2. 7 million/ year 25 NHA I ADVISORS Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A. 0C1C Scenario 5 Estimated Cash Flows: High Acquisition Costs, No Grant Funding, No Debt
Year 1 2 3 4 5 6 7 8 9 10
Acquisition/ easement cost 4, 070, 495 4, 070, 495 4, 070, 495 4, 070, 495 4, 070, 495 Operational 3, 692, 921 3, 692, 921 3, 692, 921 3, 692, 921 3, 692, 921 ' 1, 477, 168 1, 477, 168 1, 477, 168 1, 477, 168 1, 477, 168 Overhead/ Admin 500, 000 500, 000 500, 000 500, 000 500, 000 500, 000 500, 000 500, 000 500, 000 500, 000 Total IM 8, 263, 416 8, 263, 416 8, 263, 416 8, 263, 416 , 8, 263, 416 1, 977, 168 1, 977, 168 1, 977, 168 1, 977, 168 1, 977, 168 Number of taxable parcels 21. 869 21, 869 21, 869 21. 869 21. 869 21, 869 21. 869 21. 869 21. 869 21, 869 Average amual t• •-rcel 378 378 378 378 378 90 90 90 90 90 Annual budget requirement ranges from about $ 2 million/ year to $8. 25 million/ year 26 NHA I ADVISORS Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A. 0C1C Scenario 6 Estimated Cash Flows: High Acquisition Costs, 50% Grant Funding, No Debt
Year 1 2 3 4 5 6 7 8 9 10
Acquisition/ easement cost 4, 070, 495 4, 070, 495 4, 070, 495 4, 070, 495 4, 070, 495 Operational 3. 692,921 3, 692,921 3.692, 921 3, 692,921 3. 692.921 1, 477, 168 1, 477. 168 1. 477. 168 1. 477, 168 1. 477. 168 Overhead/ Admin 500, 000 500, 000 500, 000 500, 000 500, 000 500, 000 500, 000 500, 000 500, 000 500, 000 Less grant funding 3, 881, 708) ( 3, 881, 708) ( 3, 881, 708) ( 3, 881, 708) ( 3, 881, 708) Total 4, 381, 708 4, 381, 708 4,381, 708 4, 381, 708 4, 381, 708 1, 977, 168 1, 977, 168 1, 977, 168 1, 977, 168 1, 977, 168 Number of taxable parcels 21, 869 21, 869 21, 869 21, 869 21. 869 21, 869 21. 869 21, 869 21, 869 21, 869 Average annual tax/ parcel 200 200 200 200 200 90 90 90 90 90 Annual budget requirement ranges from about $ 2 million/ year to $4. 4 million/ year 27 NHAIADVISORS
Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C Scenario 7 Estimated Cash Flows: High Acquisition Costs, No Grants, Includes Debt
Year 1 2 3 4 5 6 7 8 9 10
Annual Debt Service 4. 340. 825. 00 4. 342. 975.00 4. 342. 000.00 4. 342. 575. 00 4. 344.050. 00 2.865. 775. 00 2.863.300. 00 2. 866.275.00 2.864. 050. 00 2,864, 380 Acquisition/ easement
cost
Operational 1, 477, 168 1, 477, 168 1, 477, 168 1, 477, 168 1, 477, 168 Overhead/ Admin 500, 000 500, 000 500, 000 500, 000 500, 000 500, 000 500, 000 500, 000 500, 000 500, 000 Total 4, 845, 000 4,842, 975 4,842, 000 4,842, 575 4,844, 050 4, 845, 000 4, 840, 468 4,843, 443 4, 841, 218 4,841, 548 Number of taxable
parcels 21, 869 21, 869 21, 869 21. 869 21. 869 21, 869 21, 869 21, 869 21, 869 21, 869 Average annual
tax/ parcel 222 221 221 221 222 222 221 221 221 221
Annual budget requirement is about $ 4.85 million/ year 28 NHAIADVISORS
Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C Scenario 8 Estimated Cash Flows: High Acquisition Costs, 50% Grant Funding, Includes Debt
Year 1 2 3 4 5 6 7 8 9
Yearss 10
through 20
Annual Debt Service 2. 315. 675. 00 2, 315, 200.00 2,319, 200.00 2,317, 025. 00 2, 318, 675. 00 838, 500. 00 842, 375. 00 R19, 625. 00 840, 575. 00 840, 270 Acquisition/ easement
cost
Operational 1, 477, 168 1, 477. 168 1. 477, 168 1, 477, 168 1, 477, 168 Overhead/ Admin 500. 000 500, 000 500, 000 500, 000 500, 000 500, 000 500, 000 500, 000 500, 000 500, 000 Total 2, 820, 000 2, 815, 200 2, 819, 200 2, 817, 025 2, 818, 675 2, 820, 000 2, 819, 543 2, 816, 793 2, 817, 743 2, 817, 438 Number of taxable
parcels 21, 869 21. 869 21. 869 21, 869 21. 869 21. 869 21. 869 21, 869 21. 869 21. 869 Average annual
tax/ parcel 129 129 129 129 129 129 129 129 129 129
Annual budget requirement is about $ 2. 8 million/ year 29 NHAIADVISORS
Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C Summary of Estimated Average Annual Tax Per Parcel
400
350
300
250
200
150
100 1
50il 1I
No grants With With debt With debt No grants With With debt With debt Grants and grants Grants and grants
Low Low Low Low High High High High
First 5 Years Next 15 Years
30 N HA I ADVISORS Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C Major Cost Drivers
50% grant funding for access acquisition costs and first-time treatment costs reduce the annual budget requirements long- term by about 1/ 3 Assumes debt is used to fund access acquisition costs and first-time treatment costs Use of debt reduces the required budget over the first 5 years by about 40% Assuming the use of debt, the combined annual budget required for the low" access acquisition costs is about 20% lower than the combined annual budget for the " high" access acquisition costs
The annual budget for high acquisition costs, with both grants and debt, is 65% lower than the annual budget for high acquisition costs without grant and debts over the first 5 years
Taxable interest rates on debt lower the annual budget by 5% compared with tax exempt interest rates
31 NHA I ADVISORS Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C Governance Requirements for the Wildfire Buffer Zone
Governance entity needs the following powers:
Levy and administer a parcel tax
H ire staff and/ or subcontractors to do wildfire risk reduction work Acquire and own fee title or access easements for parcels in the buffer zone Power of eminent domain to acquire and own fee title or access easements where required for wildfire risk reduction ‘ 4 ‘.‘
Power to legislate and mandate wildfire risk reduction standards on private property owners
The governance entity jurisdiction should include the following:
All parcels prioritized for treatment
All parcels benefitting from such treatment
32 N HA I ADVISORS Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C Governance Options
The following stakeholders should be considered for collaboration under a new governance entity
Paradise Recreation and Park District
Town of Paradise
County of Butte
Butte Fire Safe Council
Camp Fire Collaborative
Rebuild Paradise 040911111‘
California' s Joint Powers Authority law allows NGO' s to be voting members of a J PA
The NGO members cannot vote on amending the JPA, but can vote on budget and staffing issues
We recommend that these stakeholders begin a dialogue on forming a governance entity to implement the wildfire buffer zone 33 N HA I ADVISORS Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C A Joint Powers Authority — Some Details
JPA powers are limited to the powers share in common by all members of the JPA
This means its powers are the same as its least powerful member ( excluding NGO' s) There is often a concern amongst member public entities of a " loss of power" by turning over a key function to a JPA
Cost sharing amongst the parties can become an issue
These concerns can be resolved by seeking special State legislation to address loss of power concerns. Examples:
Requiring a super majority to approve certain actions
Specifying which types of projects can be undertaken by the JPA, and which can only be done by a member, but with JPA funding
Locking in" the role of NGOs in the JPA
34 NHAIADVISORS
Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C A Ballot Measure in November, 2026?
There is more than sufficient time to prepare a November 2026 regional ballot measure and governance entity for a wildfire buffer zone in the greater Paradise area
If there is sufficient community support to get the measure on the ballot through a petition, approval would only require a simple majority There is also discussions in Sacramento about a statewide ballot measure for wildfire risk reduction on the November 2026 ballot
What if the statewide ballot measure matched local ballot measures with revenues? What if CDI mandated a dollar or dollar reduction in insurance premium for parcel owners paying a parcel tax dedicated solely to wildfire risk reduction? Key question: is there enough community support to not only do a successful citizen initiative for a ballot measure, but to get a 50%+ 1 successful vote?
35 NHA I ADVISORS Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C Next Steps
We begin the polling process
Survey question design
Polling system: phone calls, focus groups or both
Determine the potential tax base
Identify zone of benefit for prioritized parcels
Get detailed parcel data on all parcels within potential tax base Using polling data, develop an " electable" tax structure and levy maximum Present findings to all public, private and NGO stakeholders Start dialogue on implementation, including potential governance entity and ballot measure
36 NHA I ADVISORS Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C AP'S
4904V1).
APPENDIX
NHA I ADVISORS Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463B©. 3F- D38D- 4CDC- A1D6- 2ABE915A. 0C1C A Wide Range of Treatment Cost Estimates: CalFire Treatment Cost Assumptions
Costs per acre
CalFire Treatments Forest Shrubland Herbaceous Woodland Manual Thinning 1, 461 2, 534 1, 851 2, 683
Mechanical Thinning ' 957 2, 500 N/ A 2, 807
Mechanical Piling 640 1, 521 N/ A 251
Mastication 1, 788 1, 669 1, 813 1, 198
Lop and Scatter 1, 616 1, 263 N/ A 1, 217
Herbicide 325 675 396 667
Pile Burn 810 2, 303 3, 125 N/ A
38 NHAIADVISORS
Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463B©. 3F- D38D- 4CDC- A1D6- 2ABE915A. 0C1C A Wide Range of Treatment Cost Estimates: Butte Fire Safe Council Treatment Cost Bid Results
Bid Range for Treatment Costs Per Acre
Hand thin and chip Mastication Mechanica
2C Land 2. 800- 3, 200 _ 1 . 650 1 . 650- 1 . 750
ECO 800- 3, 200 950- 3. 800 800- 2. 500
Firestorm 1 2, 100-4, 200 1 , 470- 4, 200 1 , 800- 3, 500 Paul Roen 3. 600 2, 400 2, 950
Atlas 3. 141 1 . 331 1 . 689
Bella 4365-5592 4. 365 4. 770
GE Forestry 1 . 800 800 1 , 220
Mountain View
Reforestation 1 . 800- 3, 400 2, 800 2, 600
Professional
Slashbusting none 725- 1 , 100 none
BK& Son none 1 , 800 none
Red Mtn. 4. 489 2. 489 3. 989
Average low 2, 766 1 , 889 2, 385
Average high 3. 625 2, 396 2. 774
39 NHA I ADVISORS Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463B©. 3F- D38D- 4CDC- A1D6- 2ABE915A. 0C1C A Wide Range of Treatment Cost Estimates: Butte Fire Safe Council Treatment Cost Assumptions
Butte County
Cost per acre
Treatments
Mastication 3500
Underburn ing 200
Grazing 600
Chipping and hauling
for biomass
500
Pile burning in place 150
Wildland fire
403
management
40 NHAIADVISORS
Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C A Wide Range of Treatment Cost Estimates: Plumas County Treatment Cost Assumptions
Plumas County
Evergreen Forest cost
per acre
Manual Thinning 2, 000
Mechanical Thinning 1, 750
Mastication 1, 788
41 NHAIADVISORS
Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463B©. 3F- D38D- 4CDC- A1D6- 2ABE915A. 0C1C A Wide Range of Treatment Cost Estimates: Sierra Nevada Conservancy
Costs 0
SNC Treatments Average
Mastication 600 1, 500 3, 500
Hand Thinning 600 1, 800 3, 500
Pile Burning 50 N/ A 1, 000
42 NHA I ADVISORS Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C Los GATOS— PROPOSAL FOR STUDY 3( ALM) AND OPTIONAL STUDY 4( WILDFIRE RISK MITIGATION) APPENDIX C: RESUMES FOR ASSIGNED NHA TEAM
N HA I ADVISORS Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C Staff Resumes — NHA Advisors, LLC
Mark Northcross, Principal
During a California public finance career that spans back to 1981, Mark Northcross has structured debt for nearly every kind of issuer and nearly every kind of revenue source legally available in the State.
Mr. Northcross is a leader in statewide work on climate change adaptation.
He managed the delivery of a comprehensive funding guide for Resilience by Design, a Rockefeller Foundation funded program for the Bay Area. He works Public Finance
Professional Since: with the Bay Conservation and Development Commission, Bay Area Regional 1981
Collaborative, the Southern California Association of Governments and the Resources Legacy Fund on climate change adaptation issues. Mr. Northcross Expertise also serves on special climate change committees under the aegis of the City of Sacramento, the West County Wastewater District and the Coastal Public Policy Hazards Adaptation Resiliency Group. With expertise in wildfire risk Utility Financing mitigation and funding, Mr. Northcross was invited by the Federal Reserve Climate Change Bank of San Francisco to prepare an article on that subject for their Infrastructure
Community Development Innovation Review publication, which was Development/ Land—
published in October 2019. A link to that article is available here:
Secured Financing
https:// www. frbsf. org/ community- development/ publications/ community- development_ Economic investment- review/ 2019/ october/ rebuild-to-fail- or-rebuild- to-adapt- how-cra- lending- canDeve to pment guide- climate-change- disaster- response/ Developer
Mr. Northcross was an integral team member for the California Resilience Negotiations
Pension Financing
Challenge project in the Town of Paradise. That project was completed in April 2023 and featured groundbreaking work quantifying potential reductions in fire related losses and in insurance premiums in the wildlandEducation urban Interface through fire mitigation methods. More detail about that T T T project can be found here: httrs:// www. bavareacouncil. org/ press- releases/ new- studvUU1RVINE shows- haw- communities- in- the- wiIdland- urban- interface- can- drastically- reduce- fire- risk- andreduce- i nsura nce-° rem i ums/ B. A. Social Sciences Mr. Northcross is also leader in negotiating both public- private partnerships and the workout of defaulted debt. He has negotiated public- private Licenses & Registrations partnerships for the successful development of major mixed- use projects, including such diverse communities as Davis, Fort Ord Reuse Authority, Registered with the
Hemet, Mammoth Lakes, Palmdale, Rocklin, South Lake Tahoe, and West SEC and MSRB
Covina. He is also a leader in negotiating joint ventures between different Series 50 License public agencies — with notable success in putting together bond funded risk sharing programs for cities, counties, and school districts in California.
With a practice in water and sewer financing dating back to 1983, Mr.
Northcross is very active in water and sanitation policy issues in California.
He presently serves on the California Association of Sanitation Agencies SRF committee.
Mr. Northcross also has hands- on experience as a CFO, serving since 2001 as N H A I ADVISORS treasurer for the West Point Inn Association, which runs a 117- year- old hikeFinancial& Policy strategies. in hotel in the parklands of Marin County.
Delivered.
ITEM NO. 11.
Do cus ig n Envelope ID: 8463 BA3F- D38D- 4CDC- A1 D6- 2ABE 915A0 C 1 C Staff Resumes— NHA Advisors, LLC
Mike Meyer, Vice President
Since 2003, Mr. Meyer has been providing a high level of support to California municipalities as an advisor, consultant, and an investment banker. He manages NHA's Pension and Fiscal Sustainability Group.
Mr. Meyer has executed all types of financings available to California municipalities, including pension obligation bonds, utility revenue ( water/ wastewater/ storm Public Finance drain), general fund backed leases, tax increment, general obligation, Professional Since: transportation, land secured, housing and sales tax transactions. 2003
As the firm's resident pension expert, Mr. Meyer also manages NHA's Pension and Expertise Fiscal Sustainability Group, which has advised over 80 California local agencies on topics ranging from basic CaIPERS education, to UAL cost management strategies Fiscal Sustainability Section 115 Trusts, Additional Discretionary Payments, etc.), to UAL restructuring General Fund projects. In 2015, he led the firm's efforts to pioneer some of the first UAL Financing smoothing" transactions, which were executed as privately placed lease revenue Pension Obligations
bonds given that POBs were not feasible at that time. During the re- emergence of the POB market, Mr. Meyer worked on over $ 2. 0 billion of pension bond Project Management transactions for cities, utilities districts and fire districts. This experience includes all Financial Modeling types of UAL financing structures: both privately placed debt as well as publicly Credit Analysis and offered, validated and non- validated POBs, as well as alternative structured like Presentations lease revenue bonds and utility revenue bonds.
Mr. Meyer has worked on several unique financing programs in his career including Education
the 2004 Vehicle License Fee ( VLF) pooled financing (> 100 different city participants), 2009 Beverly Hills OPEB Buyout, 2016 Berkeley Parking Revenue UCSan Diego Bonds for a new downtown garage, transportation revenue secured financings ( gas tax and local sales tax return) for Oxnard and Lancaster, and lease bonds to fund B. S. Management
CaIPERS UAL in the cities of Torrance, Ukiah, West Covina, Lakeport and Arcata.
Science
Prior to NHA Advisors, Mr. Meyer served as a Principal with Eric Scriven ( NHA partner) at p2 Capital Advisors ( 2012 to 2014), providing independent consulting Licenses & Registrations and advisory work to numerous California public agencies. Prior to that, he served Registered with the
as a Vice President at De La Rosa Investment Bankers.
SEC and MSRB
From 2013 to 2017, Mr. Meyer also helped coach the Division I UC Davis Men' s Series 50 License Tennis team and obtain the program' s first national ranking and NCAA tournament berth. Mr. Meyer enjoys being active and in nature, spending his free time backpacking, hiking, surfing, playing sports and is a dedicated practitioner of yoga and meditation.
N HA I ADVISORS Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Do cus ig n Envelope ID: 8463 BA3F- D38D- 4CDC- A1 D6- 2ABE 915A0 C 1 C Staff Resumes— NHA Advisors, LLC
Matt DeFilippis, Senior Analyst
1 Since joining NHA in 2021, Mr. DeFilippis has provided quantitative, research, and t. management support to his colleagues so that NHA can best serve California f
special districts and cities. His work has covered a variety of assignments, including CaIPERS pension liability analysis and modeling, coverage analysis for utility financings, refinancing discovery and analysis, and more. Mr. DeFilippis has assisted on multiple financings for California agencies, totaling over$ 450 million in par.
Public Finance
Professional Since: Most recently, Mr. DeFilippis provided municipal advisory services on two California 2021 utility bond transactions that closed in late 2024 for the City of Gonzales and Laguna Beach County Water District. Mr. DeFilippis also assisted the city of Fort Expertise Bragg and Rincon del Diablo Municipal Water District in financing solar panels through an equipment lease/ purchase agreement.
General Fund
Financing Mr. DeFilippis has provided advisory services to multiple California fire districts, Pension Obligations including Sonoma County Fire District ( 2022 Pension Liability Refunding), San Utility Financing Miguel Consolidated Fire Protection District (2022 Pension Liability Refunding), and Financial Modeling North County Fire Protection District in San Diego County (CaIPERS pension analysis Credit Research and and financial forecast modeling).
Presentations
When not working on bond financings, Mr. DeFilippis provides support for a variety of NHA's other projects, including financial forecast modeling and CaIPERS pension Education liability analysis and education for public agencies. 0Berkeley Mr. DeFilippis received his B. A. in Applied Mathematics from the University ofUNIVERSITY OF CALIFORNIA California, Berkeley.
B. A. Applied In his spare time, Mr. DeFilippis enjoys exploring the outdoors, both on foot and on Mathematics bike. Some of his favorite trips include backpacking Southern Oregon/ Northern California, climbing Mount Shasta, and watching the sunrise from Half Dome.
Licenses & Registrations
Registered with the
SEC and MSRB
Series 50 License
N HA I ADVISORS Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C ak.;• tl
Los GATOS— PROPOSAL FOR STUDY 3( ALM) AND OPTIONAL STUDY 4( WILDFIRE RISK MITIGATION) APPENDIX D: NHA' s REQUIRED MUNICIPAL ADVISOR DISCLOSURES NHA I ADVISORS Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C Los GATOS— PROPOSAL FOR STUDY 3( ALM) AND OPTIONAL STUDY 4( WILDFIRE RISK MITIGATION) Fiduciary Duty
NHA Advisors, LLC (" NHA") is registered as a Municipal Advisor with the U. S. Securities and Exchange Commission (" SEC") and Municipal Securities Rulemaking Board (" MSRB"). As such, NHA has a fiduciary duty to the Town and must provide both a Duty of Care and a Duty of Loyalty that entail the following.
Duty of Care:
a) exercise due care in performing its municipal advisory activities; b) possess the degree of knowledge and expertise needed to provide the Town with informed advice;
c) make a reasonable inquiry as to the facts that are relevant to the Town' s determination as to whether to proceed with a course of action or that form the basis for any advice provided to the Town; and
d) undertake a reasonable investigation to determine that NHA is not forming any recommendation on materially inaccurate or incomplete information; NHA must have a reasonable basis for:
i. any advice provided to or on behalf of the Town;
ii. any representations made in a certificate that it signs that will be reasonably foreseeably relied upon by the Town, any other party involved in the municipal securities transaction or municipal financial product, or investors in the Town securities; and iii. any information provided to the Town or other parties involved in the municipal securities transaction in connection with the preparation of an official statement.
Duty of Loyalty:
NHA must deal honestly and with the utmost good faith with the Town and act in the Town' s best interests without regard to the financial or other interests of NHA. NHA will eliminate or provide full and fair disclosure ( included herein) to the Town about each material conflict of interest ( as applicable). NHA will not engage in municipal advisory activities with the Town as a municipal entity, if it cannot manage or mitigate its conflicts in a manner that will permit it to act in the Town' s best interest.
Conflicts of Interest and Other Matters Requiring Disclosures As of the commencement date of the Project, there are no actual or potential material conflicts of interest, other than those potential conflicts noted below, that NHA is aware of that might impair its ability to render unbiased and competent advice or to fulfill its fiduciary duty. If NHA becomes aware of any material potential conflict of interest that arises after this disclosure, NHA will disclose the detailed information in writing to the Town in a timely manner.
Pursuant to MSRB Rule G- 42, on Duties of Non- Solicitor Municipal Advisors, Municipal Advisors are required to make certain written disclosures to clients which include, amongst other things, Conflicts of Interest and any Legal or Disciplinary events of NHA and its associated persons.
The following are potential conflicts of interest to be considered.
NHA represents that in connection with the issuance of municipal securities, NHA may receive compensation from the Town for services rendered, which compensation is contingent upon the successful closing of a transaction and/ or is based on the size of a transaction. Consistent with the NHA I ADVISORS Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C Los GATOS— PROPOSAL FOR STUDY 3( ALM) AND OPTIONAL STUDY 4( WILDFIRE RISK MITIGATION) requirements of MSRB Rule G- 42, N HA hereby discloses that such contingent and/ or transactional compensation may present a potential conflict of interest regarding NHA' ability to provide unbiased advice to enter into such transaction. The contingent fee arrangement creates an incentive for NHA to recommend unnecessary financings or financings that are disadvantageous to the Town, or to advise the Town to increase the size of the issue. This potential conflict of interest will not impair NHA' ability to render unbiased and competent advice or to fulfill its fiduciary duty to the Town.
NHA' fees under this potential agreement may be based on hourly fees of NHA' personnel, with the aggregate amount equaling the number of hours worked by such personnel times an agreedupon hourly billing rate. This form of compensation presents a potential conflict of interest because it could create an incentive for NHA to recommend alternatives that would result in more hours worked. This conflict of interest will not impair NHA' ability to render unbiased and competent advice or to fulfill its fiduciary duty to the Town.
NHA' fees under this potential agreement may be a fixed amount established at the outset of this potential agreement. The amount is usually based upon an analysis by the Town and NHA of, among other things, the expected duration and complexity of the transaction and the scope of services to be performed by NHA. This form of compensation presents a potential conflict of interest because, if the transaction requires more work than originally contemplated, NHA may suffer a loss. Thus, NHA may recommend less time- consuming alternatives, or fail to do a thorough analysis of alternatives. This conflict of interest will not impair NHA' ability to render unbiased and competent advice or to fulfill its fiduciary duty to the Town.
The fee paid to NHA increases the cost of investment to the Town. The increased cost occurs from compensating NHA for municipal advisory services provided.
NHA serves a wide variety of other clients that may, from time to time, have interests that could have a direct or indirect impact on the interests of another NHA client. For example, NHA serves as municipal advisor to other municipal advisory clients and, in such cases, owes a regulatory duty to such other clients just as it does to the Town. These other clients may, from time to time and depending on the specific circumstances, have competing interests. In acting in the interests of its various clients, NHA could potentially face a conflict of interest arising from these competing client interests. NHA fulfills its regulatory duty and mitigates such conflicts through dealing honestly and with the utmost good faith with the Town.
Gerald Craig Hill, the Managing Principal of NHA is currently serving as an outside director for the HdL Companies based in Diamond Bar, CA. HdL Companies is a software and professional services consulting company providing revenue data and collections information to local governments, potentially including NHA' s clients. HdL Companies have affiliates including, but not limited to, HdL Coren & Cone. From time to time, NHA utilizes the services of HdL Coren & Cone for its clients. NHA is mindful of this conflict of interest and fulfills its regulatory duty and mitigates such conflicts through dealing honestly and with the utmost good faith when this situation arises.
NHA does not have any affiliate that provides any advice, service, or product to or on behalf of the Town that is directly or indirectly related to the municipal advisory activities to be performed by NHA.
NHA has not made any payments directly or indirectly to obtain or retain NHA' municipal advisory business.
NHA has not received any payments from third parties to enlist NHA' recommendation to the Town of its services, any municipal securities transaction, or any municipal finance product.
NHA has not engaged in any fee- splitting arrangements involving NHA and any provider of investments or services to the Town.
NHA I ADVISORS Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C S14, 1
Los GATOS— PROPOSAL FOR STUDY 3( ALM) AND OPTIONAL STUDY 4( WILDFIRE RISK MITIGATION) NHA does not have any legal or disciplinary event that is material to the Town' s evaluation of the municipal advisory or the integrity of its management or advisory personnel.
NHA does not act as principal in any of the transaction( s) related to this potential agreement.
Legal Events and Disciplinary History
NHA does not have any legal events and disciplinary history on its Form MA and Form MA-I, which includes information about any criminal actions, regulatory actions, investigations, terminations, judgments, liens, civil judicial actions, customer complaints, arbitrations and civil litigation. The Town may electronically access NHA' most recent Form MA and each most recent Form MA- I filed with the Commission at the following website:
www. sec. gov/ edgar/ searchedgar/ companysearch. html
There have been no material changes to a legal or disciplinary event disclosure on any Form MA or Form MA- I filed with the SEC.
Recommendations
If NHA makes a recommendation of a municipal securities transaction or municipal financial product or if the review of a recommendation of another party is requested in writing by the Town and is within the scope of the engagement, NHA will determine, based on the information obtained through reasonable diligence of NHA whether a municipal securities transaction or municipal financial product is suitable for the Town. In addition, NHA will inform the Town of:
the evaluation of the material risks, potential benefits, structure, and other characteristics of the recommendation;
the basis upon which NHA reasonably believes that the recommended municipal securities transaction or municipal financial product is, or is not, suitable for the Town; and whether NHA has investigated or considered other reasonably feasible alternatives to the recommendation that might also or alternatively serve the Town objectives.
If the Town elects a course of action that is independent of or contrary to the advice provided by NHA, NHA is not required on that basis to disengage from the Town.
Municipal Securities Rulemaking Board Rule G- 10 Disclosure Pursuant to MSRB Rule G- 10, on Investor and Municipal Advisory Client Education and Protection, Municipal Advisors are required to provide certain written information to their municipal entity and obligated person clients which include the following:
NHA is currently registered as a Municipal Advisor with the SEC and MSRB.
Within the MSRB website at www. msrb. org, the Town may obtain the Municipal Advisory client brochure that is posted on the MSRB website. The brochure describes the protections that may be provided by the MSRB Rules along with how to file a complaint with financial regulatory authorities.
NHA I ADVISORS Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C Los GATOS— PROPOSAL FOR STUDY 3( ALM) AND OPTIONAL STUDY 4( WILDFIRE RISK MITIGATION) Record Retention
Effective July 1, 2014, pursuant to the SEC record retention regulations, NHA is required to maintain, in writing, all communication and created documents between NHA and the Town for five ( 5) years.
If there are any questions regarding the above, please do not hesitate to contact NHA.
NHA I ADVISORS Financial& Policy Strategies.
Delivered.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C Town of Los Gatos
REQUEST FOR PROPOSALS
FISCAL CONDITION ANALYSIS WITH FIVE- YEAR AND LONGTERM FORECAST, FISCAL IMPACT ANALYSIS, AND ASSET
LIABILITY MANAGEMENT STUDY
Date Issued: 8/ 20/ 2025
Proposal Submittal Deadline: 9/ 22/ 2025, by 4: 00 p. m. Pacific Standard Time Issued By:
Issued By:
Town of Los Gatos — Finance Department
110 E Main Street, Los Gatos, CA 95030
www.losgatosca. gov
Financed los gatosca. gov
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C
TABLE OF CONTENTS
A. Purpose
B. Overview
C. Minimum Qualifications
D. General Provisions and Requirements
E. Scope of Services
F. Proposal Format and Submittal Requirements
G. Evaluation Process
H. Additional Information
I. Attachments
ATTACHMENT 1 - CONFLICT OF INTEREST STATEMENT( FOR SUBMITTAL) ATTACHMENT 2 - NON- COLLUSION DECLARATION ( FOR SUBMITTAL) ATTACHMENT 3 - REFERENCES ( FOR SUBMITTAL)
ATTACHMENT 4 - STATEMENT REGARDING INSURANCE COVERAGE AND
WORKER' S COMPENSATION INSURANCE ACKNOWLEDGMENT
CERTIFICATE ( FOR SUBMITTAL)
ATTACHMENT 5 - STANDARD CONSULTANT SERVICES AGREEMENT
Schedule of Activities ( Tentative):
Activity Anticipated Date
RFP Release 8/ 20/ 2025
Deadline for Questions 9/ 15/ 2025
Last Day to Issue Addenda 9/ 17/ 2025
Proposal Submission Deadline ( 4: 00 p.m.) 9/ 22/ 2025
Proposal Evaluation Week of September 22, 2025
Consultant Interviews ( if necessary) Week of September 29, 2025 Contract Negotiation and Execution Week of September 29, 2025 Town Contacts:
Gitta Ungvari, Finance Director
Email: Finance@losgatosca. gov
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C A. PURPOSE
The Town of Los Gatos is seeking proposals from qualified firms to perform one or combined studies including:
1. A Fiscal Condition Analysis with Five- Year and Long- Term Financial Projections, and or
2. A Fiscal Impact Analysis for proposed and planned growth.
And to provide a separate proposal not to be combined for the following
3. An Asset Liability Management( ALM) Study.
Proposers may submit responses for each ofthe first two studies individually and as a combined packaged. For the third study, the Town is looking for a proposal that is not combined with the first two studies.
The three studies are listed in priority order with the most time sensitive being the fiscal condition analysis with five- year and long-term financial projections. Based on the proposals, the Town will determine which ofthe proposals to accept with emphasis on the most time sensitive analysis.
The Town reserves the right, at its sole discretion, to cancel, withdraw, postpone, or modify this RFP at any time, including after receipt of proposals, without incurring any obligation or liability to any proposer. The Town also reserves the right, after contract execution, to terminate the agreement for convenience, without cause, upon thirty ( 30) days written notice, with no liability beyond payment for work satisfactorily performed to the date oftermination.
Issuance ofthis RFP does not commit the Town to award a contract, to pay any costs incurred in the preparation of a proposal, or to procure or contract for any services.
B. OVERVIEW
The Town is undertaking this analysis to obtain an independent, data- driven assessment of its fiscal condition and near- term outlook. Current internal five- year projections indicate structural operating deficits, and the Town seeks third- party validation of assumptions, methodologies, and results to inform decision- making by staff, the Finance Commission, and the Town Council. The selected Consultant will evaluate historical trends and structural drivers, develop a transparent five- year multi- scenario forecast, and quantify risks, sensitivities, and reserve implications, while clearly distinguishing one- time from ongoing resources. The objective is to provide a public- facing foundation for budget strategy, service level planning, and proactive risk management.
Concurrently, the Town faces multiple large development proposals, including affordable housing projects associated with the General Plan and Housing Element. The Town requires a clear understanding ofthe net fiscal effects of this growth revenues and costs, operating and capital, timing and step- cost triggers ( e. g., staffing, equipment, facilities) under best- case, baseline, and worst- case scenarios through 2040. In addition, the Town seeks to inventory and evaluate key asset- liability exposures ( pension, OPEB, bonded debt, and unfunded infrastructure needs) to guide prudent funding strategies, reserve calibration, and long- term sustainability. Together, these efforts will produce integrated tools and findings that support transparent policymaking and durable fiscal health.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C At the April 14, 2025 Finance Commission meeting, the Commission recommended consolidating prior scope efforts for these studies into a single Request for Proposal process. The Commission approved eight key recommendations:
1. Consolidate scopes into a single RFP with three separate line items:
o Fiscal Analysis and Five- Year Forecast
o Long-Term Outlook( to 2040, aligned with the General Plan and Housing Element) o Optional standalone ALM Study
2. Require scenario planning using defined sets of assumptions for:
o Best, worst, and most likely cases
o National and macroeconomic conditions ( e. g., recession, tariffs, labor costs) o Risk and opportunity matrix
o Consultant' s own recommended scenario modifications or additions
3. Stakeholder engagement including interviews with internal staff and external partners ( e. g., Sewer District, Fire Department).
4. Define accounting basis and format( e. g., government- wide vs. fund- based reporting) to ensure clarity, usability, and reconciliation across documents.
5. Include cost as a decision matrix criterion to evaluate overall value of proposals.
6. Require explanation of tools and methodologies, including the use of AI, data sources, forecasting models, and technical platforms.
7. Request work samples similar to proposed scopes to assess consultant capability.
8. Articulate specific questions to be answered:
o What is the Town' s fiscal condition over the next five years? ( Study 1) o What is the long-term financial outlook? ( Study 1 and/ or Study 2) o What is the fiscal impact of projected development under the 2040 Plan and Housing Element? ( Study 2)
C. MINIMUM QUALIFICATIONS
To the satisfaction ofthe Town of Los Gatos, each proposer shall ensure their proposal, as applicable, includes sufficient information to facilitate the following Demonstrated experience conducting fiscal analyses and long- range financial forecasting for California municipalities.
Familiarity with local government budgeting, finance, infrastructure liabilities, pensions, economic development analysis, and General Plan documents.
Experience engaging with a wide variety of constituencies including but not limited to internal departments, elected officials, and other non- Town constituencies.
Strong presentation, communication, and public reporting skills.
Ability to deliver user- friendly financial models and documentation.
D. GENERAL PROVISIONS AND REQUIREMENTS
The Town may establish general provisions and requirements related to the work being performed including but not limited to:
1. Possession of all licenses required to perform services in California, if applicable.
2. Town approval required for any key personnel changes.
3. All deliverables must be provided in PDF and native editable formats.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C
4. All materials prepared or supporting prepared deliverables become the property of the Town.
E. SCOPE OF SERVICES
Study 1— Fiscal Condition Analysis with Five- Year Forecast Objective. Provide a rigorous, view of the Town' s current fiscal condition; produce a five- year multiscenario operating forecast; quantify risks and opportunities; and deliver a transparent, staffmaintainable model aligned with GAAP, GFOA, and State Controller conventions. The work product will tie, where applicable, to other authoritative documentation such as the ACFR/ CAFR, adopted budget, State Controller' s Report, or other relevant document. 1) Project Initiation & Workplan
Kickoff meeting: Confirm goals, deliverables, scope boundaries, schedule, and communication cadence; finalize the assumptions governance process ( how assumptions are proposed, reviewed, approved, and versioned).
Detailed workplan: Activities, dates, responsibilities, dependencies, and review milestones; identify critical path items.
Stakeholder map: Identify internal staff, department contacts, and external partners ( e. g., special districts) for interviews and data validation.
2) Data Intake, Validation & Controls
Minimum data (at least 10 years): ACFR/ CAFRs; California State Controller' s reports; adopted budgets and mid- year updates; trial balances; revenue detail ( property, sales, TOT, fees/ permits/ fines, franchise, business license, transfers); labor MOUs; position and pay schedules; CalPERS actuarial reports ( normal cost, UAL, amortization bases, projected employer rates); OPEB actuarial valuations; debt schedules and official statements; CIP, deferred maintenance reports, and life- cycle/ asset management reports; grants and one- time funds; reserve policies.
Data Quality Assurance/ Quality Control: Reconcile to audited financial statements or other applicable document; identify reclassifications and one- time items; maintain a Data Sources Register with date, owner, and quality notes. Implement process to ensure the accuracy, consistency, and completeness ofthe information presented in deliverables.
Accounting basis: Specify fund- based vs. government- wide views used in analysis; provide crosswalks/ reconciliations.
3) Methodology & Assumptions Framework
Method statement: Document forecasting structure, drivers, and equations utilized; define how scenario variants are applied.
Assumptions log: Centralized register for economic ( AV growth, inflation/ CPI, wage growth, medical trend), operational ( vacancy, hiring, service levels), policy ( fees, taxes), financial interest rates, investment earnings), and actuarial ( CalPERS/ OPEB) assumptions. Include source, rationale, date, owner.
Standards compliance: Where applicable, align with guidance from, but limited to, GAAP, GFOA best practices, and State Controller reporting.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C 4) Fiscal Condition Assessment( Current State)
Liquidity & reserves: Trends vs. policy targets; one-time vs. ongoing resource use; working capital indicators.
Revenues: Composition, concentration, and volatility of General Fund revenues ( property, sales, TOT, utility/ franchise, fees/ permits, transfers). Analyze seasonality, elasticity, collection risk, and extraordinary items.
Expenditures: Personnel ( base pay, steps, COLA, vacancy/ backfill, overtime), benefits ( health, workers' comp), pension and OPEB contributions, non- personnel ( contracts, utilities, insurance, fleet, fuel), and internal service charges; identify structural cost pressures and unfunded mandates.
Liabilities & commitments: Pensions ( UAL by amortization base, rate trajectories), OPEB pay- go vs. prefunding status), bonded debt( coverage, covenants), leases, and deferred capital/ maintenance backlogs.
Structural balance: Historical ongoing revenues vs. ongoing expenditures; reliance on one- time resources; identification of structural gaps.
Practices Modeling: Provide data showing the historical and current condition based on recognized models, such as the ICMA Fiscal Trend Monitoring System, the League of California Cities Municipal Financial Health Diagnostic, or other tools appropriate to provide collective insight to fiscal condition.
Benchmarking ( if applicable): Contextualize key ratios versus peer agencies and/ or recommended practice ranges.
5) Five-Year Operating Forecast( Baseline, Best-Case, Worst-Case) Baseline(" most likely"): Reflect adopted policies, existing MOUs, known program changes, and consensus macro assumptions.
Best- case: Favorable macro trajectory ( higher taxable sales, steady AV growth, stable TOT), improved investment returns, successful cost containment and vacancy savings.
Worst- case: Recessionary path( s), slower or negative AV growth, elevated wage/ medical inflation, lower TOT/ consumer spending, state takeaways/ mandates, and higher CalPERS rates or revised amortization schedules.
Revenue modeling: Property tax ( AV growth components, Prop 13 reassessment dynamics); sales tax ( category mix, elasticity to income/ price indices); TOT recovery curve; fees/ permits activity volumes/ fee policy); other taxes and intergovernmental sources.
Expenditure modeling: Wage steps/ COLA per MOU; staffing plan and vacancy factors; health trend; CalPERS employer rates and UAL amortization payments; OPEB contributions; operations & maintenance inflation; known contracts and step- cost triggers.
Sensitivity analysis: Run targeted shocks ( e. g., + 1- 2% AV growth, + 0. 5- 1. 0 pts sales growth/ elasticity, + 2- 3% medical trend, + 50- 100 bps investment earnings, pension discount- rate changes) and show fiscal effects. Determine reasonable and appropriate ranges for use in the analysis.
Reserves tracking: Model policy floors, replenishment rules, and draw triggers under each scenario.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C 6) Risk, Opportunity & Stress Testing
Risk/ Opportunity Matrix: Probability x impact scoring for high- leverage drivers ( economy, tax base, tourism/ TOT, labor/ benefits, state policy, disasters, grant volatility); quantify fiscal exposure ranges.
Macro stresses: Multi- year recession and recovery paths; interest rate shocks; investment earnings variance; inflation spikes.
Operational stresses: Hiring lag or higher vacancy; higher overtime; insurance/ premium shocks; major contract repricing; supply chain spikes.
Event stresses: Disaster scenarios ( i. e. wildfire/ earthquake/ flood) with plausible cost and revenue effects; state action ( takeaways, deferrals).
Mitigation levers: Revenue measures ( policy options), expenditure pacing, capital deferral windows, position management, reserve deployment/ replenishment strategies, each with indicative fiscal effect, lead time, and dependencies where reasonable. 7) Reserves & Policy Analysis
Adequacy tests: Compare forecast reserves to policy targets under all scenarios and stresses; estimate time to restore reserves if drawn.
Policy review: Evaluate reserve policy structure ( levels, triggers, replenishment) and recommend enhancements consistent with GFOA guidance.
8) Model Specifications ( Editable& Maintainable)
Workbook architecture: Separate Inputs/ Assumptions, Drivers, Revenue Modules, Expenditure Modules, Pensions/ OPEB, Results by Fund, Reserves, Stress/ Sensitivity, Charts & Tables, Reconciliation.
Controls: Version control; cell protections where appropriate; color- coded inputs vs. formulas; scenario toggles; sensitivity sliders; documentation panel/ tooltips.
Reconciliation: Crosswalks to audited financials and to adopted budget for Year 1; one- time vs. ongoing segmentation; fund- to- government- wide alignment notes.
User guide: Embedded data dictionary, instructions for updating, and a checklist for annual refresh.
9) Engagement& Validation
Department interviews: Validate workload/ demand drivers, pipeline initiatives, service level commitments, step- cost triggers, and risks.
Finance collaboration: Agree on key inputs ( e. g., macro path, labor/ benefit assumptions, revenue elasticities); coordinate with actuaries/ auditors as needed.
External partners ( as relevant): Validate assumptions with external partners ( i. e. sewer, stormwater, etc.) on joint cost drivers or pass- throughs. 10) Deliverables
Kickoff packet: Final workplan, data request, and engagement calendar.
Interim Findings Memo: Early condition read- out; emerging risks/ opportunities; preliminary assumptions for staff review.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C Five- Year Forecast Model( editable): With scenarios, sensitivities, reconciliation tabs, and print-ready exhibits.
Risk& Opportunity Matrix + Stress- Test Pack.
Final Report( PDF + native): Executive summary; current condition; five- year forecast( all scenarios); long- term outlook; risk/ stress results; reserve analysis; recommended actions ( timing, indicative fiscal effect); appendices ( assumptions log, data sources, reconciliation tables, benchmarking).
Presentations: At least two public meetings ( Finance Commission and Town Council) and staff work sessions.
Training & Handover: Live walktbrough, update playbook, and placement of all files per Town direction.
12) Schedule( Illustrative)
Weeks 1- 2: Kickoff; data intake; interview scheduling; method statement.
Weeks 3- 6: Condition diagnostics; interim findings memo.
Weeks 7- 10: Five- year forecasting; scenario build; sensitivities.
Weeks 11- 12: Reserves/ policy analysis; risk matrix; stress tests.
Weeks 13- 14: Draft report/ model; staff review and revisions.
Weeks 15- 16: Final report/ model; presentations; training and handover. 13) Town Support( Anticipated)
Timely access to financials, audit and actuarial reports, MOUs/ position data, CIP/ backlog, development and fee pipelines, debt/ grants, and reserve policies; scheduling of interviews; facilitation of external partner conversations as needed.
Study 2— Fiscal Impact Analysis
The Consultant will complete a robust Fiscal Impact Analysis mirroring the analytical structure and depth of the 2020 Comprehensive Plan Fiscal Impact Analysis for Annapolis, Maryland or equivalent Attachment 6). The analysis shall include:
1) Growth- Based Cost Modeling
Distinguish fixed vs. variable General Fund operating costs.
Project variable operating and staffing costs by department( e. g., General Government, Police, Parks and Public Works, Library) using appropriate demand bases ( residential population, service population, or employment).
Disaggregate costs into staffing vs. non- staffing components and identify per- unit cost escalators.
2) Revenue Modeling
Property tax and related in-lieu components based on development assumptions ( e. g., housing units, commercial sq. ft.).
Sales and use tax, transient occupancy tax ( TOT), franchise fees, business license tax, and fees/ permits/ fines using Town- specific volumes and policy assumptions.
Other locally controlled revenues ( i. e. third party partners).
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C 3) Scenario- Based Forecasts
Develop best- case, baseline, and worst- case scenarios over a 20- year horizon.
Conduct sensitivity testing on service- population growth, property values, cost escalation, and revenue volatility ( including recession simulations).
4) Capital Cost Estimation
Provide rough- order- of-magnitude ( ROM) capital cost estimates tied to infrastructure demands generated by new growth.
Recommend methodologies the Town can reuse for site- specific capital forecasting. 5) Results & Communication
Estimate net fiscal impact( revenues vs. costs) at buildout and annually through 2040.
Present findings with clear charts/ tables comparing revenue/ cost deltas and stress- tested variance bands.
Highlight fiscal implications by development type ( e. g., residential vs. commercial) and intensity/ density.
6) Methodological Transparency
Clearly define data sources, modeling assumptions, and calibration approach.
Collaborate with staff to validate variables and use Town- specific historical financials, land use policies, and demographic projections.
Study 3— Asset Liability Management( ALM) Study
The Consultant shall:
Inventory & Evaluate Liabilities: Provide an inventory and evaluation of key liabilities including but not limited to pension, OPEB, bonded debt, and unfunded infrastructure needs.
Funding Needs & Risk Reduction: Offer a standalone analysis of long- term funding needs and identify strategies to reduce risk.
ALM Modeling: Present model outputs showing fund balance sustainability and risk exposure across scenarios.
Reserve Guidance: Provide guidance on optimal reserves and potential reserve policy enhancements.
Combined Studies— Study 1 and 2
The Consultant shall deliver a unified analysis that:
Integrates the Fiscal Condition & Forecast( Study 1) with the Fiscal Impact Analysis ( Study 2) to provide a coherent picture of short and long-term fiscal sustainability.
Ensure consistency in assumptions across the impact and forecast models, using development assumptions and infrastructure costs as key inputs.
Packages results into a single report with distinct sections, shared assumptions, and harmonized formats.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C All Studies— Required Elements
All proposals for all Studies must include:
Scenario analysis with well- documented assumptions, covering macroeconomic and local risks.
A risk& opportunity matrix that quantifies high- impact variables and their fiscal effects.
Interviews with all Town departments and relevant external agencies ( e. g., Sewer District, Fire Department) to inform assumptions.
Accounting/ Reporting transparency, specifying whether analyses are government- wide or fundbased, source ofthe information, and how they reconcile.
Editable deliverables ( e. g., Excel models, PowerPoint decks) with a documented methodology and user guide.
Public presentations: at least two meetings ( Finance Commission and Town Council), plus staff work sessions as needed.
Work samples of comparable scope and complexity.
Disclosure of AI/data tools: clarify if/how AI or specialized analytics are used in modeling.
Standards compliance: GAAP, GFOA, and California State Controller standards.
Usability & training: a clear plan for long-term usability, including staff training where needed.
F. PROPOSAL FORMAT AND SUBMITTAL REQUIREMENTS
1 Proposal Format and Organization
Proposals shall be clear, concise, and organized in the order below. Provide one ( 1) searchable PDF and any native files specifically requested ( e. g., Excel models), using the section headers shown to facilitate review.
1. Cover Letter( maximum 2 pages)
Briefly summarize qualifications and project understanding; identify the primary contact authorized to bind the firm. Confirm acceptance of the Town' s Sample Consultant Services Agreement( Attachment 5) or list any specific exceptions/ edits requested.
2. Completed Certification Forms ( Attachments 1- 4)
o Attachment 1 — Conflict of Interest Statement
o Attachment 2— Non- Collusion Declaration
o Attachment 3 — References
o Attachment 4— Statement Regarding Insurance Coverage and Worker' s Compensation Insurance Acknowledgment Certificate
3. Scope Comments and Methodology
Comment on the Scope of Services and describe the proposed approach, specialized methods/ tools, milestones, QA/ QC, and how deliverables will be provided to the Town including assumptions governance and documentation practices).
4. Experience and Expertise
Demonstrate experience performing similar studies for California municipalities, including fiscal condition analysis, forecasting, fiscal impact analysis, and ALM. Include relevance to local government budgeting, finance, infrastructure liabilities, pensions/ OPEB, and General Plan/ Housing Element contexts.
5. Key Personnel and Resumes
Identify the Project Manager and key staff; provide brief role descriptions and relevant qualifications. Commit to maintaining the proposed team; note any planned subcontractors.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C
6. Timeline and Work Plan
Provide a realistic schedule with major tasks, interim deliverables, review points, and public meetings ( Finance Commission and Town Council). Indicate opportunities for phasing.
7. Samples of Comparable Projects ( 1- 3)
Provide recent examples demonstrating similar scope, scale, and complexity ( links or PDFs).
8. Disclosure of Litigation/ Discipline( last 5 years)
Disclose and explain any relevant matters; indicate status/ outcome.
9. References ( Attachment 3)
Provide a minimum ofthree ( 3) current references from comparable engagements within the past five ( 5) years, including contact information.
10. Preliminary Fee Schedule( itemized by Study)
Provide an itemized fee proposal for Study 1, Study 2, Study 3, and/ or Combined Study 1 and 2 ( as applicable), inclusive of travel and incidental expenses. Identify personnel classifications, hourly rates, estimated hours by task, and optional services.
11. Statement of Insurance Coverage( Attachment 4)
Identify carriers, types, and limits; confirm ability to meet Town requirements if selected.
12. Tools, Data Sources, and Use of AI
Summarize data sources, technical platforms, and any AI/ advanced analytics used in modeling; describe transparency, validation, and human- in-the- loop review. 2 Submittal Instructions
Due Date/ Time: Proposals must be received electronically by 9/ 22/ 2025, 4: 00 p. m. Pacific Time. Late submittals will be deemed non- responsive.
Delivery Method: Email the proposal PDF ( and any required native files) to Finance@losgatosca. gov. If using a file- sharing link, include access permissions that do not expire before award. The Proposer is responsible for confirming receipt due to potential email size limits.
Email Subject Line: " Town of Los Gatos — Fiscal Analysis Proposal ( Studies 1, 2, 3, or Combined 1 and 2)".
Single Proposal: Each Proposer may submit only one proposal; alternate proposals are not permitted unless requested by the Town. Providing separate complete documents for each study option will collectively be considered only one proposal.
Format: One ( 1) searchable PDF is preferred. Provide Excel versions for any financial models included in the submittal. Bookmark major sections and use consistent tab labels in workbooks. 3 Questions and Addenda
Questions: Direct all questions in writing to the Town' s Contact at Finance@losgatosca. gov by 9/ 15/ 2025 ( see Schedule of Activities). Do not contact other Town officials or evaluators.
Responses will be issued only by Addendum.
Addenda: The Town will issue addenda on its website. Proposers are responsible for checking for updates and must acknowledge all addenda in the proposal. The last day to issue addenda is 9/ 17/ 2025 ( see Schedule of Activities).
4 Proposal Conditions
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C Responsibility for Delivery: Proposers assume full responsibility for timely delivery. The Town is not responsible for email transmission issues or access restrictions on shared links. Proposals received after the deadline will not be considered.
RFP Schedule: See Schedule of Activities. The Town reserves the right to amend the schedule as necessary.
Use of Town Forms/ Attachments: Proposers shall submit Town forms ( Attachments 1- 4) as provided in this RFP.
Contract Template: The Town' s Sample Consultant Services Agreement( Attachment 5) is provided for reference; proposers shall accept or propose specific exceptions in the Cover Letter.
Acceptance or Rejection: The Town reserves the right to accept or reject any and all proposals for any reason, including but not limited to, lack of budget for studies, etc.
Public Records: All materials may become public records per the California Public Records Act.
5 Acknowledgment of Minimum Qualifications
By submitting, the Proposer affirms it meets the Minimum Qualifications and agrees to the General Provisions and Requirements as stated in Sections C and D of this RFP.
G. EVALUATION PROCESS
Proposals will be evaluated based on:
1. Conflict of Interest/ Non- Collusion Declarations ( Pass/ Fail)
2. Proposal Completeness and Organization ( 15 points)
3. Understanding of Scope and Methodology ( 20 points)
4. Qualifications and Experience ( 20 points)
5. Accessibility and Communication ( 15 points)
6. References and Work Samples ( 10 points)
7. Pricing and Cost- Effectiveness ( 20 points)
The Town reserves the right to conduct interviews. Evaluation is at the sole discretion of the Town.
Selection will be based on best fit as determined by the Town and will not be solely determined on points or price. The point values and evaluation criteria described herein are guidelines only; the Town reserves the right to weigh, interpret, or disregard criteria at its sole discretion. Any changes to the Town' s standard contract for service will also be considered in the evaluation.
The Town may, at its sole discretion, terminate evaluation of any or all proposals at any time and may reopen, cancel, or postpone the procurement process without award. Proposals shall remain valid for a period of one hundred twenty ( 120) days from the proposal due date unless otherwise agreed in writing by the Town. Proposers may not withdraw their proposal within this period without the written consent of the Town. Proposers shall have no claim whatsoever for compensation or reimbursement in such event.
H. ADDITIONAL INFORMATION
All costs incurred in the preparation, submission, or presentation of a proposal in response to this RFP, including but not limited to, travel, interviews, presentations, and negotiation activities,
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C shall be borne solely by the proposer. The Town shall have no obligation for any such costs, regardless of whether a contract is awarded.
All materials may become public under the California Public Records Act( PRA). The Town will not be liable for the disclosure of any materials submitted in response to this RFP that are required to be disclosed under the PRA or other applicable law. The Town reserves the right to reject any or all proposals.
Equal opportunity requirements apply.
All work must comply with local, state, and federal law.
Selection of a proposer and commencement of negotiations does not obligate the Town to execute a contract. The Town may terminate negotiations and select another proposer, issue a new RFP, or take no further action.
Any communication, verbal or written, made by the Town or its representatives during this solicitation process shall be considered non- binding unless incorporated into a formal, written agreement executed by the Town.
Any dispute arising under or related to this RFP shall be governed by the laws of the State of California, and the venue for any legal action shall be the Superior Court of California in and for the County of Santa Clara. The Town' s total liability in connection with this RFP shall be limited to the amount, if any, payable under a duly executed contract.
I. ATTACHMENTS
1. Conflict of Interest Statement
2. Non- Collusion Declaration
3. References Form
4. Insurance Certification
5. Sample Consultant Services Agreement
6. 2020 Comprehensive Plan Fiscal Impact Analysis for Annapolis, Maryland The Town of Los Gatos thanks you for your interest in this important initiative.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C ATTACHMENT 1 - CONFLICT OF INTEREST STATEMENT
THIS FORM MUST BE PRINTED OUT, COMPLETED AND SUBMITTED WITH THE
PROPOSAL
FISCAL CONDITION ANALYSIS WITH FIVE- YEAR AND LONG- TERM FORECAST,
FISCAL IMPACT ANALYSIS, AND ASSET LIABILITY MANAGEMENT STUDY The undersigned declares:
I/We Insert Name) have the following financial, business, or other relationship with Town of Los Gatos that may have an impact upon the outcome ofthe contract. If none, please specify that no other relationships may have an impact on this contract or Project.
I/We Insert Name) have the following current clients who may have a financial interest in the outcome ofthis contract. If none, please specify that no other clients may have a financial interest with an impact on this contract or Project.
Pursuant to Government Code section 1090 and any other laws, rules and regulations that may apply, the Proposer covenants that neither it, its subcontractors nor employees presently have an interest, and shall not acquire any interest, direct or indirect, financial or otherwise that would conflict in any manner or degree with contract awarded from this RFP. Proposer certifies that to the best of its knowledge, no one who has or will have any financial interest in the contract awarded from this RFP is an officer or employee of the Town. Through its submittal of a proposal, Proposer acknowledges that it is familiar with Section 87100 et seq. and Section 1090 et seq. ofthe Government Code ofthe State of California and will immediately notify the Town if it becomes aware of any facts concerning the contract to be awarded that constitute a violation of said provisions.
Furthermore, ifthere is reason to believe that collusion exists among the Proposers, the Town may refuse to consider proposals from participants in such collusion. No person, firm, or corporation under the same or different name, shall make, file, or be interested in more than one proposal for the same work unless alternate proposals are called for. A person, firm, or corporation who has submitted a sub- proposal to a Proposer, or who has quoted prices on materials to a Proposer, is not thereby disqualified from submitting a sub- proposal or quoting prices to other Proposers. Reasonable ground for believing that any Proposer is
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C interested in more than one proposal for the same work will cause the rejection of all proposals for the work in which a Proposer is interested. Ifthere is reason to believe that collusion exists among the Proposers, the Town may refuse to consider proposals from participants in such collusion. Proposers shall submit as part of their proposals documents the completed Non- Collusion Declaration provided herein.
I, on behalf of the Proposer, declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct and that this declaration is executed on date], at city], state].
Proposer Name Person, Firm, Corp.) Title of Authorized Representative Address Name of Authorized Representative
City, State, Zip
Date) Signed)
ITEM NO. 11.
Docusign Envelope ID 8463 BA3 F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C ATTACHMENT 2— NON- COLLUSION DECLARATION
THIS FORM MUST BE PRINTED OUT, COMPLETED AND SUBMITTED WITH THE
PROPOSAL
FISCAL CONDITION ANALYSIS WITH FIVE- YEAR AND LONG- TERM FORECAST,
FISCAL IMPACT ANALYSIS, AND ASSET LIABILITY MANAGEMENT STUDY The undersigned declares:
I am the Insert Title] of Insert name of
company, corporation, LLC, partnership or joint venture] the party making the foregoing proposal.
The proposal is not made in the interest of, or on behalf of, any undisclosed person, partnership, company, association, organization, or corporation. The proposal is genuine and not collusive or sham.
The Respondent has not directly or indirectly induced or solicited any other respondent to put in a false or sham proposal. The Respondent has not directly or indirectly colluded, conspired, connived, or agreed with any bidder or anyone else to put in a sham proposal, or to refrain from responding. All statements contained in the proposal are true.
Any person executing this declaration on behalf of a respondent that is a corporation, partnership, joint venture, limited liability company, limited liability partnership, or any other entity, hereby represents that he or she has full power to execute, and does execute, this declaration on behalf ofthe respondent.
I declare under penalty of perjury under the laws ofthe State of California that the foregoing is true and correct and that this declaration is executed on date], at city], [ state].
By:
Name:
Title:
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C ATTACHMENT 3 - REFERENCES
THIS FORM MUST BE PRINTED OUT, COMPLETED AND SUBMITTED WITH THE
PROPOSAL
FISCAL CONDITION ANALYSIS WITH FIVE- YEAR AND LONG- TERM FORECAST,
FISCAL IMPACT ANALYSIS, AND ASSET LIABILITY MANAGEMENT STUDY List three( 3) references for work of a similar nature to the Services performed within the last five( 5) years. Use additional sheets as necessary.
1. Name of Agency Agency Address
Contact Name Contact Title
Contact Telephone Contact Email Address
Contract Period Contract Amount
Description of services performed including costs.
2. Name of Agency Agency Address
Contact Name Contact Title
Contact Telephone Contact Email Address
Contract Period Contract Amount
Description of services performed including costs.
3. Name of Agency Agency Address
Contact Name Contact Title
Contact Telephone Contact Email Address
Contract Period Contract Amount
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C Description of services performed including costs.
I hereby certify that the Proposer performed the work listed above.
Signature of Proposer Name Date
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C ATTACHMENT 4 - STATEMENT REGARDING INSURANCE COVERAGE AND
WORKER' S COMPENSATION INSURANCE ACKNOWLEDGMENT CERTIFICATE
THIS FORM MUST BE PRINTED OUT, COMPLETED AND SUBMITTED WITH THE
PROPOSAL
FISCAL CONDITION ANALYSIS WITH FIVE- YEAR AND LONG- TERM FORECAST,
FISCAL IMPACT ANALYSIS, AND ASSET LIABILITY MANAGEMENT STUDY PROPOSER HEREBY CERTIFIES that the Proposer has reviewed and understands the insurance coverage requirements specified in the RFP. Should the Proposer be awarded a contract for Services, Proposer further certifies that the Proposer can meet the specified requirements for insurance, including insurance coverage of any subcontractors, and agrees to name the Town as additional insured for the Services specified.
By certifying this form, the Proposer also understands the Worker' s Compensation insurance requirement per the California Labor Code, Sections 1860 and 1861:
I am aware ofthe provisions of Section 3700 ofthe Labor Code, which require every employer to be insured against liability for worker' s compensation or to undertake self- insurance in accordance with the provisions ofthat code, and I will comply with such provisions before commencing the performance ofthe work ofthis contract.
Name of Proposer ( Person, Firm, or Corporation)
Signature of Proposer' s Authorized Representative
Name & Title of Authorized Representative
Date of Signing
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C ATTACHMENT 5- SAMPLE CONSULTANT SERVICES AGREEMENT
ATTACHED BEHIND THIS PAGE]
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C
AGREEMENT FOR CONSULTANT SERVICES
THIS AGREEMENT is made and entered into on DATE) by and between TOWN OF LOS GATOS, a California municipal corporation, (" Town") and NAME OF COMPANY, (" Consultant"), whose address is
ADDRESS OF COMPANY. This Agreement is made with reference to the following facts.
L RECITALS
1. 1 The Town desire to engage Consultant to provide XXXXXXXXX.
1. 2 The Consultant represents and affirms that it is willing to perform the desired work pursuant to this Agreement.
1. 3 Consultant warrants it possesses the distinct professional skills, qualifications, experience, and resources necessary to timely perform the services described in this Agreement.
Consultant acknowledges Town has relied upon these warranties to retain Consultant.
II. AGREEMENTS
2. 1 Scope of Services. Consultant shall provide services as described in that certain proposal sent to the Town on ( DATE), which is hereby incorporated by reference and attached as Exhibit A.
2. 2 Term and Time of Performance. This contract will remain in effect from to Consultant shall perform the services described in this agreement as follows:
XXXXXXXX.
2. 3 Compliance with Laws. The Consultant shall comply with all applicable laws, codes, ordinances, and regulations of governing federal, state and local laws. Consultant represents and warrants to Town that it has all licenses, permits, qualifications and approvals of whatsoever nature which are legally required for Consultant to practice its profession. Consultant shall maintain a Town of Los Gatos business license pursuant to Chapter 14 of the Code of the Town of Los Gatos.
2. 4 Sole Responsibility. Consultant shall be responsible for employing or engaging all persons necessary to perform the services under this Agreement.
2. 5 Information/ Report Handling. All documents furnished to Consultant by the Town and all reports and supportive data prepared by the Consultant under this Agreement are the Town' s property and shall be delivered to the Town upon the completion of Consultant' s services or at the Town' s written request. All reports, information, data, and exhibits prepared or assembled by Consultant in connection with the performance of its services pursuant to this Agreement are confidential until released by the Town to the public, and the Consultant shall not make any of the these documents or information available to any
ITEM NO. 11.
Docusign Envelope ID 8463 BA3 F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C individual or organization not employed by the Consultant or the Town without the written consent of the Town before such release. The Town acknowledges that the reports to be prepared by the Consultant pursuant to this Agreement are for the purpose of evaluating a defined project, and Town' s use of the information contained in the reports prepared by the Consultant in connection with other projects shall be solely at Town' s risk, unless Consultant expressly consents to such use in writing. Town further agrees that it will not appropriate any methodology or technique of Consultant which is and has been confirmed in writing by Consultant to be a trade secret of Consultant.
2. 6 Compensation. Compensation for Consultant' s professional services shall not exceed XXXX, inclusive of all costs. Payment shall be based upon Town approval of each task.
2. 7 Billing. Billing shall be monthly by invoice within thirty (30) days of the rendering of the service and shall be accompanied by a detailed explanation ofthe work performed by whom at what rate and on what date. Also, plans, specifications, documents or other pertinent materials shall be submitted for Town review, even if only in partial or draft form.
Payment shall be net thirty (30) days. All invoices and statements to the Town shall be addressed as follows:
Invoices:
Town of Los Gatos
Attn: Accounts Payable
P. O. Box 655
Los Gatos, CA 95031- 0655
Email preferred: ap@losgatosca. gov
2. 8 Availability of Records. Consultant shall maintain the records supporting this billing for not less than three years following completion ofthe work under this Agreement.
Consultant shall make these records available to authorized personnel ofthe Town at the Consultant' s offices during business hours upon written request of the Town.
2. 9 Assignability and Subcontracting. The services to be performed under this Agreement are unique and personal to the Consultant. No portion ofthese services shall be assigned or subcontracted without the written consent of the Town.
2. 10 Independent Contractor. It is understood that the Consultant, in the performance ofthe work and services agreed to be performed, shall act as and be an independent contractor and not an agent or employee of the Town. As an independent contractor he/ she shall not obtain any rights to retirement benefits or other benefits which accrue to Town employee( s). With prior written consent, the Consultant may perform some obligations under this Agreement by subcontracting, but may not delegate ultimate responsibility for performance or assign or transfer interests under this Agreement. Consultant agrees to testify in any litigation brought regarding the subject ofthe work to be performed under this Agreement. Consultant shall be compensated for its costs and expenses in preparing for, traveling to, and testifying in such matters at its then current hourly rates of compensation, unless such litigation is brought by Consultant or is based on allegations of Consultant' s negligent performance or wrongdoing.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C
2. 11 Conflict of Interest. Consultant understands that its professional responsibilities are solely to the Town. The Consultant has and shall not obtain any holding or interest within the Town of Los Gatos. Consultant has no business holdings or agreements with any individual member of the Staff or management of the Town or its representatives nor shall it enter into any such holdings or agreements. In addition, Consultant warrants that it does not presently and shall not acquire any direct or indirect interest adverse to those ofthe Town in the subject ofthis Agreement, and it shall immediately disassociate itself from such an interest, should it discover it has done so and shall, at the Town' s sole discretion, divest itself of such interest. Consultant shall not knowingly and shall take reasonable steps to ensure that it does not employ a person having such an interest in this performance ofthis Agreement. If after employment of a person, Consultant discovers it has employed a person with a direct or indirect interest that would conflict with its performance ofthis Agreement, Consultant shall promptly notify Town ofthis employment relationship, and shall, at the Town' s sole discretion, sever any such employment relationship.
2. 12 Equal Employment Opportunity. Consultant warrants that it is an equal opportunity employer and shall comply with applicable regulations governing equal employment opportunity. Neither Consultant nor its subcontractors do and neither shall discriminate against persons employed or seeking employment with them on the basis of age, sex, color, race, marital status, sexual orientation, ancestry, physical or mental disability, national origin, religion, or medical condition, unless based upon a bona fide occupational qualification pursuant to the California Fair Employment& Housing Act.
III. INSURANCE AND INDEMNIFICATION
3. 1 Minimum Scope of Insurance:
i. Consultant agrees to have and maintain, for the duration of the contract, General Liability insurance policies insuring him/ her and his/ her firm to an amount not less than: two million dollars ($ 2, 000, 000) combined single limit per occurrence for bodily injury, personal injury and property damage. ii. Consultant agrees to have and maintain for the duration of the contract, an Automobile Liability insurance policy ensuring him/ her and his/ her staff to an amount not less than one million dollars ($ 1, 000, 000) combined single limit per accident for bodily injury and property damage. iii. Consultant shall provide to the Town all certificates of insurance, with original endorsements effecting coverage. Consultant agrees that all certificates and endorsements are to be received and approved by the Town before work commences.
iv. Consultant agrees to have and maintain, for the duration of the contract, professional liability insurance in amounts not less than $ 1, 000, 000 which is
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C sufficient to insure Consultant for professional errors or omissions in the performance of the particular scope of work under this agreement.
General Liability:
i. The Town, its elected and appointed officials, employees, and agents, are to be covered as insured as respects: liability arising out of activities performed by or on behalf ofthe Consultant; products and completed operations of Consultant, premises owned or used by the Consultant. This requirement does not apply to the automobile or professional liability insurance required for professional errors and omissions.
ii. The Consultant' s insurance coverage shall be primary insurance as respects the Town, its elected and appointed officials, employees, and agents. Any insurance or self-insurances maintained by the Town, its elected and appointed officials, employees, and agents, shall be excess of the Consultant' s insurance and shall not contribute with it. iii. Any failure to comply with reporting provisions ofthe policies shall not affect coverage provided to the Town, its elected and appointed officials, employees, and agents.
iv. The Consultant' s insurance shall apply separately to each insured against whom a claim is made or suit is brought, except with respect to the limits of the insurer' s liability.
3. 2 All Coverages. Each insurance policy required in this item shall be endorsed to state that coverage shall not be suspended, voided, cancelled, reduced in coverage or in limits except after thirty ( 30) days' prior written notice by certified mail, return receipt requested, has been given to the Town. Current certification of such insurance shall be kept on file at all times during the term of this agreement with the Town Clerk.
3. 3 Workers' Compensation. In addition to these policies, Consultant shall have and maintain Workers' Compensation insurance as required by California law and shall provide evidence of such policy to the Town before beginning services under this Agreement. Further, Consultant shall ensure that all subcontractors employed by Consultant provide the required Workers' Compensation insurance for their respective employees.
3. 4 Indemnification. The Consultant shall save, keep, hold harmless and indemnify and defend the Town, its elected and appointed officials, employees, and agents, from all damages, liabilities, penalties, costs, or expenses in law or equity that may at any time arise or be set up because of damages to property or personal injury received by reason of, or in the course of performing the work described in this contract.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C IV. GENERAL TERMS
4. 1 Waiver. No failure on the part of either party to exercise any right or remedy hereunder shall operate as a waiver of any other right or remedy that party may have hereunder, nor does waiver of a breach or default under this Agreement constitute a continuing waiver of a subsequent breach ofthe same or any other provision ofthis Agreement.
4. 2 Governing Law and Venue. This Agreement, regardless of where executed, shall be governed by and construed to the laws ofthe State of California. Venue for any action regarding this Agreement shall be in the Superior Court ofthe County of Santa Clara.
4. 3 Termination of Agreement. The Town and the Consultant shall have the right to terminate this agreement with or without cause by giving not less than fifteen days ( 15) written notice of termination. In the event of termination, the Consultant shall deliver to the Town all plans, files, documents, reports, performed to date by the Consultant. In the event of such termination, Town shall pay Consultant an amount that bears the same ratio to the maximum contract price as the work delivered to the Town bears to completed services contemplated under this Agreement, unless such termination is made for cause, in which event, compensation, if any, shall be adjusted in light ofthe particular facts and circumstances involved in such termination.
4. 4 Amendment. No modification, waiver, mutual termination, or amendment of this Agreement is effective unless made in writing and signed by the Town and the Consultant.
4. 5 Disputes. In any dispute over any aspect ofthis Agreement, the prevailing party shall be entitled to reasonable attorney' s fees, including costs of appeal.
4. 6 Notices. Any notice required to be given shall be deemed to be duly and properly given if mailed postage prepaid, and addressed to:
Town of Los Gatos CONSULTANT NAME
Attn: Town Clerk Attn:
110 E. Main Street ADDRESS
Los Gatos, CA 95030
or personally delivered to Consultant to such address or such other address as Consultant designates in writing to Town.
4. 7 Order of Precedence. In the event of any conflict, contradiction, or ambiguity between the terms and conditions ofthis Agreement in respect ofthe Products or Services and any attachments to this Agreement, then the terms and conditions of this Agreement shall prevail over attachments or other writings.
4. 8 Entire Agreement. This Agreement, including all Exhibits, constitutes the complete and exclusive statement of the Agreement between the Town and Consultant. No terms, conditions, understandings or agreements purporting to modify or vary this Agreement,
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C unless hereafter made in writing and signed by the party to be bound, shall be binding on either party.
IN WITNESS WHEREOF, the Town and Consultant have executed this Agreement.
Town of Los Gatos by:
Chris Constantin, Town Manager
Recommended by:
Consultant, by:
Gitta Ungvari, Finance Director
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C Approved asto Form:
Gabrielle Whelan, Town Attorney
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C bae urban economics
DRAFT 2020 Comprehensive Plan Fiscal Impact Analysis
For the City ofAnnapolis, Maryland
August 8, 2020
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ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C Contents
EXECUTIVE SUMMARY I
Methodology Overview
Summary of Findings
INTRODUCTION 3
METHODOLOGY 5
PROJECTIONS 9
OPERATING COSTS IMPACT 9
REVENUE IMPACT 12
Property Tax Revenue Impact of New Growth, 2020- 2040 12 Income Tax Revenue Impact of New Growth, 2020- 2040 16
Overall Growth- related Impact to General Fund Revenues, 2020- 2040 18 FISCAL IMPACT ANALYSIS OF NEW GROWTH 19
Sensitivity Analysis of Fiscal Impacts 20
OTHER COST CONSIDERATIONS 24
Capital Costs Impact 24
CONCLUSION 27
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C
EXECUTIVE SUMMARY
As part of the Annapolis Comprehensive Plan update, BAE Urban Economics has prepared a fiscal impact analysis of new growth in Annapolis between 2020 and 2040. Among the key features of the Comprehensive Plan are the development and growth projections that serve as the basis for the policies and strategies set forth in it. A fiscal impact analysis is a powerful tool to assess whether the new growth assumed in the plan will strain government services or generate net revenues that allow the government to improve and expand services and invest in economic growth. By 2040, Annapolis is projected to grow by 583 new households and 4,347 new residents. The service population is projected to grow by 4, 388. Growth projections are based on population, jobs, and household projections from the Baltimore Metropolitan Council ( BMC), Round 9 projections, published in 2016.
Methodology Overview
This fiscal impact analysis evaluates operating costs and revenues in the General Fund. The analysis uses the Fiscal Year 2020 ( FY20) Adopted Budget as a baseline to estimate the current level of service provided by the city government in terms of operating costs. Operating cost projections are based on the growth in either the residential population demand base or the service population demand base, which is the residential population plus 50 percent of jobs. Revenues other than real property tax and income tax revenue were projected similarly, based on an average revenue per chosen demand base. Real property tax and income tax revenue were calculated based on the development assumptions in the Comprehensive Plan.
The Annapolis property tax rate is applied to the assumed assessed values of new development. Income tax revenue is based on the property values of new residential development and calculating a minimum income required to purchase or rent a given unit.
An estimate of capital costs is provided, but it is not incorporated into the fiscal impact analysis, as the assumptions behind the calculations are more tenuous and less reliable than the evaluation of operating costs and revenues. However, to the extent that growth will generate capital costs, these are expected to be minimal as Annapolis will not require new, additional major capital infrastructure.
Given the recent COVID- 19 outbreak and its potential effects on the economy, various property tax revenue scenarios are tested for impact on the overall growth- related revenue estimate.
Although the crisis may impact the fiscal resiliency of the City, it is important to note the fiscal impact is calculated for the next 20 years.
Summary of Findings
This analysis finds that the growth projected in the Comprehensive Plan update will have an estimated net fiscal impact totaling $ 776, 000 to the City of Annapolis General Fund by 2040, which is calculated by adding approximately$ 3. 3 million in new revenues and subtracting
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C
2. 5 million in new operating costs. Capital costs are estimated to be $ 553, 600. This is a marginally positive fiscal impact and a sensitivity analysis suggests the fiscal impact could reasonably turn out negative, although this would also be marginal relative to the size of the FY20 adopted budget. This result is explained by the heavily residential development program assumed in the model, which serves as the basis for the fiscal impact.
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C
INTRODUCTION
This report presents an analysis of the projected net fiscal impact that the population and employment growth envisioned in the City of Annapolis Comprehensive Plan update will have on the City of Annapolis General Fund between 2020 and 2040. Fiscal impact analysis is a powerful tool to assess the revenues and costs associated with new development within a jurisdiction. New homeowners and businesses generate revenues to local governments by paying taxes, fees, and fines. They also bring about new costs for a jurisdiction in the form of new or improved roads, more schools and parks, and increased investment in public safety.
These costs are comprised of both operating and capital components; growth can require both new infrastructure and an increase in operating capacity to maintain a given level of service.
Fiscal impact analysis allows a jurisdiction to compare the revenues and costs from new growth, which can inform decisions ranging from assessing the feasibility of a new development to updating tax rates and reevaluating existing services.
Fiscal impacts are calculated in terms of impact on the annual budget. In general, the formula for calculating the fiscal impact per land use ( i. e. low-density residential, mixed use, etc.) or development type ( single-family detached, multi-family, office, etc.) is:
Annual Fiscal
Impact Revenues - Operating Costs - Capital Costs
of new growth) of new growth) of new growth) of new growth) fiA fiscal impact analysis of a comprehensive plan allows jurisdictions to assess the feasibility of the new growth projected in the plan. In coordination with the city and the comprehensive planning team, BAE Urban Economics conducted a thorough fiscal impact analysis for the City of Annapolis to estimate the revenues and costs associated with new growth based on the FY20 adopted budget, the Capital Improvement Program ( CIP), and detailed discussions with city department heads and staff. Discussions with city staff focused on how department operations would change in response to new growth, as measured in the revenues and expenditures of each department. These discussions were the basis of deciding how to model revenues and costs with respect to the growth in the Comprehensive Plan.
Critically, a fiscal impact analysis does not account for the economic impacts of the Comprehensive Plan. Most components of the plan are intended to improve the Annapolis economy, whether directly or indirectly. Whether it is through improved environmental and social outcomes or directly through economic development policies, the Comprehensive Plan seeks to make Annapolis a desirably place to live. The economic impacts of the Comprehensive Plan will ultimately be based on more specific notions of, for example, the kinds of new jobs and incomes that come to Annapolis as a result of the plan, and the impact the plan has on resident' s incomes, property values and overall standing. The plan details 3
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C how the city plans to become more efficient and sustainable, which will also deliver economic benefits. Indeed, there are analyses that model these impacts and are useful to conduct as they would give an indication of future fiscal standing. However, a fiscal impact analysis specifically avoids considering the dynamic impact of the Plan on the economy. Instead, it seeks to determine whether the City is projected to accommodate t Ian' s assumed level of new growth at the level of service the government currently extends through its o erns, Atarapital infrastructure without raising taxes or other sources of revenue.
Therefore, the dollar value of the fiscal impact is less important than whether the impact is positive or negative, and what the magnitude of the impact is. The fiscal impact is not a prediction of the annual budget levels in FY2040 but rather, an indication of risks or opportunities presented by the deficit or surplus generated by new growth. 4
ITEM NO. 11.
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METHODOLOGY
A variety of methodologies were used to project growth- related impacts to different sources of revenue and for the different departments within the City. In general, through meetings and consultations with city staff, components of the FY2O adopted budget were designated as / fixed' or `variable'; that is, determinations were made regarding which revenues and costs v
would be impacted by growth. Ultimately, only revenues and expenditures from the General Fund were analyzed as Enterprise Funds' are not impacted by growth, and Internal Service i'7
Funds2 are accounted for in the operating costs of departmental budgets in the General Fund.
Operating cost projections are based on the growth in either the residential population demand base or the service population demand base, which is the residential population plus 50 percent of jobs. Revenues other than real property tax and income tax revenue were projected similarly, based on an average revenue per chosen demand base. Real property tax and income tax revenue were calculated based on the development assumptions in the Comprehensive Plan. The Annapolis property tax rate is applied to the assumed assessed values of new development. Income tax revenue is based on the property values of new residential development and calculating a minimum income required to purchase or rent a given unit.
An estimate of growth- related capital costs and school costs is also provided, but these costs are not incorporated into the fiscal impact analysis itself. The city of Annapolis does not bear any schools costs, as schools are provided by Anne Arundel County. Moreover, as the city is built out, there will be limited new capital costs in terms of major infrastructure, which include roads classified as arterials or higher, and new sewer and water line ( not including connections). Sidewalks, road connections to entrances and other site related infrastructure I*114111" are not typically included in the fiscal impact analysis of a comprehensive plan, where the goal is to establish an order of magnitude for the fiscal impact, and the cost of smaller infrastructure can vary considerably.
The costs of smaller infrastructure, to the extent there are any, depend largely on assumptions about development types and potential sites, which is more information than established currently in the Comprehensive Planning process. It is certainly useful to conduct a fiscal impact analysis with more specific assumptions that are informed by proposed development The Enterprise Funds are used to account for those activities of the City that are financed and operated in a manner similar to private business enterprises where costs and expenses, including depreciation, are recovered principally through user charges. Individual operations that the City has designated as enterprise funds include Water, Sewer, Parking, Transportation, Watershed Restoration, and Refuse funds." 2 Internal Services Funds, including Health Insurance, Self-Insurance, Fleet Operations, and Fleet Replacement activities, provide service to the City government, and are paid for primarily through departmental budgets. As a result, increases in operating costs to departmental budgets will account for transfers from those departments to the Internal Service Funds.
5
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C types on a given site or in a given area, but it can only be done when there are proposed or finalized land use changes. In fact, fiscal impact analyses are often used to evaluate individual development projects. For the purposes of the current Comprehensive Plan, a fiscal analysis will be ultimately conducted for specific potential development sites to study the impact of potential zoning changes. Nonetheless, a rough estimate of capital costs is provided in this report based on the average spending in the Capital Improvement Plan for FY20 through FY25. As the estimate is less rigorously conceived than the estimates of revenues and operating costs, it is not included in the fiscal impact result.
As shown in the fiscal impact analysis presented in this report, 87.2 percent of the$ 80.8 million in City FY20 General Fund revenues are held variable, meaning that these revenues will generally increase in relation to the City' s population and employment growth through 2040.
Notably, projecting growth- related real property tax revenues accounts for over 64 percent of potential General Fund revenues based on FY20 levels.
Table 1: FY20 General Fund Revenues Held Variable
Source of FY20 Revenue FY20 Adopted
Revenue Held Variable Budget Variable
Taxes( a) 54,834,000 $ 54,983,800 99.7%
Licenses& Permits $ 3,256,300 $ 3,256,300 100. 0%
Fines& Forfeitures $ 435,000 $ 435,000 100.0%
Interest, Rent, Other $ 1, 549,000 0.0%
Intergovernmental( b) $ 6,343,000 $ 11, 565,000 54.8%
Charges for Service $ 5,626,500 $ 5,626,500 100. 0%
Other 3,423,500 0.0%
Total 70,494,800 $ 80,839, 100 87.2%
Notes:
a) Taxes include real and personal property taxes, and penalties and interest. b) Of intergovernmental sources of revenue, only the income tax is projected.
The fiscal impact analysis presented in this report estimates that 53. 4 percent of the approximately$ 83. 0 million in General Fund operating expenses in the FY20 adopted budget are variable, while the remaining expenditures were determined to be unaffected by new growth. Non-staff operating expenditures and staffing costs were analyzed separately.
Operating expenditure line items were held fixed or variable depending on if they were determined to be affected by growth.
Similarly, operating costs related to staff salaries, wages, and benefits were projected based on the need for new staff, which was based on the level of employed staff per department in FY20. Certain positions in each department, such as chiefs and directors, where held fixed 6
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C while lower level staff were held variable. The percentages of FY20 General Fund expenditures held variable are summarized in Table 2.
Table 2: FY20 General Fund Expenditures Held Variable
Variable Variable FY20 Adopted
Departm ent Expenditures Staff Costs Budget Variable
General Government( a) 1, 363, 650 $ 5, 359, 113 $ 30, 581, 430 22. 0% Police 2, 458, 830 $ 13, 336, 939 $ 19, 620, 830 80. 5% Fre 1, 380, 370 $ 11, 894, 367 $ 19, 286, 270 68. 8%
Emergency Management( b) $ 417, 520 0. 0%
FUblic Works 2, 386, 250 $ 3, 337,587 $ 7, 885, 250 72. 6% Parks 1, 597, 850 $ 1, 155, 655 $ 5, 176, 700 53. 2%
Total 9, 186, 950 $ 35, 083, 661 $ 82, 968, 000 53. 4%
Notes:
a) General government includes: City Council and the Office of the Mayor, Human Resources, Management Information Technology, Finance, Planning& Zoning, and the Office of Environmental Policy. b) Emergency management expenditures were determined to be fixed as they all growth- related needs over the next 20 years will come from non- local allocations.
Operating costs were projected linearly; for each variable line item and staffer within each department, projections of the increased costs generated by new growth were based on the rates of growth in either service population or residential population. The service population, which is defined as the residential population plus 50 percent of jobs, is projected to grow faster over the next 20 years than the growth in the residential population and is a useful proxy to measure the growth- related costs of services provided to residents and workers. For example, public works costs are likely to increase alongside the growth in the service population, as both workers and residents demand public works services. Parks costs, on the other hand, would not be impacted by an increase in workers, and are more appropriately projected by population growth.
A level of service was determined for the non-staff operating expenditures by dividing the amount budgeted for a given variable line item in FY20 by the size of the base year service or residential population. For example, based on the $320,050 appropriated for supplies3 in the Planning& Zoning Department, an average $ 3. 18 is spent per member of the service population ( 55,763 in 2020). The level of service is multiplied by the growth in the given demand base. Growth projections used in this fiscal impact analysis are discussed in the next section.
Similarly, a level of service for staffing is based on dividing the number of employed staff by the appropriate base year population. For example, based on the 14 ' Equipment Operator' positions in the Department of Public Works, there are 0.00025 of them per member of the service population in 2020. This is multiplied by the change in service population to 3 This budget refers to the line item for" Supplies and Other" within the Department budget for Planning& Zoning.
Expenditures within this line item include office supplies, training for staff and memberships. 7
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C determine how many new Equipment Operators are needed, which is then multiplied by the total salary and benefits received by each Equipment Operator to determine a cost. Based on an analysis of salaries, it was found that, on average, city staff across all departments receive benefits (i. e. health insurance) valued at 35 percent of their salary. This cost increase is incorporated into salary levels of staff when calculating the costs of growth- related staff needs.
Capital costs are also estimated, although not incorporated into the fiscal impact as the assumptions about growth- related capital needs are is less rigorously evaluated than the analysis of operating costs and revenues. While it is very unlikely that the city will require new, additional major capital infrastructure to service growth, there may be increased costs due to additional wear and tear on existing infrastructure. Using the average spending in the CIP between FY20 and FY25 per service population, we estimate how much additional spending in the CIP would be required by the growth in the service population by 2040. It is important to note that more detailed analysis of specific capital costs that are sensitive to development type and land use can be conducted once there are reliable assumptions that can be made.
There is no reason, however, to expect that more detailed fiscal impact analyses that are land use- and site-specific will lead to an increase in the estimate of capital costs provided in this report, as it is simply unknown what, if anything, the city would be responsible for in a given development project.
In terms of revenues, real property taxes are calculated directly based on the number of new residential units and nonresidential square footage contained within the comprehensive plan, and their respective market values, which are used as proxies for estimating assessed values.
Furthermore, income tax revenue is based on calculating the household incomes needed to purchase or rent the new residential units, and then applying Annapolis' share of Anne Arundel County' s income tax rate. All other costs and revenues, such fines and fees, are projected based on the existing average levels of revenues per service population today.
All calculations presented for costs, revenues and impacts are rounded to the nearest $ 1, 000. 8
ITEM NO. 11.
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PROJECTION
Projections of the residential population, jobs, and households are based on growth rates developed by the Baltimore Metropolitan Council ( BMC). As shown in Table 3, the residential population of Annapolis is expected to grow by 4,347 between 2020 and 2040, while jobs are projected to grow by 82 in total. Therefore, the service population, which is defined as the residential population plus 50 percent of jobs, is anticipated to grow by 4,388. It is important to note that household growth is projected to increase at a lower rate than population growth, meaning that existing Annapolis households in 2020 will become larger. Using the average household sizes, new households can account for up to 1, 478 of the 4, 347 new residents, or only one- third of new growth. Therefore, the estimate of income tax revenues in this fiscal impact analysis is conservative as only the incomes of residents in new households are calculated. All projections used in this fiscal impact analysis are based directly on projections within the 2020 Comprehensive Plan.
Table 3: Summary of Demographic Projections
Base Overall Change % Change
Annapolis 2020 2025 2030 2035 2040 2020- 2040 2020- 2040 Population( a)( b) 40, 262 40, 765 40, 918 43, 852 44, 609 4,347 10. 8% Households( a)( c) 16, 426 16, 527 16, 868 16, 929 16, 989 563 3.4% Avg. Household Size 2. 45 2.47 2.43 2.59 2. 63 0. 17 7. 1% Jobs( d) 31, 001 31, 026 31, 041 31, 060 31, 083 82 0.3% Service Population( e) 55, 763 56, 278 56, 438 59, 382 60, 151 4,388 7.9% Notes:
a) Projections for population and households follow trends published in Round 9 of the BMC forecasts. b) Base year data reflects 2018 estimates from Esri, scaled by the BMC Round 9 annual growth rate from 2015- 2020( 0. 06%) c) Household projections account for 132 residential units currently in the construction pipeline as of April 1, 2020. Projections based on the BMC trend and Esri base year estimate include an additional 6. 65 units( 132/20) each year. d) Base year estimate and trends are based on BMC Round 9 estimates, with no adjustments. e) Service population is defined as the residential population plus 50% of jobs.
Source: Baltimore Metropolitan Council, Round 9; Department of Planning& Zoning; Esri; BAE, 2020.
OPERATING COSTS IMPACT
The impact of new growth on operating costs from 2020 to 2040 is based on expenditures in the General Fund. Expenditures were analyzed by department and summarized in categories including General Government, Police, Fire, Public Works, and Recreation and Parks.
Among General Government expenditures, budget items for Management Information Technology( MIT), Finance, and Planning and Zoning were held variable as the needs for these departments are likely to increase as the city grows, based on discussions with city staff.
Projected increases in expenditures in the General Government category were based on the projected growth in service population, as these departments are affected by both residential growth and the presence of jobs and businesses. Providing the same level of service over the 9
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C next 20 years to new growth, as represented by the variable non- staff operating expenditures in these departments, will generate approximately an additional $ 107, 000 in operating costs at plan buildout in 2040. Staffing is also only projected to increase in these departments.
Based on the growth in the service population, General Government will need to hire four or five new staffers to maintain the ratio of these staffers to the service population in 2020. The weighted average salary of these positions is $ 64,000, for a total cost of approximately 396,000, including accounting for an additional 35 percent in benefits.
Police operating expenditures are projected based on the growth in households, and no operating expenditures were held fixed. Household growth is chosen as the demand base because public safety costs can reasonably be expected to increase alongside development, as indicated by the Chief of Police. However, the growth- related impact on police costs realistically lies between the development growth and population growth. As a result, growthrelated impacts of public safety costs are adjusted in a sensitivity analysis of overall findings later in this report.
Staff needs were projected for all administrative positions, while only the Police Chief, Major, and Captain positions were held fixed in terms of uniformed officers. From 2020 to 2040, police operating expenditures will cost approximately $ 84,000. Administrative staff will need to increase by one staffer to maintain the existing level of service, while the number of uniformed officers will need to increase by four or five. In total, including 35 percent for benefits, staffing costs between 2020 and 2040 will be $ 457, 000.
Growth- related operating costs for the Fire Department by 2040 are slightly below the growthrelated operating costs for police. Based on the growth in the service population, Annapolis will need to spend $ 81,000 for operations and $ 408,000 in staff costs. This includes adding four or five firefighters below the rank of Fire Captain.
The FY20 Department of Public Works budget is subdivided into six categories including Administration, Engineering and Construction, Streets, Traffic Control and Maintenance, Snow, and Facilities. All operating expenditures were projected based on the increase in service population between 2020 and 2040 and maintaining the existing level of service. The projected cumulative operating expenditures over the next twenty years would cost approximately $ 188,000. Leadership and management positions within the various departments within Public Works were held fixed, while the rest were projected based on the growth in service population as well. Between 2020 and 2040, this analysis estimates that growth- related Public Works staff costs will be approximately$ 444,000, including benefits.
This represents hiring approximately five new staff.
Recreation and Parks costs round out the General Fund expenditures. Of the 11 subcategories within the Recreation and Parks budget, only costs for Arts in Public Places are held fixed. Recreation and Parks costs are projected based on the growth in the residential io
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C population as growth in nonresident workers will not generate an additional need. Operating expenditures between 2020 and 2040 are estimated to be $ 212, 000. Non- management level employees at the Pip Moyer Recreation Center are projected to increase, as well as custodial and administrative parks workers and harbormaster staff costs. In total, including 35 percent benefits, staff costs for Recreation and Parks will cost in total $ 125, 000 by 2040, representing one to two additional staff. Notably, there are several contractual workers identified in the Recreation and Parks budget, although these staff are accounted for in the projection of contractual services within the operating expenditures, not staff costs.
In total, the cumulative growth- related impact to the General Fund expenditures between 2020 and 2040 is approximately$ 2. 5 million, as shown in Table 4. This includes$ 672, 000 in new operating expenditures and $ 1. 8 million in staff costs. Total projected operating and staffing costs represent a 3. 0 percent increase over the FY20 adopted budget levels. The Police and Fire departments represent 59. 7 percent of the growth-related operating costs, followed by Public Works ( 16.5 percent), General Government ( 15 percent), and Recreation and Parks (8.8 percent).
Table 4: Growth-Related Operating Costs, 2020- 2040
2020 Adopted Operating Expenditure Staff Costs Total Impact, % Total Impact, % Increase Department Budget Impact, by 2040 Impact, by 2040 by 2040 by2040 since 2020 General Government( a) $ 30, 581, 000 $ 107, 000 $ 396, 000 $ 503, 000 20. 1% 1. 6% Police 19, 621, 000 $ 84, 000 $ 457, 000 $ 541, 000 21. 6% 2. 8% Fire 19, 286, 000 $ 81, 000 $ 408, 000 $ 489, 000 19. 5% 2. 5% Public Works 7, 885, 000 $ 188, 000 $ 444, 000 $ 632, 000 25. 3% 8. 0% Recreation and Parks $ 5, 217, 000 $ 212, 000 $ 125, 000 $ 337, 000 13. 5% 6. 5% Total 82, 590, 000 $ 672, 000 $ 1, 830, 000 $ 2, 502, 000 100. 0% 3. 0% Notes:
a) General Government includes: City Council and the Office of the Mayor, Human Resources, Management Information Technology, Finance, Planning& Zoning, and the Office of Environmental Policy.
Sources: City of Annapolis, FY 2020 Adopted Budget; BAE, 2020. 11
ITEM NO. 11.
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REVENUE IMPACT
The impact of growth on Annapolis General Fund revenues will come primarily from real property taxes, which account for 64 percent of FY20 revenues. The other major source of revenue is intergovernmental transfers, which account for 14. 3 percent of FY20 revenues.
While some intergovernmental transfers, such as the utility tax or highway tax, are likely to increase over the next 20 years, these are State- based transfers for which analysis is beyond this report. However, income tax revenue is projected, which accounts for nearly 55 percent of intergovernmental transfers.
Real property tax revenue is calculated directly based on an assumption of the future development in Annapolis by 2040 and associated property values. Importantly, proposed land use changes and development types have not yet been finalized in the Comprehensive Plan at the time of the writing of this report, and the assumptions here are subject to change.
Iterations of the fiscal impact model can be performed as the planning process advances, of after it is complete.
Income tax is based on the incomes of the households that occupy the new projected development. As a result, income tax revenue projections in this fiscal impact analysis are potentially underestimated as new households do not account for all the population growth Annapolis is projected to experience between 2020 and 2040. The BMC Round 9 projections of population for Annapolis assume an increase in the household size of existing households, which will likely result in an increase in income tax revenue from additional residents in existing households. However, this analysis does not estimate this additional income tax revenue associated with additional residents in existing households due to a lack of information in the projections related to the age, employment, and income of these residents.
The income tax revenue calculations shown in this analysis therefore represent a somewhat conservative estimate of income tax revenues attributable to the projected growth. All other revenues to the General Fund are either held fixed or projected by either growth in the service population, residential population, or jobs.
Property Tax Revenue Impact of New Growth, 2020-2040
Property tax revenues are calculated directly based on a preliminary assumption of the development projections in the Annapolis Comprehensive Plan. The Annapolis property tax is applied to the estimated market value of the new development in 2040, which is calculated based on assumptions of rents, sale prices, and vacancy rates. The property tax revenue at buildout in 2040 is shown in order to compare the impact of growth- related operating costs.
However, the assessed property values assumed throughout the development period are the market values assumed, which are based on market conditions in FY19 and do not include 12
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C inflation. A sensitivity analysis accounting for potential recession- level effects of the Covid- 19 crisis on property values is also provided later in this report.
Assumptions for determining the market value of new residential development are shown in Table 5. There will be a total of 600 new homes built. The market value of the for- sale units is based on the market values for new construction from FY19, as reported in the market study for the Annapolis Comprehensive Plan. The market rate values for new construction are higher than the median sale price. The total market value of for-sale units, which is simply the number of units multiplied by the respective sale price by unit type, is $ 317. 6 million.
The market value of for-rent multifamily units is also based on the rents reported in the market study, and in addition, assumes a five percent vacancy rate and average annual expenses based on the National Apartment Association' s ' 2019 NM Survey of Operating Income & Expenses in Rental Apartment Communities.' Using a cap rate of 4. 75 percent, the estimated 13
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1 D6- 2ABE915A0C1 C market value of the for-rent multifamily properties is determined. The market value of the all for-rent units, including affordable units, is $ 22. 0 million.
Table 5: Assessed Value Assumption for New Residential Units, 2020- 2040 Total New Residential Units* 600
Market- Rate Residential
For Rent
Number of New Units 109
Average Monthly Rent( a) 1, 600
Vacancy Rate 5%
Average Annual Expense per Unit( b) 8,661
NOI( per unit) 9,579
For Sale
New Single Family Homes 69
Sale Rice( c) 700,000
New For-Sale Tow nhomes 322
Sale Rice 650, 000
New Condos 100
Sale Rice 600, 000
Summary
For- Rent Residential NOI 1, 044, 111
Residential Capitalization Rate 4. 75%
Estimated Market Value 21, 981, 000
For- Sale Total Value 317,599,000
Notes:
a) Based on the Q3 2019 Asking rents from the' Demographic and Economic Profile and Real Estate Market Analysis.' b) Based on the estimated operating costs for mid& hi- rise rental properties from the National Apartment Association' s' 2019 NAA Survey of Operating Income& Expenses in Rental Apartment Communities.' c) Based on new construction sale price from the' Demographic and Economic Profile and Real Estate Market Analysis.' Sources: City of Annapolis; National Apartment Association; BAE, 2020. 14
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C The estimated market value of new nonresidential development is based on assumptions of NNN rent ( per square foot) from the market study and a 5. 0 percent vacancy rate that are used to determine a net operating income ( N01) per square foot. A 6. 25 cap rate is applied to the NOI multiplied by the projected increase in nonresidential development. The only nonresidential development projected in the Comprehensive Plan is a net 20,000 square feet increase in the retail inventory and a net 20,000 square feet increase in the office inventory.
As shown in Table 6, the estimated market value of new retail development by 2040 is $ 8.5 million, and the estimated market value of new office development is $ 8. 2 million.
Table 6: Assessed Value Assumptions for New Nonresidential Units, 2020- 2040 Nonresidential
Retail
NNN Rent( per sq. ft. per year) 28. 00
Vacancy Rate 5%
NOI( per sq. ft.) 26. 60
Net New Retail( SF) 20,000
Office
NNN Rent( per sq. ft. per year) 27. 00
Vacancy Rate 5%
NOI( per sq. ft.) 25. 65
Net New Retail( SF) 20, 000
Summary
Retail NOI( a) 532, 000
Nonresidential Capitalization Rate 6. 25%
Estimated Market Value 8, 512,000
Office NOI( b) 513, 000
Nonresidential Capitalization Rate 6. 25%
Estimated Market Value 8, 208,000
In total, at plan buildout in 2040, the market value of new development, which represents the assessed value for real property tax revenue purposes, is approximately$ 356.3 million. 15
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C Applying the Annapolis real property tax rate of 0. 7380 per $ 100 of assessed value generates annual revenue at buildout of$ 2. 6 million. This is summarized in Table 7.
Table 7: Annual Real Property Tax Revenue at Plan Buildout, 2040 City of
Annapolis
Assessed Value of New Res. Development, 2020- 2040 339,580,000 Assessed Value of New Non- Res. Development, 2020-2040 $ 16,720,000 Assessed Value of Total New Development, 2020- 2040 $ 356,300,000 R-operty Tax( per$ 100 of assessed value) 0. 7380
Annual Property Tax Revenue at Plan Buildout 2,629,000
Income Tax Revenue Impact of New Growth, 2020-2040
This analysis uses the home sale price and rent assumptions shown in Table 5 above to estimate household incomes among new households in Annapolis and applies Annapolis' share of Anne Arundel County' s income tax rate, which is an effective tax rate of 0.7025 percent, to estimate income tax revenues from these households. Income assumptions for the new for-rent units are calculated by assuming a vacancy rate of 5.0 percent and a rent-toincome ratio of 25 percent, which would imply these renters are not cost- burdened. For the new for-sale units, the revenue calculations assume a 20 percent down payment on the median sale price, a fixed 30-year mortgage rate of 4. 50 percent, and a monthly mortgage payment to gross monthly income ratio of 28 percent. The effective Annapolis income rate is applied to the incomes calculated using this method and multiplied by the number of new units. Applying this method to new single- family units with an assumed sale price, for example, of$ 700, 000 would require a household income of$ 121, 604, which is above the 16
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C 2019 household median income in Annapolis ($ 80,010). Assumptions for growth- related income tax revenue are shown in Table 8.
Table 8: Growth- related Income Tax Revenue Calculation Assumptions Market- Rate Residential
For Rent
New For- Rent Wits 109
Average Monthly Rent( a) 1, 600
Vacancy Rate 5%
Annual Household Income( b) 76, 800
New Income Tax Revenue ( c) 38, 000
For Sale
New Single Family Homes 69
Sale Rice( d) 700, 000
Loan Amount( e) 560, 000
Mortgage Rate( f) 4. 50%
Loan Term( months) 360
Monthly Payment 2, 837
Annual Income( f) 121, 604
New Income Tax Revenue ( g) 40, 000
New Townhom es 322
Sale Rice( d) 650, 000
Loan Amount( e) 520, 000
Mortgage Rate( f) 4. 50%
Loan Term( months) 360
Monthly Payment 2, 635
Annual Income( f) 112, 918
New Income Tax Revenue 174, 000
New Condos 100
Sale Rice( d) 600, 000
Loan Amount( e) 480, 000
Mortgage Rate( f) 4. 50%
Loan Term( months) 360
Monthly Payment 2, 432
Annual Income( f) 104, 232
New Income Tax Revenue 50, 000
Notes:
a) Based on the Q3 2019 Asking rents from the' Demographic and Economic Profile and Real Estate Market Analysis.' b) Assumption of Rent- to-Income ratio: 25. 00%
c) The Anne Arundel County income tax rate in FY20: 2. 81% Annapolis' percentage of Anne Arundel County Income Tax: 17. 00% d) Based on median sale price from the' Demographic and Economic Profile and Real Estate Market Analysis.' e) Loan amount assumes 20% down payment.
f) Assumes Fixed- rate mortgage.
f) Assumption of monthly mortgage payment as percentage of gross monthly income: 28% gross monthly income multiplied by 12 for annual income) Source: BAE, 2020
17
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C As shown in Table 9, Combining the estimated new income tax revenue from new renteroccupied households ($ 38,000) and the new income tax revenue from new owner- occupied households ($ 264,000) generates a total new incomes tax revenue of$ 302, 000 between 2020 and 2040.
Table 9: Growth- related Income Tax Revenue, 2020- 2040 City of
Annapolis
Income Tax Revenue from For- Rent Wits $ 65, 000
Income Tax Revenue from For- Sale Wits $ 212, 000
New Income Tax Revenue 277, 000
Source: BAE, 2020
Overall Growth-related Impact to General Fund Revenues, 2020-2040 Other revenues in the General Fund were also accounted for in the fiscal impact analysis based on dividing FY20 revenues by a given population and multiplying by the growth in that population. Personal property tax revenue between 2020 and 2040 were projected in terms of jobs growth, as personal property is assessed on businesses. Licenses and Permits and Charges for Services revenue were projected by the growth in residential population, while fines and forfeiture revenues were projected by the growth in service population. All other revenues were held fixed. The impact of growth on other revenues between 2020 and 2040 is approximately $347,000.
Table 10 summarizes the growth- related impact to General Fund revenues. By 2040, new growth will generate an estimated $ 3.3 million in revenue. Real property tax revenue 18
ITEM NO. 11.
Docusign Envelope ID: 8463BA3F- D38D- 4CDC- A1D6- 2ABE915A0C1C generates 80. 2 percent of the total impact, which suggests that the fiscal impact relies heavily on the market value assumptions of new development.
Table 10: Growth- related Impact to General Fund Revenues, 2020- 2040 Source of 2020 Adopted Revenue Im pact, % Total Im pact, Revenue Budget( a) by 2040 by 2040
Real Property Tax( b) 51, 884,000 $ 2,629,000 80.2%
Personal Property Tax( c) $ 2,950,000 $ 8,000 0. 2%
Income Tax( d) 6,343,000 $ 302,000 9. 2%
License& Permits( e) 3,256,300 $ 112, 000 3. 4%
Fines& Forfeitures( f) 435,000 $ 34,000 1. 0%
Charges for Service( g) $ 5,626,500 $ 193, 000 5. 9%
Total 70,494,800 $ 3,278,000 100%
Notes:
a) Revenues shown are only for those revenue sources held variable, so total of FY20 adopted budget levels do not match FY20 General Fund revenues.
b) Property taxes are calculated based on the projections of new residential development for the Comprehensive Plan. The assumed projected' development program' in place currently is a placeholder. c) Projected based on base year personal property tax revenue per job. d) Revenue tax is based on the household revenues of new residential development. As a result, this is a low estimate as new residential development does not account for the entirety of the projected population growth by 2040. e) Projected based on base year licenses and permits revenue per resident. f) Projected based on base year fines and forfeitures revenue' service person.' g) Projected based on base year charges for service revenue per resident.
FISCAL IMPACT ANALYSIS OF NEW GROWTH
Combining the growth- related impacts to operating costs, capital costs, and revenues determines the overall fiscal impact by 2040. As shown in Figure 1, the fiscal impact of new growth will be $ 776,000 by 2040. If new growth generates this fiscal impact by 2040, the impact at plan buildout in 2040 would be a 0.94 percent increase to the FY20 adopted budget of$ 82. 6 million. While this represents a positive fiscal impact, the impact is marginally above 19