Submitted On:
Jul 14, 2025, 12:17PM PDT
City Council Regular Meeting -
Submit your written public
comment
City of Pleasanton
Full Name
First Name:
Michael
Last Name:
Mitchell
Email (this entry is disclosable
if included)
[email protected]
Meeting Type
City Council Workshop at 4 p.m.
Agenda Item Number
74 Comments
The Castlewood Property Owners Association believes it is time for Castlewood to be annexed by Pleasanton.
Castlewood annexation is currently #74 on the City’s priority list.
That’s understandable in the context that Castlewood and Pleasanton have talked about this before and it has been Castlewood that usually backs away. We'd like to assure you that Castlewood is more than ready to move forward with annexation and that we could get this done quickly.
Within Castlewood, a few things have changed from the past, but most critically, the County is no longer providing us with adequate road, water, and sewer services. Historically, we had a dedicated program manager from the County for those services. However, that program manager, sadly, passed away suddenly in 2021. The county has not replaced the role, our services are getting worse every year, and frankly, it’s obvious the County wants us to go away. Both the Board of Supervisors and Alameda LAFCo are aware of our situation.
For Pleasanton, annexation aligns with multiple strategic priorities.
For example:
Goal A. Funding Our Future Strategy - just from property tax alone, Castlewood would provide ~$1m in revenue annually. It's a benefit not just this year, but ongoing.
Goal C. Investing in Our Environment – Our communities are co- dependent. Pleasanton should have knowledge of the infrastructure at Castlewood, including water and sewer.
Goal D. Safeguarding Our City Strategy – Last year, in the peak of fire season, the water tanks at Castlewood went dry, simply due to negligence by the County. Thank goodness there wasn’t a fire at the time as it could have devastated more than just Castlewood.
Goal E. Building a Community Where Everyone Belongs – Our children went to Pleasanton schools, we drive on Pleasanton roads, our post office is on Black Ave., yet we are not a Pleasanton residents. For Pleasanton, there is no additional ‘soft costs’ to formalizing a long-standing relationship.
There may be a misconception within Pleasanton that our water infrastructure is dated. The truth is that it was completely replaced in 1995, and we had brand-new holding tanks commissioned just last year. At the same time, we have our own water supply and would not burden Pleasanton with an additional water drain.
We can say with confidence that the majority of Castlewood residents support being annexed by the City of Pleasanton. We are committed to making this cash positive for the City, including sharing the cost of the annexation work itself. As an example of how serious we are, we have already funded an ‘as is’ report on the status of Castlewood to prepare for annexation. Please see the report attached to this comment.
As you might see in that report, Castlewood could form a new Community Service District as an alternative to annexation. However, this would be a missed opportunity for both parties as we would not be able to access the recurring property tax revenue that the City could through annexation.
While we know annexation will take some time, Castlewood is prepared to make the transition as soon as this year. We hope members of the City Council will give us some ‘dots’ in the coming workshop so we can move ahead for our mutual benefit.
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CCSA_Existing Conditions_2025-06-02.pdf
REPORT
SPECIAL STUDY OF GOVERNANCE OPTIONS
EXISTING CONDITIONS REPORT
CASTLEWOOD COUNTY SERVICE AREA
Prepared by
Berkson Associates
Prepared for
Castlewood Property Owners Association
June 2, 2025
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Castlewood County Service Area (CCSA)
i
Table of Contents
1. Overview ................................ ................................ ................................ ................................ ......................... 1 About the Castlewood CSA ...........................................................................................................................................................1 Population and Land Use ..............................................................................................................................................................1 Map 1 Castlewood CSA ............................................................................................................................................................................... 2
2. Overview of Services, Facilities & Infrastructure ................................ ................................ ............................... 3 Table 1 Summary of Current Facilities, Services & Providers ..................................................................................................................... 4
3. Administration & Engineering ................................ ................................ ................................ .......................... 5 Table 2 Summary of CCSA General Fund .................................................................................................................................................... 6 General Fund Expenditures ...........................................................................................................................................................6 General Fund Revenues ................................................................................................................................................................6
4. Sewer M&O and Capital Improvements ................................ ................................ ................................ ............ 7 Collection System ..........................................................................................................................................................................7 Sewer Treatment...........................................................................................................................................................................7 Sanitary Sewer Overflows (SSOs) ..................................................................................................................................................7 Sewer M&O Expenditures .............................................................................................................................................................8 Table 3 Summary of Sewer M&O Costs as Basis for FY2024-25 Charges ................................................................................................... 8 Sewer M&O Service Charges.........................................................................................................................................................8 Sewer Capital Improvements & Funding ......................................................................................................................................9
5. Water Maintenance & Operations (M&O) and Capital Improvements ................................ ............................. 10 Water Source and Distribution .................................................................................................................................................. 10 Water Quality ............................................................................................................................................................................. 10 Water System Leakage ............................................................................................................................................................... 11 Water M&O Expenditures .......................................................................................................................................................... 11 Table 4 Summary of Water Costs as Basis for FY2024-25 Charges ........................................................................................................... 11 Non-recurring Water M&O Expenditures .................................................................................................................................. 11 Water M&O Service Charges ..................................................................................................................................................... 12 Water O&M Supplemental Charge ............................................................................................................................................................ 13 Water Capital Improvements ..................................................................................................................................................... 13 Table 5 Water System Improvement Costs ............................................................................................................................................... 14
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6. Roads ................................ ................................ ................................ ................................ ............................ 15 Road Fund Expenditures ............................................................................................................................................................ 15 Road Capital Improvements....................................................................................................................................................... 15 Table 6 Road Capital Improvement Costs ................................................................................................................................................. 15 Road Funding ............................................................................................................................................................................. 16
7. Other Public Services ................................ ................................ ................................ ................................ ..... 17 Police Protection ........................................................................................................................................................................ 17 Fire Protection ............................................................................................................................................................................ 17 Planning & Building .................................................................................................................................................................... 17 CC&R Enforcement..................................................................................................................................................................... 17 Library......................................................................................................................................................................................... 17
8. Financial Conditions, Indicators & Trends ................................ ................................ ................................ ....... 18 Table 7 Summary of CCSA Revenues and Expenditures ........................................................................................................................... 19 Revenues .................................................................................................................................................................................... 20 Property Tax ............................................................................................................................................................................................... 20 Service Charges .......................................................................................................................................................................................... 20 Table 8 Summary of Charges (FY23-FY29) ................................................................................................................................................ 21 Expenditures .............................................................................................................................................................................. 21 Assets ......................................................................................................................................................................................... 21 Fund Balances............................................................................................................................................................................................. 21 Infrastructure and Facilities ....................................................................................................................................................................... 22 Liabilities..................................................................................................................................................................................... 22 State Loan ................................................................................................................................................................................................... 22 County Revolving Fund............................................................................................................................................................................... 22
9. Governance Options ................................ ................................ ................................ ................................ ...... 23 Table 9 Summary of Governance Options ................................................................................................................................................ 24 CCSA (Status Quo) ...................................................................................................................................................................... 25 Community Services District ...................................................................................................................................................... 25 Annexation to Pleasanton .......................................................................................................................................................... 25
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Attachment A ................................ ................................ ................................ ................................ .................... 26 CCSA Sewer Parcel Map ............................................................................................................................................................. 26 Attachment B ................................ ................................ ................................ ................................ .................... 28 CCSA Water Parcel Map ............................................................................................................................................................. 28 Attachment C ................................ ................................ ................................ ................................ .................... 30 CCSA Roads Parcel Map ............................................................................................................................................................. 30 Attachment D ................................ ................................ ................................ ................................ .................... 32 CCSA Roads and Approximate Lengths ...................................................................................................................................... 32 Attachment E................................ ................................ ................................ ................................ ..................... 34 CCSA Tax Increment Factors by Entity ....................................................................................................................................... 34
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Castlewood County Service Area (CCSA)
1 1. Overview
Residents of the Castlewood community concerned about the cost and provision of public services by Castlewood Community Services Areas (CCSA) commissioned the current report. This report provides information to support discussion of governance options that could improve public services to Castlewood.
The report describes current CCSA services, facilities, infrastructure and other aspects of governance including operations and finances. If the community moves forward with a change of governance, this information and additional analysis will be considered by the County, other affected public agencies which could include the City of Pleasanton, and by the Alameda Local Agency Formation Commission (LAFCO) who will process a reorganization application.
About the Castlewood CSA
A Community Services Area (CSA) is a dependent special district.1 The Alameda County Board of Supervisors serve as the CSA board and oversee County staff in the management and operation of the district.
The Castlewood CSA (CCSA) was formed on September 17, 1968, to provide for the improvement, maintenance and drainage of the private roads in the Castlewood unincorporated area adjacent to the City of Pleasanton. In May 1979, the scope of CCSA services was extended to include provision of sewer and water services.
Map 1 shows the boundaries of the district, which cover 587 acres. The area is unincorporated and within the Sphere of Influence (SOI) of the City of Pleasanton. An SOI is an area of potential future expansion as determined and approved by LAFCO.
Population and Land Use
The CCSA boundary encompasses 587 acres serving a population of 638 residents.2 Two 18-hole golf courses and a country club are also within the CCSA.
Within the CSA are 242 residential units.3 The number of residential units benefitting from road, sewer, or water services varies depending on unit location, availability of more proximate service providers or infrastructure, and in some cases homeowner provision of service (e.g., maintenance of access roads).
1 Gov. Code Sec. 25210-25217.4 “County Service Area Law”. 2 Municipal Service Review and Sphere of Influence Reviews. Alameda County Special Districts and County Service Areas. Alameda Local Agency Formation Commission (LAFCO). Final Commission Report, October 11, 2024. (2024 CSA MSR).
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2 Map 1 Castlewood CSA4
4 Source: LAFCO map viewer; Google maps; Berkson Associates.
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3 2. Overview of Services, Facilities & Infrastructure
CCSA is responsible for the operation and maintenance of water, sewer, and roads in Castlewood.
Services are provided by CCSA through agreements with various public agencies and contracts with private firms.
The County of Alameda’s Dept. of Public Works staff manage and administer the affairs of CCSA.
Castlewood, as an unincorporated community, receives other public services provided by the County of Alameda, including sheriff protection and animal control, fire protection, library, planning and building, public works, and flood control (Zone 7 Water Agency).
Other public agencies provide services to the community e.g., school districts and community college, mosquito abatement and East Bay Regional Park.
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4 Table 1 Summary of Current Facilities, Services & Providers
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5 3. Administration & Engineering
ACPWA staff provide several administration and engineering tasks:
• Management of capital improvements (bid and contract oversight, design and applicable law) • Regulatory reporting and compliance
• Records maintenance (CSA records, maps databases and files • Finance (budgets, accounting and financial reporting) • Routine and emergency services
• Contract Management
• Public outreach (surveys, response to public inquiries • Legal services
• Coordination with other County departments (BOS, planning, Counsel, Assessor, Auditor) and public agencies (City of Pleasanton, SFPUC, state regulatory agencies) The CCSA budget tracks administrative and overhead costs in its General Fund. Services specific to sewer, water and roads are assumed to be allocated to their respective funds.
Table 2 summarizes multiple years of revenues and expenditures in the General Fund. The summary is based on data derived from unaudited County invoices and reports.5
5 Data from CPOA file: "FY20-24 REVEXP Combined - 5.17.24, tab "Pivot"; FY24 and FY25 from FY26 Annual Report
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6 Table 2 Summary of CCSA General Fund
General Fund Expenditures
Significant increases in salaries, professional services (administration, applied overhead, financial and audit), and legal fees resulted in CCSA General Fund operating shortfalls beginning in FY2021-22.
Administrative, financial and legal costs are not allocated to the road, sewer or water operations, and therefore are not funded by charges for those services. Applied overhead is distributed among several funds.
General Fund Revenues
Property taxes are the primary funding source for administrative and overhead costs reported in the General Fund.
Interest earnings are a significant revenue source in certain years depending on prevailing interest rates and fund balances. The interest on balances in other funds appears to be allocated entirely to the General Fund.
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7 4. Sewer M&O and Capital Improvements
Collection System
The CCSA sewer system consists of “5.3 miles of gravity sewer pipeline segments, 116 manholes and cleanouts, 0.8 miles of force mains, and one pump station.”6 Property owners are responsible for laterals from their residence to the property line.
The sewer system serves approximately 215 residential units and a single commercial service connection from the Castlewood Country Club discharging an equivalent of 41 residential units of sewage.7 A small number of lots are on septic systems.8
Sewer Treatment
All wastewater is conveyed to the Dublin-San Ramon Services District (DSRSD) for ultimate treatment and disposal through the West Pleasanton Interceptor sewer.
CCSA purchased treatment capacity for 308 RDEs, of which 247 RDEs have been purchased and connected. Nine of the remaining 61 RDEs have been purchased but not connected; the unpurchased 52 RDEs represent capacity available for purchase.9
Services provided by the CCSA (ACPWA) include routine maintenance of the sewerage pump station, emergency sewerage system repairs, field inspections, monitoring sewerage capacity and related sewerage system data.10 The City of Pleasanton maintains the pump station under contract with the CSA.
Maintenance of the rest of the sewerage system is contracted to Bracewell Engineering.11 Sanitary Sewer Overflows (SSOs)
No SSOs were reported from 2020 through 2025.12
6 Sanitary Sewer Management Plan (SSMP), Castlewood County Service Area R-1967-1. Alameda County Public Works Agency in consultation with Causey Consulting. May 2023.
7 2023 Sewer Management Plan.
8 The 2012 CCSA MSR noted five septic systems.
9 Annual Report, Fiscal Year 2023-2024, Castlewood County Service Area, 5/2/2023. (FY24 CCSD Annual Report) 10 FY24 CCSD Annual Report.
11 County of Alameda Standard Services Agreement, Procurement Contract No. 26793, July 1, 2024 – June 30, 2029. 12 Spill Public Report, State Water Resources Control Board, 1/1/2020 – 3/1/2025. See: “Castlewood CS” https://www.waterboards.ca.gov/water_issues/programs/ciwqs/publicreports.html#sso
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8 Sewer M&O Expenditures
Table 3 shows projected costs that were the basis for FY2024-25 charges.13 Table 3 Summary of Sewer M&O Costs as Basis for FY2024-25 Charges
Sewer M&O Service Charges
Charges are based on annual costs to fund sewer maintenance and operations.
Annual sewer M&O service charges remained flat at $675/RDE from 2014 through FY2023-24 then increased in FY2024-25 by $110 to $785. In FY2025-26 the sewer M&O charges total $809 per RDE after the increase and will grow 3%/year thereafter.
A preliminary review of unaudited CCSA invoices indicates an approximate $180,000 Sewer Maintenance Fund FY2023-24 ending fund balance.14 The estimated ending fund balance does not include about $50,000 of encumbrances which would reduce the unrestricted funds available by a corresponding amount.15
13 Castlewood CSA R-1967-1 Engineer’s Report for Proposed Service Charge Increase, April 2024. 14 See CPOA file: “FY20-24 Combined – 5.17.24”, tab “Pivot (2024)”. 15 ACPWA accounting deducts remaining contractual obligations applicable to future years as a deduction from the ending fund balance.
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9 Sewer Capital Improvements & Funding
The 2023 Sewer Management Plan16 includes a Capital Improvement Program that proposes expenditures of $100,000 annually from FY2022-23 through FY2026-27.
CCSA’s sewer capital charges, remaining relatively constant at approximately $1,100 per meter/connection, are deposited to the Water Capital Fund to pay for capital improvements. These charges generated about $124,000 in FY24 which exceeds the $100,000 annual CIP expenditure recommended in the 2023 Sewer Management Plan.
No expenditures are reported from FY2019-20 through FY2023-24 based on a review of invoices, and none are reported in engineer’s reports and annual reports, enabling a fund balance to accumulate. A preliminary review of unaudited CCSA invoices indicates an ending balance of about $1.2 mill. in the Sewer Capital Fund’s FY2023-24 ending fund balance.17 ACPWA’s last audited financial reports were prepared for the fiscal year FY2021-22.18 The document did not report individual fund balances.
16 Sanitary Sewer Management Plan, Castlewood County Service Area R-1967-1. Alameda County Public Works Agency in consultation with Causey Consulting. May 2023.
17 See CPOA file: “FY20-24 Combined – 5.17.24”, tab “Pivot (2024)”. 18 Financial Statements and Independent Auditor’s Report, June 30, 2022. The Castlewood Fund. Alameda County Public Works Agency.
Prepared by Grant & Smith, LLP, CPAs.
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Castlewood County Service Area (CCSA)
10 5. Water Maintenance & Operations (M&O) and Capital Improvements Water Source and Distribution
CCSA’s sole source of water is from “the Pleasanton Well Fields owned by the San Francisco Public Utilities Commission (SFPUC).”19 The State Dept. of Water Resources (DWR) “...has not identified this basin as over-drafted, nor is projected to be over-drafted in the future.”20
Prior water rights, which originated “with an agreement between Phoebe Hearst and the Spring Valley Water Company”21 in 191122 entitle CCSA to 90 MG per year at no cost.
Water flows to the Valley Reservoir near the Valley Golf Course; the City of Pleasanton, by contract with the CSA, “operates and maintains the Foothill Pump Station and the pipeline”23 to CCSA and its reservoir. From the reservoir, water is delivered to CCSA users and pumped to steel storage tanks. Private wells serve a small number of lots.24 Water Quality
The water supply is disinfected “via sodium hypochlorite injection. The SFPUC monitors water quality weekly.”25 Recent annual water quality reports, required by the State and prepared by ACPWA and the CCSA contract water O&M provider, reported all water delivered to CCSA customers “...met all applicable federal and state drinking water standards without any violations.”26
In November 2024 a “Boil Water Notice” was issued for Castlewood then rescinded two days later.27 The incident was caused by PGE puncturing the main water line which triggered repairs and testing.28
19 2012 CCSA Water & Sewer Assessment.
20 2020 SFPUC UWMP, p.6-7.
21 Castlewood County Service Area Municipal Service Review Final. January 10, 2013. Prepared for the Local Agency Formation Commission of Alameda County. Baracco and Associates, Policy Consulting Associates, LLC. (2012 CCSA MSR). 22 Castlewood County Service Area Water and Sewer Assessment. Prepared at the Request of Alameda County Public Works Agency.
October 2012. Prepared by Pakpour Consulting Group and Psomas. (2012 Sewer & Water Assessment). 23 FY24 Annual Report, 5/2/2023, recommending rates for FY2023-24. 24 The 2012 CCSA MSR reported five wells.
25 2020 Urban Water Management Plan for the City and County of San Francisco, Public Review Draft, April 2021. Prepared by The San Francisco Public Utilities Commission.
26 2022 and 2023 Annual Water Quality Reports, Alameda County Public Works Agency and Coleman Engineering. 27 Boil Water Notice for Castlewood Estates Water System CA015008, 11/13/2024. Accessed from CPOA website. Cancellation 11/15/2024.
28 CPOA, May 14, 2025.
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11 Water System Leakage
County reports indicate leakage estimates ranging from 41 percent (2022) to 15 percent (2023).29 The high leakage in 2022 can be attributed to effects of the old water tanks and subsequent replacement process. Individual residential water meters and overage charges have reduced water usage.30 In 2012 an assessment found potential “unaccounted for water” representing about 11 percent to 15 percent of water pumped and recommended further investigation into potential losses.31 It is not known whether further investigations were conducted.
Water M&O Expenditures
Table 4 shows projected costs that were the basis for FY2024-25 charges.32 Table 4 Summary of Water Costs as Basis for FY2024-25 Charges
The projected costs resulted in a nearly 300 percent increase in water M&O charges compared to the prior year FY2023-24.
Non-recurring Water M&O Expenditures
Non-recurring and unanticipated expenditures reduced fund balances and created a cumulative deficit requiring a County loan. An additional assessment was added to water M&O service charges to repay the loan (see Water O&M Supplemental Charge, below).
Future charges (notwithstanding the 10-year supplemental charge) were calculated based on costs shown in Table 4 excluding extraordinary, non-recurring charges (plus an annual inflation adjustment for water and sewer O&M
29 CPOA data from County (CPOA file: “County Summary Homeowner Usage PDF-Water use (2020-2023) 9.23.24-Downloaded 09.24.24”). 30 CPOA 4/18/2025.
31 2012 CCSA Water & Sewer Assessment.
32 Castlewood CSA R-1967-1 Engineer’s Report for Proposed Service Charge Increase, April 2024.
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12 charges). The calculation of charges does not include a contingency for emergencies. No County policies regarding CSA reserves or fund balances were identified.
Water M&O Service Charges
Service charges based on annual costs provide funding for water maintenance and operations. Total service charges increased significantly in recent years, primarily due to water operations and maintenance as noted above in the section Non-recurring Water M&O Expenditures.
Water M&O rates were $1,089 per meter/connection for nine years through FY24,33 increasing to $2,958 in FY25 or nearly triple the prior year. The following year, FY26, charges are projected to increase to $3,940 if the proposed supplemental charge for prior year fund balance deficits (see below) applies to a full year of FY26. The supplement is proceeding through the notice and hearing process.34 A number of factors contributed to water O&M costs exceeding revenues, a need for higher rates, and reductions in fund balances that triggered a County loan and supplemental assessment. Cost factors included:
1. Unforeseen leaks and pump failures during fiscal years FY2022-23 and FY2023-24, demanding immediate attention.35
2. Water system configuration and operation information missing, or system improperly configured, contributing to higher emergency repair costs.36
3. Multiple changes in O&M contract providers at increasing contract costs and additional charges.37
4. Water overage charges for usage exceeding CCSA’s allocated 90MG annually due to excess use,38 leakage, and possible impacts during water tank repair and testing.39 Prior years’ rates did not anticipate or incorporate these costs, and did not provide reserves for contingencies and emergencies; consequently, ACWPA added a supplemental charge beginning in FY2025-26 to repay the County loan40 for an accumulated fund balance deficit to that point.
33 Annual Report, Fiscal Year 2023-2024, Table 2.
34 FY26 Annual Report, 5/6/2025, recommending rates for FY2025-26. 35 Castlewood CSA R-1967-1 Engineer’s Report for Proposed Supplemental Service Charge, April 22, 2025, pg. 5-6. 36 Review of Five Years of Water Maintenance Invoices, CPOA Water Committee 3/20/2025. 37 Castlewood CSA R-1967-1 Engineer’s Report for Proposed Supplemental Service Charge, April 22, 2025, pg. 5-6. 38 CCSA subsequently implemented charges for excess use by residents [date]. 39 Review of Five Years of Water Maintenance Invoices, CPOA Water Committee 3/20/2025. 40 See ACPWA memorandum to BOS with attached resolution R-2024-484, Oct. 2, 2024.
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13 Future years’ rates were not increased to cover the higher annual costs in FY2023-24 (and the prior year) reported in the calculation of the supplemental charge (see below).41 These rates presume that future costs are at FY2024-25 levels (plus 3 percent inflation) without the “non-recurring” costs that caused fund balance deficits.
Water O&M Supplemental Charge
As a result of estimated Water Operations ending fund balance shortfalls, in April 2025 ACPWA proposed to add a “Supplemental Service Charge” of $829.72 per RDE, leaving other rates as established the prior year.42 The supplemental charge repays over ten years a County loan43 approved in Oct. 2024 to cover an estimated $1.4 million ending fund balance shortfalls accumulated in FY2022-23 and FY2023-24.
The supplemental charge would bring total water M&O charges to approximately $3,940 annually per meter/connection (if effective FY2025-26). The supplement is proceeding through the notice and hearing process.44 Water Capital Improvements
CCSA recently replaced its old redwood tanks. The new tanks were funded by a loan from the State. When CCSA applied for the loan, costs were estimated at $1.5 million. CCSA subsequently obtained a loan for $3 million which was deposited to the Water Capital Fund.
Annual repayment began in 2023. Combined principal and interest payments are $177,000 annually.
Table 5 summarizes planned improvements. ACPWA met with Castlewood representatives in 2023 and discussed options for funding the improvements. To date, no action has been taken. The CCSA’s FY26 Annual Report also indicated a need to “replace the roof at one of the of the water pump stations” but no costs were provided.45 The 2012 Water and Sewer Assessment recommended CSA budgeting for water main replacement “...starting at 40 years in the event emergency repairs need to occur.”46 Approximately 90 percent of the system was replaced in 1996 and has a lifespan of about 100 years.47
41 Castlewood CSA R-1967-1 Engineer’s Report for Proposed Supplemental Service Charge, April 22, 2025, Table 2. 42 Castlewood CSA R-1967-1 Engineer’s Report for Proposed Supplemental Service Charge, April 22, 2025. 43 See ACPWA memorandum to BOS with attached resolution R-2024-484, Oct. 2, 2024. 44 FY26 Annual Report, 5/6/2025, recommending rates for FY2025-26. 45 FY26 Annual Report, 5/6/2025, recommending rates for FY2025-26. 46 2012 CCSA Water & Sewer Assessment.
47 2012 CCSA Water & Sewer Assessment.
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14 Table 5 Water System Improvement Costs
ACPWA presented options such as a debt and/or supplemental assessments to fund capital improvements.48 No decisions on improvements or their fund.
CCSA’s water capital charges, remaining relatively constant at approximately $416 per RDE, are deposited to the Water Capital Fund to pay for capital improvements.
A preliminary review of unaudited CCSA invoices indicates an ending fund balance shortfall of about ($250,000) in the Water Capital Fund’s FY2023-24 ending fund balance.49 ACPWA’s last audited financial reports were prepared for the fiscal year FY2021-22.50 The document did not report individual fund balances.
48 CCSA meeting presentation, Sept. 2023.
49 See CPOA file: “FY20-24 Combined – 5.17.24”, tab “Pivot (2024)”. 50 Financial Statements and Independent Auditor’s Report, June 30, 2022. The Castlewood Fund. Alameda County Public Works Agency.
Prepared by Grant & Smith, LLP, CPAs.
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15 6. Roads
CCSA maintains approximately five miles of private roads and related drainage facilities in Castlewood, or about 43,000 square yards of pavement, excluding about one mile of privately maintained roads.51 Another 1.1 miles of road are County-owned and maintained.52 The 3-year moving average Pavement Condition Index (PCI) for Alameda County unincorporated roads in 2023 was 72, or “good (70-79)”, on a scale of 100.53 For reference, City of Pleasanton streets averaged a PCI of 77. The PCI for CCSA roads is not known.
Road Fund Expenditures
Road Fund expenditures vary annually depending on maintenance needs. Over a five-year period, expenditures averaged about $50,000 consistent with annual revenues.
Road Capital Improvements
ACPWA annual reports indicate that a major resurfacing project (Castlewood Drive) is required, and a program of regular slurry seals and periodic overlays are needed but are not currently funded adequately by CCSA road assessments.
In a 2023 presentation, ACPWA identified the road improvements shown in Table 6.
Table 6 Road Capital Improvement Costs
According to the FY24 Annual Report, in FY 2019-20 “the side roadways from Castlewood Drive were slurry sealed.
Extensive base repair was also conducted on Greens Lane. Overlay of Castlewood Drive will be conducted after completion of the redwood tank replacement project.”54 Phasing and funding for these projects was not identified.
51 See Attachment D for estimated road lengths and public vs. private roads. 52 Castlewood Dr. from Sunol Rd. to Foothill Rd, and Foothill Rd. 53 Pavement Condition Index (PCI) for Bay Area Jurisdictions 2023. Metropolitan Transportation Commission (MTC). Oct. 30, 2024. 54 FY24 Annual Report, 5/2/2023, recommending rates for FY2023-24.
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16 Road Funding
CCSA road assessments of $224 per residential parcel totaling $47,700 annually. The fee paid for projected recurring expenditures of $15,900 and provided an annual surplus of $31,800;55 no additional increases through FY2028-29 were proposed or adopted by the BOS.56
Fixed Road Fund charges subsequently adopted by the BOS continued current CSA road assessments through FY2028-29;57 these rates and revenues appear significantly below the recurring amounts sufficient to fund optimal periodic slurry seals and resurfacing noted in Table 6.
55 Castlewood CSA Engineer’s Report. April 2024. Table 1. 182 residential parcels pay the service charge, and the Club has been estimated to attract as many vehicle trips as 31 residential parcels. Other residential parcels privately maintain their roads and are not assessed or solely utilize County roads.
56 Alameda County Board of Supervisors Resolution No. 2024-131. March 26, 2024. 57 Alameda County Board of Supervisors Resolution No. 2024-131. March 26, 2024.
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17 7. Other Public Services
Police Protection
The Alameda County Sheriff's Office (ACSO) provides patrol services to unincorporated areas and the California Highway Patrol handles traffic enforcement. The ACSO is funded by County General Fund sources and by a Countywide CSA for police protection, which accrues Education Revenue Augmentation Funds (ERAF).58 Fire Protection
The Alameda County Fire Department (ACFD) provides wildland and structure fire protection throughout 500 square miles including unincorporated communities such as Castlewood and cities.
ACFD does not have stations located in unincorporated areas around Pleasanton. The Livermore-Pleasanton Fire Department provides service in this vicinity and to Castlewood CSA via contract with the County.59 The nearest station is LPFD Station #4 at 1600 Oak Vista Way in Pleasanton, about 3.5 miles from the Club at Castlewood.
Approximately 25 percent of Castlewood is within a moderate to very high fire severity zone within ACFD’s Local Responsibility Area (LRA).
Castlewood is within Alameda County Fire Zone #3 which is allocated an 18.1% share of property tax growth in the Castlewood CSA Tax Rate Area.60
Planning & Building
Alameda County provides planning and building services to Castlewood property owners through the Community Development Agency (CDA) and the Public Works Agency (PWA). Offices are located in Hayward.
CC&R Enforcement
Castlewood properties are subject to restrictions (“CC&Rs”) that protect the aesthetics of the community. The CC&Rs are legally binding and enforced by legal action of property owners. The CCSA does not have the authority to enforce the CC&Rs.
Library
The residents of Castlewood contribute to the County library system through a share of their property tax and a special tax. The nearest County library is in the City of Dublin.
58 Legislative changes associated with the State’s allocation of property tax revenues to ERAF (Education Revenue Augmentation Fund) resulted in a loss to the Special District Augmentation Fund; those losses were compensated by the State and those compensating funds are allocated by the County to CSA-PP-1991-1 for public safety purposes. 59 Countywide MSR on Fire Protection and Emergency Medical Services, March 5, 2024. Chp. 4, pg. 73. 60 Alameda County Auditor-Controller, Report ID: TXA-21 Tax Roll Year: 2024-2025, TRA 75-011.
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18 8. Financial Conditions, Indicators & Trends
As illustrated in Table 7, total CCSA fund balances declined to minimal levels by FY2023-24. ACPWA subsequently increased charges and loaned CCSA $1.4 million to cover accumulated deficits in the Water M&O Fund. Rate increases in FY2024-25, and lower costs resulted in an estimated positive net change in FY2024-25.
A number of factors contributed to this fund balance decline61 including:
• Leaks and pump failures
• Increased contract costs and erroneous allocation of 100 percent of contract costs to water fund62 • Water “Overage” charges including leakage during tank replacement • Debt service for replacement of water tanks
• Other non-recurring costs, e.g., lack of documentation and improper system configuration causing damage and need for repairs
As part of its rate setting for FY2025-26, APWA requested a supplemental assessment to repay the County’s loan from its revolving fund of $1.4 million over ten years. The loan eliminated the Water M&O Fund FY2023-24 ending fund balance shortfall of ($1.4 million) but did not provide for nor project future fund balance reserves for contingencies and emergencies.
It is uncertain whether the estimated FY2024-25 fund balance increase will continue because of the lack of audited financial reports, absence of a capital improvement program (CIP) with projected costs and timing, and the need for a rate study that details and documents projected costs and revenues, adequate debt service coverage, and appropriate fund balance reserves for contingencies and emergencies.
Table 7 summarizes CCSA revenues and expenditures.63 The table estimates combined fund balances relative to the FY2021-22 fund balances reported in the FY2021-22 Castlewood Financial Report, the most recent audited financial reports available. These estimates differ slightly from estimates in the FY26 Annual Report due to the absence of independently audited financial reports since FY2021-22.
Actual fund balances will differ based on audited data and application of other accounting measures, e.g., recognition of accounts payable. Fund balances typically report restricted, designated and assigned portions, for example to indicate funds needed to meet contractual “encumbrances”64.
61 See also 2025 Engineers Report (p.6).
62 Based on review of unaudited invoices.
63 Data from CPOA file: "FY20-24 REVEXP Combined - 5.17.24, tab "Pivot". 64 Encumbrances are “...budgetary tools used to track outstanding commitments for goods and services that have not yet been received or paid for. Encumbrances are typically reflected in the balance sheet as a reduction in the unassigned fund balance. According to GASB 54, significant encumbrances should be disclosed in the notes to the financial statements.
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19 Table 7 Summary of CCSA Revenues and Expenditures
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20 Revenues
Property Tax
The total assessed value in CCSA for FY2024-25 is $411.9 million65 which generates $117,177 to CCSA.66 This represents an increase of 4.7%.
Approximately 40.01% of CCSA property tax is shifted to the Education Revenue Augmentation Fund (ERAF).67 After the ERAF shift, CCSA receives $70,298.
In the event of reorganization, property taxes will be transferred to the new entity. The creation of a Community Services District (CSD) will transfer current property taxes from the CSA to the CSD.
Annexation to Pleasanton will require a tax exchange agreement to determine the split of current County property tax from Castlewood between the County and the City.
Service Charges
Total service charge rates increased significantly in recent years. Rates were approximately $3,500 per RDE for eleven years through FY2023-24,68 then increased to $5,482 in FY2024-25. The cost increases were primarily due to water O&M rates as described in Section 5. The rate increase contributed to a positive net change in FY25.
Table 8 summarizes recent and projected charges by service.
65 Report 51-202 Net Totals by Value/Fund, file: 51202069-1-Final-07-24-24.TXT, Fund (Class) 7380 Castlewood CSA R-67-1. Auditor- Controller Alameda County.
66 Report TXA-21 Data by Class-TRA Relationships Tax Roll Year: 2024-2025, Auditor-Controller Alameda County. 67 2024-25 ERAF Contribution Percentages, Auditor-Controller Alameda County. The shift varies slightly each year. 68 Annual Report, Fiscal Year 2023-2024, Table 2.
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21 Table 8 Summary of Charges (FY23-FY29)
Expenditures
As summarized in Table 7 and described for each fund in the prior section, expenditures and non-recurring expenses peaked in FY2022-23. ACPWA took steps to provide a County loan to cover $1.4 million of accumulated Water O&M Fund deficits and increased rates. A supplemental charge is intended to repay the County loan.
Assets
Fund Balances
As estimated in Table 7, total fund balances at the end of FY24 were under $500,000 and approaching a deficit. The shortfalls resulted from recent years of annual costs exceeding revenues.
The Water Maintenance Fund indicated a significant deficit. A $1.4 mill. County loan restored the Water Maintenance Fund’s balance to zero.69 ACPWA’s last audited financial reports were prepared for the fiscal year FY2021-22.70 The document did not report individual fund balances.
69 Castlewood CSA R-1967-1 Engineer’s Report for Proposed Supplemental Service Charge, April 22, 2025, pg. 5-6. 70 Financial Statements and Independent Auditor’s Report, June 30, 2022. The Castlewood Fund. Alameda County Public Works Agency.
Prepared by Grant & Smith, LLP, CPAs.
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22 Infrastructure and Facilities
CCSA does not report the value of the sewer, water and road infrastructure and facilities it maintains in its financial reports; the last financial report was prepared for FY2021-22.71 Financial reports commonly document the value of a public agency’s infrastructure and facilities. Annual and accumulated depreciation can provide a partial measure of asset condition, in addition to physical assessments, to indicate the adequacy of investments in capital maintenance.
Liabilities
The most recent audited financial reports prepared for the CCSA for FY2021-22 showed accounts payable and accrued expenditures of $529,051 but provided no further detail or explanation.72 More recent liabilities incurred by CCSA include the following obligations which should be documented with repayment schedules in an audited financial report.
State Loan
The Drinking Water State Revolving Fund (DWSRF) provided CCSA a loan of $3 million for water tank replacement.73 Repayments began in 2023 and total approximately $177,000 annually.
County Revolving Fund
The County created a CSA revolving fund and provided CCSA with $1.4 million74 to fund accumulated deficits in the CCSA Water Maintenance Fund. ACPWA added a supplemental assessment to water maintenance charges to repay the loan over a ten-year period.75
71 Financial Statements and Independent Auditor’s Report, June 30, 2022. The Castlewood Fund. Alameda County Public Works Agency.
Prepared by Grant & Smith, LLP, CPAs.
72 Financial Statements and Independent Auditor’s Report, June 30, 2022. The Castlewood Fund. Alameda County Public Works Agency.
Prepared by Grant & Smith, LLP, CPAs.
73 See County BOS resolution approving application for DWSRF, Nov. 6, 2020. 74 See ACPWA memorandum to BOS with attached resolution R-2024-484, Oct. 2, 2024. 75 Castlewood CSA R-1967-1 Engineer’s Report for Proposed Supplemental Service Charge, April 22, 2025.
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23 9. Governance Options
Options offer the opportunity to improve the effectiveness of public services to Castlewood in a number of ways (depending on the option):
• Efficiencies of scale could reduce future administrative, operational, and other costs • Local representation could improve accountability
• Financial reporting and planning could increase transparency, improve decision making and cost management
Actual future road, water and sewer charges will depend on the outcome of the financial and capital planning efforts, operational and governance changes attributable to a given option.
Table 9 summarizes key aspects of governance options.
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24 Table 9 Summary of Governance Options
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25 CCSA (Status Quo)
This option is essentially “no change” in the status quo.
A number of actions could be undertaken to improve the cost efficiency and effectiveness of current operations and help to manage future rate increases, as noted in this report.
Community Services District
The formation of an independent CSD run by a locally elected board offers the potential to improve local oversight and decision making.
Improved cost effectiveness may be partially offset by additional costs associated with running a CSD.
Annexation to Pleasanton
Annexation to the City of Pleasanton could improve local representation compared to the status quo BOS.
Management by municipal departments could provide access to expertise, policies and procedures that could improve financial transparency and planning.
The community may receive a higher level of municipal services compared to those provided to unincorporated communities. Annexation could increase revenues to the City to help offset service costs.
Castlewood could become a zone within the City for the purpose of assessments and to mitigate potential financial impacts on the City from the costs of Castlewood services and infrastructure.
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26 Attachment A
CCSA Sewer Parcel Map76
76 Accessed 5/7/2025 at: https://castlewoodpoa.org/county-service-area/
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28 Attachment B
CCSA Water Parcel Map77
77 Accessed 5/7/2025 at: https://castlewoodpoa.org/county-service-area/
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30 Attachment C
CCSA Roads Parcel Map78
78 Accessed 5/7/2025 at: https://castlewoodpoa.org/county-service-area/
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32 Attachment D
CCSA Roads and Approximate Lengths
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34 Attachment E
CCSA Tax Increment Factors by Entity
CCSA Account 7380 Tax Rate Area (TRA): 75-011
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35