CC SR 20240702 04 - ACLAD KCLAD Financial Assistance Loan Agreements
CITY COUNCIL MEETING DATE: 07/02/2024
AGENDA REPORT AGENDA HEADING: Regular Business
AGENDA TITLE:
Consideration and possible action to approve the financial assistance loan agreements
between the City and Klondike Canyon Landslide Abatement District (KCLAD) and
Abalone Cove Landslide Abatement District (ACLAD).
RECOMMENDED COUNCIL ACTION:
(1) Approve the Final Loan Agreement with ACLAD for $1,500,000, which include
a 12-year term and a 2.5% interest rate;
(2) Approve the Final Loan Agreement with KCLAD for $1,917,500, which include
a 12-year term and a 2.5% interest rate;
(3) If deemed acceptable, approve an additional appropriation of $1,500,000
ACLAD and KCLAD $1,917,500 from the Capital Infrastructure Program (CIP)
Fund;
(4) Authorize the Mayor and City Clerk to ACLAD’s financial assistance agreement
pursuant to a form approved by the City Attorney’s Office;
(5) Authorize the Mayor and City Clerk to KCLAD’s financial assistance agreement
pursuant to a form approved by the City Attorney’s Office with the
understanding that funds will not be released until both the City and KCLAD
find and agree upon a solution with the Portuguese Bend Club regarding the
placement of the emergency hydraugers on common property, if needed; and,
(6) Receive and file the 10-Year Financial Models for ACLAD and KCLAD.
FISCAL IMPACT: If the recommended Council actions are approved, an additional
appropriation of $3,417,500 is required from the Capital
Infrastructure Program (CIP) Fund.
The FY 2024-25 CIP Fund is estimated to have a beginning fund
balance of $29.4 million, $6.5 million of revenues and transfers, and
$10.6 million of capital projects. After applying the City Council
Reserve Policy of $5 million, the projected year-end fund balance is
$19.2 million.
The loan of $3.4 million, over a 12-year period, is projected to have
a financial impact of approximately $5.5 million. This is based on the
loan amounts, potential interest earnings loss, and as one of the
largest land owners within each Geologic Hazard Abatement District
(GHAD), the City would also have to pay a portion (approximately
58%-59%) of the loan repayments if they become part of the annual
tax assessments determined by the District’s annual budget. VR
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Amount Budgeted: $0
Additional Appropriation: $3,417,500
Account Number(s): 330-400-0000-7201
(CIP Fund – Debt Service) VR
ORIGINATED BY: Vina Ramos, Director of Finance VR
REVIEWED BY: same as below
APPROVED BY: Ara Mihranian, AICP, City Manager
ATTACHED SUPPORTING DOCUMENTS:
A. Final Loan Agreement between City and ACLAD (page A -1) – pending and
to be transmitted as late correspondence
B. Final Loan Agreement between City and KCLAD (page B -1) – pending and
to be transmitted as late correspondence
C. 10-Year Financial Model for ACLAD and KCLAD (page C-1)
D. ACLAD Resolution No. 2024-8 Accepting the Offer of the City Loan with
Terms and Conditions Subject to Further Negotiation. (page D-1)
E. KCLAD Resolution No. 24-9 Accepting the Offer of the City Loan with Terms
and Conditions Subject to Further Negotiation. (page E-1)
F. June 4, 2024 Financial Assistance Staff Report
BACKGROUND:
On March 19, 2024, the City Council approved moving forward with emergency work in
the Portuguese Bend Landslide consisting of installing two emergency hydrauger
systems with five drain arrays each and associated work. Also on March 19, 2024, the
City Council directed Staff to explore assisting the ACLAD and the KCLAD with in-kind
services and financial assistance in the form of a loan for landslide mitigation measures
prepared by a licensed geotechnical engineering company and return to the City Council
for consideration.
On June 4, 2024, the City Council discussed the potential financial assistance package
for ACLAD in the amount of $1,500,000 and $1,917,500 for KCLAD. After considering the
information presented that evening including public testimony, the City Council
unanimously agreed to defer to a later time the following Staff Recommendations:
• Review the proposed terms and conditions of the financial assistance package
for each ACLAD and KCLAD, which include a 12-year term and a 2.5% interest
rate;
• If deemed acceptable, approve an additional appropriation of $1,917,500
(KCLAD) and $1,500,000 (ACLAD) from the Capital Infrastructure Program
(CIP) Fund, and,
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• Authorize the Mayor and City Clerk to sign each financial assistance agreement
pursuant to a form approved by the City Attorney’s Office.
The detailed information and potential financial impacts of these loans were
comprehensively reported and documented in the June 4 staff report (Attachment F) and
is available on the City’s website and linked below for refence:
• https://rpv.granicus.com/MetaViewer.php?view_id=5&clip_id=4549&meta_id=119
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Since the June 4 meeting, Staff has been working closely with certain board members of
both ACLAD and KCLAD to settle on mutually agreeable loan terms. The City Council is
now being asked to review the final negotiated loan terms.
DISCUSSION:
As reported on June 4, in accordance with the Public Resources Code from the
Geological Hazard Abatement Law, the City is allowed to provide financial assistance to
abate the landslide. This action promotes the interests of the City, its residents, and
visitors by slowing or stopping the progress of land movement. Ultimately, the City Council
directed Staff to work with the two GHADs to finalize the loan agreement highlighting the
following:
1. Reiterating the importance of transparency and financial accountability,
including additional oversight from the City, regular issuance financial reports,
and annual audit reports.
2. Develop a 10-year Financial Model outlining estimated Sources of Revenues
and Expenditures. The Financial Model tool will assist in upholding the Districts’
repayment obligations and demonstrating that the loan will support the District’s
ability to continue to thrive and achieve success.
In response to the City Councils directives above, the following information is a summary
of the loan agreement and the assumptions used to develop the 10 -Year Financial Model
for ACLAD and KCLAD.
1. Loan Agreements
Since June 4, 2024, the City team have been working closely with ACLAD and KCLAD
(Districts) to finalize the terms and conditions of the financial assistance package. The
following items have been added in the loan agreement for the City Council’s
consideration:
• As requested by the City, Districts must provide to the City the Project's plans and
specifications certified to meet all applicable codes and standards by a licensed
Professional Engineer.
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Request has been accepted by the Districts.
• As requested by the City, Districts m ust deploy a qualified construction inspector
on all days that construction is performed, to assure that construction is performed
in accordance with plans and specifications; borrower shall submit daily
construction reports to the City detailing all activities and conditions.
Request has been accepted by the Districts.
• As requested by the City, Districts must provide quarterly financial reports and an
annual audit report by December 2025. The financial reports were originally
proposed by the City on a monthly basis, however, due to the staffing level
(volunteers), Staff supports the change from monthly to quarterly. This change
does not impact on the City's ability to monitor the financials on a regular basis if
needed, especially as a landowner within each District. Staff will also receive the
annual audit reports.
Request has been accepted by the Districts.
• As requested by the City, Districts shall have seven (7) calendar days from the
date of said notice to correct any deficiency in the records specified by City in said
notice, or, if more than seven (7) days shall be reasonably necessary to correct
the deficiency, Districts shall begin to correct the deficiency within seven (7) days
and correct the deficiency as soon as reasonably possible.
Request has been accepted by the Districts.
• Added allowable “soft costs” for the professional engineer, construction inspector,
a project bookkeeper/accountant and Builder’s Risk Insurance premiums. These
services are additional requests from the City for oversight. The Districts have
requested to include these as part of allowable costs using the loan amount.
In light of the District’s current financial stance, the City team supports this
proposal to facilitate project progression and improve oversight of the
project.
• Added language related to grant funds. Both Districts are actively pursuing and
identifying additional sources of funding, including Congressional Directed
Spending, Disaster Recovery, and FEMA grants which are directly tied to the
timely passage of the federal fiscal year budget. These funds will be a significant
supplement to Districts operating budget, thereby, possibly reducing or even
eliminating the amount of the loan required to complete the Projects.
The City team supports this request.
Table 1 on the following page highlights the main terms and conditions of the loan. The
complete loan agreements for both ACLAD and KCLAD are included as Attachments A
and B. The City Council’s requests of adding transparency, financial accountability, and
additional oversight are underlined.
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Table 1: Terms and Conditions of the Loan Agreement
PROJECT Stabilization projects for Portuguese Bend Landslide.
PRINCIPAL AMOUNT Up to $1,500,000 for ACLAD and $1,917,500 for KCLAD.
DRAW DOWNS 1. Draw Down on Loan made upon Application for
Disbursements with certain certifications and invoices,
contracts, etc. verifying work.
2. Funds shall be solely designated for the Project including soft
costs of the professional engineer, construction inspector, a
project accountant, and Builder’s Risk Insurance premiums.
Operational expenditures including administrative costs, legal
and or litigation costs, and ongoing maintenance are not
permitted uses of these funds.
The 12-year term will start with the first draw down.
CONDITIONS TO LOAN
AND/OR DRAW DOWN
1. Borrower must provide a wet-stamped Engineers Report
showing and verifying work to be done for the Project. (Due to
the City on May 28, 2024).
2. The Project for the landslide mitigation measures must be
prepared by a licensed geotechnical engineering company.
(Due to the City no later than July 31, 2024).
3. Borrower must provide a Resolution approving Loan
Agreement by the Boards. Due to the City prior to City
Council’s approval of the agreement tentatively scheduled on
July 2, 2024.
4. Borrower must provide to the City the Project's plans and
specifications certified to meet all applicable codes and
standards by a licensed Professional Engineer.
5. Borrower must deploy a qualified construction inspector on
all days that construction is performed, to assure that
construction is performed in accordance with plans and
specifications; borrower shall submit daily construction
reports to the City detailing all activities and conditions.
Districts shall work with the City to develop a 10-Year Financial
Model outlining estimated Sources of Revenues and
Expenditures. The financial model tool shall assist in upholding
repayment obligations to the City and in identifying financial
challenges early, if any, allowing for appropriate measures to be
taken. (Due to the City no later than July 31, 2024).
LOAN PAYMENTS 1. The City shall endeavor to create level debt service with
respect to each Principal Payment over a period not to
exceed 12 years.
2. The Scheduled Payment is calculated based on the loan
amount divided by 12 years.
3. The City retains the right in its sole discretion to forgo the
physical payment made to the Borrower for its annual
assessment from Borrower and instead treat the City’s
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annual assessment as a credit toward the required loan
payments from the Borrower.
Scheduled Payment shall be due and payable annually on
December 1, commencing December 1, 2025 for the first
disbursement date.
INTEREST RATE The Note shall bear interest at a rate of 2.5 percent (2.5%) per
year from the date of the initial disbursement until the Loan is
repaid in full.
TERM Maximum 12 Years
PROJECTED
SUBSTANTIAL
COMPLETION DATE OF
PROJECT/ PORTION
1. No later than 90 days from the date of the execution of the
agreement unless otherwise approved by the City.
2. Completion date may be extended upon approval of the City
Manager or the City Council.
COVENANTS ON
PROPOSITION 218
To comply with Proposition 218 in the increase of Assessments.
PREPAYMENT Anytime. No prepayment penalty.
RECORDS
1. Borrower shall provide quarterly financial reports including
Balance Sheets, Statement of Revenues and Expenditures,
Detailed Accounting Reports of Expenditures and Revenues.
2. City to have unfettered access to books.
3. Borrower shall have seven (7) calendar days from the date of
said notice to correct any deficiency in the records specified
by City in said notice, or, if more than seven (7) days shall be
reasonably necessary to correct the deficiency, Borrower shall
begin to correct the deficiency within seven (7) days and
correct the deficiency as soon as reasonably possible.
4. Borrower shall provide an annual audit financial report. The
first audit report is due to the City on December 1, 2025.
EVENTS OF DEFAULT
1. Failure to make payments.
2. Failure to abide by covenants following notice and opportunity
to cure.
3. Filing of bankruptcy or receivership or similar event or item.
4. Representations by ACLAD are not true and correct.
5. Loan is due in full following event of default, or any other
remedy provided by law.
6. In the event ACLAD defaults on a payment, the City shall have
the right to use any default amount plus default rate fees as
credit towards the City’s total Annual Assessment payment.
Default Rate of 5%.
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In addition to the above, but specific to KCLAD, as the City continues to move forward
with its test bores to determine the precise location to place Emergency Hydrauger E -1,
the testing may conclude that the best location to extract maximum water from the ground
is to place Hydrauger E-1 on the seaward side of Palos Verdes Drive South on common
property owned by the Portuguese Beach Club (PBC). In light of this, the Council is being
asked to authorize the Mayor to sign the Loan Agreement with KCLAD , but defer the
release of the funds, until an agreement, if needed, is secured between the City and the
PBC for the installation of Hydrauger E-1. Although KCLAD is not affiliated with PBC, both
parties benefit from the loan, as well as the City’s installation of Hydrauger A -1. For that
reason, Staff is recommending adding a condition to the recommendation that delays
releasing the funds to KCLAD until an Agreement is resolved.
Based on the information presented above, if deemed acceptable, Staff seeks City
Council’s approval for the following:
• The Loan Agreement with ACLAD for $1,500,000, which include a 12 -year term
and a 2.5% interest rate;
• The Loan Agreement with KCLAD for $1,917,500, which include a 12 -year term
and a 2.5% interest rate; and
• An additional appropriation of $1,500,000 ACLAD and KCLAD $1,917,500 from
the Capital Infrastructure Program (CIP) Fund; and
• Authorize the Mayor and City Clerk to ACLAD’s financial assistance agreement
pursuant to a form approved by the City Attorney’s Office; and
• Authorize the Mayor and City Clerk to KCLAD’s financial assistance agreement
pursuant to a form approved by the City Attorney’s Office with the condition that
funds will not be released until both the City and KCLAD find and agree upon a
solution with the Portuguese Bend Club regarding the placement of the emergency
hydraugers if needed.
2. 10-Year Financial Model
At the June 4, 2024 meeting, the City Council requested that both Districts provide a 10 -
year financial model. Staff has been working closely with ACLAD and KCLAD to develop
the 10-year Financial Model as presented below. Similar to the City’s 10-Year Financial
Model, the information below is based on currently available data. Other factors can
influence the model. It has been suggested to the District’s team that moving forward,
they incorporate the continuous preparation of this model into their annual budget
process.
It should also be noted that based on the assumptions and analysis in developing the
model, the City, as the major landowner, contributes approximately 58%-59% of the
estimated assessments. Over the next 10 years, assuming Prop 218 requirements are
followed, and the assumptions presented in the model are part of the budget, the total
assessments for the Districts are estimated to be $5.7 million for ACLAD and $5.3 million
for KCLAD. Based on the City's contribution percentages of 58% for ACLAD and 59% for
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KCLAD, the City's estimated contributions would be $3.3 million and $3.1 million,
respectively.
ACLAD
The following assumptions were included to develop the 10 -Year Financial Model for
ACLAD (also shown in Attachment C):
• Using tax assessments as sources of funds with an average of $572,000 in the
next 10 years.
• $758,000 total in well drilling costs. Of this amount, $250,000 is allocated in the
first year and decreases to approximately $50,000 to $63,300 thereafter.
• $250,000 of extraordinary repairs. Budget of $25,000 per year.
• $1.5 million in maintenance service and parts. Budget of approximately $130,000
to $170,000 per year.
• $400,000 of utilities. Approximately $36,000 to $46,000 budget per year.
• $450,000 of surface drainage expense. Approximately $50,000 budget per year.
• $304,000 of contingency funds. Approximately $29,000 budget per year.
• $500,000 goal for reserves by incrementally increasing the balance meet this
target by Year 5.
• 3% increase year-over-year in administrative costs.
• 4% interest earnings the first 2 years, and 2% in subsequent years.
In summary, based on ACLAD's above estimated assumptions, the 10-Year Financial
Model anticipates the following assessments:
• Maintain the same assessment of approximately $5 98,000 for Year 1
through Year 4 (Table 2),
• Level off assessments from Year 5 through Year 10, ranging from
approximately $549,000 to $577,000 (Table 3).
CONTINUED ON THE NEXT PAGE
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Table 2: ACLAD 10-Year Financial Model – Year 1 to Year 5
These projections are for illustrative purposes only and do not guarantee or imply that
assessments will increase or reflect actual assessments in future years. Any
assessments are subject to Prop 218 requirements.
CONTINUED ON THE NEXT PAGE
Abalone Cove Landslide Abatement
District 2024-25 2025-26 2026-27 2027-28 2028-29
Proposed Expenditures
Total Administrative 21,150 21,785 22,438 23,111 23,805
Total Maintenance & Operations 476,850 329,805 338,094 346,632 355,426
Total Replacement of Reserves 100,000 100,000 91,000 82,000 23,500
Total Debt Services - Loan Payment 0 146,231 146,231 146,231 146,231
Total Estimated Expenditures 598,000 597,821 597,763 597,974 548,961
Proposed Sources of Funds
Use of Reserves
Assessments 598,000 597,821 597,763 597,974 548,961
RPV Reimb Well Monitoring Expense 2,400 2,400 2,400 2,400 2,400
Grants
Total Est. Sources 600,400 600,221 600,163 600,374 551,361
Est. Beg. Balance - Reserves 56,000 158,400 264,100 368,100 467,200
Add: Replacement Reserves 100,000 100,000 91,000 82,000 23,500
Add: Interest Earnings 10,600 14,700 9,300
Deduct: Use of Reserves
Est. Total Reserves 156,000 261,700 365,700 464,800 500,000
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Table 3: ACLAD 10-Year Financial Model – Year 6 to Year 10
These projections are for illustrative purposes only and do not guarantee or imply that
assessments will increase or reflect actual assessments in future years. Any
assessments are subject to Prop 218 requirements.
KCLAD
The following assumptions were included to develop the 10 -Year Financial Model for
KCLAD (also shown in Attachment C):
• Using tax assessments as sources of funds with an average of $536,500 in 10
years.
• Utilizing $85,200 from current reserves in FY 2025-26 to prevent assessment
increases during the first five years.
• $775,000 total in well drilling costs. Of this amount, $500,000 in first three years
and drops to $50,000 each year in Year 4-7 and reduced to $25,000 each year in
Year 8-10.
• $250,000 of extraordinary repairs. Budget of $25,000 per year.
• $515,000 for well and pipeline maintenance services. Average of $50,000 budget
per year.
• $1 million in channel maintenance projects. Budget of $100,000 per year.
• $100,000 in sub slide consulting services for Beach Club slide. Budget of $10,000
per year.
Abalone Cove Landslide Abatement
District 2029-30 2030-31 2031-32 2032-33 2033-34
Proposed Expenditures
Total Administrative 24,519 25,254 26,012 26,792 27,596
Total Maintenance & Operations 364,484 373,813 383,423 393,320 403,515
Total Replacement of Reserves 0 0 0 0 0
Total Debt Services - Loan Payment 146,231 146,231 146,231 146,231 146,231
Total Estimated Expenditures 535,233 545,298 555,665 566,343 577,342
Proposed Sources of Funds
Use of Reserves
Assessments 535,233 545,298 555,665 566,343 577,342
RPV Reimb Well Monitoring Expense 2,400 2,400 2,400 2,400 2,400
Grants
Total Est. Sources 537,633 547,698 558,065 568,743 579,742
Est. Beg. Balance - Reserves 502,400 514,800 527,500 540,500 553,700
Add: Replacement Reserves - - - - -
Add: Interest Earnings 10,000 10,300 10,600 10,800 11,100
Deduct: Use of Reserves
Est. Total Reserves 512,400 525,100 538,100 551,300 564,800
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• $333,200 of contingency budget. Average of $33,300 budget per year.
• $500,000 goal for reserves by incrementally increasing the balance meet this
target by Year 5.
• 3% increase year-over-year in administrative costs.
• 4% interest earnings the first 2 years, and 2% in subsequent years.
In summary, based on KCLAD's estimated assumptions, the 10-Year Financial Model
anticipates the following assessments:
• Maintain the same assessment of approximately $571,000 for Year 1
through Year 5 (Table 4),
• Level off assessments from Year 5 through Year 10, ranging from
approximately $500,000 to $478,000 (Table 5).
Table 4: KCLAD 10-Year Financial Model – Year 1 to Year 5
These projections are for illustrative purposes only and do not guarantee or imply that
assessments will increase or reflect actual assessments in future years. Any
assessments are subject to Prop 218 requirements.
Klondike Canyon Geologic Hazard
Abatement District 2024-25 2025-26 2026-27 2027-28 2028-29
Proposed Expenditures
Administrative 24,200 24,926 25,674 26,444 27,237
Maintenance and Operations 466,370 444,293 335,937 282,105 282,768
Replacement of Reserves 80,000 0 22,000 75,050 73,600
Debt Services - Loan Payment 0 186,932 186,932 186,932 186,932
Total Estimated Expenditures 570,570 656,151 570,543 570,531 570,537
Proposed Sources of Funds
Use of Reserves 0 85,200 0 0 0
Assessments 570,570 570,951 570,543 570,531 570,537
Grants
Total Est. Sources 570,570 656,151 570,543 570,531 570,537
Est. Beg. Balance - Reserves 399,000 399,000 313,800 326,400 414,550
Add: Replacement Reserves 0 75,050 73,600
Add: Interest Earnings 0 12,600 13,100 8,300
Deduct: Use of Reserves (85,200)
Est. Total Reserves 399,000 313,800 326,400 414,550 496,450
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Table 5: KCLAD 10-Year Financial Model – Year 6 to Year 10
These projections are for illustrative purposes only and do not guarantee or imply that
assessments will increase or reflect actual assessments in future years. Any
assessments are subject to Prop 218 requirements.
Based on the information presented above, Staff seeks City Council’s approval to receive
and file the 10-Year Financial Models for ACLAD and KCLAD.
ADDITIONAL INFORMATION:
ACLAD and KCLAD Assessments
Based on the accelerating efforts by both Districts to slow down the land movement, on
April 25, 2024, ACLAD and KCLAD proposed significant increases in their property
assessments. For the City, its assessments as a landowner would increase from
$175,074 to $379,621 for ACLAD, and from $50,877 to $335,826 for KCLAD. The total
increase is approximately $489,000, which is funded each year from the City’s General
Fund under the Public Works budget.
On June 4, 2024, the City Council approved not to protest the District’s proposed
increases to the tax assessments. Pursuant to Proposition 218, each District conducted
Klondike Canyon Geologic Hazard
Abatement District 2029-30 2030-31 2031-32 2032-33 2033-34
Proposed Expenditures
Administrative 28,054 28,896 29,763 30,656 31,576
Maintenance and Operations 283,470 284,166 257,636 258,381 259,154
Replacement of Reserves 0 0 0 0 0
Debt Services - Loan Payment 186,932 186,932 186,932 186,932 186,932
Total Estimated Expenditures 498,456 499,994 474,331 475,969 477,662
Proposed Sources of Funds
Use of Reserves 0 0 0 0 0
Assessments 498,456 499,994 474,331 475,969 477,662
Grants
Total Est. Sources 498,456 499,994 474,331 475,969 477,662
Est. Beg. Balance - Reserves 496,450 506,350 516,450 526,750 537,250
Add: Replacement Reserves 0 0 0 0 0
Add: Interest Earnings 9,900 10,100 10,300 10,500 10,700
Deduct: Use of Reserves
Est. Total Reserves 506,350 516,450 526,750 537,250 547,950
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a protest hearing on June 10, 2024 (ACLAD), and June 17, 2024 (KCLAD). Both hearings
were passed via Resolution No. 24-3 for ACLAD (Attachment D) and Resolution No. 24-
1 (Attachment E) for KCLAD.
CONCLUSION:
Based on the City Council’s directives, since March 16, 2024, the City has diligently
pursued a path to support ACLAD and KCLAD. Based on the directives of the City
Council, the financial package includes a loan of $1,500,000 to ACLAD and $1,917,500
to KCLAD, which includes a 12-year term and a 2.5% interest rate, which projects a
financial impact for the City of approximately $5.5 million.
Additionally, the terms and conditions of the loan being proposed include accountability,
transparency, and additional oversight. As requested by the City Council, Staff and the
Districts have also developed a 10-Year Financial Model based on assumptions, to
illustrate the District’s planned expenditures and necessary funding sources to maintain
financial solvency.
ALTERNATIVES:
In addition to the Staff recommendation, the following alternative actions are available for
the City Council’s consideration:
1. Direct staff not to proceed with a financial assistance package for one or
both GHADS.
2. Discuss and take other action related to this item.
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Abalone Cove Landslide Abatement District
10-Year Financial Model
FY 2024-2034 (SUMMARY)
Abalone Cove Landslide Abatement
District 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30 2030-31 2031-32 2032-33 2033-34
Proposed Expenditures
Total Administrative 21,150 21,785 22,438 23,111 23,805 24,519 25,254 26,012 26,792 27,596
Total Maintenance & Operations 476,850 329,805 338,094 346,632 355,426 364,484 373,813 383,423 393,320 403,515
Total Replacement of Reserves 100,000 100,000 91,000 82,000 23,500 0 0 0 0 0
Total Debt Services - Loan Payment 0 146,231 146,231 146,231 146,231 146,231 146,231 146,231 146,231 146,231
Total Estimated Expenditures 598,000 597,821 597,763 597,974 548,961 535,233 545,298 555,665 566,343 577,342
Proposed Sources of Funds
Use of Reserves
Assessments 598,000 597,821 597,763 597,974 548,961 535,233 545,298 555,665 566,343 577,342
RPV Reimb Well Monitoring Expense 2,400 2,400 2,400 2,400 2,400 2,400 2,400 2,400 2,400 2,400
Grants
Total Est. Sources 600,400 600,221 600,163 600,374 551,361 537,633 547,698 558,065 568,743 579,742
Est. Beg. Balance - Reserves 56,000 158,400 264,100 368,100 467,200 502,400 514,800 527,500 540,500 553,700
Add: Replacement Reserves 100,000 100,000 91,000 82,000 23,500 - - - - -
Add: Interest Earnings 10,600 14,700 9,300 10,000 10,300 10,600 10,800 11,100
Deduct: Use of Reserves
Est. Total Reserves 156,000 261,700 365,700 464,800 500,000 512,400 525,100 538,100 551,300 564,800
*These projections are for illustrative purposes only and do not guarantee or imply that assessments will increase or reflect actual assessments in future years.
Any assessments are subject to Prop 218 requirements*
C-1
Abalone Cove Landslide Abatement District
10-Year Financial Model
FY 2024-2034 (DETAILED)
Abalone Cove Landslide Abatement
District 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30 2030-31 2031-32 2032-33 2033-34
Proposed Expenditures
010 Support Staff 16,800 17,304 17,823 18,358 18,909 19,476 20,060 20,662 21,282 21,920
011 Legal 2,000 2,060 2,122 2,185 2,251 2,319 2,388 2,460 2,534 2,610
012 Board Related Expenses 600 618 637 656 675 696 716 738 760 783
013 Election Related Expenses 500 515 530 546 563 580 597 615 633 652
014 Office Expenses 1,200 1,236 1,273 1,311 1,351 1,391 1,433 1,476 1,520 1,566
015 Bank Charges 50 52 53 55 56 58 60 61 63 65
Total Administrative 21,150 21,785 22,438 23,111 23,805 24,519 25,254 26,012 26,792 27,596
Maintenance & Operations
201 Purchased Consulting Services 20,000 20,600 21,218 21,855 22,510 23,185 23,881 24,597 25,335 26,095
202 Utilities 36,000 37,080 38,192 39,338 40,518 41,734 42,986 44,275 45,604 46,972
203 Insurance 7,500 7,725 7,957 8,195 8,441 8,695 8,955 9,224 9,501 9,786
204 Easement Payments 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500
205 Purchased Maintenance Service/Parts 130,000 133,900 137,917 142,055 146,316 150,706 155,227 159,884 164,680 169,621
206 Surface Drainage Expense 0 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000
208 Well Drilling Costs 250,000 50,000 51,500 53,045 54,636 56,275 57,964 59,703 61,494 63,339
209 Contingency Funds 29,850 27,000 27,810 28,644 29,504 30,389 31,300 32,239 33,207 34,203
Total Maintenance & Operations 476,850 329,805 338,094 346,632 355,426 364,484 373,813 383,423 393,320 403,515
207 Replacement Reserve 100,000 100,000 91,000 82,000 23,500
Total Replacement of Reserves 100,000 100,000 91,000 82,000 23,500 0 0 0 0 0
City Loan Payment 146,231 146,231 146,231 146,231 146,231 146,231 146,231 146,231 146,231
Total Debt Services 0 146,231 146,231 146,231 146,231 146,231 146,231 146,231 146,231 146,231
Total Estimated Expenditures 598,000 597,821 597,763 597,974 548,961 535,233 545,298 555,665 566,343 577,342
Proposed Sources of Funds
Use of Reserves
Assessments 598,000 597,821 597,763 597,974 548,961 535,233 545,298 555,665 566,343 577,342
RPV Reimb Well Monitoring Expense 2,400 2,400 2,400 2,400 2,400 2,400 2,400 2,400 2,400 2,400
Grants
Total Est. Sources 600,400 600,221 600,163 600,374 551,361 537,633 547,698 558,065 568,743 579,742
Est. Beg. Balance - Reserves 159,300 161,700 264,100 368,100 467,200 502,400 514,800 527,500 540,500 553,700
Add: Replacement Reserves 100,000 91,000 82,000 23,500 - - - - -
Add: Interest Earnings 10,600 14,700 9,300 10,000 10,300 10,600 10,800 11,100
Deduct: Use of Reserves
Est. Total Reserves 159,300 261,700 365,700 464,800 500,000 512,400 525,100 538,100 551,300 564,800
*These projections are for illustrative purposes only and do not guarantee or imply that assessments will increase or reflect actual assessments in future years.
Any assessments are subject to Prop 218 requirements*C-2
Klondike Canyon Geologic Hazard Abatement District
10-Year Financial Model
FY 2024-2034 (SUMMARY)
Klondike Canyon Geologic Hazard
Abatement District 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30 2030-31 2031-32 2032-33 2033-34
Proposed Expenditures
Administrative 24,200 24,926 25,674 26,444 27,237 28,054 28,896 29,763 30,656 31,576
Maintenance and Operations 466,370 444,293 335,937 282,105 282,768 283,470 284,166 257,636 258,381 259,154
Replacement of Reserves 80,000 0 22,000 75,050 73,600 0 0 0 0 0
Debt Services - Loan Payment 0 186,932 186,932 186,932 186,932 186,932 186,932 186,932 186,932 186,932
Total Estimated Expenditures 570,570 656,151 570,543 570,531 570,537 498,456 499,994 474,331 475,969 477,662
Proposed Sources of Funds
Use of Reserves 0 85,200 0 0 0 0 0 0 0 0
Assessments 570,570 570,951 570,543 570,531 570,537 498,456 499,994 474,331 475,969 477,662
Grants
Total Est. Sources 570,570 656,151 570,543 570,531 570,537 498,456 499,994 474,331 475,969 477,662
Est. Beg. Balance - Reserves 399,000 399,000 313,800 326,400 414,550 496,450 506,350 516,450 526,750 537,250
Add: Replacement Reserves 0 75,050 73,600 0 0 0 0 0
Add: Interest Earnings 0 12,600 13,100 8,300 9,900 10,100 10,300 10,500 10,700
Deduct: Use of Reserves (85,200)
Est. Total Reserves 399,000 313,800 326,400 414,550 496,450 506,350 516,450 526,750 537,250 547,950
*These projections are for illustrative purposes only and do not guarantee or imply that assessments will increase or reflect actual assessments in
future years. Any assessments are subject to Prop 218 requirements*
C-3
Klondike Canyon Geologic Hazard Abatement District
10-Year Financial Model
FY 2024-2034 (DETAILED)
Klondike Canyon Geologic Hazard
Abatement District 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30 2030-31 2031-32 2032-33 2033-34
Contract Administrative Services
110 Executive - Administrative 12,000 12,360 12,731 13,113 13,506 13,911 14,329 14,758 15,201 15,657
111 Consulting Geologist/Legal 10,000 10,300 10,609 10,927 11,255 11,593 11,941 12,299 12,668 13,048
113 Board Related Expenses 500 515 530 546 563 580 597 615 633 652
114 Election Related Expenses 1,200 1,236 1,273 1,311 1,351 1,391 1,433 1,476 1,520 1,566
116 Administration Consultation 500 515 530 546 563 580 597 615 633 652
Total Administrative 24,200 24,926 25,674 26,444 27,237 28,054 28,896 29,763 30,656 31,576
202 Insurance 7,500 7,763 8,034 8,315 8,606 8,864 9,130 9,404 9,686 9,977
203 Office Expenses 1,000 2,000 2,070 2,142 2,217 2,295 2,375 2,458 2,544 2,633
208 Well Drilling Costs 200,000 200,000 100,000 50,000 50,000 50,000 50,000 25,000 25,000 25,000
209 Well & Pipeline Maintenance Services 65,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000
210 Extraordinary Repairs 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000
211 Electricity 6,000 6,240 6,490 6,749 7,019 7,300 7,592 7,896 8,211 8,540
212 Channel Maintenance Project 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000
213 Sub Slide Consulting - Beach Club Slide 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000
410 Contingency 51,870 43,290 34,343 29,899 29,926 30,011 30,069 27,878 27,940 28,004
Total Maintenance & Operations $466,370 $444,293 $335,937 $282,105 $282,768 $283,470 $284,166 $257,636 $258,381 $259,154
207 Replacement Reserves 80,000 75,050 73,600 0 0 0 0 0
Total Replacement of Reserves 80,000 - 22,000 75,050 73,600 - - - - -
City Loan Payments 186,932 186,932 186,932 186,932 186,932 186,932 186,932 186,932 186,932
Total Debt Services - 186,932 186,932 186,932 186,932 186,932 186,932 186,932 186,932 186,932
Total Estimated Expenditures 570,570 656,151 570,543 570,531 570,537 498,456 499,994 474,331 475,969 477,662
Proposed Sources of Funds
Use of Reserves - 85,200 0 0 0 0 0 0 0 0
Assessments $570,570 570,951 570,543 570,531 570,537 498,456 499,994 474,331 475,969 477,662
Grants
Total Est. Sources 570,570 656,151 570,543 570,531 570,537 498,456 499,994 474,331 475,969 477,662
-
Est. Beg. Balance - Reserves 399,000 399,000 313,800 326,400 414,550 496,450 506,350 516,450 526,750 537,250
Add: Replacement Reserves - 75,050 73,600 - - - - -
Add: Interest Earnings 0 12,600 13,100 8,300 9,900 10,100 10,300 10,500 10,700
Deduct: Use of Reserves (85,200)
Est. Total Reserves 399,000 313,800 326,400 414,550 496,450 506,350 516,450 526,750 537,250 547,950
*These projections are for illustrative purposes only and do not guarantee or imply that assessments will increase or reflect actual assessments in future years. Any
assessments are subject to Prop 218 requirements*C-4
Abalone Cove Landslide Abatement District
P.O. Box 4351 Palos Verdes Peninsula, CA 90274 (310) 753-7117
Resolution No. 24-8
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ABALONE COVE LANDSLIDE
ABATEMENT DISTRICT, CITY OF RANCHO PALOS VERDES, CALIFORNIA, GIVING NOTICE THAT
THE BOARD OF DIRECTORS FOR THE ABALONE COVE LANDSLIDE ABATEMENT DISTRICT
ACCEPTS THE CITY LOAN OFFERWITH PROVISIONS.
NOW, THEREFORE, THE BOARD OF DIRECTORS OF THE ABALONE COVE LANDSLIDE
ABATEMENT DISTRICT, CITY OF RANCHO PALOS VERDES, CALIFORNIA, DOES HEREBY
RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS:
THAT: THE ABALONE COVE LANDSLIDE ABATEMENT DISTRICT BOARD ACCEPTS THE
CITY OFFER TO LOAN ABALONE COVE LANDSLIDE ABATEMENT DISTRICT UP TO $ 1.5
MILLION ON THE LOAN TERMS AS MAY BE MUTUALLY AGREED UPON.
PASSED, APPROVED AND ADOPTED THIS 10TH DAY OF JUNE 2024
______________
Chairman of the Board of Directors
Abalone Cove Landslide Abatement District
ATTEST:
Sandra E. Marshall
District Clerk
CERTIFICATION
I, Sandra E. Marshall, duly appointed Clerk of the Abalone Cove Landslide Abatement District; hereby certify
that the foregoing Resolution No. 24-8 was regularly adopted by the Board of Directors of the District at a
meeting thereof held on the 10th day of June 2024, by the following vote:
AYES: Leon, Barth, Knight and Miller
NOES: 0
ABSENT: 0
Sandra E. Marshall
Sandra E. Marshall, District Clerk
ABALONE COVE RESOLUTION NO. 24-8
D-1
E-1