IA SR 20250715 C - IA Monthly Treasurer's Report for May 2025
IMPROVEMENT AUTHORITY MEETING DATE: 07/15/2025
AGENDA REPORT AGENDA HEADING: Consent Calendar
AGENDA TITLE:
Consideration to receive the May 2025 Cash Balances/Monthly Treasurer’s Report for
the City’s Joint Powers Improvement Authority.
RECOMMENDED IMPROVEMENT AUTHORITY ACTION:
(1) Receive and file a background report on the formation and purpose of the City’s
Joint Powers Improvement Authority; and,
(2) Receive and file the May 2025 Cash Balances/Monthly Treasurer’s Report for the
City’s Joint Powers Improvement Authority.
FISCAL IMPACT: None
Amount Budgeted: N/A
Additional Appropriation: N/A
Account Number(s): N/A
ORIGINATED BY: Robert Moya, Deputy Director of Finance RM
Jane Lin, Senior Accountant
REVIEWED BY: Vina Ramos, Director of Finance VR
Catherine Jun, Deputy City Manager CJ
APPROVED BY: Ara Mihranian, AICP, Chief Administrative Officer
ATTACHED SUPPORTING DOCUMENTS:
A. Monthly Treasurer’s Report for May 2025 (page A-1)
B. Horan Lawsuit Settlement Agreement (page B-1)
BACKGROUND:
This monthly report summarizes the cash balance and investments for the month of May
2025 for the Joint Powers Improvement Authority (Improvement Authority) which includes
the Abalone Cove Permanent Fund and the Portuguese Bend Special Revenue Fund. A
separate report is also prepared monthly for the City’s General Fund, Capital
Infrastructure Program Fund, Special Revenue Funds, and Other Funds (see separate
agenda report on tonight’s Consent Calendar).
For this month’s report, staff is also providing background report on the formation and
purpose of the Improvement Authority for informational purposes.
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DISCUSSION:
Background on the formation of the City’s Improvement Authority
The Improvement Authority is a separate legal governmental entity created on September
4, 1990, in accordance with the provisions of the Reimbursement and Settlement
Agreement (Settlement Agreement), dated October 27, 1987, which was entered into by
the City of Rancho Palos Verdes (City), the Rancho Palos Verdes Redevelopment
Agency (Agency) and the County of Los Angeles in connection with the Horan Lawsuit
(Attachment B). The Settlement Agreement requires funds to be set aside in accounts
and expended by the Improvement Authority to maintain landslide abatement
improvements in the Portuguese Bend and Abalone Cove areas of the greater
Portuguese Bend Landslide Complex (Landslide Complex) that were installed and
constructed by the then-Agency, which was dissolved on February 1, 2012 due to
legislation enacted by the State of California. Since then, the City has assumed the
fiduciary role of Successor Agency and is responsible for closing out the Agency’s
operations. This includes tracking financial activities, reporting cash activities to the City
Council, preparing accounting entries for transactions, submitting annual financial reports
to the Los Angeles County Auditor-Controller, attending annual meetings, preparing the
Annual Comprehensive Financial Report (ACFR), and coordinating the audit process.
To summarize, the Successor Agency differs from the Improvement Authority in that the
Successor Agency is generally responsible for closing out the Agency’s operations based
on state law, while the Improvement Authority is generally responsible for managing the
funds established as part of the Settlement Agreement.
Reporting Entity
While the Improvement Authority is a separate legal governmental entity, it is also a
“blended” component unit of the City. This means the balances and transactions of the
Improvement Authority are reported in a separate Permanent and Special Revenue
Funds and are included in the government-wide statements. The following specific criteria
were used in determining that the Improvement Authority is a “blended” component unit.
• The members of the City Council are also members of the Board of the
Improvement Authority. Similarly, the officers of the City serve as officers of the
Improvement Authority.
• The City oversees both the accounts of the City and the Improvement Authority.
The Authority is fiscally dependent on the City, and there is potential for the Authority to
impose specific financial burdens on the City, as the City subsidizes maintenance
operations performed by the Authority and the City is legally liable for facilities maintained
by the Authority.
Reporting Funds
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Given the recent emergency and stabilization efforts in the Landslide Complex, this report
provides relevant financial context regarding the City’s Improvement Authority. The
Abalone Cove Permanent Fund maintains a $1 million non -spendable balance, while the
Portuguese Bend Special Revenue Fund receives ongoing support from the General
Fund through transfers. Both funds are restricted to specific eligible uses. Due to these
limitations, only a minimal share of costs (less than 1%) is currently allocated to the fund,
with the General Fund, Capital Infrastructure Program (CIP) Fund, and other Special
Revenue Funds continuing to cover the majority of related expenses.
The Improvement Authority must report on the following funds:
The Abalone Cove Permanent Fund was initially funded with a $1 million non-spendable
endowment received through the Settlement Agreement. In accordance with the
Settlement Agreement, only interest earnings generated by the $1 million principal may
be used to fund landslide maintenance activities. The $1 million and the interest earnings
are held and tracked in the City’s Permanent Fund.
The Abalone Cove Permanent Fund has maintained a consistent balance due to its
endowment requirement of $1 million. The source of revenue for this fund in FY 2024-25
includes a budget of interest earnings of approximately $30,000. The FY 2024-25 budget
for expenditures are primarily for $13,000 in utilities and $10,000 for services related to
monitoring wells.
The Portuguese Bend Special Revenue Fund is financed through annual contributions
from the General Fund to cover annual landslide-related maintenance. The sources of
revenue for this fund include approximately $1,700 in interest earnings and $15,000 of
transfers from the General Fund. These transfers are used for utilities and routine
maintenance related to the Portuguese Bend area.
Since FY 2022-23, due to the significant expenditures related to the area, the remaining
maintenance costs including emergency and stabilization efforts (~$36.8 million in FY 24 -
25 and ~$17.8 million in FY 25-26) have been funded through a combination of the Capital
Infrastructure Fund, General Fund, and other Special Revenue Funds.
May 2025 Cash Balances/Monthly Treasurer’s Report
Summary of Cash and Investments by Fund
As of May 31, 2025, the cash balance for the Abalone Cove Permanent Fund remains at
$1,151,041 with no financial transactions in May. This amount is invested in the Local
Agency Investment Fund (LAIF) with interest earnings of $38,386 at the end of May. The
average interest rate is approximately 4%.
Similarly, the Portuguese Bend Special Revenue Fund maintained its balance at
$109,206, with no financial transactions in May. This amount is invested in the LAIF with
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interest earnings of $4,242 through the end of May. The average interest rate is
approximately 4%.
As part of the year-end closing process, Staff is in the process of reviewing any
outstanding invoices and processing the quarterly interest earning allocations. These
updates will be reflected in the June report, which will be reported out in August.
CONCLUSION:
Staff recommend that the City Council receive and file the background report on the
formation and purpose of the City’s Improvement Authority and its Treasurer’s Report for
the period ending May 2025.
ALTERNATIVES:
In addition to Staff recommendation, the following alternative action is available for the
City Council’s consideration:
1. Take other action, as deemed appropriate.
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