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CC SR 20260421 K - ACLAD KCLAD Tax AssessmentsCITY COUNCIL MEETING DATE: 04/21/2026 AGENDA REPORT AGENDA HEADING: Consent Calendar AGENDA TITLE: Consider the City’s proposed Fiscal Year (FY) 2026-27 Annual Tax Assessments for Abalone Cove Landslide Abatement District (ACLAD) and Klondike Canyon Landslide Abatement District (KCLAD). RECOMMENDED COUNCIL ACTION: (1)Receive and file a report on the proposed property tax assessment formulas for FY 2026-27 for ACLAD and KCLAD; and (2)If deemed acceptable, authorize the payment of $860,300 for FY 2026-27 tax assessments consisting of $384,398 for ACLAD and $475,902 for KCLAD based on each Geologic Hazard Abatement District’s property assessment formula. FISCAL IMPACT: Estimated FY 2026-27 tax assessments of $860,300 have been included as a budget assumption as part of the April 20, 2026 Budget Workshop. VR Amount Budgeted: $860,300 in FY 2026-27 Budget Assumptions Additional Appropriation: $0 Account Number(s): 101-400-3150-4901 (General Fund – Public Works- Other Expense) ORIGINATED BY: Vina Ramos, Director of Finance VR REVIEWED BY: Catherine Jun, Deputy City Manager CJ APPROVED BY: Ara Mihranian, AICP, City Manager ATTACHED SUPPORTING DOCUMENTS: A.ACLAD Engineer’s Report FY 2025-26 (Page A-1) B.KCLAD Engineer’s Report FY 2025-26 (Page B-1) C.August 5, 2025 City Council Staff Report on the formation of a third Geologic Hazard Abatement District (page C-1) 1 BACKGROUND: Geologic Hazard Abatement District Background In September 1978, the Rancho Palos Verdes City Council received information regarding movement along Palos Verdes Drive South and Narcissa Drive indicating a reactivation of the ancient Portuguese Bend Landslide Complex. In response, the City established a building moratorium in the area and authorized a series of geological investigations to better understand the issue and identify potential solutions. The City retained Robert Stone and Associates (RSA) to conduct a comprehensive hydrogeologic investigation. The findings concluded that managing surface and subsurface water was necessary to mitigate ongoing land movement. In 1979, the State enacted Senate Bill (SB) 1195, authorizing the formation of Geologic Hazard Abatement Districts (GHADs). GHADs are public agencies formed to address and mitigate geologic hazards, including landslides. These districts are governed by a board of five elected directors representing property owners within the district boundaries. Each GHAD operates under a Plan of Control, which outlines its purpose and activities. Funding is primarily derived from property assessments established in accorda nce with Proposition 218 and based on a benefit assessment formula adopted at the time of formation. Authority / Applicable Law As public entities, ACLAD and KCLAD are subject to Proposition 218 requirements for any changes to assessments. Proposition 218 requires that assessments be supported by an Engineer’s Report and based on the proportional special benefit conferred to each parcel within the GHAD. The Engineer’s Reports rely on the long-standing assessment methodologies approved at the time of each GHAD’s formation. The City, as a property owner within both GHADs, represents approximately 60% of the assessed units in ACLAD and KCLAD. It should be noted that the City was not a property owner of land (aside from roads) within each GHAD at the time of formation and subsequently became a property owner, beginning in 1996, with the gradual acquisition of open space land within each of the two GHADs jurisdictional boundaries. In April 2024, ACLAD and KCLAD notified property owners, including the City, of proposed FY 2024-25 assessment increases based on projected budget needs in response to an increase in the rate of land movement following recent winter rain storms. Following the required hearing process, the assessments were approved in June 2024, resulting in the following changes: • ACLAD: increased from $175,074 to $379,621 (an increase of $204,547, or 116%) • KCLAD: increased from $50,877 to $335,826 (an increase of $284,949, or 560%) 2 The combined increase for FY 2024-25 was $489,496 or 217% (see Table 1 on the following page). In April 2025, the FY 2025-26 assessments increased again as follows: • ACLAD: increased to $384,398 (an increase of $4,777, or 1.2%) • KCLAD: increased to $475,902 (an increase of $140,076, or 42%) The combined increase for FY 2025-26 is $144,854, or 20% (see Table 1 below). Across both fiscal years, the City received the required Engineer’s Reports (Attachments A and B), which include financial data, methodology, and the benefit allocation formula. The City did not file a protest in either year. These assessments are funded through the General Fund under the Public Works budget. DISCUSSION: ACLAD and KCLAD are scheduled to conduct public hearings on their respective proposed budgets and benefit assessment formulas. The proposed budgets for FY 2026- 27 do not include an increase and remain consistent with the prior year for both GHADs. As a result, no action is required by the City to consider protesting the assessments. Tables 1 through 4 present the proposed tax assessments, benefit assessment formula, and supporting district budgets. As shown in Table 1, the total assessment increased significantly by 217% in FY 2024– 25, followed by a more moderate 20% increase in FY 2025–26, and is projected to remain relatively flat in FY 2026–27. As summarized in the attached Engineer’s Reports (Attachments A and B), the increase in assessments were due to the GHADs response to an increase in land movement resulting from winter rain storms . Table 1: ACLAD and KCLAD Proposed Tax Assessments (City) Table 2, on the following page, outlines the benefit assessment formula used to allocate costs based on land, habitable area, public infrastructure, and public use, assigning units to ensure an equitable distribution of costs. Continued on the Next Page FISCAL YEAR ACLAD KCLAD TOTAL Increase ($) Increase (%) FY 2023-24 175,074 50,877 225,951 FY 2024-25 379,621 335,826 715,447 489,496 217% FY 2025-26 384,398 475,902 860,301 144,854 20% FY 2026-27 384,398 475,902 860,301 - 0% 3 Table 2: Benefit Assessment Formula ACLAD Assessment Table 3 below is ACLAD’s proposed FY 2026-27 budget, which is used to calculate the proposed tax assessments based on the Benefits Assessment Formula describe above. Based on last year’s tax assessment, as a landowner, the City pays approximately 64% of the total proposed budget. Based on the proposed budget, total Maintenance and Operations costs increase d by $132,664 or 23%, primarily driven by higher utilities, insurance, and the addition of a City loan payment. These increases are partially offset by reductions in consulting services and the removal of contingency funds. Administrative costs decrease slightly by $600 due to the elimination of board-related expenses. Overall, while operating costs are rising, the total assessment remains unchanged at $598,000, supported by the use of prior year funding. The City’s estimated share also remains flat at $384,398. Continued on the Next Page 4 Table 3: FY 2026-27 ACLAD Proposed Budget KCLAD Assessment Table 4 on the next page is KCLAD’s proposed FY 2026–27 budget of $808,356. Based on last year’s tax assessment, as a landowner, the City pays approximately 59% of the total proposed budget. Based on the proposed budget, total Maintenance and Operations costs remain flat at $753,356, showing no overall change from FY 2025–26. However, there are significant shifts within categories. Increases include electricity (+$44,000, +733%), insurance (+$3,400, +27%), and the addition of a City loan payment ($186,932). These increases are offset by substantial reductions in well and pipeline maintenance (-$131,832, -50%), extraordinary repairs (-$50,000, -33%), and litigation defense (-$50,000, -20%), along with smaller decreases in consulting services. Administrative costs remain unchanged at $55,000, with no year-over-year difference. Overall, the total funds requested by assessment remain flat, with no net change from the prior year. The City’s estimated tax assessment also remains unchanged at $475,902 . Abalone Cove Landslide Abatement District FY 2025-26 Budget FY 2026-27 Proposed Change ($)Change (%) 010 Executive Director 16,800 16,800 - 0% 011 Legal Expenses 2,000 2,000 - 0% 012 Board Related Expenses 600 - (600)-100% 013 Election Related Expense 500 500 - 0% 014 Office Expenses 1,200 1,200 - 0% 015 Bank Charges 50 50 - 0% Total Administrative 21,150 20,550 (600)-100% Maintenance & Operations 201 Purchased Consulting Services 20,000 5,000 (15,000)-75% 202 Utilities 86,000 100,000 14,000 16% 203 Insurance 7,500 14,060 6,560 87% 204 Easement Payments 3,500 3,500 - 0% 205 Purchased Maintenance Service/Parts 230,000 230,000 - 0% 207 Replacement Reserve - - - 0% 208 Well Drilling Costs 200,000 200,000 - 0% 209 Contingency Funds 29,850 - (29,850)-100% 210 City Loan Payment - 156,954 156,954 100% Total Maintenance & Operations 576,850 709,514 132,664 23% Carryover from prior year's funding $0 ($132,064)($132,064)-100% Funds Requested by Assessment $598,000 $598,000 $0 0% CITY'S Estimated Tax Assessment (~64%)$384,398 $384,398 $0 0% 5 Table 4: FY 2026-27 KCLAD Proposed Budget ADDITIONAL INFORMATION: On August 5, 2025, the City Council initiated the formal process to form a third GHAD to be called the “Portuguese Bend Landslide Abatement District” (the “PBLAD”) (Attachment C). The lands to be included in the newly formed GHAD (“PBLAD”) would be limited to lands outside of any remaining GHAD’s jurisdiction. This would leave ACLAD and/or KCLAD intact. These lands consist primarily of the Portuguese Landslide in the middle of the Abalone Cove and Klondike landslides (Attachment C). Out of the 113 properties within the proposed GHAD, 90 are privately owned. Furthermore, 23 properties are owned by the City and exceeds 50% of the assessed valuation of land within the proposed GHAD. These properties currently do not engage in any landslide abatement efforts, and forming a new GHAD would contribute towards the overall efforts in the Landslide Complex to prevent damage, mitigate, abate, and control the landslide. As reported in the August 5, 2025 Staff Report (Attachment C), in summary, the following are the recommended procedural steps: Klondike Canyon Geologic Hazard Abatement District FY 2025-26 Budget FY 2026-27 Proposed Change ($) Change (%) Contract Administrative Services 010 Executive Director 16,800 16,800 - 0% 011 Consulting Geologist/Legal 20,000 20,000 - 0% 013 Board Related Expenses 2,000 2,000 - 0% 014 Board Related Expenses 1,200 1,200 - 0% 016 Administration Consultation 15,000 15,000 - 0% Total Administrative 55,000 55,000 - 0% 202 Insurance 12,600 16,000 3,400 27% 203 Office Expenses 3,000 3,000 - 0% 207 Replacement Reserves 16,000 16,000 - 0% 208 Well Drilling Costs - - - 0% 209 Well & Pipeline Maintenance Services 265,000 133,168 (131,832)-50% 210 Extraordinary Repairs 150,000 100,000 (50,000)-33% 211 Electricity 6,000 50,000 44,000 733% 212 Channel Maintenance Project - - - 0% 213 Sub Slide Consulting - Beach Club Slide 5,000 2,500 (2,500)-50% 214 Litigation Defense 250,000 200,000 (50,000)-20% 215 City Loan Payment - 186,932 186,932 100% 410 Contingency 45,756 45,756 - 0% Total Maintenance & Operations 753,356 753,356 - 0% TOTAL - Funds Requested by Assessment $808,356 $808,356 $0 0% CITY'S Estimated Tax Assessment (~59%)$475,902 $475,902 $0 0% 6 1. Direct staff to prepare and issue a Request for Proposal (RFP) to retain a certified engineering geologist to prepare an engineer’s report which would lead to the development of a “Plan of Control” describing the landslide hazards and a plan for the abatement or mitigation thereof. 2. Conduct a town hall to receive community input on forming a new third GHAD and to present the draft engineer’s report including the draft plan of control. 3. Conduct a public meeting for the City Council to receive information on the plan of control and to determine that public health, safety, and welfare require formation of a district. \ 4. Conduct a public hearing to the proposed formation inviting property owners to make a written objection to the formation in accordance with Proposition 218. 5. At the close of the hearing or within 60 days thereafter, the City Council may proceed by resolution to order the formation of the proposed district and appoint five (5) property owners within the district to the initial board of directors for terms not to exceed four (4) years. Alternatively, the City Council may appoint itself to act as the board of directors. However, if it appears at the hearing that property owners of more than 50% of the assessed valuation of the proposed district object to the formation, the City Council must close the hearing and direct that formation proceedings be abandoned. At this time, the City issued an RFP to retain a certified engineering geologist to prepare an engineer’s report. At the conclusion of the RFP process, the City received two proposals and are currently reviewing the proposals. Once vetted, Staff will bring a proposed professional services agreement to the City Council for its consideration, which will likely occur by the end of May 2026. CONCLUSION: The proposed FY 2026-27 assessments for ACLAD and KCLAD remain unchanged from the prior year. Staff recommend that the City Council receive and file the FY 2026 -27 estimated tax assessments and authorize the assessment payments totaling $860,300 between both GHADs (ACLAD and KCLAD). ALTERNATIVES: In addition to Staff recommendation, the following alternative actions are available for the City Council’s consideration: 1. Request for additional information prior to considering authorizing the payment of assessments. 2. Take no action, and receive and file this report. 7 May 10, 2024 ABATEMENT ACTIVITIES WITHIN THE DISTRICT ABALONE COVE LANDSLIDE ABATEMENT DISTRICT FISCAL YEAR 2023-24 LOS ANGELES COUNTY, CALIFORNIA ENGINEER’S REPORT Prepared for: ABALONE COVE LANDSLIDE ABATEMENT DISTRICT BOARD OF DIRECTORS Rancho Palos Verdes, California Prepared by: GORDON LEON ABALONE COVE LANDSLIDE ABATEMENT DISTRICT PO Box 4351 Palos Verdes Peninsula, CA 90274 Godon.Leon@gmail.com A-1 1 TABLE OF CONTENTS Certification ...................................................................................................................2 Part I - Overview and Benefits Provided to the District ................................................3 Part II – Financial Performance and FY24/25 Budget ...................................................4 Part III – Benefit Assessment and Method of Apportionment ......................................6 Part IV – Conclusion ......................................................................................................7 Appendix A – Assessment Roll .....................................................................................8 A-2 2 CERTIFICATION AGENCY: ABALONE COVE LANDSLIDE ABATEMENT DISTRICT PROJECT: ABATEMENT ACTIVITIES WITHIN THE DISTRICT TO: ABALONE COVE LANDSLIDE ABATEMENT DISTRICT BOARD OF DIRECTORS IN THE CITY OF RANCHO PALOS VERDES, STATE OF CALIFORNIA ENGINEERING REPORT FOR FISCAL YEAR 2023-24 The preparation of this Annual Engineering Report (“Report”) is in conformance with the obligation of the Abalone Cove Landslide Abatement District in the City of Rancho Palos Verdes to levy assessments within the District to provide services upon each lot or parcel of land in the district in proportion to the estimated benefit to be received by each such lot or parcel of land for Fiscal Year 2023–24. I, Tim Kelly, authorized representative of the District, the duly appointed Assessment Engineer submit the following Report which consists of the following four (4) parts and an Appendix. PART I: Overview: Provides historical information about the District and the general scope and responsibilities of the District. PART II: Financial performance of the District including the budget and proposed budget for FY 24/25 PART III: Explanation of the Assessment apportionment process and an estimated cost of the improvements on each benefited lot or parcel of land within the Assessment District. PART IV: Conclusion Appendix A – Assessment Roll In conclusion, it is my opinion that the costs and expenses of the District have been assessed to the lots and parcels within the boundaries of the District in proportion to the estimated benefits to be received by each lot or parcel from the services provided. DATED: May 10, 2024 ___________________________________________ Tim Kelly, P.E., Assessment Engineer, MPE No. 25452 A-3 3 Part I: Abalone Cove Landslide Abatement District The Abalone Cove Landslide Abatement District (ACLAD) is a “geologic hazard abatement district" created by the City of Rancho Palos Verdes and residences of the Abalone Cove community under special legislation passed by the California Legislature in l980 for the “purposes of prevention, mitigation, abatement or control” of the Abalone Cove landslide. It was the first geohazard abatement district created in the state (GHAD). The District is governed by five elected Directors, which serve for a term of four years. Under the Beverly Act of l980, the District may assess properties benefiting from the mitigation or abatement efforts for the cost of the improvements. ACLAD is broadly responsible for abatement efforts to prevent movement of the Abalone Cove land movement. To do this, the district operates and maintains dewatering wells and associated discharge lines, easements to assure access to the dewatering facilities, monitors groundwater elevations throughout the District, reviews measurements of the Global Positioning System for evidence of slide movement and works with the City of RPV to maintain certain storm culverts and other improvements related to landslide abatement. What Does ACLAD DO? ACLAD is broadly responsible for abatement efforts to prevent movement of the Abalone Cove landslide. The most effective abatement method is the dewatering wells, and currently the district operates and maintains the dewatering wells. These include wells drilled during the formation of ACLAD by the interim homeowners association, wells drilled under the authority of ACLAD, funded by issuance of a bond, and wells drilled by the City. ACLAD also monitors the groundwater elevation, and periodically re-drills wells. ACLAD monitors the Global Positioning System (GPS) stations measurements for evidence of slide movement. The groundwater table within and immediately upslope of the landslide has been lowered significantly by the existing dewatering wells. This can halt or slow the movement except during periods of exceptional rainfall and has increased the stability of the Abalone Cove Landslide. The District conducts or contracts investigations related to the geology, rainwater discharge and groundwater flow in the area to aid in evaluating and developing abatement efforts. A complete set of documents that constitute ACLAD’s Plan of Control can be found on the ACLAD website AbaloneCLAD.com The Plan of Control details the mitigation activities that are performed by ACLAD A-4 4 Part 2: Current Financial Status and Proposed FY 24/25 Budget The increase land movement during the past year has resulted in shearing of existing wells, breaks in the drainage system that takes water from the wells to the ocean, and increased maintenance of individual wells. ACLAD also funded two new de-watering wells (WW 23 and WW24) located on Narcissa Drive with funding from the cash on hand. As a result of the increased operating costs and fast tracking the two new wells, cash on hand was depleted to approximately $71,000 at the time of the preparation of this report. The categories of spending are shown in the attached budget. Abalone Cove Landslide Abatement District Proposed Maintenance and Operations Bud et 2024/2025 And - Bud ets for Fiscal Years 2022/2023 and 2023/2024 Account Description Bud et Bud et ctual Proposed Bud et 2022/2023 2023/2024 2023/2024 2024/2025 Application of Funds Contract Administrative Services 010 Support Staf 16,800.00 16,800.00 16,800.00 16,800.00 011 Legal Expenses 5,000.00 2,000.00 5,793.00 2,000.00 012 Board Related Expenses 300.00 300.00 610.00 600.00 013 Election Related Expenses 500.00 500.00 500.00 014 Office Expenses 950.00 950.00 1,650.54 1,200.00 015 Bank Charges - checkin 50.00 50.00 50.00 Total Administrative 23,600.00 20,600.00 24,853.54 21,150.00 Maintenance & Operations 200 Field Staf 0.00 0.00 0.00 201 Consulting Services 30,000.00 20,000.00 10,152.59 20,000.00 202 Utilities 25,200.00 30,000.00 33,000.00 36,000.00 203 Insurance 7,500.00 7,500.00 9,511.80 7,500.00 204 Easement Pa ments 2,500.00 2,500.00 1,650.00 3,500.00 205 Maintenance Service/parts 78,454.00 75,000.00 105,000.00 130,000.00 206 Surface Drainage Expense 0.00 0.00 50,000.00 207 Replacement Reserves 100,000.00 208 Well Drilling Costs 47,500.00 120,000.00 293,293.49 250,000.00 209 Contingenc Funds 10,782.00 13,780.00 29,850.00 A-5 5 210 RPV for Well Monitoring Expense 0.00 0.00 0.00 0.00 211 RPV for Well Maintenance 0.00 0.00 0.00 0.00 Total Maintenance & Operations 201,936.00 268,780.00 452,607.88 626,850.00 Total Warrants 225,536.00 289,380.00 477,461.42 648,000.00 Sources of Funds - Income Funds Requested b Assessment 225,636.00 289,380.00 289,380.00 648,000.00 RPV Monitoring reimbursement 0.00 2,400.00 2,400.00 2,400.00 Interest Income 700.00 700.00 52.93 700.00 Total Sources of Funds 226,336.00 292,480.00 291,832.93 651,100.00 Reserves 471,629.00 435,197.00 70,000* 100,000.00 * estimated from May actuals A-6 6 Part III: Benefit Assessment Method of Apportionment of the Assessments: The method of apportionment of assessments indicates the proposed assessment of the net amount of the costs and expenses of the maintenance and/or servicing of the improvements to be assessed upon the lots and parcels of land within the Assessment District in proportion to the estimated special benefits to be received by such lots and parcels. Benefit Assessment Formula To help in understanding the Benefit Assessment Formula, here is the formula as adopted by the Board of Directors. Type of Property Units of Assessment 1. Land (improved & unimproved) @ 1 unit per acre (43,560 square feet) 2. Habitable area* @ 1 unit per each 1,000 square feet of improvements 3. Public highways @ 1 unit per 5,000 square feet of public roads 4. Public Use @ 2 units per acre * Improvements are defined as the habitable area - living quarters on the property. For example: For a Non-Public property, if the parcel is 13,068 square feet, this equals 13,068 divided by 43,560 = 0.300 acres in size, or 0.300 units In addition, the habitable area is 2,175 square feet, which equals 2.175 units So, the Total Units for the property = (0.300) + (2.175) = 2.475 The Assessment Per Unit is the Total Operating Cost of the District divided by the Grand Total Units in the District. For example: If the Total Operating Cost of the District is $648,000 And the Total Units in the District is 1,471.66 Then the Assessment Per Unit = $648,000 / 1471.66 = $440.32 ** ** This is as of 04/18/2024. The numbers always change slightly. To determine the assessment for the property, multiply the Assessment Per Unit by the Total Units for the property. In the example above, the assessment per unit is $440.32 times 2.475 Total Units for the property = $1,098.79 assessment for the property. A-7 7 Part IV: Conclusion The record two years of Winter Rains and the resulting increase in movement of the Abalone Cove Landslide stressed the ACLAD de-watering well system. To meet the challenge, ACLAD increased the maintenance and reduced the cycle time for repairs. The board also added two new wells to the system, and managed the installation of four RPV wells in the coastal bluff below Palos Verdes Drive South. The board authorized spending as much of the cash on hand as was necessary to meet the demands of the landslide. The proposed budget for FY24/25 includes the rising cost of maintenance, provides $50K to fix storm drainage along PBCA and Vanderlip roads damaged by the landslide, adds another two wells to the system, and provides for the creation of a Replacement and Emergency Reserve to meet unanticipated and unbudgeted expenses which may arise during the year. The goal is to fund the Reserve to $500,000 at the rate of $100,000 per annum. There is no change to the apportionment formulas that have been in place since the beginning of ACLAD. The FY 24/25 proposed budget does not fund Altamira Canyon Lining, or a myriad of additional surface water drainage projects. ACLAD is currently applying for Federal grants to line Altamira Canyon and discussing fast track funding from the City of Rancho Palos Verdes to prepare for next winter's storms. The ACLAD Board of Directors continues to be dedicated to removing water from the landslide. There will be an election in November to elect 3 board members. All of the members of ACLAD are encouraged to stand for election. Active participation in the ACLAD system will help to maintain the high level of service to our community. A-8 8 Appendix A: ACLAD Assessments by APN A-9 B-1 B-2 B-3 B-4 B-5 B-6 B-7 B-8 B-9 B-10 B-11 B-12 B-13 B-14 B-15 B-16 B-17 B-18 B-19 B-20 B-21 B-22 B-23 B-24 B-25 B-26 B-27 B-28 B-29 B-30 B-31 B-32 B-33 B-34 B-35 B-36 B-37 B-38 B-39 B-40 B-41 B-42 CITY COUNCIL MEETING DATE: 08/05/2025 AGENDA REPORT AGENDA HEADING: Regular Business AGENDA TITLE: Consideration to initiate the process to establish a new third Geologic Hazard Abatement District. RECOMMENDED COUNCIL ACTION: (1) Review the advantages and procedures to forming a new third Geologic Hazard Abatement District (GHAD) not currently part of an existing GHAD; and, (2) If deemed acceptable, direct staff to initiate the formal process to form a third GHAD to be called the “Portuguese Bend Landslide Abatement District” (the “PBLAD”). FISCAL IMPACT: Determining whether to form a new third GHAD will not have an initial fiscal impact on the City. However, if the City Council decides to initiate the process, there will be costs to be considered by the City Council at the time a professional services agreement is presented for a consultant to prepare a required engineer’s report and plan of control. Amount Budgeted: N/A Additional Appropriation: N/A Account Number(s): N/A ORIGINATED BY: William Wynder, City Attorney WW REVIEWED BY: Catherine Jun, Deputy City Manager CJ APPROVED BY: Ara Mihranian, AICP, City Manage ATTACHED SUPPORTING DOCUMENTS: A. Senate Bill No. 1195, California State Statute, Public Resources Code, Sections 26500-26654 (Linked) B. Proposition 218 Notice and Protest Procedures (Linked) C. Resolution No. 81-4 (Page C-1) D. Resolution No. 82-17 (Page D-1) E. Proposed Map of the Portuguese Bend Landslide Abatement District (Page E-1) C-1 BACKGROUND: General Information GHADs are governmental districts formed for the prevention, mitigation, abatement or control of a “geologic hazard,” which is defined as an actual or threatened landslide, land subsidence, soil erosion, earthquake, fault movement or any other natural or unn atural movement of land or earth. (Public Resources Code §§ 26525, 26507.) The GHAD Law (Sections 26500 et seq.), authored by the City’s then-State Senator, Robert Beverly (and assisted by former Councilmember Ken Dyda) was enacted by the State Legislature in 1979 in response to the Portuguese Bend landslides and gives local agencies the authority to form GHADs (Attachment A). A GHAD is a political subdivision of the State. It is not an agency or instrumentality of a local agency. A GHAD is governed either by a board consisting of five property owners within the district or the legislative body forming the district. GHADs are authorized to acquire, construct, operate, manage and maintain improvements on public or private lands and accept such improvements undertaken by anyone. “Improvement” means any activity that is necessary or incidental to the prevention, mitigation, abatement, or control of a geologic hazard, including, without limitation, construction, maintenance, repair or operation of any improvement. GHADs are authorized to levy and collect property owner assessments to pay for the costs and expenses of the maintenance and operation of any improvements acquired or constructed pursuant to the GHAD Law. These assessments attach as liens on property located within the GHAD and may be collected at the same time and in the same manner as general taxes on real property. All assessment proceedings must comply with Proposition 218’s notice and protest procedures for new or increased property related fees (Attachment B). The first two GHADs formed in California were the Abalone Cove Landslide Abatement District (“ACLAD”) and Klondike Canyon Landslide Abatement District (“KCLAD”). There are now some 55 GHADs organized and functioning in California. Formation of ACLAD and KCLAD In September 1978, the City Council was presented with information regarding cracks and movement along Palos Verdes Drive South and Narcissa Drive that indicated a landslide was in progress. This landslide was the Abalone Cove Landslide, a sub-slide that is separate from the Portuguese Bend Landslide sub-slide that activated in 1956. The Council immediately established a building moratorium in the area and authorized the first in a series of geological investigations to define the problem and identify potential solutions. During March 1979, the Council hired Robert Stone and Associates to perform a comprehensive hydrogeologic investigation to determine the feasibility of dewatering the C-2 landslide to slow it down. Later that year, the preliminary borehole tests favored installing a series of dewatering wells. The Public Resources Code allows two different types of governing bodies for a GHAD. A city council must either (a) appoint five owners of real property within the district to the initial board of directors or (b) appoint itself to act as the board of directors. In the case of a board of directors composed of property owners, after the appointment of the initial directors, the board must be composed of five directors elected from within the GHAD, each of whom serves a term of four years. The City Council formed ACLAD in 1981 pursuant to Resolution No. 81-4, and KCLAD was formed in 1982 pursuant to Resolution No. 82-17 (Attachments C and D). At the July 1, 2025 meeting, Councilmember Perestam requested, and the Council concurred, that staff bring forward a future report for the City Council’s consideration to form a third GHAD encompassing the properties, including possible private and public property, that are not part of an existing GHAD within the Greater Portuguese Bend Landslide Complex (Landslide Complex). Tonight, the City Council is being asked to review the procedures to form this third GHAD, and if deemed acceptable, direct staff and the City Attorney’s Office to initiate the process. DISCUSSION: Advantages of Forming a GHAD Through a Plan of Control prepared as part of a required engineer’s report, a GHAD can act to prevent damage resulting from landslide hazards by monitoring the earth movement and undertaking improvements for the prevention, mitigation, abatement, or control thereof. Moreover, there are certain advantages to forming a GHAD, as summarized below. GHADs Have Borrowing Authority A GHAD is authorized to levy and collect assessments on each property within its district to pay for the cost of maintenance and operation of any improvements. A GHAD is also authorized to use the Improvement Act of 1911, Municipal Improvement Act of 1913, or the Improvement Bond Act of 1915 to pay for the costs of improvements made pursuant to the GHAD Law. Neither ACLAD nor KCLAD have opted to utilize this financing mechanism which, if utilized, could require substantial annual debt service. Immunity from Liability for Damages A GHAD is provided a degree of immunity from liability for damages caused by injury to persons or property as a result of gradual earth movement or actions taken to abate such hazard provided that the board has (1) found the existence of such hazard on the basis of adequate evidence; (2) determined appropriate remedial action to abate such hazard; and (3) undertaken to implement such remedial action. This degree of limited liability C-3 encourages the formation of GHADs and undertaking of remedial action to abate the hazard. GHADs Are Exempt from the California Environmental Quality Act (“CEQA”) Improvements or other remediation efforts caused to be undertaken under the GHAD Law and all activities in connection therewith are exempt from CEQA. This statutory exemption is broad as these improvements and activities are deemed to be specific action s necessary to prevent or mitigate an emergency as defined by Section 21080(b), a section of CEQA that expressly exempts certain activities from CEQA. GHADs Are Exempt from the Requirements of the Public Contract Code Public Resources Code § 26600 provides that “the board of directors may negotiate improvement contracts or may award such contracts by competitive bidding pursuant to procedures adopted by the board of directors.” Part 3 of Division 2 of the Public Contract Code establishes competitive bidding requirements for local agencies but does not include requirements for GHADs. California Courts have recognized that “absent a statutory directive, a public entity is not bound to engage in competitive bidding.” (Construction Industry Force Account Council, Inc. v. Ross Valley Sanitary District, 244 Ca.App.4th 1303, 1316 (Cal. App. 1st Dist. 2016); Construction Industry Force Account Council v. Amador Water Agency , 71 Cal.App.4th 810, 815 (Cal. App. 1st Dist.. 1999) (recognizing that the Legislature has taken “an ad hoc approach” in establishing contracting requirements for local agencies); Associated Builders and Contractors v. Contra Costa Water District, 37 Cal.App.4th 466 (Cal. App. 1st Dist. 1995) (finding that appellants had cited no section of the Public Contract Code requiring a county water district to comply with open bidding and award a contract to the lowest bidder). The general provisions of the Public Contract Code would most likely not apply to GHADs because the law dealing with GHADs contains more specific contracting procedures in Section 26600. (Las Tunas Beach GHAD v. City of Malibu, 38 Cal. App 4th 1002, 1010 (1995) [determining that more specific provisions of the GHAD Law control over more general provisions in other statutory schemes].) Even if the Public Contract Code provisions were to apply, much of the work to be performed under contract for a GHAD could be excluded from the public bidding requirements due to the emergency nature of GHAD functions. GHADs are Likely Subject to the State’s Prevailing Wage Laws A GHAD is not explicitly exempted from the State's prevailing wage requirements under the Labor Code. Whether GHADs must comply with prevailing wage laws depends on the nature of the work performed and whether it qualifies as "public works" under California Labor Code §§ 1720 et seq. The California Supreme Court's decision in Kaanaana v. Barrett Business Services, Inc., 11 Cal.5th 158 (2021) has significant implications for GHADs regarding prevailing wage C-4 requirements under Labor Code 1720. Previously, the prevailing wage law was generally understood to apply primarily to construction-related work for public agencies. However, the Kaanaana decision broadened the definition of "public work" under Labor Code 1720(a)(2) to include any work done for special districts, such as sanitation districts, irrigation districts, or improvement districts. Two unresolved questions were left by the Kaanaana decision. First, while it is the court that greatly expanded the scope of work that can be covered by the Prevailing Wage Law, it neglected to define precisely which “special districts” are affected by its ruling. The section of the statute being interpreted by the court, Labor Code §1720(a)(2), states that “public works means” “[w]ork done for irrigation, utility, reclamation, and improvement districts, and other districts of this type.” (Emphasis added.) Which are “districts of this type” for purposes of the statute and the court’s interpretation? Nowhere in its decision does the court directly address this question, or suggest where, if anywhere, the line can be drawn between “other districts of this type” and districts outside the reach of Labor Code § 1720(a)(2). The second major practical question left unanswered is precisely what “work” performed for special districts by their contractors will henceforth be deemed “covered” by the state Prevailing Wage Law. Given these uncertainties, the Kaanaana ruling likely means that if a GHAD contracts for any work costing over $1,000, not just construction -related work, the contractors and subcontractors performing that work must pay their employees the prevailing wage as determined by the California Department of Industrial Relations (DIR). This includes tasks such as maintenance, inspections, and monitoring related to geologic hazards that may not have previously been considered traditional "public works". Broadly speaking, prevailing wage requirements can increase overall project costs by approximately 25% or more. In addition, the administrative and compliance obligations associated with prevailing wage may limit participation from some contractors or firms. Disadvantages of Forming a GHAD Though a GHAD is a subdivision of the state and technically would not be part of the City, if the City Council serves as the board of directors of a GHAD and the potential for this GHAD to enter into agreements with the City to utilize certain personnel and equipment, there is the risk of blurring the boundaries of actions taken by the GHAD and actions taken by an agent or representative of the City that could potentially expose City assets to liability claims. As such, it is imperative that strict lines o f separation be maintained between the City and the GHAD. GHAD Formation Procedure The proceedings for the formation of a GHAD are set forth in the GHAD Law and are exclusive, notwithstanding any other provision of law. Under State law, GHAD formation is exempt from the Local Agency Formation Commission (“LAFCO”) review process and from review under CEQA, as previously noted. It is important to reiterate that C-5 improvements or other remediation efforts caused to be undertaken under the GHAD Law and all activities in connection therewith are also exempt from state contracting law requirement, thereby streamlining the remediation and response process to land movement. The following are the recommended procedural steps: 1. Direct staff to prepare and issue a Request for Proposal (RFP) to retain a certified engineering geologist to prepare an engineer’s report which would lead to the development of a “Plan of Control” describing the landslide hazards and a plan for the abatement or mitigation thereof. The City Council will be requested to consider approving the Professional Services Agreement (if the cost exceeds the City Manager’s signing authority of $25,000), in order to commence the preparation of the engineer’s report. 2. Conduct a town hall to receive community input on forming a new third GHAD and to present the draft engineer’s report including the draft plan of control. 3. Conduct a public meeting for the City Council to receive information on the plan of control and to determine that public health, safety, and welfare require formation of a district. After receiving the report, the Council would be asked to first adopt a resolution declaring that it is subject to the GHAD Law and forward a copy of this resolution to the State Controller. The City Council may then adopt a resolution to initiate proceedings for the formation of a district. The resolution must c ontain the following: a) A statement that the resolution is made pursuant to the GHAD Law. b) A statement that the City Council has been presented with and has reviewed a plan of control and has determined that the health, safety, and welfare require formation of a district. c) The setting of a public hearing on such determination and directing that notice be mailed to all owners of real property included within the proposed district. 4. Notice & Public Hearing The City Council would then be asked to conduct a public hearing. Notice of the public hearing must be mailed at least 20 days before the date of the public hearing to each property owner within the proposed district. A copy of the resolution initiating formation proceedings must be attached to the notice. The notice sha ll set forth the time, date, and place of the hearing, briefly describe the purpose of the hearing, and indicate where the plan of control may be reviewed or duplicated. The notice shall also set forth the address where objections to the proposed formation may be delivered up to and including the time of the hearing. Property owners may make a written objection to the formation in accordance with Proposition 218. The City Council will be presented with all objections at the public C-6 hearing. The City Council may adjourn such hearing from time to time, but not to exceed 60 days from the date specified in the original notice. At the close of the hearing or within 60 days thereafter, the City Council may proceed by resolution to order the formation of the proposed district and appoint five (5) property owners within the district to the initial board of directors for terms not to exceed four (4) years. Alternatively, the City Council may appoint itself to act as the board of directors. If property owners are appointed to the initial board of directors, then following the initial term, the board of directors shall consist of five (5) elected directors as provided by Section 26583. However, if it appears at the hearing that property owners of more than 50% of the assessed valuation of the proposed district object to the formation, the City Council must close the hearing and direct that formation proceedings be abandoned. Proposed Lands Included in a New Third GHAD A GHAD may include lands in more than one local agency, and the lands may be publicly or privately owned. The lands included within a district may be noncontiguous provided that all lands are specially benefitted by the construction proposed to be undertaken by the district in a plan of control approved by the legislative body. However, no parcel of real property shall be divided by the boundaries of the proposed district. The lands to be included in the newly formed GHAD, which is proposed to be called the Portuguese Bend Landslide Abatement District (“PBLAD”) would be limited to lands outside of any remaining GHAD’s jurisdiction. This would leave ACLAD and/or KCLAD intact. These lands consist primarily of the Portuguese Landslide in the middle of the Abalone Cove and Klondike landslides (Attachment E). Out of the 113 properties within the proposed GHAD, 90 are privately owned. Furthermore, 23 properties are owned by the City and exceeds 50% of the assessed valuation of land within the proposed GHAD. These properties currently do not engage in any landslide abatement efforts, and forming a new GHAD would contribute towards the overall efforts in the Landslide Complex to prevent damage, mitigate, abate, and control the landslide. Considering properties outside the City’s jurisdictional boundaries may cause delays in the process and at this time is not recommended. Levy & Collection of Assessments In order to levy and collect assessments to pay for costs and expenses of maintenance and operation of any improvements, an officer of the GHAD must first prepare a report that sets forth the yearly estimated budget, the proposed estimated assessments to b e levied each year against each parcel of property, and a description of the method used in formulating the estimated assessments. Next, the GHAD board shall adopt a resolution declaring its intention to order that the costs and expenses of maintaining and operating improvements be assessed against property within the district and consider all protests at a duly noticed public hearing . At C-7 the conclusion of the hearing, the board may adopt, reduce, or modify any assessment and shall make its determination upon each assessment described in the report. Thereafter, the board may confirm the assessments and order the levy and collection thereof by resolution. If assessments are proposed to increase from the maximum amount levied in any previous year, the board is required to comply with Proposition 218 notice, protest, and hearing procedures with respect to that increase (Attachment B). It would require a 50% protest vote to block such proposed increase. ADDITIONAL INFORMATION Dissolving a GHAD At the July 1 City Council meeting under Public Comments on Non-Agenda Items, Sha Tahmasebi, a resident of Seaview, requested the City Council consider, among other things, dissolving KCLAD. The City Council can dissolve a GHAD pursuant to the Public Resources Code if it obtains the unanimous consent of the board, or by a vote of the owners of more than 50% of the assessed valuation of the real property in the GHAD, but the Council would then be responsible for the GHAD’s liabilities; the Council could then reform the GHAD with the Council as the board of directors, but if more than 50% of the assessed valuation of the real property in the proposed GHAD object, the formation must be abandoned. The City Council may, by resolution, order the dissolution of GHAD. The resolution is only valid if the City Council, based on substantial evidence, makes one or more of the following findings: (a) The corporate powers have not been used, there is a reasonable probability that those powers will not be used in the future, and the district holds no significant liquid assets. (b) The board of directors, by resolution passed by unanimous vote of the directors, or by a vote of the owners of more than 50% of the assessed valuation of the real property in the district, approved the dissolution of the district. (c) The district has not levied or collected any assessments and holds no significant liquid assets. (d) The district has not substantially complied with a material condition of the resolution of formation adopted by the legislative body. If the City obtained a dissolution, then the City Council or GHAD’s board would need to adopt a resolution setting a noticed public hearing on the proposed dissolution. Note however, that if the GHAD were dissolved, the City Council would be required to assume all remaining responsibilities and obligations of the District, and to fulfill certain C-8 statutory requirements regarding the GHAD’s assets. Since the City is a property owner, the City can offer an alternative plan than what is provided for in the statutes for the distribution of ownership of a GHAD’s assets. The City could propose to transfer the assets to the re-formed GHAD. Initiate Re-formation of a GHAD The re-formation of a GHAD may be initiated by resolution of the City Council. Note that if it appears at the public hearing that owners of more than 50% of the assessed valuation of the proposed GHAD object to the formation, the City Council must close the hearing and direct that proceedings for the formation of a district be abandoned. If not more than 50% of the property owners object to the formation of the GHAD, at the close of the hearing or within 60 days thereafter, the Council may proceed by resolution to order the formation of the proposed GHAD with the Council as the board of directors. (Pub. Res. Code § 26567) A potential drawback to this approach is that ACLAD could successfully be dissolved, but the City might not be able to successfully re-form the District. This would leave the City with all of the liabilities and obligations of a GHAD. Apply to LAFCO for a Reorganization of a GHAD. Alternatively, the Council could apply for a reorganization by Los Angeles County Local Agency Formation Commission (“LAFCO”). LAFCO has the power to review and approve with or without amendment, wholly, partially, or conditionally, or disapprove proposals for changes of organization or reorganization, consistent with LAFCO’s written policies, procedures, and guidelines. LAFCO may initiate proposal by resolution of application for the dissolution of a district, a merger, the establishment of a subsidiary district, or the formation of a new district. However, LAFCO may only initiate a proposal if the change in organization or reorganization is consistent with a recommendation or conclusion of a study prepared under LAFCO’s authority. Applications for a reorganization or dissolution done under LAFCO can be found on their website: http://www.lalafco.org/. If the City attempts to change the organization of the Board through LAFCO, then the special reorganization filing fee is $10,000. If the GHAD decides to dissolve through LAFCO instead of reorganizing, then a district dissolution is $5,000 dollars. The City can initiate proceedings as a landowner or affected agency. This approach is more costly than dissolving under the Public Resources code and requires studies supporting the City’s proposal. Additionally, a dissolution under LAFCO runs the same risk of transferring all the liabilities and obligations to the City if a new GHAD is not formed. However, instead of applying for a dissolution, the City can apply for a reorganization under LAFCO which is not accompanied by that risk. Another benefit of reorganization under LAFCO is the City would not have to ensure all the liabilities and obligations were successfully transferred to the new GHAD since the district would not be dissolved. LAFCO does not always accept the proposal exactly as submitted and may choose to make alterations, but LAFCO cannot continue a project without the applicant C-9 so if the City does not like the direction LAFCO’s proposal is headed, they can withdraw the application. CONCLUSION: The City Council is being asked to consider whether to proceed with the formation of a new third GHAD to be called the Portuguese Bend Landslide Abatement District (“PBLAD”). If desired, direct staff to initiate the formation proceedings. As part of that process, the City Council will consider retaining a certified engineering geologist to prepare an engineer’s report and plan of control to inform the City Council on the formation of the lands to be included therein and costs for remediation measures. ALTERNATIVES: In addition to Staff’s Recommendations, the following alternative actions are available for the City Council’s consideration: 1. Direct staff to return with a report on dissolving ACLAD and/or KCLAD and initiate the proceedings to form a successor GHAD that encompasses the entire Landslide Complex. 2. Direct Staff to form a third GHAD but only include either public and/or private property. 3. Direct Staff not to proceed with forming a new third GHAD. 4. Take other action as deemed appropriate. C-10 RESOLUTION NO. 81-4 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO PALOS VERDES ORDERING THE FORMATION OF THE ABALONE COVE LANDSLIDE ABATEMENT DISTRICT The City Council of the City of Rancho Palos Verdes hereby resolves as follows: Section 1: The City Council of the City of Rancho Palos Verdes passed Resolution No. 80-76 on December 2, 1980, initiating proceedings for the forma- tion of a landslide abatement district. Said resolution established January 6, III1981 as the date for a public hearing on formation of the landslide abatement district. The City Council finds and determines that notice of said hearing was properly sent out to all property owners in compliance with Section 26561, et seq. , of the Public Resources Code. Section 2: The City Council of the City of Rancho Palos Verdes held a public hearing on the formation of the landslide abatement district on January 6, 1981 and received objections to the proposed formation from all owners of real property within the proposed district wishing to make objections. After reviewing all said objections the City Council hereby finds and determines that objections were re- ceived from owners of less than 50% of the assessed valuation of property within the proposed district. Since such objections were received from owners of less than 50% of the assessed valuation, the City Council may proceed with the formation of a landslide abatement district. Section 3: The City Council hereby orders the formation of the Abalone Cove landslide abatement district pursuant with boundaries as shown on Exhibit "A" attached hereto, to the provisions of Division 17 of the Public Resources Code of the State of California. Section 4: The following five owners of real property within the. proposed district are hereby named to the initial Board of Directors of the Abalone Cove landslide abatement district for the terms indicated: 1. James Stewart 2 years 2. John Tretheway 2 years 3. Harriet Medve 4 years 4. Ken Dyda 4 years 5. Seymour Warner 4 years After the initial term, each term will be for a four (4) year period. PASSED, APPROVED AND ADOPTED this 6th day of January, 1981. c.- c=lzf3srutitaiL)t.d MAYOR aRlk__ ___ III ATTEST: DONALD F. GULUZZY, CITY CLERK & EX OFFICIO CLERK OF THE COUNCIL dIL IF.; . . 7" L. . 1:' . 0( / TY CL I HEREBY CERTIFY that the foregoing is a true and correct copy of Resolution No. 81-4 approved and adopted by the City Council of the City of Rancho Palos Verdes at a meeting thereof held on the 6th day of January, 1981. All,t• / Ty C' RK C-11 cligitillikWa 4 Eir.e.-...V.: N4,,A,.. 4-' s--"`" r—,"7""\-. 4.. 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I.Si t9Q1 C-12 C-13 C-14 Sa n t aCr u z Ocean Terrace Dr Sail ViewAve Co unt r y Mea do w Rd Pa c ificaDr Anaca pa SantaCruz Sa nt a Cruz Misty A cres Rd Sa n t a Rosa Cres tRd Crest Rd Arrowroot Ln Pa c k e t R d Sea Cove Dr Ba r ke nt in e Rd C lippe r Rd Palos VerdesDr S Barkentine Canyon Preserve Sea C o v e D r Cre nshaw Blvd Pa rk P l Burma Rd San Cl emen t eDr Sant a Ca talinaDr Vanderlip Dr CrestRd Del Cerro Park Narcis sa Dr Narcissa Dr N arcissa Dr Cin na mo nLn Swee t b a y Rd Gi n g e r Roo t Ln FigtreeRd Vanderlip D r PeppertreeDr Narcissa Dr Peppe r t r e e DrPalo s V e r d e s DrS Abalone Cove Shoreline Park California Coastal National Monument Burma Rd Burma RdBu r maRd Am ber Sky D r Oceanaire Dr Coveview Dr Buggy W hipDr Crest Rd W Burma Rd Bur maRd Tang erineRd Lim e tre e Ln Portuguese Bend Nature Preserve Ad m i r a b l e D r Sea w a l l Rd Bur ma R d Pa lo s V erd e s Dr S Abalone Cove Shoreline Archery Range Por tu gu ese BendRd George f f Rd Qu a il Ridg e Rd N Possu m Ri d ge Rd Crest R d W Crest Rd E PortugueseBend R d Running Brand Rd Packsaddle RdW Pinto Rd Crest Rd E Fo r r e sta l D r Exult antDr Dau n tle ssDr Admira bleDr Sea R a ven Dr Pirate Dr Stalw art Dr Co n qu e r o r Dr Main S a i l D r Palos Verdes Dr S Forrestal Nature Preserve Ladera Linda Park and Community Center PalosVerdesDrS Sources: Esri, TomTom, Garmin, FAO, NOAA, USGS, © OpenStreetMap contributors, and the GIS User Community, Maxar Legend Abalone Cove Landslide Abatement District Klondike Canyon Landslide Abatement District Privately Owned Parcels Landslide Moratorium Geologic Hazard Abatement District C-15