TO: Members of the Governing Board
FROM: Christopher Silke - District Engineer
REPORT BY: Annamaria Martinez - Assistant Engineer
SUBJECT: Fiscal Year 2025-26 Lake Berryessa Resort Improvement District Budget
RECOMMENDATION
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Conduct a Public Hearing to consider testimony on the automatic annual four percent (4%) increase to the T-1 Special Tax for the Lake Berryessa Resort Improvement District Budget, the Fiscal Year 2025-26 Recommended Budget for a total appropriation of $1,622,079, and to accept the District Engineer’s report. (Fiscal Impact: $373,361 Net Use of Fund Balance; Lake Berryessa Resort Improvement District; Discretionary)
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BACKGROUND
Lake Berryessa Resort Improvement District (LBRID) was established by the Resort Improvement Act in the 1960’s. Revenues to support the District are generated as follows:
Ordinance T-1
In January, 1998, the residents of this District voted to replace a water/sewer availability charge of $240 per parcel per year with a special tax for water and sewer of $412 per year. The tax is applied to each parcel within the District having water/sewer infrastructure available to it. The special tax is collected by the County Treasurer along with the property tax on each parcel. Revenues generated by these charges are appropriated through the annual budget of the District and fund the maintenance and upgrade of existing water and sewer system facilities.
On August 30, 2005, the residents of the District approved Measure 'B' that increased the special tax to $570 per year and modified the annual adjustment to be a fixed rate of 4%. The Ordinance allows for a fixed annual adjustment of 4%. The special tax was $1,191 in Fiscal Year 2024-25. Adjusting for the fixed rate increase, the new tax rate for Fiscal Year 2025-26 will be $1,238.
Budgets
The recommended budget for Fiscal Year 2025-26 for the Lake Berryessa Resort Improvement District budgets is submitted as follows:
Division 52200 - LBRID Operating Budget
The requested appropriation for Division 52200 is $1,391,980. The recommended budget provides revenue collected through water and sewer user rates (57%), a special tax (38%), a small portion of ad valorem property taxes (4%), miscellaneous revenue (1%), and use of available fund balance (6%) to offset the estimated appropriations.
The proposed budget includes appropriations necessary to continue operation and maintenance of the water and wastewater systems in compliance with permits issued by the California Division of Drinking Water and the Central Valley Regional Water Quality Control Board.
Estimated appropriations include the following:
1. Sewer Collection, Treatment, and Disposal System expenses;
2. Water Treatment and Distribution System expenses;
3. Districtwide administrative and related expenses including billing, engineering services, etc.;
4. Maintenance projects including general grounds and facility management;
5. Small equipment and minor infrastructure replacement/additions; and
6. Contingency for unexpected costs associated with operating water and wastewater facilities.
District staff presented a five-year financial outlook to the Board on October 8, 2019 and recommended that the District retain a consultant to perform a Cost of Service/Rate Study for the District as such a study had not been performed for the District before. After completing the RFP process, Robert D. Niehaus, Inc. (RDN) was retained and began their study of District finances in February 2020. The study concluded in July 2020. Using data provided by the District and the Napa County Auditor-Controller’s Office, RDN created a five-year financial projection and concluded that the current water and sewer rates - which were last increased in 2013 - in addition to the T-1 Special Tax that is increased by 4% annually, were sufficient to cover the Operating Budget through the study period.
In Fiscal Year 2025-26 staff revisited the rate/budget models that were provided to the District as part of the Study and found that the District’s finances are still supported by user rates and the annual 4% increase applied to the T-1 Special Tax through an updated projection period ending Fiscal Year 2027-2028. New evaluations will continue to be conducted annually to determine when a new Cost of Service/Rate Study may be needed.
Division 52205 - LBRID Capital Improvement Projects
Recommended appropriations is $6,565,466.
The District has seven (7) currently active capital projects that will remain "in progress" and will roll over in Fiscal Year 2025-26 as appropriate:
1. 19007 - Groundwater Mitigation Project - estimated rollover $1,594,099
2. 22009 - Sustainable Water Supply Project - estimated rollover $2,011,958
3. 22013 - Water Treatment Plant Upgrades - estimated rollover $80,227
4. 22014 - Lift Station A Sewer Tank Replacement Project - estimated rollover $143,654
New funding of $1,400,000, for a total FY 2025-26 appropriation of $1,543,654
5. 22015 - Water Plant Generator Replacement - estimated rollover $14,516
6. 22016 - SCADA System Upgrades Project - estimated rollover $6,447
7. 23005 - Tank No 3 Replacement and Distribution System Improvements Project - estimated rollover $1,314,565
Project 19007: Includes installation of a sub-terrain drain pipe around the District’s wastewater treatment and storage ponds to mitigate the inflow of natural groundwater into the ponds, reducing the risk of overflow/discharge of wastewater to the environment. The project also includes replacement of aged transfer piping between the ponds, and raising berm heights on multiple ponds to maintain adequate freeboard as required by the District’s Waste Discharge Requirements issued by the Central Valley Regional Board. Project design is 90% complete and a 100% funding award from the Clean Water State Revolving Fund Program is in the final review phase by the State Division of Financial Assistance. Staff will return to the Board upon receipt of a funding agreement from the State to update the budget for future construction activities.
Project 22009: Project is funded by the California Office of Emergency Services Hazard Mitigation Grant Program. Project elements include a hydrogeologic study of Putah Creek near the existing intake location to determine whether an alternate Putah Creek water supply exists closer to Lake Berryessa that will provide a sustainable source of supply through exceptional drought cycles. Should an alternative water supply be located, the grant will also be used for construction costs associated with developing the identified source.
Projects 22013, 22014, and 22016: The Board of Supervisors approved $1.35 M in American Rescue Plan Act Funds to be used at LBRID for the noted projects above and described below.
Staff is currently soliciting proposals for Project 22013 and anticipates retaining multiple vendors to perform the grounds and building renovations over the next fiscal year.
Project 22014 was advertised for construction bids in Fiscal Year 2023-24; however, Contractor bids exceeded the available budget. After receiving a funding supplement for this project from Department of Water Resources through the State Budget Act of 2022, the project was re-designed with a smaller concrete tank plus sewer force main replacement to improve pumping efficiency and presently advertised for Contractor bids. Construction will occur throughout Fiscal Year 2025-26.
The Supervisory Control and Data Acquisition (SCADA) System Upgrades Project was awarded in May 2023 with the goal of replacing the outdated and obsolete existing SCADA system used on-site to monitor operation of the water and sewer systems with an updated system that will provide enhanced controls and connectivity to the plant for both on-site and remote operations. Integration of the new SCADA system is near deployment; however, additional start-up and testing services will remain in effect throughout Fiscal Year 2025-26.
Project 23005: This project includes the replacement of the remaining original redwood water storage tank with a new bolted steel tank of similar capacity. Construction is underway and expected to be substantially complete prior to the start of Fiscal Year 2025-26; however, due to funding requirements, the administration portion of the project will continue for several months into the new fiscal year.
Division 52210 - LBRID Debt Service
Total appropriations requested are $230,099.
In early FY 2007-08, the District successfully issued $4,755,841 in Limited Obligation Improvement Bonds. The appropriations requested are to pay the debt service and expected regular administration fees currently scheduled for FY 2025-26. Additionally, FY 2025-2026 will be the eighteenth year of assessment collections made from District residents to repay the debt service for the bond.
T-1 SPECIAL TAX APPROPRIATIONS LIMIT
California Constitution Article XIIIB, section 4 (Proposition 4) places a limit on the appropriations of both state and local government agencies. The appropriations limit is tied to the amount of taxes collected. Thus, at the present time an entity may not expend more than the proceeds of taxes in the base year of Proposition 4 (1979) as adjusted for cost of living and population factors. This amount is commonly referred to as the Base Appropriation Limit. A local agency's appropriation limit may be adjusted to a level that exceeds the Base Appropriation Limit by a vote of the electors of the local government agency. Such a vote is valid for only four years.
The District held such an election on March 5, 2024, and requested the Appropriations Limit for the term 2025 - 2028 be set at $510,000. The measure to increase the Appropriations Limit was successful; no further action is required until Fiscal Year 2027-2028 when the Appropriations Limit for the term 2027 - 2030 will likely need to be adjusted once again.
Procedural Requirements:
1. Open Public Hearing
2. Staff Reports
3. Public Comment
4. Close Public Hearing
5. Continue item to Tuesday, June 24, 2025 consent calendar.
FISCAL & STRATEGIC PLAN IMPACT
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Is there a Fiscal Impact? |
Yes |
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Is it currently budgeted? |
No |
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Is it Mandatory or Discretionary? |
Discretionary |
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Is the general fund affected? |
No |
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Future fiscal impact: |
None. The budget is for Fiscal Year 2025-26 only. |
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Consequences if not approved: |
Without the budget adoption, the District will not have the appropriate spending authority needed for fiscal year 2025-26. |
ENVIRONMENTAL IMPACT
ENVIRONMENTAL DETERMINATION: The proposed action is not a project as defined by 14 California Code of Regulations 15378 (State CEQA Guidelines) and therefore CEQA is not applicable.