SANTA CRUZ COUNTY BOARD OF SUPERVISORS INDEX SHEET

Creation Date: 2/1/05 Source Code: PUBWK Agenda Date: 2/8/05

I NVENUM: 55768

Resolution(s): 20-2005 Ordinance@):

Contract(s):

Continue Date(s): Index: --Letter of Public Works Department

--Exhibits

Item: 38. ADOPTED RESOLUTION NO. 20-2005 approving Resolution of Pajaro Dunes Geologic Hazard Abatement District Regarding Acquisition of Riverwall Project and directed the Clerk of the Board to take related actions, as recommended by the Director of Public Works

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County of Santa Cruz AM) ~ L E ~ E P A R T M E N T OF PUBLIC WORKS

STREET, ROOM 410, SANTA CRUZ, CA 95060-4070 -2160 FAX (831) 454-2385 TDD (831) 454-2123

THOMAS L. BO DIRECTOR OF PUBL

AGENDA: FEBRUARY 8, 2005

January 31, 2005

701 Ocean Street Santa Cruz, California 95060

SUBJECT: APPROVAL OF RESOLUTION OF PAJARO DUNES GEOLOGIC HAZARD ABATEMENT DISTRICT

Dear Members of the Board:

The Board of Directors of the Pajaro Dunes Geologic Hazard Abatement District has requested that your Board approve their Resolution No. 16-2004, in which it establishes its intention to form an assessment district and assess the properties therein for the purpose of acquiring the existing Riverwall Project from the Pelican Homeowners’ Association.

The Pelican Homeowners’ Association constructed an approximately 640-foot long tie-back steel sheet pile wall (the “Riverwall Project”) at the mouth of the Pajaro River in the first half of 2004, in order to protect their beach front property from erosion damage. They obtained a loan to finance the project and currently have an outstanding balance of approximately $1,835,000.

The Board of Directors of the Pajaro Dunes Geologic Hazard Abatement District now seeks to acquire the Riverwall Project from the Pelican Homeowners’ Association and pay off the outstanding balance of the existing loan. It plans to form an assessment district, levy assessments, and issue tax-exempt bonds, which it will use to pay off the loan. Through these steps, the property owners in the proposed assessment district are expected to benefit because it is anticipated that the tax-exempt bonds will be issued at a low and fixed rate of interest for an extended period, thereby avoiding balloon payments and a renegotiation every five years over the term of the existing bank loan.

The proposed assessment district lies within the unincorporated area of Santa Cruz County. Public Works’ Real Property Division has reviewed this issue and determined that the only property rights the County has in this proposed assessment district are the public streets. Public streets and highways would be exempt from the proposed assessment.

SANTA CRUZ COUNTY BOARD OF SUPERVISORS Page -2-

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Pursuant to California Streets and Highways Code Section 10104, in order to take the steps summarized above, the Pajaro Dunes Geologic Hazard Abatement District must submit its Resolution of Intention and proposed map to your Board and obtain your Board’s approval. County Counsel has reviewed and approved of the requested action.

It is therefore recommended that your Board adopt the attached Resolution Approving Resolution of Pajaro Dunes Geologic Hazard Abatement District Regarding Acquisition of Rivenvall Project and direct the Clerk of the Board to file a copy of this Resolution with the District Clerk of the Pajaro Dunes Geologic Hazard Abatement District.

Yours truly, -?

~ H O M A S L. BWCH Director of Public Works

TLB:LL:bbs

Attachments

RECOMMEPrgED FOR APPROVAL:

County Administrative Officer

Copy to: Pajaro Dunes Geologic Hazard Abatement District Pelican Homeowners’ Association Public Works Department

Pajaro Dunes GHAD.doc

0213 BEFORE THE BOARD OF SUPERVISORS

OF THE COUNTY OF SANTA CRUZ, STATE OF CALIFORNIA

RESOLUTION NO. 28120?5

On the motion of Supervisor Wormhoudt duly seconded by Supervisor Pir-e the following resolution is adopted:

RESOLUTION APPROVING RESOLUTION OF PAJARO DUNES GEOLOGIC HAZARD ABATEMENT DISTRICT REGARDING ACQUISITION OF RIVERWALL PROJECT

WHEREAS, the Board of Directors of the Pajaro Dunes Geologic Hazard Abatement District has submitted to the Board of Supervisors its Resolution 16- 2004, entitled “A Resolution of the Board of Directors of the Pajaro Dunes Geologic Abatement District of Public Interest or Necessity and of Intention to Acquire Riverwall Project (by Paying Off Existing Loan the Proceeds of Which were Utilized to Acquire and/or Construct the Riverwall Project) in Zone 2 of the District by the Establishment of an Assessment District Pursuant to the Municipal Improvement Act of 1913, Issuing Bonds Pursuant to the Improvement Bond Act of 1915 in Connection Therewith and Levying Assessments as Security Therefore (Attached as -

Exhibit I),” and a map indicating the extent of territory included in the proposed district (Attached as Exhibit 2); and

WHEREAS, the territory included in the proposed district lies within the boundaries of the unincorporated areas of the County of Santa Cruz; and

WHEREAS, all County-owned property or rights of way, including public streets and highways, within the proposed assessment district shall be omitted from the proposed assessment; and

WHEREAS, the Board of Directors of the Pajaro Dunes Geologic Hazard Abatement District has requested that the Santa Cruz County Board of Supervisors approve Resolution 16-2004, pursuant to California Streets and Highways Code Section 101 04 (See Exhibits 3 and 4); and

WHEREAS, the Board of Supervisors’ approval of Resolution 16-2004 is not intended to create any liability on the part of the County of Santa Cruz;

NOW, THEREFORE, BE IT RESOLVED AND ORDERED that the Santa Cruz County Board of Supervisors hereby approves of the Pajaro Dunes Geologic Hazard Abatement District‘s Resolution 16-2004 and proposed boundary map.

PASSED AND ADOPTED by the Board of Supervisors of the County of Santa Cruz, State of California, this 8th day of February 2005, by the following vote:

AYES: SUPERVISORS Beautz, Pirie, Wormhoudt, Stone and Campos NOES: SUPERVISORS None

ABSENT: SUPERVISORS None

JONY CAM- Chairperson of said Board

ATTEST: 'dsn; B o ~ o w s ~ Clerk of said Board

APPRgVED AS TO FORM:

DISTRIBUTION: County Counsel Department of Public Works Pajaro Dunes Geologic Hazard Abatement District Pelican Homeowners' Association

- Exhibit 1

RESOLUTION NO. I 6 . 1 ~ 4 0 2 1 5

A RESOLUTION OF THE BOARD OF DIRECTORS OFTHE PAJARO DUNES GEOLOGIC ABATEMENT DISTRICT OF PUBLIC INTEREST OR NECESSITY AND

EXISTING LOAN THE PROCEEDS OF WHICH WERE UTILIZED TO ACQUIRE AND/OR CONSTRUCT THE RIVERWALL PROJECT) IN ZONE 2 OF THE DISTRICT

BY THE ESTABLISHMENT OF AN ASSESSMENT DISTRICT PURSUANT TO TFJE MUNICIPAL IMPROVEMENT ACT OF 1913, ISSUING BONDS PURSUANT TO T m

IMPROVEMENT BOND ACT OF 1915 IN CONNECTION THEREWITH AND LEVYING ASSESSMENTS AS SECURITY THEREFOR

OF INTENTION TO ACQUIRE RIVERWALL PROJECT (BY PAYING-OFF

ZONE 2 ASSESSMENT DISTRICT (ACQUISITION OF RIVERWALL PROJECT)

RESOLVED, by the Board of Directors (the “Board”) of the Pajaro Dunes Geologic

Hazard Abatement District (the “District”), Watsonville, California, that in its opinion the public

interest or necessity require and that it is the intention of said Board to establish an assessment

district pursuant to the Municipal Improvement Act of 191 3, and issue bonds in connection

therewith pursuant to the provisions of the Improvement Bond Act of 1915, for the purpose of

acquiring the Riverwall Project hrn the Pelican Homeowners’ Association (“PHA”) by paying-off

the existing loan agreement executed as of October 17, 2003 (Three Party River WaIl Financing

Agreement, Including Security Agreements) @erein ‘%e Loan Agreement”) by and between the

District, PHA and Coast Commercial Bank (“Bank”), and the Promissory Note executed by PHA,

bearing even date therewith and relating thereto (collectively the “Existing Loan”), the proceeds of

which were utilized, together with other available funds, to construct andor acquire the Riverwdl

Project in Zone 2 of the District, to establish a reserve fund and pay costs of issuance of the bonds,

all of the foregoing being collectively referenced herein as the “Project”, and to levy assessments on

real property located in said Zone 2 as security therefor and for the purpose of paying principal and

interest on said bonds, as follows:

1. That the District has heretofore undertaken and completed the Project and has

executed the Loan Agreement with PHA and Bank, the proceeds of which were utilized as set forth

above.

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2. The Existing Loan was in the original principal amount of $1,849,862.50, and the

current outstanding principal balance is in the amount of approximately $1,835,000.00.

3. Annual debt service on the Existing Loan is paid by the levy of an assessment by the

District on real property located within Zone 2 of the District, all in accordance with the Plan of

Control (the “Plan”) approved by the Board of Supervisors of the County of Smta Cruz upon

formation of the District.

4. The rate of interest paid on the Existing Loan is 6%.

5. That this District hereby declares its intent to form an assessment district within

Zone 2 of the District to be h o r n as the “Pajaro Dunes Geologic Hazard Abatement District -

Zone 2 Assessment District (Pay-off of Existing Loan: Riverwall Project)” (the “Assessment

District”), and to proceed with the issuance of Pajaro Dunes Geologic Hazard Abatement District,

Limited Obligation Improvement Bonds, Zone 2 Assessment District - Pay-off of Existing Loan:

Riverwall Project (the ”Bonds”), the proceeds of which will be used to acquire the Riverwall

Project fjtom PHA by paying-off the Existing Loan, establish a reserve fund, and pay costs and

expenses relating thereto, and thereby result in savings to the property owners within the

Assessment District.

3. Said District M e r declares that all public streets and highways within said

Assessment District in use in the performance of a public function as such shall be omitted fiom the

assessment hereafler to be made, as the same will receive no benefit therefjtom.

4. Said acquisitions and improvement representing the Project, having heretofore

been undertaken and completed, and the costs and expenses associated with the formation of an

assessment district and the levy of assessments, in the opinion of this Board, are of more than

local or ordinary public benefit, and the costs and expenses thereof are made chargeable upon the

proposed Assessment District, the exterior boundaries of which Assessment District are the

composite and consolidated area as more particularly shown on a map substantially labeled

“Proposed Boundary Map of Pajaro Dunes Geologic Hazard Abatement District - Zone 2

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Assessment District (Acquisition of Riverwall Project),” County of Santa Cruz, State of

California,” prepared by the Engineer of Work and on file in the Office of the District Clerk, to

which reference is hereby made for further particulars. Said map indicates by a boundary line the

extent of the territory included in the proposed Assessment District and shall govern for all

details as to the extent of the Assessment District.

5. Notice is hereby given that fully registered serial andor term bonds to represent the

unpaid assessments, bear interest at a rate not to exceed 12% per annum (the maximum rate

permitted by law), the par amount of said bonds not to exceed $2,170,000.00, are intended to be

issued hereunder in the manner provided in the Improvement Bond Act of 19 1 5, being Division 10

of the California Streets and Highways Code (the 1915 Act”), the last installment of such bonds

shall mature not to exceed fifteen (25) years from the second day of September next succeeding

twelve (12) months from their date.

6. The provisions of Part 1 1.1 of the 1915 Act, providing an alternative procedure for

the advance payment of assessments and the calling of bonds shall apply to the assessments and the

Bonds. In accordance with the provisions of Part 16 (commencing with Section 8880) of the 19 15

Act, a special reserve fimd shall be established for the Bonds fiom the proceeds of the sale of the

Bonds, and the amount of said special reserve fund shall be fixed and determined upon the sale of

the Bonds, and shall be included in the assessment.

7. This Board hereby covenants with the holders of said assessment bonds to be

issued herein that it will, within one hundred fifty (1 50) days following the due date of any

delinquent installment of assessments securing the bonds to be issued, commence and thereafter

diligently prosecute to completion a foreclosure action regarding such delinquent installment of

assessment against parcels with delinquent assessments in excess of $1,000 by the October 1

following the close of each Fiscal Year in which assessments were due and will commence

judicial foreclosure proceedings against all parcels with delinquent assessments by the October 1

following the close of each Fiscal Year in which it receives assessments in an amount which is

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less than 95% of the total assessment levied, and diligently pursue to completion such

foreclosures.

8. The acquisitions andor improvement representing the Project have already been

completed in accordance with applicable provisions of Division 17 of the California Public

Resources Code and other applicable law, and it is the purpose of these proceedings for the

District to acquire the Riverwall Project, including an easement covering the land on which it is

situate, by replacing the current outstanding balance of the Existing Law with the issuance of

bonds representing unpaid assessments, the proceeds of which bonds will be utilized to acquire

the Riverwall Project and pay-off the Existing Loan to Coast Commercial Bank, establish a

reserve fund and pay costs of issuance. Except as otherwise provided herein for the issuance of

bonds, all proceedings relating to the establishment of the assessment district for Zone 2 of the

District and the levy of assessments shall be done pursuant to the provisions of the 191 3 Act.

9. Said assessment proceedings and the details of the completed Project are hereby referred

to the Engineer of Work (herein “Engineer”), being a competent person employed by the Board

of Directors for that purpose and said Engineer is hereby directed to make and file, or cause to be

filed, with the District Clerk a report in writing, presenting the following

Maps and descriptions of the lands and easements representing the

completed Project;

Reference to plans and specifications on file with the District Clerk

relating to the completed Project;

The total cost of the improvements and of the cost of lands, rights-of-way,

and easements, if any, representing the completed Project;

The estimated costs and expenses in connection with the issuance and

registration of bonds, all to be charged as an incidental expense of the

proceedings;

A diagram showing, as they existed at the time of adoption of this

Resolution, the exterior boundaries of the Assessment District and the

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lines and dimensions of each parcel of land within the Assessment District. Each

subdivision, including each separate condominium interest as defrned in Section

783 of the California Civil Code, shall be given a separate number upon the

diagram. The diagram may refer to the County Assessor’s maps for a detailed

description of the lines and dimensions of any parcels, in which case those maps

shall govern for all details concerning the lines and dimensions of the parcels;

A proposed assessment of the total amount representing the acquisition

cost of the Riverwall Project, including the necessary easement (current

outstanding principal amount of the Existing Loan) and all costs and

expenses of the proceedings proposed, including costs and expenses

relating to the proposed issuance of bonds, upon each subdivision of real

property in the Assessment District in proportion to the estimated benefits

received by those subdivisions, respectively, from the completed Project,

consistent with the methodology established for Zone 2 in the Plan of

Control referenced herein. The assessment shall refer to the subdivisions

by their respective numbers as assigned pursuant to paragraph (e) above;

and

A proposed maximum and annual assessment upon each of the several

subdivisions of land in the Assessment District to pay costs incurred by the

District and not otherwise reimbursed which result from the administration

and collection of assessments or .from the administration or registration of

any associated bonds and reserve or other related funds.

The true value of the parcels of real property in the proposed Assessment

District, individually and in the aggregate, “true value” being defined in

Part 7.5 of Division 4 of the California Streets and Highways Code, the

provisions of which are hereby made applicable hereto.

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10. When any portion or percentage of the items herein referenced in paragraph 9 0 ,

above, is to be paid from sources other than assessments, the amount of such portion or

percentage shall first be deducted from the estimated total amount of such items, and the

assessment upon property proposed in the Report shall include only the remainder of the

estimated amount of said items.

11. If any excess shall be realized from the assessment it shall be used, in such

amounts as the Board of Directors may determine, in accordance with the provisions of law for

one or more of the following purposes:

(a) Transfer to the general fund of the District, provided that the amount of

any such transfer shall not exceed the lesser of $1,000 or 5% of the total amount

expended fiom the escrow fund to be established to pay-off the Existing Loan;

(b) As a credit upon the assessment and any supplemental assessment in

accordance with the provisions of Section 10427.1 of the California Streets and

Highways Code;

(c) To reimburse the District for any contributions or advances to or for the

Assessment District that were not pledged in this Resolution of Intention;

(d) For the maintenance of the improvements or a specified part thereof; or

(e) To call bonds, thereby reducing outstanding assessments and subsequent

assessment installments. In the event that the Board of Directors determines to

use all or some portion of the surplus to call bonds prior to maturity, the treasurer

shall do each of the following:

(i) Cause the special reserve fund, if any, to be reduced as necessary

pursuant to Section 8887 of the 1915 Act to assure that the Bonds will

not become subject to federal income taxation.

(ii) Cause any assessment previously paid in cash to receive a credit in

cash pursuant to subdivision (b) of Section 10427.1 of the 1913 Act

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for the proportionate share of the surplus as determined pursuant to

subdivision (a) of Section 10427.1 of the 1913 Act.

(iii) Cause the preparation of new auditor’s records to reflect the adjusted

principal amount of the remaining assessment. All subsequent

assessment installments shall be based upon the adjusted principal

amount of the assessment as reflected in the revised auditor’s record.

12. Notice is further given that the District will not obligate itself to advance available

funds from the District general fund or any other fund- of the District to cure any deficiency

which may occur in the bond redemption fund, provided, however, that it shall not preclude itself

fi-om so advancing such funds if, in its sole discretion, it so determines,

13. It is further determined pursuant to California Streets and Highways Code Section

8571 -5 that the Bonds may be refunded in the manner provided by Divisions 10, 1 1, and 1 1.5 of

the California Streets and Highways Code if the said Board of Directors determines that it is

within the public interest or necessity to do so. The interest rate of such Bonds shall not exceed

the maximum rate provided by law, and the last installment of such Bonds shall mature not to

exceed twenty-five (25) years from the second day of September next succeeding twelve (12)

months fi-om their date; and any adjustment of assessments resulting from the refunding will be

done on a pro rata basis.

NOTICE IS HEREBY GIVEN that, in the opinion of this Board of Directors, the areas

contained within said proposed Assessment District are the properties which are benefited by the

improvements representing the Project heretofore completed and the corresponding pay-off of the

Existing Loan, and the issuance of bonds, and that the public interest and convenience require,

and that for purposes of satisfying paragraph 9(f) of this resolution it is the intention of this

Board of Directors that a maximum a n n u a l assessment of not to exceed two percent (2%) of the

annual installment of principal and interest on the Bonds issued will be added to each a n n u a l

installment of the unpaid assessments to pay costs incurred by the District and not otherwise

reimbursed, which result from the registration or administration of the Bonds issued, the

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collection or payment of the amounts due on the Bonds issued, or from the registration or

administration of any associated bonds and reserve or other related funds.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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PASSED AND ADOPTED this 1 1 th day of December 2004, by the following vote:

AYES: BOARDMEMBERS: me ~ s c b ~ ,

NOES: BOARDMEMBERS:

ab; LndChJ Lclj3, b d

ABSENT: BOARDMEMBERS:

ABSTAIN: BOARDMEMBERS: 4-7 /

APPROVED: < J f / / ( / / f , t , . t, ,,/ , &y President of thg Board of Directors

ATTEST:

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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CERTIFICATE OF THE DISTRICT CLERK

I, the undersigned District Clerk, do hereby certifi that the foregoing resolution was duly

and regularly adopted by the Board of Directors of the Pajaro Dunes Geologic Hazard Abatement

District at a regular meeting thereof held on December 1 1, 2004, by the vote indicated above, a

majority of the members being present; and, in the event the foregoing resolution is not the original

on file in my office, I further certify that the foregoing resolution is a true, correct, and complete

copy of the original thereof which is on file in my office.

Dated: December 11,2004. n

District Cl&k -7 Pajaro Dunes Geologic Hazard Abatement District

EXHIBIT A 0225

DESCRIPTION OF WORK (RIVERWALL PROJECT - ALREADY COMPLETED AND TO BE ACQUIRED)

ASSESSMENT DISTRICT (ACQUISITION OF RIVERWALL PROJECT) PAJARO DUNES GEOLOGIC HAZARD ABATEMENT DISTRICT - ZONE 2

Description of Riverwall Project

The Riverwall Project has already been completed and is to be acquired by the Pajaro Dunes Geologic Hazard Abatement District. The purpose of the formation of the assessment district, the levy of assessments and the issuance of bonds, all with respect to Zone 2 of the Pajaro Dunes Geologic Hazard Abatement District, is to .acquire the Riverwall Project and pay- off the current outstanding balance of the existing loan (approximately $1,835,000, together with any interest due thereon calculated to the date of pay-off) with Coast Commercial Bank, the proceeds of which were utilized by the Pelican Homeowners’ Association to construct and/or acquire the improvements representing the Riverwall Project; to establish a reserve fund for bonds to be issued; and pay all costs and expenses associated with the proceedings and the issuance of bonds. The following description of the work, which is general in nature, relates to the Riverwall Project (a project that has already been completed by the Pelican Homeowners’ Association) and consists of:

An approximately 640-foot long tied-back steel sheet-pile wall whose construction was completed in the first half of 2004, the same running parallel to the southern boundary of Zone 2 of the District.

Easement

Further, as a part of the Project, an easement with respect to land immediately underlying the Riverwall is to be acquired by the Pajaro Dunes Geologic Hazard Abatement District from the Pelican Homeowners’ Association. Pending a necessary land swap between the Pelican Homeowners’ Association and the State of California (which is necessary due to the fact that a portion of the Riverwall is situate on land owned by the State of California), it will be recognized that an easement by implication exists over the land on which the Riverwall is situate, both as to the State of California with respect to land it owns and as to the Pelican Homeowners’ Association with respect to land it owns. Upon completion of the land swap, the necessary instrument conveying the easement will be recorded in the office of the Recorder of the County of santa C m .

Reversion

In addition, the Pajaro Dunes Geologic Hazard Abatement District intends to hold title to the Riverwall Project, and the easement underlying it, until the end of the useful life of the Riverwall, which i s a period of 30 years from the date of closing of the bond issue, at the end of which time, which is approximately 5 years longer than the final maturity of the bonds to be issued (bonds are intended to be issued with a final maturity date of approximately 25 years fiom date of issuance), all right, title and interest in and to the Riverwall Project and the easement underlying the same, shall revert back to the Pelican Homeowners’ Association automatically.

Exhibit A 6

A V B A 3 Y 3 1 N C W

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0226

December 23,2004

Honorable Board of Supervisors

County Adm~mstm tive M c e s 701 Ocean Street Santa Cruz, California 95060

county sf Santa cruz . .

Attn: Clerk of the Board

Re: Pajaro Dunes Geologic Hazard Abatement District, Zone 2 Assessment District (Acquisition of Riverwall Project)

Dear Board of Supervisors:

I am writing to you on behalf of the Pajaro Dunes Geologic Hazard Abatement District (“District”). On December 11,2004, the Board of Directors of the District adopted the enclosed resolution requesting the Board of Supervisors to consent to the undertaking of proceedings by the District for the acquisition of the Riverwall Project and for the assessment of the costs thereof upon lands in the District benefited thereby, atl pursuant to Special Assessment and Assessment Bond Acts. This resolution was adopted in connection with proceedings undertaken by the District that seek formation of an assessment district for acquisition of the Rivenvall Project. The lands within the proposed assessment district are within the boundaries of the Pajaro Dunes Geologic Hazard Abatement District.

The purpose of the District in pursuing acquisition of the Riverwall Project (the construction of which was completed in early 2004) is to pay-off the existing Coast Commercial Bank loan, replacing that debt with tax-exempt bonds, the principal and interest on which would be paid through the formation of an assessment district for Zone 2 of the District and the levy of assessments. In order to keep the bonds tax-exempt the District must acquire ownership of the Riverwall Project. By paying-off the existing Coast Commercial Bank loan the property owners in the proposed assessment district will be significantly benefited and will receive much needed debt relief in that the debt represented by the tax-exempt bonds to be issued will be at an anticipated lower rate of interest and, more importantly, at a fixed rate of interest, thereby avoiding balloon payments and a renegotiation every five years of the existing bank loan.

2661 BEACH ROAD WATSONVILLE CALIFORNIA 95076 PHONE (831) 761-7744 FAX (831) 728-0235

~

Board of Supervisors,

Decemba 23,2004 Page -2-

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county of santa cruz 0228

The request for the consent of the Board of Supervisors is made pursuant to Section 101 04 of the California Streets and Highways Code. This Section provides, in essence, that whenever a local agency (other than a city or county) is undertaking proceedings for formation of an assessment district, it must request and receive the approval by the county of the proposed resolution of intention and the proposed boundarymap.

The Pajaro Dunes Geologic Hazard Abatement District is desirous of proceeding with the formation of this assessment district, and, therefore, requests your approval of the matters stated above. For this purpose, a resolution is enclosed and submitted to you for your adoption at your earliest Board meeting at which the matter can be agendized. This resolution approves the form of resolution of intention and proposed boundary map.

Enclosed for your review is a copy of the resolution of intention of the District, and a boundary map of the proposed assessment district.

Your anticipated adoption of the resolution gmnting consent is much appreciated.

A representative of the District will be present at your Board meeting at which this item is agendized. I request the Clerk of the Board to provide me with a notice of said meeting.

Respecmy submitted,

PAJARO DUNES GEOLOGIC HAZARD ABATEMENT DISTRICT

Pajaro Dunes Geologic Hazard Abatement District

2661 BEACH ROAD WATSONVILLE CALIFORNIA 95076 PHONE (831) 761-7744 FAX (831) 728-0235

~- Exhibit 4

RESOLUTION NO. 1s- m 4 0 2 2 9

A RESOLUTION REQUESTING CONSENT OF THE BOARD OF SUPERVISORS OF SANTA CRUZ COUNTY TO UNDERTAKE PROCEEDINGS FOR THE ACQUISITION

OF THE RIVERWALL PROJECT BY PAJARO DUNES GEOLOGIC HAZARD

TO PROVIDE THAT THE COSTS OF S A I D ACQUISITION SHALL BE ASSESSED UPON THE ASSESSMENT DISTRICT BENEFITED, UNDER APPROPRIATE

SPECIAL ASSESSMENT AND ASSESSMENT BOND ACTS

ABATEMENT DISTRICT (BY MEANS OF PAYING-OFF AN EXISTING LOAN) AND

PAJARO DUNES GEOLOGIC HAZARD ABATEMENT DISTRICT ZONE 2 ASSESSMENT DISTRICT (ACQUISITION OF RIVERWALL PROJECT)

RESOLVED, by the Board of Directors (the “Board”) of the Pajaro Dunes Geologic Hazard Abatement District (the “District”), County of Santa Cruz, California, that:

WHEREAS, it is the intention of this Board to undertake appropriate special assessment and assessment bond proceedings for the acquisition of the Riverwall Project, a project that has heretofore been completed, fi-om the Pelican Homeowners’ Association (the “PHA”) as set forth in Exhibit A, hereto attached and incorporated herein by reference; and

WHEREAS, this Board proposes to assess the costs of said acquisition and the expenses incidental thereto upon a district benefited thereby, the exterior boundaries of which are the coterminous exterior boundaries of the composite and consolidated area more particularly shown on a map thereof entitled “Assessment Diagram, Pajaro Dunes Geologic Hazard Abatement District - Zone 2 Assessment District (Acquisition of Riverwall Project)” (herein the “Assessment District”) on file with the District Clerk.

WHEREAS, all of said acquisitions to be made and the lands to be assessed to pay the costs and expenses thereof are within the Assessment District and within the unincorporated territory of the County of Santa Cruz;

WHEREAS, said acquisition to be made is of such a character that it will directly and peculiarly affect property not only within the boundaries of the District but also the unincorporated territory within the County of Santa Cruz, and the purposes sought to be accomplished can best be accomplished by a single comprehensive scheme of work;

WHEREAS, there has been filed with this Board a form of Resolution of Intention to be used in said proceedings; and

WHEREAS, the public interest, convenience and necessity will be served by the making of said acquisition and the levying of said assessments and the issuance of bonds in connection therewith, the proceeds of which will be utilized to pay-off an existing loan between PHA and- Coast Commercial Bank (the proceeds of which had been utilized to construct the Riverwall Project) .

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0230 NOW, THEREFORE, IT IS ORDERED, as follows:

1. That request be, and the same is hereby, made of the Board of Supervisors of the County of Santa Cruz, being the legislative bodies having jurisdiction over the unincorporated territory in which said acquisition is to be had and made and said assessments are to be levied, grant to this Board its consent, expressed by resolution, to the ordering of said acquisition, to the formation of the assessment district, and to the assessment of the costs thereof upon the property benefited thereby, and the assumption of jurisdiction thereover for the purposes aforesaid.

2. That request be, and the same is hereby, made that the Map of 'Proposed Boundaries and the form of Resolution of Intention to be adopted, be approved.

3. That the Clerk of this District is hereby directed to file with the Clerk of the Board of Supervisors of the County of Santa Cruz a certified copy of this resolution, together with a copy of said Map of Proposed Boundaries and Resolution of Intention.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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PASSED AND ADOPTED this 1 lth day of December 2004, by the following vote:

AYES: BOARDMEMBERS: Wdef, 6 c b d LW'ki\a &lba l e d

NOES: BOARDMEMBERS:

ABSENT: BOARDMEMBERS:

ABSTAIN: BOARDMEMBERS:

APPROWD:

ATTEST:

X * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *

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CERTIF'ICATE OF THE DI$TRICT CLERK

I, the undersigned District Clerk, do hereby certify that the foregoing resolution was duly

and regularly adopted by the Board of Directors of the Pajaro Dunes Geologic Hazard Abatement

District at a regular meeting thereof held on December 11, 2004, by the vote indicated above, a

majority of the members being present; and, in the event the foregoing resolution is not the original

on file in my office, I further certify that the foregoing resolution is a true, correct, and complete

copy of the original thereof which is on file in my offi

Dated: December 1 1,2004.

Pajaro Dunes Geologic Hazard Abatement District

EXHIBIT A 0 2 3 3

DESCRIPTION OF WORK V R W A L L PROJECT -ALREADY COMPLETED AND TO BE ACQUIRED)

ASSESSMENT DISTRICT (ACQUISITION OF RJYERWALL PROJECT) PAJARO DUNES GEOLOGIC HAZARD ABATEMENT DISTRICT - ZONE 2

Description of Riverwall Project

The Riverwall Project has already been completed and is to be acquired by the Pajaro Dunes Geologic Hazard Abatement District. The purpose of the formation of the assessment district, the levy of assessments and the issuance of bonds, all with respect to Zone 2 of the Pajaro Dunes Geologic Hazard Abatement District, is to acquire the Riverwall Project and pay- off the current outstanding balance of the existing loan (approximately $1,835,000, together with any interest due thereon calculated to the date of pay-off) with Coast Commercial Bank, the proceeds of which were utilized by the Pelican Homeowners’ Association to construct andor acquire the improvements representing the Riverwall Project; to establish a reserve fund for bonds to be issued; and pay all costs and expenses associated with the proceedings and the issuance of bonds. The following description of the work, which is general in nature, relates to the Riverwall Project (a project that has already been completed by the Pelican Homeowners’ Association) and consists of:

An approximately 640-foot long tied-back steel sheet-pile wall whose construction was completed in the first half of 2004, the same running parallel to the southern boundary of Zone 2 of the District.

Easement

Further, as a part of the Project, an easement with respect to land immediately underlying the Riverwall is to be acquired by the Pajaro Dunes Geologic Hazard Abatement District from the Pelican Homeowners’ Association. Pending a necessary land swap between the Pelican Homeowners’ Association and the State of California (which is necessary due to the fact that a portion of the Riverwall is situate on land owned by the State of California), it will be recognized that an easement by implication exists over the land on which the Riverwall is situate, both as to the State of California with respect to land it owns and as to the Pelican Homeowners’ Association with respect to land it owns. Upon completion of the land swap, the necessary instrument conveying the easement will be recorded in the office of the Recorder of the County of santa cruz.

Reversion

In addition, the Pajaro Dunes Geologic Hazard Abatement District intends to hold title to the Riverwall Project, and the easement underlying it, until the end of the useful life of the Riverwall, which is a period of 30 years from the date of closing of the bond issue, at the end of which time, which is approximately 5 years longer than the final maturity of the bonds to be issued (bonds are intended to be issued with a final maturity date of approximately 25 years fiom date of issuance), all right, title and interest in and to the Riverwall Project and the easement underlying the same, shall revert back to the Pelican Homeowners’ Association automatically.

Exhibit A . .