Santa Paula: Geological Hazard Abatement District (GHAD)

By Sheryl Hamlin

What is a GHAD?

A GHAD is a mechanism to collect funding in perpetuity for areas with long-term, unsolvable geologic issues where properties have been located. By forming the GHAD, the city or county in which the GHAD is formed is relieved of the obligation to pay in the event of a geologic crisis situation. Read more here.

The Santa Paula GHAD

When the houses at the hospital were built, the hill instability was a well-known fact, according to Council Member Hernandez, who said he watched the hill slide in the 2005 storm. Recently in the February 2017 storms where Santa Paula received 4 inches of rain in two days, the homes in the GHAD “performed well” according to Patrick Lam from the firm Engeo, the company hired by the former Public Works Director Brian Yanez to manage the GHAD.


Hospital area GHAD

According to the GHAD Manager for Santa Paula, the goal is to amass a reserve account of $1.3 million by assessing each of the 75 parcels in the hospital GHAD (see site plan) $1414 annually. At this moment in time, there is $313,000 in the fund, which is an increase from the $80,000 reported in 2015.

Citizen Reaction

There were about twenty homeowners present at the meeting. Two spoke: Benita Pagoria and Anthony Ferreira. Ms. Pagoria stated that the homeowners would like accountability for the expenditures and a reduction in the fee. It was noted that some homeowners pay as much as $10,000 including the GHAD, their taxes and the HOA. Mr. Ferreira stated that the homeowners would like to either manage the GHAD themselves or have representation on the GHAD, both of which appear to be impossible without disbanding and reforming the GHAD. Ms. Pagoria asked a pointed question: why would the city approve homes in an area known for risk? Ms. Pagoria said that after researching, she had details of expenditures including a balance of $314,000 in the fund.

Benita Pagoria, homeowner

Finances

Sandra Easley, Finance Director, told the council that they had “line items’ in the May 1st handout, but did not identify the label. She said the council would be provided with more detail at a future meeting. The GHAD fund number is 503 and does not appear to be in the papers distributed at the budget meeting, although the 503 fund shows a projected balance of $305,317 in the finance report of April 3, 2017.

The ENGEO Manager of the Santa Paula GHAD stated that the goal is $1.3 million in reserves, to which Council Member Hernandez said that one million is not enough for a serious incident. It was also noted that the GHAD does not provide insurance. At a 2015 council meeting, the question of insurance for the GHAD was discussed, to which the former Public Works Director Brian Yanez indicated no sucn insurance exists.

Council Member Hernandez stressed that these homes made the renovation of the Santa Paula Hospital (owned by the county) possible.

Governance

Vice Mayor Gherardi asked about the board of the GHAD to which the local manager said that the council was the board. Upon receipt of this information, the council generally agreed they did not have enough information to understand and/or approve the GHAD fees and asked for details at a subsequent meeting. They also asked for the costs of the ENGEO consultants.

Procedural Matters

From a procedural standpoint, the council should adjourn as the Santa Paula City Council and reconvene as the Santa Paula GHAD. The meeting notice should reflect these two organizations. This is also true for the Santa Paula Water Authority which forms the board of the two enterprises: water and sewer.

Fund 503 is the Santa Paula GHAD. It is proposed that the Williams Homes/Hardison project will also have a GHAD. Will these funds be comingled with the hospital homes? And remember the Peck and Foothill project which was denied also required a GHAD. Would these funds have been segregated?

It was finally established that both the consultants and the contractors were hired and paid by the GHAD, but the city manages the GHAD fund 503 and issues the checks. Is this a strong arm’s length relationship for liability purposes?

Questions the council should ask.

To watch the video, click here.

 

For more information about the author visit Sheryl Hamlin dot com.


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2 Responses to Santa Paula: Geological Hazard Abatement District (GHAD)

  1. Richard McDonald June 10, 2017 at 7:39 am

    Thank you Sheryl Hamlin for keeping us so informed with your well written articles. I have a better window of the Santa Paula community because of your time and efforts.

    Reply

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