Larkspur forms tax district for $22M bulkhead project

Larkspur is creating a special district to raise $22 million to repair a protective bulkhead in the Larkspur Marina neighborhood.

The City Council voted unanimously on Sept. 18 to adopt a resolution forming the district and a resolution of necessity to incur debt.

The formation of the community facilities district, a government entity that exists to secure financing through the sale of bonds for public improvements and services, will allow residents to vote on a special property tax for the project. The bonds would extend 30 to 35 years.

“There are a group of residents in Larkspur who need the city’s help because they can’t raise the money without us,” said Mayor Scot Candell. “We are able to help them with little or no risk to the city.”

Two-thirds of voters in the district would have to approve a special tax to fund the project, which will repair a deteriorating dividing wall between water and homes in the Riviera Circle area. The vote would be conducted by mail-in ballot on March 4.

City Manager Dan Schwarz said the partnership between the city and the property owners’ association was done on behalf of the residents there who appealed to the city for action.

“We would use the CFD vehicle so that the property owners would have the ability to assess themselves to fund needed repairs to the bulkhead, essentially the wall that retains the water, keeps it out of the backyards of the homes and keeps everything stable,” he said.

Mark Pressman, a consultant who advises the city, said at least 50% of the bulkhead is failing. Design and engineering for the new bulkhead is underway, he said.

“The new bulkhead would provide a number of benefits to each of the homeowners and vicinity in general,” he said. “It will be city-run as far as the finances go, but the property owners association and a construction management firm will assume the primary responsibility of the day-to-day work.”

Construction bidding is expected to begin in the next six to nine months, a staff report said.

Pressman said different financing approaches were evaluated, including private funding. The district was determined to be the best way to disperse payments over time and ensure that residents pay collectively into the effort.

The neighborhood consists of 98 residential parcels with lagoon frontage in the back of each parcel. The land portion of the parcels are separated by a bulkhead built more than 50 years ago.

Councilmember Catherine Way sought to confirm that the city would be free from consequences should the bonds go unpaid.

“In my time of council, this is the first we’ve ever had of this type of arrangement,” she said.

Schwarz said the vehicle had been used on a smaller scale for communities to fund undergrounding of electrical wires. He said another unusual taxing vehicle was used in the neighborhood for homes that have docks along the creek and others that do not.

He said the only risk to the city would be to its reputation.

“I would submit that would mean Larkspur was experiencing a catastrophic event across the whole city, so we would have bigger problems,” Schwarz said.

The council would sit as the district board. Their role would be only to facilitate the financial transaction of the bond.

City staff time for the formation process and ongoing annual administration expenses district are anticipated to be offset by reimbursement from the tax or from a special fund paid by the association.

The association has agreed to reimburse the city for staff time for the formation process if the election to form the community facilities district is unsuccessful.