FAQ: Permanent Road Division

Raul M. Rojas, Director, Public Works

If you live on a non-County maintained road and want to fund improvements to the road, you may want to form a Permanent Road Division (PRD). A PRD is a geographic area formed pursuant to California Streets and Highways Code, Sections 1160-1197 which provides property owners a mechanism to pay for private road improvements. Road improvements are paid by the property owners through special benefit assessments/taxes that are placed on the tax rolls, which are voted on by the benefiting properties in accordance with Proposition 218. The boundaries of the PRD generally include properties fronting on or using the non-County maintained road(s). Road maintenance services are provided by contractors hired with PRD funds. Detailed information about Marin County’s PRD program can be found in the following FAQ.

Frequently Asked Questions:

 

FAQ #1 - What is a Permanent Road Division?

A Permanent Road Division (PRD) is a division formed in accordance with the California Streets and Highway Code sections 1160-1197. The PRD is usually created at the request of property owners in unincorporated areas to help finance road improvements and/or maintenance where the roads are privately maintained.

FAQ #2 - What Permanent Road Divisions are currently operating in unincorporated Marin County?

  1. Bolinas Highlands
  2. Inverness Sub. #2
  3. Madrone Park Circle
  4. Monte Cristo
  5. Mountain View Ave.
  6. Paradise Ranch Estates
  7. Ridgewood Ave.

Map of Permanent Roads Divisions in Marin County as of February 2019

FAQ #3 - Do we need a PRD to maintain our private roads?

No. A PRD is just one option available. Property owners could choose to form other types of organizations or funding mechanisms, including a homeowners’ association, a community facilities district, or choose to fund the repairs without a formal organization. If unsure, the property owners should consult an attorney to determine the best mechanism for their area.

FAQ #4 - Who funds PRD costs associated with PRD formation, improvements, and maintenance?

All costs, including the cost of an election, must be covered by the property owners within the PRD. These costs are typically paid for by the passage of a special tax that is reflected on the tax bills of all property owners in the defined district pursuant to California Streets and Highway Code section 1179.5. 

Once the PRD is formed, PRD funds are handled as public monies. This means that the PRD must follow purchasing and contracting requirements, including following the competitive bid process via the Public Contract Code and prevailing wage requirements.

FAQ #5 - Can a PRD receive a loan to cover the improvement cost?

An interest-bearing loan may be available to finance a portion of road work rather than waiting until the PRD has accumulated sufficient funds through the tax measure. The PRD may contact the Department of Finance at treasurersoffice@marincounty.org or (415) 473-6143 for more information, including interest rate requirements associated with loan repayment.

FAQ #6 - What are the disadvantages of a PRD?

The main disadvantage of utilizing a PRD is increased cost. A portion of any assessment or special tax must be used to pay County staff for administrative time related to the PRD. In addition, because the funds raised by a PRD are public monies, the PRD is required to pay prevailing wage and follow bid procedures as outlined in the Public Contract Code related to its project, which can increase costs and the timing of a project. Finally, the PRD can only finance capital improvements over a maximum of a ten (10) year period. This will often result in a higher annual tax assessment than would be expected under other funding means with a longer repayment period.

FAQ #7 - How long until does this process take?

Typically, a PRD can be formed, and a special tax placed on the ballot within 12 to 18 months. Initial road work can usually occur 6 to 12 months after the special tax passes and a loan taken out.

FAQ #8 - How is a PRD formed?

There are several steps to forming a PRD. It involves gathering community support, preparation of a formal boundary map, a petition, and Board of Supervisor's approval. If the PRD intends to also request a ballot measure for a special tax for immediate improvements, an engineer’s report detailing scope and cost for the improvements is required. The County requests that the petition for formation and the request for a ballot measure for a special tax be combined (this streamlines the process and avoids multiple hearings before the County Board of Supervisors).

Formation Process:

Step 1 - The County recommends the local property owners assess the level of support for the creation of a PRD. If there is adequate interest, affected property owners shall establish an advisory committee (Committee) and appoint one person to act as a liaison with the County.

Step 2 - The Committee will be responsible for preparation of the petition, which must include, at a minimum, a preliminary boundary map and a description of the location of any road to be improved or maintained. The formation documents should indicate whether the PRD is formed for a specific project, and/or for ongoing maintenance. To avoid confusion, the County also requests that the Committee submit a list of all properties within the PRD, which shall include the APNs, property address, and whether the property is improved or unimproved. The specific requirements for the petition are set forth in California Streets & Highway Code section 1162. A petition template is available here. A sample of a previous petition is available here. The Committee should submit the draft petition and any other supporting documents to the Department of Public Works for review prior to obtaining signatures.

Step 3 - The Committee must obtain an Affidavit of Valuations pursuant to California Streets & Highway Code section 1163. This may be obtained from the Assessor’s office at Assistant Assessor – Valuation at 415-473-7213. Exhibit C needs to be completed by the Assessor’s Office also.

Step 4 - After the County has reviewed the petition and related documents and made any required revisions, the Committee should circulate the petition for signatures to the property owners. If the majority of the landowners, or owners of more than 50 percent of the assessed valuation of land within the proposed PRD, sign the petition then the Committee may submit the petition to the Department of Public Works. If the petition will also seek a ballot measure for a special tax, there are additional requirements set forth below.

Step 5 - The Department of Public Works will schedule a notice of public hearing wherein it will request a formal hearing and publication and mailing of the notice as required by State law. If any property owner believes that their property does not benefit from the work proposed, the property owner should file a verified petition as set forth in Streets & Highway Code section 1168.5 prior to the date of the formal hearing.

Step 6 - At the hearing, the County Board of Supervisors will determine whether the PRD should be formed. If the Board votes in favor of formation, the PRD is considered formed.

FAQ #9 - How does a PRD petition for specific construction and improvements and for the funds to complete this work?

If the PRD is already formed or you plan to form the PRD as set forth above at the same time, these are the steps for the Committee to also petition for the work to be performed and for a special tax to pay for the improvements. As stated above, if the PRD is not yet formed, the County requests that a petition to form and a petition for improvements and a special tax be combined to avoid multiple hearings.

    Funding Process:

Step 1 - Make sure that your PRD is still in existence; if not, follow the steps above to draft a petition to form the PRD. If the PRD was formed for a specific project and the project has been repaid, it is possible that the PRD no longer exists pursuant to California Streets and Highway Code section 1194. If the Committee is unsure, please confirm with Department of Public Works. If the PRD is determined to be in existence, then it may seek additional funding if all loan obligations have been repaid.

Step 2 - The PRD shall obtain an engineer’s report that sets forth proposed work and estimated costs. The cost of the engineer’s report can be paid from funds in the existing PRD account. If the PRD lacks funds, the property owners shall bear these costs. However, if the special tax passes, these costs can be refunded if codes and laws stipulating the expenditure of public monies have been followed. (The engineer that prepares the engineer’s report shall be a licensed civil engineer in California that does not live within the boundaries of the PRD.)

Step 3 - The Committee must prepare a petition as set forth in California Streets & Highway Code section 1170, which must include a description of the project and its probable costs as provided in the engineer’s report. In addition, the PRD shall request that a special tax be levied. If the PRD intends to obtain a loan from Department of Finance for road improvements or to request that a special tax be levied, the petition must be signed by at least 70% of the landowners in the PRD. A petition template is available here. A sample of a previous petition is available here.

The 70% requirement for signatures is a County Policy to assure a high likelihood of eventual ballot approval prior to spending additional County resources on the process. (Note: to create this special tax, the actual vote must pass by a 2/3 majority of all votes cast of registered voters that live in the PRD boundary area, not homeowners.)

The Committee should submit the draft petition and any other supporting documents to the Department of Public Works for review prior to obtaining signatures.

Step 4 - The Department of Public Works will schedule a notice of public hearing wherein it will request a formal hearing and publication and mailing of the notice as required by State law. If the Board of Supervisors approves the project, it will order an election. If such an election is ordered, the Committee will work with the County Elections Department to prepare the documents required for the election. The Committee may provide arguments in favor of the special tax measure to be included in voter’s pamphlet. The Committee may contact Dan Miller at 415-473-6437 or danmiller@marincounty.org. Again, those voting on the tax measure are registered voters within the PRD boundaries, not the landowners. In addition, there are only certain mail ballot election dates, so the PRD should coordinate with the County Elections Department to determine when the dates.

Step 5 - If the tax measure passes by the required 2/3 votes cast of registered voters in the PRD, the Committee will work to complete the project in accordance with Streets & Highway Code sections 1171-1172. The Committee will need to coordinate the project with the Department of Public Works.

 

FAQ #10 - Who should I contact for general questions?

For general questions on PRDs, please contact Jason Wong at jwong@marincounty.org. Be sure to provide your contact information including email and phone.