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3 City of Pleasanton Landscape Maintenance District No. 1995-1, Moller Ranch Engineer’s Report, Fiscal Year 2025-26 increased if it is set at an amount that is no more than the maximum amount initially authorized when the assessment district was created. (Cal. Const. Art. XIII D, § 5(b); Gov. Code § 53750(h)(2)(B).) However, as a first step to a more sustainable assessment level, staff is only restoring the assessments as approved by Resolution 97-84, which was the first assessment following the implementation of Proposition 218, and was $675.63 per parcel per year. With a total of 101 parcels in the district (including two public parcels), the fiscal year 2025-26 total assessment will be $69,376.14. Assessment revenues were lowered in 1999 and have remained the same since then, however, over the years, operational costs and utility costs have increased while the assessment revenues have remained the same. The proposed increase to the fiscal year 2025-26 total assessment revenue, although a step in the right direction, will not be sufficient to fund the maintenance of all common areas, including water costs, county assessment fees, city administration fees, replacement of plantings, irrigation systems, fencing, lighting, and other district improvements. The Engineer’s Report projects that the City will need to reduce landscape maintenance and water use so that l andscape maintenance and necessary capital improvement costs remain below assessments. An increase in the annual assessment will be necessary to meet the maintenance standards of the district in the future. The city plans to restore the assessments to the approved amount in steps to reduce the burden to property owners. This stepped increase will help to address increased water costs, which require a significant portion of the LMD budget, and which increased thirty percent in calendar year 2024, another twelve percent in 2025, and are projected to continue to increase in future years. The assessment increase will also help to pay for necessary infrastructure and treatment costs so that the level of maintenance and care is restored back to the necessary maintenance standards of the district established by Ordinance 1503. Additionally, the assessment increase will help to fund the improvements required by Assembly Bill 1572, which was passed by the State Assembly on October 13, 2023. The bill relates to water use on lawns within the district and requires that no irrigation be used on nonfunctional turf areas prior to January 1, 2029. The district has two areas that are considered “nonfunctional turf” by the bill, one at each entry, that will need to be removed and replaced. The turf conversion is estimates to cost around $80,000. Staff administration time and the consultant fees for Proposition 218 compliance are included in the assessments. The consultant fees for the Proposition 218 compliant Engineer’s Report will cost approximately $9,000 and will come from the reserve fund, in addition to staff time. Without the proposed increase in assessments, the district may be at risk to fines or litigation. To limit liability for the district, the city intends to raise assessments to be consistent with the approved formation document rates, which were established by Resolution 95-102 as $1,000 annually maximum with an escalator based on the Consumer Price Index (CPI) for the Bay Area. Staff and the consultant plan to