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Page 5 of 11 The current annual assessment of $16.62 per parcel is no longer sufficient to cover necessary maintenance, emergency repairs, or long-term capital improvements. While the overall assessment revenue currently supports basic maintenance and operational costs—including water, electricity, and administrative fees—it is inadequate for more extensive needs such as system upgrades, plant replacements, and emergency repairs. The district faces an immediate annual funding shortfall of approximately $3,200 for minimum maintenance operations. Additionally, the Proposition 218 process to pursue a rate increase will cost approximately $36,000, bringing the total projected reserve draw to approximately $32,400 for the current fiscal year. The capital repair and replacement reserve fund balance is approximately $81,000 but estimated capital needs over the next ten years total approximately $600,000. These needs include full replacement of the irrigation system, plant and tree replacements, pruning, masonry wall repairs, and consultant services. To address this funding gap, staff recommends restoring the assessment to the level of $60.08 per parcel (or $61.10 per parcel including the 1.7% county fee), as authorized by the City Council and adopted by Resolution 88-375. This adjustment can be implemented without a Proposition 218 property owner vote and would provide critical near-term relief. Following the restoration of the assessment to 1988 levels, staff further recommends initiating a Proposition 218-compliant process to seek property owner approval for: • An increase to approximately $150 per parcel annually, and • An annual inflation escalator to ensure the district remains financially sustainable over time. If the Proposition 218 property owner vote does not pass, staff will be forced to implement cost-reduction measures, including the permanent shutoff of portions of the irrigation system. This will lead to accelerated landscape deterioration, increased long-term repair costs, and higher liability exposure for the City. Staff believes the recommended actions represent a responsible and necessary approach to maintaining service levels, protecting community assets, and ensuring the long-term sustainability of District 1984-1. Landscape Maintenance District 1993-1, Windsor Landscaping Maintenance District 1993-1, established in 1993, provides for the maintenance of public landscaping within the Windsor Subdivision. The scope of maintenance includes masonry walls, trees, shrubbery, groundcover, irrigation systems, entry features, and common area drainage ditches. The district also funds all water and electricity associated with irrigation. These improvements are located within Lot A (northeast side of Tapestry Way and Minton Court, and the northwest corner of the subdivision) and Lot C (southwest corner of the subdivision). The current annual assessment of $265.11 per parcel is no longer sufficient to fund the Page 217 of 864