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Page 8 of 11 evaluate long-term funding needs and prepare an updated assessment proposal that reflects the district’s capital and maintenance obligations. Total estimated improvements and capital needs over the next decade are approximately $800,000. These include irrigation system replacement, landscape restoration, major fence repairs, and state-mandated fire mitigation improvements. Restoring the assessment to historic levels will be the first step toward achieving fiscal sustainability for District 1993-2. A successful Proposition 218 property owner vote will be necessary to implement a comprehensive funding solution and prevent further degradation of the district's landscape and infrastructure. Landscape Maintenance District 1994-1, Oak Tree Farm Landscape Maintenance District 1994-1, established in 1994, provides for the maintenance of open space areas, entry features, decorative lighting, firebreaks, trees, shrubbery, groundcover, and irrigation systems within the Oak Tree Farm subdivision. The current annual assessment of $465.75 per parcel is sufficient to fund reduced maintenance services, including county assessment fees, City administration fees, and minor improvements. However, it is not sufficient to fund critical capital repairs, irrigation system restoration, major oak tree pruning, or emergency repair services. To address ongoing water leaks, the irrigation system has been shut off, which has negatively impacted plant health. City staff continues to work with the maintenance contractor to maximize efficiency under these constraints. Despite these efforts, an increase in the annual assessment will be necessary to restore previous service levels and maintain the long-term sustainability of the district. The current capital repair and replacement reserve fund balance is $71,000, which is insufficient to address necessary near-term improvements. These include: • Irrigation system replacement • Plant replacement • Decorative fence repair • Lighting replacement • Extensive tree pruning This fiscal year, maintenance, water, and electricity costs are projected at $40,700, with an additional $9,000 required for the Proposition 218 process, resulting in an estimated reserve fund use of $25,500. City staff and consultants recommend restoring the assessment to the 1998 post-Proposition 218 level of $617.41 per parcel (or $627.91 per parcel including the 1.7% county fee) as an initial step toward fiscal stability. Staff plans to implement additional increases to reach the originally approved assessment amount of $1,000 per parcel, with an annual inflation escalator based on the Bay Area Consumer Price Index (CPI). Increases will be phased in over time to reduce the burden on property owners. Total estimated capital needs over the next decade are approximately $400,000. Due to the existing authority granted at formation and the inclusion of the inflation escalator, a Proposition 218-compliant property owner vote will not be required to implement these adjustments. Page 220 of 864