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Page 9 of 11 Landscape Maintenance District 1995-1, Moller Ranch Landscape Maintenance District 1995-1, established in 1995, provides for the maintenance of open space areas, entry features, lighting, firebreaks, trees, shrubbery, groundcover, and irrigation systems within the Moller Ranch subdivision. The current annual assessment of $560.53 per parcel is sufficient to fund the reduced maintenance level of the district, including water and electricity costs, county assessment fees, City administration fees, and general operations. However, this amount is not adequate to grow the capital repair and replacement reserve required to address aging infrastructure and long-term improvement needs. The district’s capital reserve fund balance is approximately $258,000, but this is not sufficient to cover the cost of several near-term improvements. These include: • Extensive irrigation system replacement • Plant and tree replacement • Decorative fence repairs • Lighting and other feature replacements Due to numerous breaks in the irrigation system, a portion of the system has been shut off, impacting the health of established landscaping. In prior years, City staff met with the Moller Ranch HOA to discuss the need for increased assessments. While initial support for a rate increase was limited, the HOA expressed interest in understanding the long-term cost-benefit. Discussions resumed in summer 2024 to evaluate a Proposition 218-compliant property owner vote to support the district's capital and maintenance needs. The Proposition 218 process is expected to cost approximately $9,000, contributing to a total projected reserve fund use of $24,000 in the current fiscal year. City staff and their consultants recommend restoring the assessment to the 1998 post- Proposition 218 level of $675.63 per parcel (or $687.12 per parcel including the 1.7% county fee). This restoration is intended as a first step toward fiscal sustainability. Staff further plans to implement phased increases up to the original formation-approved maximum assessment of $1,000 per parcel, along with an annual inflation escalator based on the Bay Area Consumer Price Index (CPI) to maintain long-term financial health. Maintenance, water, and electricity costs are projected to total $80,200 this fiscal year, driven by major irrigation repairs, turf conversion, and tree pruning. An additional $9,000 will be required for the Proposition 218 process, resulting in a reserve draw of approximately $24,000. Over the next decade, the total cost of necessary improvements is estimated at $1,000,000. These include irrigation and landscape restoration, fence replacement, and other capital needs. Because the original formation documents authorize the $1,000 assessment level and include an inflation adjustment provision, a Proposition 218-compliant property owner vote will not be required to implement the phased increases. Increases to Assessments In 2022, City staff, in coordination with SCI Consulting Group, initiated a Proposition 218- compliant process to increase assessments for the two most underfunded LMDs: Windsor (District 1993-1) and Bonde Ranch (District 1993-2). These efforts were paused following Page 221 of 864