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assessments are not higher than the previous year's assessments, and that the GHADs were formed by consent of all original property owners (the developers), the current proposed assessments are not subject to a Prop. 218 vote of present property owners. PUBLIC COMMENT On April 21st, staff invited and held an informational meeting with property owners from the four GHADs to answer questions and promote a better understanding of the GHADs. Twelve residents attended this meeting, and the following issues were addressed: a) Residents were concerned whether their assessments were going to increase this year. Staff was able to advise those residents that the index for the GHADs provided for no change in the assessment from the previous year. b) Residents from the Laurel Creek GHAD commented about the amount of reserves in their GHAD and wanted to know if there was a cap of the reserves. Staff explained the Plan of Control for the GHAD anticipates a major event every 10 years, and since the Laurel Creek GHAD is over 10 years old and there has not been an event, the reserves have continued to grow. Staff explained that reserves are like an insurance policy, if a landslide occurred funds from the reserves could be immediately available to repair the landslide if there were not sufficient funds in the reserves to repair the slide some other method of payment for the repairs would be necessary such as borrowing money or selling bonds but in either case the property owners within the GHAD would be responsible for these costs. Our consultant has stated the cost of repairing a small landslide could cost over $300,000 and a large landslide could be over $1,000,000. Based upon these numbers staff and our consultant have determined there are not sufficient reserves in the Laurel Creek GHAD. In several years when the reserves grow larger our consultant can update our current risk assessment based upon current history of the GHAD and recalculate the probability of a major event and cost. c) Property owners also asked why the reserves were not earning a higher rate of return, which could then offset the amount of the assessments. Staff explained that the investment vehicles available to public entities were limited and conservative, so a high rate of return could not be expected in this low interest rate environment. d) A resident of The Preserve sought an explanation of the prior annexation to the Laurel Creek GHAD of the Kolb Ranch and Oak Hill Estate developments due to concerns that those annexed areas appeared to have much steeper slopes, and thought that higher risk was thus assumed by the Laurel Creek GHAD. The GHAD geotechnical consultant, ENGEO, brought geotechnical maps from The Preserve, Kolb Ranch, and Oak Hill Estates, to show that while the annexed areas appear steeper, there are more documented landslide and earth movement risks within the Preserve, such that the respective risks are Page 4 of 6