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and special benefits, the City must separate the general benefits from the special benefits and pay for the general benefits out of another revenue source, typically the City's General Fund. Since the passage of Proposition 218, the City has evaluated this distinction between special and general benefits and determined that the landscaping and other improvements being maintained under each district is of specific benefit to the property owners comprising each district. The Lighting and Landscaping Assessment process, once assessments are updated to meet current maintenance requirements, will provide an efficient and effective means for maintenance to be assured. DISCUSSION The City currently has five Lighting and Landscape Maintenance Districts which are being assessed. When the properties within the districts are assessed, the net amount is included on the County property tax bill. At that time, the County adds 1.7% to the base assessment as an administration fee. The assessment amount due on the City parcels located within Ponderosa-Del Prado, Bonde Ranch, Oak Tree Farm, and Moller Ranch Districts are transferred by the City Finance Department directly into the respective special district from the General Fund. This is done because there is no County property tax bill for these public parcels. Since the County is not involved in the transactions for the City parcels, the City does not pay the 1.7% County administration fee on these parcels. For this reason the amount paid by the City per parcel is 1.7% less than the assessment amount described in the tax bill. The Engineer's budget for each district includes a reserve fund to provide for the replacement of improvements such as planting, irrigation, decorative entry walls, signage, light fixtures, etc. Replacement costs have been calculated for the eventual replacement of the improvements of each district. Currently, the reserve funds are insufficient to cover these replacement costs due in part to the lack of adjustment of assessment amounts for 20+ years. Landscape Maintenance District 1984-1, Ponderosa-Del Prado The Ponderosa Homes subdivision (L & L District 1984-1) has been in place for thirty- three (33) years. Maintenance in this District includes the care of masonry walls, trees, shrubbery, groundcover and irrigation systems along Paseo Santa Cruz between Corte Santa Maria and Corte Pacifica. The District has continued to meet city water use reduction requirements through replacement of irrigation components and limiting irrigation to the plant material. The overall assessments for the coming year for District 1984-1 (Ponderosa-Del Prado) will remain at $5,813.32. This amounts to $16.90 per parcel. The $5,813.32 is insufficient to fund the maintenance of all common areas along Paseo Santa Cruz, including water and electrical costs, county administration fees, city administration fees, replacement of plantings, irrigation systems, masonry walls, and other district improvements. The Engineer's Report projects that $16,020.72 will be required from the reserve fund to cover projected maintenance costs. An increase in the annual assessment will be necessary in the future in order to maintain the maintenance standards of the District. Page 4 of 7