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Oak Tree Farm. The Oak Hill Estates and the Kolb Ranch Estates subdivisions were both annexed into the Laurel Creek Estates CHAD after the formation of the original district, which included only The Preserve neighborhood; those annexations occurred on August 1, 2000, and July 20, 2004, respectively. All of the four existing GHADs are located on the west side of Foothill Road and are in areas where potential geologic hazards exist. All four of the GHADs were created prior to the passage of Proposition 218 in November of 1996 and have a built-in escalation factor to compensate for inflation: the Engineering News Record (ENR) Construction Cost Index for the San Francisco Bay Area. DISCUSSION 2019-2020 PROPOSED ASSESSMENTS The annual assessments can be adjusted each year by the ENR Construction Cost Index for the San Francisco Bay Area. The current index allows for an increase of two percent. The allowed ENR adjustment is stated within each GHAD's original creation document and is therefore compliant with Proposition 218. Laurel Creek Estates The Engineer's Report for the Laurel Creek Estates CHAD concludes that funding is needed for the following special services for properties within this GHAD: repair and maintenance of surface and subsurface drainage facilities, slope stabilization, erosion control, routine maintenance, site inspection, preparation of the Engineer's Report and City administrative costs. This year, staff recommends maintaining the current parcel assessment of $392. There are 121 properties within the CHAD (102 in Laurel Creek Estates, including the two City-owned water reservoir sites; seven in Oak Hill Estates and 12 in Kolb Ranch Estates). This year's projected revenue will be $59,432. The anticipated operational expenses this year will total $40,221, leaving $19,211 to be deposited into the fund reserve. As of May 1, 2019, the Laurel Creek Estates CHAD has a fund reserve of $845,941 . The reserve assumes the potential for a significant repair of the hillside slopes once every ten years. These reserves can also be used for the eventual replacement of slope stabilization infrastructure, should it be necessary. Based upon some experience with the cost of landslide repairs in this area west of Foothill Road, staff believes this reserve amount to be appropriate but is still concerned about whether it will actually cover the cost of needed repairs, should a significant landslide occur. Lemoine Ranch Estates The Engineer's Report for the Lemoine Ranch Estates CHAD concludes that funding is needed for the following special services for properties within this GHAD: inspection and repair of the surface drainage improvements such as the concrete v-ditches and storm drain outlets, detection and mitigation of potential geologic hazards, slope stabilization, erosion control, routine maintenance, site inspection, preparation of the Engineer's Report and City administrative costs. This year staff recommends increasing the annual parcel assessment by the allowed two percent, to $707. With 12 properties within the CHAD, this year's projected revenue will be $9,784. The anticipated operational Page 3 of 6