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Increases to Assessments Assessments in each of the districts will remain unchanged this fiscal year. As stated in this report and previous reports, assessments have not been increased in the LMDs since they were created. Therefore, the current assessments are based upon operation and maintenance costs, and capital replacement costs, that existed at the time the LMDs were created. The districts have operated year-to-year through a combination of reducing maintenance, shutting down irrigation systems, and depleting capital replacement reserves. This is due in large part to the complicated process required to increase assessments created by the passage of Proposition 218 in 1996. However, annual costs have continued to increase, and capital reserves have been depleted to the point now that this operational strategy is no longer sustainable. The revenue in some districts, as detailed above, is no longer enough to cover the operational costs. This strategy also resulted in depleting the reserves needed for eventual capital replacement. City staff, in consultation with SCI Consulting Group, a consultant that specializes in the formation of LMDs, began the analysis and Proposition 218 compliant voting procedure to increase assessments for the two most underfunded LMDs, Windsor and Bonde Ranch, but the voting process was put on hold due to the Bonde Ranch residents' opposition to the increase at the February 3, 2022, neighborhood outreach meeting regarding the subject. Additionally, the voting process for the Windsor LIVID was also put on hold based on the input from residents at the February 2, 2022, outreach meeting. The Windsor residents expressed the desire for a longer and more inclusive outreach process prior to holding the vote. The City plans to conduct outreach in 2022 and 2023 with the vote now expected to occur in 2023. The City will be working to determine maintenance expectations and appropriate maintenance standards for each district and will determine the appropriate reserve amount to cover eventual capital replacements. When complete, required assessment increases will be calculated. The goal for each LIVID with this effort is to fully understand the funding required to implement a sustainable landscape maintenance program in accordance with PUD requirements and the expectations of those residents living in the affected special assessment district, as well as to grow the capital reserve with an annual contribution to fund eventual replacement based upon an anticipated replacement cycle. The assessments will not be increased for this coming year's maintenance. The information contained within this report regarding the need to increase assessments, and the plan to have the residents in each special district consider and vote on an assessment increase, is informational only with respect to the proposed public hearing and action before City Council on June 21, 2022. PUBLIC COMMENT Staff provides general information to residents within the Landscape and Lighting Maintenance Districts as a part of the public notice for confirmation of the Engineer's Report. This annual notice provides the name and phone number of a staff contact person should questions arise. While assessments will not increase because of this year's Engineer's Report, it is expected that the plan outlined in this report to ask Page 8 of 9