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FINANCIAL STATEMENT Funding of these GHADs will have a minimal financial impact on the City. The City pays for two parcels within Laurel Creek Estates, one parcel within Moller Ranch, and one parcel within the Oak Tree Farm. These parcels contain public facilities, such as water tanks and pump stations, thus requiring appropriations from the Water Fund (420) in the amount of $959 and the Sewer Fund (430) in the amount of $341. The City's cost to administer the four GHADs is funded by the assessments. BACKGROUND GHAD - Purposes and Description Geologic Hazard Abatement Districts (GHADs) are authorized by California Public Resources Code §26500. Like any special assessment district, a GHAD assesses property owners for a benefit they receive that is special to them. GHADs are formed to prevent, mitigate, abate or control a geologic hazard within the district. A "geologic hazard" is an actual or threatened landslide, land subsidence, soil erosion, or other movement of land. Earthquake damage is exempted from coverage by the GHAD. GHADs are formed when a geotechnical investigation at the time of development reveals areas within the development that are unsuitable for housing or other structures due to evidence of prior or potential earth movement. These undevelopable areas within the project are set aside as open space. The developer is then obligated to construct infrastructure designed to lessen the likelihood that earth movement will occur, or to minimize damage to developed areas should earth movement occur. The infrastructure often includes slope stabilization measures such as drainage ditches, pipe networks, and hillside armoring. The GHAD is the funding mechanism to operate, monitor, maintain, repair, and eventually replace the slope stabilization infrastructure or to address soil movement issues. City Council has been designated as the Board of Directors for each GHAD. The developers, as authorized by the Board of Directors, established initial assessments based upon "Plan of Control" documents created for each GHAD. The Plan of Control documents utilized each development's original construction plans as the basis for the monitoring, maintenance, and repair plan. The developers deposited funding into a reserve as "seed money" for eventual capital replacement needs. After the establishment of each GHAD, annual assessments have been collected from property owners at the same time and in the same manner as property taxes. Existing GHADs within the City of Pleasanton There are currently four GHADs within the City: Laurel Creek Estates (The Preserve, Oak Hill Estates and Kolb Ranch Estates), Moller Ranch, Lemoine Ranch Estates, and Oak Tree Farm. The Oak Hill Estates and the Kolb Ranch Estates developments were both annexed into the Laurel Creek Estates GHAD after the formation of the original district, which included only The Preserve neighborhood. All four of the existing GHADs are located on the west side of Foothill Road in hillside areas where potential geologic hazards exist. These four 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. Page 2 of 4