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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. 2023-2024 Proposed Assessments The annual assessments can be adjusted each year by the ENR Construction Cost Index forthe San Francisco Bay Area with a maximum adjustment of two percent. The allowable ENR adjustment is defined within each GHAD's original creation document and is therefore compliant with Proposition 218. The Engineer's Reportfor each GHAD concludes thatfunding is needed forspecial services within the GHAD in the coming year according to consultant-prepared monitoring reports. As such, staff recommends increasing the annual parcel assessment by two percent to fu n these services. Th e table below lists (A)the n u mber of parcels with in each GHAD th at are su bject to assessment, (B) the proposed assessment amount for the coming year, (C)the projected total revenue, (D)the anticipated operational expenses, (E)the excess revenue to be deposited to reserve accounts,and (F)the total currentfund reserve. The reserve assumes a significant repair of the h iI[side slopes will be needed once every ten years. These reserves can also be used for the eventual replacement of slope stabilization infrastructure when necessary. Number of Proposed Projected Anticipated Deposit to Total Current GHAD Name Parcels Annual Revenue Operational Fund Fund (A) Assessment (C = A X B Expenses Reserve Reserve B + interest D E = D —C F Laurel Creek 121 $424* $64,239* $56,032* $8,207* $1,058,627** Moller 100 $130* $14,688* $14,688* $0 $121,904** Ranch Lemoine 12 $765* $10,580* $10,580* $0 $98,206** Ranch Oak Tree 42 $348* $15,596* $15,596* $0 $116,067** Farm * Updated in comparison to the May 16, 2023, agenda report due to a calculation error ** Updated in comparison to the May 16, 2023, agenda report based on recent account activity Proposition 218 Compliance As noted above, the proposed assessments fund geologic monitoring and related maintenance services, which provide: (1) all lands included within a district shall be specially benefitted by construction proposed in a plan of control approved by the legislative body and (2)the assessments were previously approved by all property owners at the time the assessmentwas created. Since these criteria have been satisfied, the GHAD assessments can be increased by an amount not exceeding the ENR index without being subject to a Proposition 218 vote of current property owners. Page 3 of 4