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a) Residents were concerned about whether their assessments were going to increase. In previous years, staff was able to advise those residents that the index for the GHADs provided for no change in the assessment from the previous year. For the past few years, however, a nominal two percent increase was recommended which is less than or equal to the ENR index. b) Residents from the Laurel Creek GHAD commented about the amount of reserves in their GHAD and wanted to know if there was a cap for the reserves. Staff explained the Plan of Control for the GHAD anticipates a major event every 10 years. Since the Laurel Creek GHAD is over 10 years old and there has not been an event, the reserves have continued to grow. Staff explained that reserves are like an insurance policy: if a landslide occurred, funds from the reserves could be immediately available to repair the landslide. If there were not sufficient funds in the reserves to repair the slide, some other method of payment for the repairs would be necessary such as borrowing money or selling municipal bonds. In either case, the property owners within the GHAD would be responsible for these costs. c) Residents asked why the reserves were not earning a higher rate of return, which could then offset the amount of the assessments. Staff explained that the investment vehicles available to public entities are limited and conservative, so a high rate of return should not be expected. d) Residents of The Preserve sought an explanation of the prior annexation of Kolb Ranch and Oak Hill Estates to the Laurel Creek GHAD due to concerns that those annexed areas appeared to have much steeper slopes and thought that higher risk should thus be assumed by the Laurel Creek GHAD. The City's geotechnical consultant, ENGEO, brought geotechnical maps from The Preserve, Kolb Ranch, and Oak Hill Estates, to show that while the annexed areas appear steeper, there are more documented landslide and earth movement risks within The Preserve, such that the respective risks are equivalent. In addition, because the areas have similar improvements that require the same type of maintenance and monitoring, the assessments for all 121 properties in the Laurel Creek GHAD are the same. e) Residents had general questions about what type of landslide would be repaired with GHAD reserve funds. They were advised that landslides in the open spaces not threatening structures, roads, or utilities would generally be left in their natural condition. Landslides that threatened structures would be repaired. Residents were further advised that if reserve funds were not sufficient, an additional assessment could be proposed. California law also allows for municipal bond funding to be repaid by future assessments. f) In response to questions, staff explained that insurance for landslides was not available to private property owners, or to GHADs, and hence the need for reserve funds to accumulate by the GHAD assessments. Page 4 of 5