Wish I had more info for you since your plan sounds much better than a toxic, chemical lawn. I used to be more into grass/mowing in OH, but as hot as it is here, I just don't want to mow any more than necessary, no idea how to cultivate the grass here on purpose. And even right after mowing, it's not comfortable on bare feet, blah. We cut it as low as possible, as rarely as possible, and rejoice when drought or cold makes it stop for a while. I'm hope someone who appreciates fertilizing/cultivating grass will pop by with something actually helpful to answer your questions. Good luck!

Someone elses idea's if you want to use chemicals. Provided a link below. http://en.allexperts.com/q/Lawns-725/St-Augustine-lawn-2.htm My Experience I have not used any treatments (bug / 'cides) for my grass in probably 2 years now. This summer I watched ALL of my neighbors grass get brown patches and so forth. I did not have a problem for the last 2 years. I water in the mornings twice a week and fertilize (less then stated amounts) 3 times a year. If I find an area that looks like it is getting in trouble I will throw compost on it (Example cow manure compost). I have always noticed the ULTRA-GREEN lawns are the fist to die in the summers. My point is the more chemicals you add to the lawn, the more problems it seems people get. I would either dig it up and replace if it is small, or maybe try some compost and treat the soil. Healthy grass will creep in. This has been my experience. And though there is some weeds (the grass keeps it in check - most weeds in your lawn are from poor soil / severe dry conditions), it is one of the best looking lawns in the neighborhood. Adding fertlizer would be a bad choice at this time, could further the problem, go compost or replace. Here is a link that might be useful: Could help

One application of fungus control will not kill the fungus. You need multiple applications 2 weeks apart. Also important is what time of day you are watering. If you are only watering for 15 minutes (which is not really long enough to get water down in the soil) you should be able to water during the early morning so the grass has a chance to dry out. Does the fence shade the spot? Can you eliminate watering that area?

If you had not already applied a chemical fungicide I could have helped you. Recheck the label on your fungicide to be sure it works in the temperatures you are getting now. Most tell you to not use above 80 or 85 degrees F. If that's on your label then stop using it now. The easy solution to the problem, had you not already used the chemical, is to apply ordinary corn meal at rate of 20 pounds per 1,000 square feet. If you cannot find corn meal in 50 pound bags at your local feed store, you can also use cracked corn or corn flour from the grocery store. You can find it in 25 pound bags in stores that cater to the Hispanic community. Corn meal works by attracting a beneficial predatory fungus which kills the disease fungus. So if you have already used a fungicide, then the beneficial fungus is gone. If the temps are too high for your chemical fungicide, then wait 2 months and try the corn meal. Or you might be able to speed up the recovery by using compost at a rate of 1 cubic yard per 1,000 square feet along with the corn meal. Compost contains the beneficial fungus you need and will reinoculate the soil with it. Here are before and after pictures using corn meal. The grass in the pictures were in deep filtered shade of a large live oak tree. That was about as dense as it ever got in that area with zero hours of direct sunlight. St Augustine does not get thatch except under the most ridiculous maintenance practices. It would require daily watering and weekly fertilizing with a liquid spray. I have seen it, but only on one yard. And as soon as the management on that yard went back to normal the thatch disappeared. That lawn was growing entirely on top of the soil. Aerating won't help. Would you characterize your soil as sand or something else? Okay I just read back. This is Floratam? Floratam is the most disease resistant variety of St Aug. It is also the most sensitive to chemicals. Stop mowing it low and let it grow up for several weeks until it is higher than your mower's highest setting. Then mow every 2-3 weeks. The idea is to grow deeper roots which can get nutrition from deeper down in the soil/sand. You should see the new Floratam growing in at a faster rate than the disease can progress. You MIGHT still need corn meal to get rid of it, but tall Floratam in full sun can outrun a disease. Deeper rooted Floratam needs much less water and even less fertilizer. I have grown it up to 32 inches high in the Texas heat and drought, and it never needed either irrigation or fertilizer over a 2 year period. I'm not suggesting you do that, but the grass loves being tall. Here are some other tips to keep disease out of your lawn. Never put anything on the grass and leave it overnight. No toys, no yard clippings, no trash, no yard tools, nuthin that would cut off the airflow overnight. Disease will form in the morning dew if the dew cannot evaporate easily. Also be sure your soil drains well both downward and outward so it never puddles anywhere. You can improve downward percolation by spraying the entire yard with any clear shampoo at a rate of 3 ounces per 1,000 square feet and follow that up with 1/2 to 1 inch of irrigation or rain. And one last question: what is your watering regimen? How often and for how long do you water when it is not raining?