05-07-2019 - Item 12 - Begin Annual Proceedings For Citywide Lighting And Maintenance District and Preliminary Approval Of the Engineer's ReportAGENDA ITEM NO. 12
AGENDA STAFF REPORT
City of West Covina | Office of the City Manager
DATE:May 7, 2019
TO:Mayor and City Council
FROM:David Carmany
Interim City Manager
SUBJECT:BEGIN ANNUAL PROCEEDINGS FOR CITYWIDE LIGHTING AND
MAINTENANCE DISTRICT AND PRELIMINARY APPROVAL OF THE
ENGINEER'S REPORT
RECOMMENDATION:
It is recommended that the City Council adopt the following resolutions:
RESOLUTION NO. 2019-28 - A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF WEST COVINA, CALIFORNIA ORDERING THE PREPARATION OF A
REPORT REGARDING THE FISCAL YEAR 2019-20 ASSESSMENT TO BE LEVIED
IN CONNECTION WITH THE CITYWIDE LIGHTING AND MAINTENANCE
DISTRICT
RESOLUTION NO. 2019-29 – A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF WEST COVINA, CALIFORNIA PRELIMINARILY APPROVING THE
ENGINEER’S REPORT FOR THE CITYWIDE LANDSCAPE AND MAINTENANCE
DISTRICT, DECLARING THE INTENTION OF THE CITY COUNCIL TO LEVY AN
ASSESSMENT FOR FISCAL YEAR 2019-20 IN CONNECTION WITH SUCH
DISTRICT AND SETTING A PUBLIC HEARING FOR JUNE 18, 2019 REGARDING
THAT ASSESSMENT
BACKGROUND:
The Citywide Lighting and Maintenance District was established in 1976. As the name implies, this
district encompasses the entire City. Prior to Fiscal Year 1997-1998, the Citywide District funded a
variety of public improvements and services which included: street tree maintenance, median
maintenance, park maintenance, municipal pool maintenance, area lighting maintenance, traffic
signal maintenance, traffic engineering, and street lighting engineering. Since the passage of
Proposition 218 in November 1996 and the subsequent property owner-approval in July 1997 of the
Citywide District assessment, the Citywide District currently funds only those services that have
been designated as a "Special Benefit". This includes the maintenance and servicing of most of the
street lights and street trees within the City.
The Citywide Lighting and Maintenance District funds the operation and maintenance of assessable
(special benefit) street trees and street lighting. These funds are used for the operations and
maintenance of street lights, trimming of street trees, and removal and replacement of diseased street
trees.
DISCUSSION:
The Landscaping and Lighting Act of 1972 (Streets & Highways Code 22500 et seq.) sets forth
requirements for annual proceedings for the Citywide Lighting and Maintenance District. The first
step in the process is to adopt a resolution ordering the preparation of an "Engineer's Report" for the
District. The Engineer's Report, prepared by Willdan Financial Services, includes plans and
specifications for improvements, estimated costs, an assessment diagram, and assessment spread for
the estimated costs.
Since the assessments for the Citywide Lighting and Maintenance District were approved in a
property-owner mail proceeding election in July 1997, there is no need to conduct additional mail
ballot proceedings for the annual assessment so long as the assessment rates and the assessment
methodology do not change in a way that increases the assessment against any parcel above what
was submitted to the property owners in 1997. The 1997 balloting provided for annual rate
adjustments not to exceed the annual Consumer Price Index (CPI) or 2%, whichever is less. This
year’s proposed rate increase is 2%. This will cause the assessment for a typical single family
residence to be $53.34 for 2019-20.
Also, for Council's consideration is the adoption of a “Resolution of Intention” that preliminarily
approves the Engineer’s Report and states the Council’s intention to levy the assessments for 2019-
20. This Resolution also sets a public hearing on the assessments for June 18, 2019. At the public
hearing, the City Council will consider any written and oral comments regarding the level of
assessments and proposed maintenance and capital improvement work within the district. Notice of
the hearing will be published as required by law. Following the June 18, 2019 hearing, the Council
will have an opportunity to adopt a resolution levying the assessment for the Fiscal Year.
The City's General Fund finances a portion of the Citywide District through the City's payment of
assessments on City-owned properties in the amount of $28,332. In addition, the Successor Agency
of the City of West Covina is projected to pay an assessment amount of about $1,751 to the
Citywide District for the parcels owned by the former Redevelopment Agency. At this time, this is
an enforceable obligation cost of the Successor Agency and paid through the Recognized Obligation
Payment Schedule (ROPS) fund.
LEGAL REVIEW:
The City Attorney has reviewed and approved the staff report, resolutions and preliminary
Engineer’s Reports.
OPTIONS:
The City Council has the following options:
1.Increase current assessment rates by 2%. This would generate an additional $33,201 in street
lights and street trees assessment. Staff is recommending this option.
2.Maintain the current assessment rates. Maintaining the rates at their current levels (0%
increase) would deplete the reserves at a faster pace and require the General Fund to subsidize
the district in future years.
3.Reduce the assessment rates; Citywide District reserves will be depleted at a faster pace
requiring the City’s General Fund to subsidize the district.
4.To not renew the district. If the City Council does not wish to continue the districts and
wishes to fund the districts from the General Fund, the resolutions are not necessary.
Prepared by: Miguel Hernandez, Public Works Project Supervisor
Fiscal Impact
FISCAL IMPACT:
For FY 2019-20, the Engineer’s Report for the Citywide Lighting and Maintenance District
proposes to implement the property owner-approved adjustment to adjust the assessment rates
upwards by 2% from their current levels. This will generate an additional $33,201 in revenue. The
total projected revenue from the recommended rates is $1,693,226. Including the $8,000 interest
and $1,183,849 balance from the previous year, the total funds available is $2,885,075.
The proposed operating budget for the district is $1,596,707, which reflects an increase of 1.32%
from the approved/amended budget for FY 2018-19. The FY 2019-20 operating budget for the
district includes an administration and overhead charge of $78,111, personnel costs of $108,625,
maintenance contracts cost of $305,210, property and liability insurance costs of $22,370, utility
costs of $1,000,000, $36,443 in supplies, vehicles, maintenance and gas costs, and $45,948 in
engineering costs. The administration and overhead costs are derived from support services
provided by various departments including: City Manager’s office, City Attorney’s office, City
Clerk’s office, Finance Department, and Human Resources Department. Support services include
but not limited to payroll, personnel recruitment, insurance claims, audits, budgets, and purchasing.
The reserves are projected to be approximately $1,288,368 by the end of FY 2019-20. These
reserves cover the cash flow, which is needed to pay monthly expenses while income is received
twice a year. The amount necessary to avoid a net negative cash flow over the period of one year is
$798,354, which is approximately one-half of the proposed operating budget. The City’s General
Fund can be used to cover any temporary cash flow deficiencies and later reimbursed when district
funds become available.
Since the City of West Covina is not exempt from assessments for this district, the City’s total
assessment is about $30,083.34. The City pays this assessment using General Funds within the non-
departmental operating budget.
There are no specific legal requirements or formal guidelines for the amount of reserves in an
assessment district; however, at least 50% is required to cover cash flow. A reserve between 100%
and 200% is recommended by staff to cover cash flow, future capital projects, emergencies, and as a
benefit, it also provides interest income.
In an effort to reduce energy costs for the district, staff looked into the cost of converting the lamps
for the street lights from High Pressure Sodium Vapor (HPSV) to Light Emitting Diodes (LED).
There are approximately 9,045 street lights within the City. Of these, about 8,235 streets lights are
owned and operated by Southern California Edison. The cost to convert to LED would be about
$300 per light for a total of $2.7 million.
The wattage used for LED light is about half what is needed for the HPSV lights, resulting in a cost
savings of about $135,000 per year. Taking the conversion cost estimate into account, the payback
would approximately be 20 years.
Attachments
Attachment No. 1 - Citywide Lighting Rate History
Attachment No. 2 - Citywide Lighting Engineer's Report
Attachment No. 3 - 10-Year Projection
Attachment No. 4 - Resolution No. 2019-28
Attachment No. 5 - Resolution No. 2019-29