05-07-2019 - Item 09 - Begin Annual Proceedings Fo Landscape Maintenance District No. 6 and Preliminary Approval of The Engineer's ReportAGENDA ITEM NO. 9
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 LANDSCAPE MAINTENANCE
DISTRICT NO. 6 AND PRELIMINARY APPROVAL OF THE ENGINEER'S
REPORT
RECOMMENDATION:
It is recommended that the City Council adopt the following resolutions:
RESOLUTION NO. 2019-23 - 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 LANDSCAPE MAINTENANCE DISTRICT NO. 6
RESOLUTION NO. 2019-24 – A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF WEST COVINA, CALIFORNIA PRELIMINARILY APPROVING THE
ENGINEER’S REPORT FOR LANDSCAPE MAINTENANCE DISTRICT NO. 6,
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 4, 2019 REGARDING
THAT ASSESSMENT
BACKGROUND:
Landscape Maintenance District No. 6 (LMD6) was established in 1980 at the request of the owner
of the development in lieu of forming a Homeowners’ Association. LMD6 is generally located in
the easterly end of the City known as South Hills. The assessments collected are used to maintain
landscaping, irrigation, and hardscape, (e.g. sidewalks, walls, graffiti abatement, clean-up of sites,
etc.) in public open space areas within its boundaries. LMD6 contains 238 single-family dwellings,
approximately 12 acres of landscaped and irrigated areas, and approximately 65 acres of natural
open space areas.
DISCUSSION:
The Landscaping and Lighting Act of 1972 (Streets & Highways Code 22500 et seq.) sets forth
requirements for annual proceedings for LMD6. 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.
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 4, 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 4, 2019 hearing, the Council
will have an opportunity to adopt a resolution levying the assessment for the Fiscal Year.
At this time, Staff recommends that the assessment rates be maintained at their current levels for
Fiscal Year (FY) 2019-2020. The annual assessment rates for LMD6 will be maintained at $650 per
lot.
LEGAL REVIEW:
The City Attorney has reviewed and approved the attached resolutions and preliminary Engineer’s
Report.
OPTIONS:
The City Council has the following options:
1.Approve Staff’s recommendation to maintain the assessment rates at their current levels. The
attached “10-Year Fiscal Projection” shows rates being maintained at their current levels and
the reserve levels over the next 10 years; or
2.Reduce the assessment rates; LMD6’s reserves will be depleted at a faster pace requiring the
City’s General Fund to subsidize the district; or
3.Increase the assessment rates above the maximum rate of $650 annually. LMD6 would need
to comply with the mail ballot provision of Proposition 218 to do this; or
4.Not renew the district. If the City Council does not wish to continue the district and wishes to
fund the district from the General Fund, the resolutions are not necessary.
Prepared by: Miguel Hernandez, Public Works Project Supervisor
Fiscal Impact
FISCAL IMPACT:
The FY 2019-20 Engineer’s Report for LMD6 recommends that the assessment rates be maintained
at their current levels. The assessment rate for LMD6 is based on a special uniform benefit to the
property owners and is recommended to remain at its current level of $650 per lot annually ($54.16
per month). The projected revenue from the recommended rates is $154,700. Including the balance
of $175,758 from the previous year, the total funding available is $330,458.
The preliminary operating budget for LMD6 is $161,947, which is an increase of 1.39% when
compared to the approved/amended budget for FY 2018-19. The proposed operating budget only
funds the regular landscape maintenance services.
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.
Attachments
Attachment No. 1 - LMD6 Rate History
Attachment No. 2 - LMD6 Engineer's Report
Attachment No. 3 - 10-Year Projection
Attachment No. 4 - Resolution No. 2019-23
Attachment No. 5 - Resolution No. 2019-24