06-04-2019 - Item 05 - Consideration of Adoption of a Resolution of Intention To Levy Assessments For The Auto Plaza Business Improvement DistrictAGENDA ITEM NO.5
AGENDA STAFF REPORT
City of West Covina I Office of the City Manager
DATE: June 4, 2019
TO: Mayor and City Council
FROM: David Carmany
Interim City Manager
SUBJECT: CONSIDERATION OF ADOPTION OF A RESOLUTION OF INTENTION TO LEVY
ASSESSMENTS FOR THE AUTO PLAZA BUSINESS IMPROVEMENT DISTRICT
RECOMMENDATION:
It is recommended that the City Council adopt the following resolution:
RESOLUTION NO. 2019-33 - A RESOLUTION OF INTENTION OF THE CITY COUNCIL OF
THE CITY OF WEST COVINA TO LEVY ASSESSMENTS WITHIN THE WEST COVINA AUTO
PLAZA BUSINESS IMPROVEMENT DISTRICT AREA FOR FISCAL YEAR 2019-20, AND
PROVIDE NOTICE OF PUBLIC HEARING THEREON TO BE CONDUCTED JUNE 18, 2019
BACKGROUND:
California state law establishes the framework for Business Improvement Districts (BID). The State wanted to
make it possible for groups of businesses to band together and invest in their commercial neighborhoods for the
purposes of revitalization, stability and growth. The City created this BID at the request of the businesses located in
the area. The BID assessment is collected through property taxes and managed by the City for BID expenditures on
BID determined programs. BID funded programs are in addition to normal City services and maintenance. Each
June, the City Council holds noticed public hearings before deciding to renew the BID for another year.
On June 1, 1993, the City Council adopted Ordinance No. 1923, which established the West Covina Auto Plaza
BID. The assessment revenue is collected from businesses located within the Business Improvement Area and is
used to pay for the capital costs, operation and maintenance of an electronic reader board sign located in the West
Covina Auto Plaza, adjacent to the I-10 freeway, as well as payment for the operation and maintenance costs for the
Auto Plaza entry monument sign and landscaping located at the southwest corner of Azusa Avenue and Garvey
Avenue South.
On April 19, 1994, the City Council appointed an Advisory Board consisting of the owners (and/or their
representatives) of the auto dealerships located at the Auto Plaza. The function of the Advisory Board is to review
the Annual Report (Attachment No. 2), which includes the Fiscal Year 2019-20 budget for the proposed assessment
and make a recommendation to the City Council with respect to adopting that report.
DISCUSSION:
The purpose of this report is to set the date and time of the Public Hearing to consider the adoption of a budget and
annual assessment for the West Covina Auto Plaza Business Improvement District area. On May 23, 2019, the
West Covina Auto Plaza Business Improvement District (West Covina Auto Plaza BID) Advisory Board held its
annual meeting and approved the Annual Report. The Annual Report was filed with the City Clerk as required by
the Parking and Business Improvement Area Law of 1989 (Streets and Highways Code Section 36500, et seq.).
Upon setting the date and time of the Public Hearing, the next step in this process is for the City Council to adopt
the Resolution of Intention (Attachment No. 1), which sets a public hearing date, at which time the City Council
will consider the proposed budget for the Business Improvement District. The attached Resolution sets the date for
the required Public Hearing for June 18, 2019. At the conclusion of the Public Hearing, the City Council may
adopt or revise (but not increase) the proposed assessment.
The Annual Report includes a total budget of $118,326.40, with an assessment of $16,524.00 per dealership site.
Gross estimated annual cost for operating expenditures including programming, maintenance, electricity, and
insurance for the readerboard sign, landscaping, landscape maintenance, taxes and preparation costs, is
$67,735.74. The annual loan repayment is $50,590.66, totaling $118,326.40 in annual expenditures. The Advisory
Board voted to assess themselves $16,524.00 (the same as last year) which would generate $115,668.00 for Fiscal
Year (FY) 2019-20. As the annual expenditures increased, the assessments will not cover the total annual
expenditures with a deficit of $2,658.40. The Advisory Board elected to utilize a portion of FY 2018-19 surplus of
$127,679.84 to cover the deficit and to cover the required six (6) month operating reserve ($33,867.87). An
assessment of $16,524.00 for each of the seven (7) dealership sites in the business improvement district will be
placed on the tax rolls by the County of Los Angeles Department of Auditor -Controller.
The anticipated year-end net balance for FY 2018-19 is anticipated to be $125,021.44 including the operating
reserves.
Adoption of a Resolution of Intention is required by the procedure set forth in the Streets and Highways Code,
Section 36534.
LEGAL REVIEW:
The City Attomey's Office has reviewed the attached documents and approved them as to form.
OPTIONS:
The City Council has the following options:
1. Approve staff s recommendation; or
2. Provide alternative direction.
ENVIRONMENTAL REVIEW:
This project is a General Exemption under the California Environmental Quality Act.
Prepared by: Gerardo Rojas, Economic Development Project Coordinator
Fiscal Impact
FISCAL IMPACT:
There is no impact to the City's General Fund by adopting the resolution of intention and setting the Public
Hearing for June 18, 2019. As part of the Annual Report approval by the Auto Plaza BID is the repayment of the
City loan. All costs are covered by assessments collected from the West Covina Auto Plaza Business
Improvement District dealerships. In addition, the Auto Plaza Business Improvement District is charged a
nominal administrative fee for City staff s time to administer the West Covina Plaza BID and monitor the annual
budget.
Attachments
Attachment No. 1 -Resolution No. 2019-33
Annual Report for Fiscal Year 2019-20 - Attachment No. 2
CITY COUNCIL GOALS & OBJECTIVES: Build Financial Health & Economic Stability