06-04-2019 - Item 11 - West Covina Landscape Maintenance District No. 7 Public HearingAGENDA ITEM NO. 11
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: WEST COVINA LANDSCAPE MAINTENANCE DISTRICT NO. 7 PUBLIC HEARING
RECOMMENDATION:
It is recommended that the City Council adopt the following resolution, which provides for the assessment rates in
Landscape Maintenance District No. 7 to be maintained at their current levels:
RESOLUTION NO.2019-40 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WEST
COVINA, CALIFORNIA, APPROVING THE ENGINEER'S REPORT AND CONFIRMING A
DIAGRAM AND ASSESSMENT FOR FISCAL YEAR 2019-20 FOR LANDSCAPE MAINTENANCE
DISTRICT NO. 7
BACKGROUND:
The Landscaping and Lighting Act of 1972 (Streets & Highways Code 22500 et seq.) sets forth requirements for
annual proceedings for a Landscape Maintenance District (LMD). A LMD is not a separate entity of the City. It is
a financing vehicle utilized when the development of a neighborhood in the community is identified to specially
benefit by certain improvements, such as parks, playgrounds, landscapes, sidewalks, trees, etc. Due to this special
benefit, landowners in the identified area are assessed to pay the costs of the construction and/or ongoing
maintenance of such improvements.
Each LMD is created through formation proceedings (also known as a vote of the affected property owners)
pursuant to the Landscaping and Lighting Act of 1972 (the "1972 Act"). This usually occurs at the time a
residential or commercial project is first developed. The "1972 Act" allows a local agency (such as the City of
West Covina) to levy an annual assessment for the maintenance of the community improvements, based on special
benefit directly or indirectly, to the property owners within the LMD. Annual assessments are paid as part of a
line -item on individual property tax bills.
This report concerns LMD No. 7 (LMD7). LMD7 was established in 1980 at the request of the owner of the
development in lieu of forming a Homeowners' Association. LMD7 is generally located in the easterly end of the
City. The funds collected by the district are used to maintain landscaping, irrigation and hard scape (e.g. sidewalks,
walls, graffiti abatement, clean-up of site, etc.) in public open space areas within its boundaries. Currently, LMD7
contains 372 improved and 8 unimproved single-family residential parcels. When development is 100 percent
complete, LMD7 will contain 380 developed single residential parcels, 25 acres of landscaped and irrigated area,
and 105 acres of natural area.
DISCUSSION:
The Landscaping and Lighting Act of 1972 specifies the procedures for renewal of landscape maintenance
districts. At its regular meeting on May 7th, 2019, the City Council preliminarily approved the Engineer's Report
prepared pursuant to the provisions of the "Landscaping and Lighting Act of 1972" and Proposition 218. The City
Council also adopted Resolution No. 2019-26 declaring its intention to levy and collect the assessment and set June
4, 2019, as the date for the public hearing.
The preliminary approval of the Engineer's Report does not commit the City Council to adopt the proposed
assessments for the District. During or after the public hearing, the City Council may maintain or reduce the
assessment rates and revise expenditures that are funded by the District. The City Council's action only becomes
final when the assessments are confirmed by resolution upon completion of the public hearing. However, it cannot
raise the rate that is now capped by Proposition 2018.
The next step is the approval of the assessment rates. Following the Public Hearing, the City Council may adopt a
resolution confirming the diagram and assessment levy either as proposed or as revised by the City Council. This
action levies the assessment for the Fiscal Year.
At this time, staff is recommending that the assessment rates be maintained at their current levels for Fiscal Year
2019-20. The annual assessment rates for LMD7 will be maintained at $464.06 per developed lot and $139.22 per
undeveloped lot.
LEGAL REVIEW:
The City Attorney has reviewed and approved the staff report, resolutions, and preliminary Engineer's Report.
OPTIONS:
The City Council has the following options:
1. Aprove staffs 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; LMD7's reserves will be depleted at a faster pace requiring the City's General
Fund to subsidize the district; or
3. Provide alternative direction.
ENVIRONMENTAL REVIEW:
This project is a General Exemption under the California Environmental Quality Act.
Prepared by: Miguel Hernandez, Public Works Project Supervisor
Fiscal Impact
FISCAL IMPACT:
The Fiscal Year 2019-20 Engineer's Report for LMD7 recommends that the assessment rates be maintained at
their current levels. The annual assessment rates for LMD7 will be maintained at $464.06 per improved lot and
$139.22 per unimproved lot. The total projected revenue is $173,744 including interest. Including the $221,920
balance from the previous year, the total funds available is $397,664.
The preliminary operating budget for LMD7 for Fiscal Year 2019-20 is $171,285 which is an increase of .33%
compared to the approved/amended budget for Fiscal Year 2018-19. The proposed operating budget funds not
only the regular landscape maintenance but is also able to fund some improvements, such as irrigation system
improvements and enhancement to existing landscaping.
Upon 100% completion of the development within LMD7, there will be 380 improved residential lots. The
district's open space area will increase to 25 acres of landscaped and irrigated area and 105 acres of natural open
space area, for a total of 130 acres. The total cost to maintain these areas is estimated at $200,000.
There are no 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 - Rate History
Attachment No. 2 - LMD7 Engineer's Report
Attachment No. 3 - 10 Year Projection
Attachment No. 4 - Resolution No. 2019-40