06-18-2019 - Item 07 - West Covina Landscape Maintenance District No 1 Setting of Fiscal Year 2019-20 Assessment RateAGENDA ITEM NO. 7
AGENDA STAFF REPORT
City of West Covina | Office of the City Manager
DATE:June 18, 2019
TO:Mayor and City Council
FROM:David Carmany
Interim City Manager
SUBJECT:WEST COVINA LANDSCAPE MAINTENANCE DISTRICT NO. 1 SETTING
OF FISCAL YEAR 2019-20 ASSESSMENT RATE
RECOMMENDATION:
It is recommended that the City Council adopt the following resolution, which provides for the
assessment rate to be maintained at the current rate of 11.88 cents per 100 dollars of assessed
valuation.
RESOLUTION NO. 2019-45 – A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF WEST COVINA, CALIFORNIA, SETTING THE ASSESSMENT RATE
FOR WEST COVINA LANDSCAPE MAINTENANCE DISTRICT NO. 1 FOR THE
FISCAL YEAR BEGINNING JULY 1, 2019
BACKGROUND:
In 1970, a planned community development known as Woodside Village began with “clustered”
housing units on smaller lots and numerous open space areas. This combination of small lots and
open space areas were developed to provide more cost-effective housing and create a park-like
setting. In order to pay for maintenance of the open space areas, Landscape Maintenance District
No. 1 (LMD1) was formed as an ad valorem assessment district pursuant to the Municipal
Improvement Act of 1911. LMD1 is generally located south of Amar Road, east of Azusa Avenue
between Temple Avenue and Shadow Oak Drive and consists of 872 properties (Attachment No. 1).
The assessments within an ad valorem (Latin word for “according to value”) district are based on
property value rather than benefit as in other districts, which were formed pursuant to the
Landscaping and Lighting Act of 1972. In 1972, Proposition 92 capped the assessment rates for ad
valorem districts at their 1972 rate, which for LMD1 was 18.75 cents per 100 dollars of assessed
value.
DISCUSSION:
For Fiscal Year (FY) 2019-20, the assessment rate is proposed to be maintained at the current rate of
11.88 cents per 100 dollars of assessed value. At this rate, the annual assessment for a home and
property valued at $400,000 would be $475.20. The total projected revenue is $460,000 including
$11,000 in interest, which will continue to fund the current maintenance activities without any
negative impact on the reserves for this district. Attachment No. 2 shows the history of assessment
rates in this district for the last 15-years. There have been no increases in assessment rates over the
last eight years.
LEGAL REVIEW:
The City Attorney has reviewed and approved the resolution.
OPTIONS:
The City Council has the following options:
1.Approve staff's recommendation; or
2.Reduce the assessment rate; LMD1’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 item is exempt from the provisions of the California Environmental Quality Act (CEQA)
pursuant to Section 15061(b)(3)of the CEQA Guidelines in that it consists of the maintenance and
operations of landscaping and irrigation within the district, which does not have the potential for
causing a significant effect on the environment.
Prepared by: Miguel Hernandez, Public Works Project Supervisor
Fiscal Impact
FISCAL IMPACT:
For FY 2019-20, the assessment rate is proposed to be maintained at the current rate of 11.88 cents
per 100 dollars of assessed value. The projected income from the recommended rates is $460,000.
In addition, $11,000 is projected to be received in interest. The total projected revenue is
$471,000. The total funds available is $2,439.930, including the $1,968,930 fund balance from the
previous fiscal year.
For FY 2019-20, the proposed operating budget for LMD1 is $350,935, which is a decrease of 1.9%
when compared to the approved/amended budget for FY 2018-19. The proposed operating budget
only funds regular landscape maintenance services.
There are no legal requirements or formal guidelines for the amount of reserves in an assessment
district. However, Staff recommends a fund balance reserve equivalent to a minimum of at least
one-year operating expenditure to cover cash flow. The financial status of the district will be
reviewed annually to determine the appropriate assessment rate and impact on reserves.
Attachments
Attachment No. 1 - Map
Attachment No. 2 - Rate History
Attachment No. 3 - Financial Report
Attachment No. 4 - 10 Year Projection
Attachment No. 5 - Resolution No. 2019-45