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06-18-2019 - Item 15 - Public Hearing Regarding West Covina Auto Plaza Business Improvement District Fiscal Year 2019-20 Annual Report And AssessmentAGENDA ITEM NO. 15 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:PUBLIC HEARING REGARDING WEST COVINA AUTO PLAZA BUSINESS IMPROVEMENT DISTRICT FISCAL YEAR 2019-2020 ANNUAL REPORT AND ASSESSMENT RECOMMENDATION: It is recommended that the City Council adopt the following resolution: RESOLUTION NO. 2019-35 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WEST COVINA, CALIFORNIA CONFIRMING THE ANNUAL REPORT FOR THE WEST COVINA AUTO PLAZA BUSINESS IMPROVEMENT DISTRICT AREA FOR FISCAL YEAR 2019-2020 AND LEVY OF ASSESSMENT 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 Business Improvement District (BID). On September 15, 1993, the West Covina Auto Plaza Association, Inc. (Association) was incorporated, and is the legal non-profit entity for the Auto Plaza BID. The property tax assessment is collected from businesses located within the BID and is used to pay for the capital costs, operation and maintenance of an LED readerboard sign located in the West Covina Auto Plaza adjacent to the I-10 freeway, and the operation and maintenance costs for the Auto Plaza entry monument including the sign and landscaping located at the southeast corner of Azusa Avenue and Garvey Avenue South. Financing also includes landscaping maintenance along the I-10 Freeway immediately facing and parallel to the Auto Plaza dealerships. 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 (FY) 2019-20 budget for the proposed assessment and make a recommendation to the City Council with respect to adopting that report. On May 23, 2019, the Auto Plaza BID Advisory Board held its annual meeting. At that meeting, the Advisory Board approved the FY 2019-20 Annual Report, which includes the FY 2019-20 budget. The FY 2019-20 Annual Report has been 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.). DISCUSSION: Submitted for City Council consideration is a resolution (Attachment No. 1) confirming the FY 2019-20 Annual Report filed by the Auto Plaza BID Advisory Board. Adoption of the resolution places direct assessments on the auto dealers of the West Covina Auto Plaza BID. Included in the resolution is the BID Boundaries (Exhibit A) and the West Covina Auto Plaza BID FY 2019-20 Annual Report with the budget (Exhibit B). 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 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 $127,679.84 including the operating reserves. At the conclusion of the hearing, the City Council may adopt, revise, change, reduce, or modify the proposed assessment or type of improvements to be funded, but the City Council may only reduce the boundaries or assessments and not increase the boundaries or assessments. If the Council determines to levy the assessment, it may adopt the attached resolution. LEGAL REVIEW: The City Attorney'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: The proposed code amendment 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 is consists of review of the annual report which does not have the potential for causing a significant effect on the environment. Prepared by: Gerardo Rojas, Econ Development Project Coordinator Additional Approval: Robbeyn Bird, Interim Finance Director Fiscal Impact FISCAL IMPACT: There is no impact to City funds by adopting the attached resolution that confirms the Annual Report. 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 BID 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 to Levy Assessments CITY COUNCIL GOALS & OBJECTIVES: