07-02-2019 - Item 08 - Public Hearing Regarding West Covina Auto PlazaAGENDA ITEM NO. 8
AGENDA STAFF REPORT
City of West Covina | Office of the City Manager
DATE:July 2, 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 conduct the public hearing and then 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:
This item was continued from the June 18, 2019 City Council Meeting.
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 reader board 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,
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 reader board 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 agenda report and the attached documents and has approved the
resolution as to form.
OPTIONS:
The City Council has the following options:
Approve staff’s recommendation; or1.
Provide alternative direction.2.
ENVIRONMENTAL REVIEW:
The proposed 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 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
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 No. 2019-35
CITY COUNCIL GOALS & OBJECTIVES: Achieve Fiscal Sustainabiltiy and Financial Stability
Enhance the City Image and Effectiveness
Engage in Proactive Economic Development
ATTACHMENT NO. 1
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
The City Council of the City of West Covina resolves as follows:
SECTION 1: The City Council proposes to levy and collect assessments within the West
Covina Auto Plaza Business Improvement District Area ("Area") for Fiscal Year (FY) 2019-20.
SECTION 2: On June 1, 1993, the City Council adopted Ordinance No. 1923, which
established the West Covina Auto Plaza Business Improvement District ("District") for purposes of
levying an assessment within the designated Area. The proposed use of the assessment revenue
collected is used for financing the construction, operation, and maintenance of an LED readerboard
sign located in the West Covina Auto Plaza adjacent to the San Bernardino Interstate 10 Freeway (I-
10) as well as financing of the operation and maintenance costs for the entry monument to the Auto
Plaza, which includes the sign and landscaping located at the southwest 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.
SECTION 3: On June 16, 2015, the Advisory Board modified the benefits zones within the
District, increasing the number of benefit zones from six (6) dealership sites to seven (7) dealership
sites (Exhibit A).
SECTION 4: The Advisory Board for the District filed with the City Clerk an Annual
Report pursuant to the Parking and Business Improvement Area Law of 1989 (Streets and Highways
Code Section 36500, et seq.) which describes the proposed improvements and activities authoriz ed
by Ordinance No. 1923. The Annual Report is attached as Exhibit B and incorporated herein by
reference.
SECTION 5: On June 4, 2019, the City Council adopted a Resolution of Intention to levy
assessments within the District for FY 2019-20, and set the date for a public hearing to be held on
June 18, 2019.
SECTION 6: The Annual Report recommends an assessment of $16,524.00 for each of the
seven auto dealerships within the District Area for FY 2019-20, which is the same assessment from
the previous FY 2018-19.
SECTION 7: Notice, pursuant to Government Code 36534, was given for public testimony
on the proposed assessment for Fiscal Year 2019-20 at the Public Meeting held on June 4, 2019, and
the resolution of intention was published, notifying the public of the public hearing that was
conducted on June 18, 2019 and continued to July 2, 2019. The meetings were/are scheduled for 7
p.m. at the West Covina City Council Chambers located at 1444 W. Garvey Avenue South, West
Covina, California.
SECTION 8: A majority protest to the assessment was not received by the City Council as
defined in Streets and Highways Code Section 36535.
SECTION 9: The City Council confirms the Annual Report for the District for FY 2019-20
and hereby levies the assessment of $16,524.00 on each of the seven auto dealerships as
recommended in the report.
SECTION 10: This resolution shall take effect immediately upon adoption.
SECTION 11: The City Clerk shall certify to the adoption of this resolution.
APPROVED AND ADOPTED by the City Council of the City of West Covina at a meeting
thereof held on the 2nd day of July 2019.
Mayor
ATTEST
______________________________
City Clerk Nickolas S. Lewis
I, NICKOLAS S. LEWIS, HEREBY CERTIFY that the foregoing Resolution No. 2019-35
was duly adopted by the City Council of the City of West Covina at a meeting thereof held on the
2nd day of July 2019, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
________________________________
City Clerk Nickolas S. Lewis
APPROVED AS TO FORM:
City Attorney Scott Porter
Attachments:
Exhibit A - West Covina Auto Plaza Business Improvement District Boundaries
Exhibit B - West Covina Auto Plaza Business Improvement District FY 2019-20 Annual
Report
2.27 acres
3
7
8474-007-039, 040
8474-004-047, 048
2.23 acres
Envision Toyota of West Covina
Envision Mercedes BenzEnvision Mercedes Benz
Envision Audi
Former Clippinger Chevrolet
7
New Proposed Benefit Zones Exhibit ADriveTime
Ford of West Covina
EXHIBIT B
WEST COVINA AUTO PLAZA
BUSINESS IMPROVEMENT DISTRICT
ANNUAL REPORT
FOR
FISCAL YEAR 2019-2020
1. Any proposed changes in the boundaries of the business improvement district area.
None.
2. The improvements and activities to be provided for Fiscal Year 2019-2020.
Financing the operation and maintenance of an LED readerboard sign located in the West
Covina Auto Plaza adjacent to the San Bernardino Interstate 10 Freeway as well as
financing of the operation and maintenance costs for the entry monument to the Auto
Plaza, which includes the sign and landscaping located at the southwest corner of Azusa
Avenue and Garvey Avenue South. Financing also includes landscape maintenance
along Interstate 10 Freeway immediately facing and parallel to the Auto Plaza
Dealerships.
3. Estimate of the cost of providing the improvements and the activities for Fiscal Year
2019-2020.
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 wo uld 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 2017-18 surplus of $127,679.84 to cover the deficit of $2,658.40
and to cover the required six (6) month operating reserve ($33,867.87). An assessment of
$16,524 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.
4. Method and basis of levying the assessment for Fiscal Year 2019-2020.
The method and basis of levying the assessment will be pursuant to Ordinance No. 1923,
which was adopted by the City Council on June 1, 1993.
5. Amount of any surplus or deficit revenues to be carried over from Fiscal Year 2018-
2019.
The total amount of surplus anticipated to be carried over from Fiscal Year 2018-2019 is
$127,679.84. This includes the six (6) month operating reserve of $33,867.87.
6. Amount of any contributions to be made from sources other than the assessments
levied.
None.
West Covina Auto Plaza
Business Improvement District
2019 - 2020 (July 1 - June 30)
FY 2014-2015 FY 2015-2016 FY 2016-2017 FY 2017-2018
Assessment Among 7
Dealership/Sites
Actual
Assessment Among 7
Dealership/Sites
Actual
Assessment Among 7
Dealership/Sites
Actual
Assessment Among 7
Dealership/Sites
Actual Adopted Budget As of 5/14/19 % Budget Projected
Not using Fund
Balance
Keeping Assessment
the Same
Using portion of Fund
Balance for Operating
Reserves
Fund Balance
Beginning Balance as of July 1 (5,715.96)$ 67,404.67$ 88,695.68$ 121,669.80$ 129,556.55$ 127,679.84$ 127,679.84$ 127,679.84$ 127,679.84$
TOTAL Revenues 115,668.00$ 74,306.18$ 152,194.27$ 115,668.00$ 50,646.56$
TOTAL Expenditures 116,826.40$ 152,194.27$ 118,326.40$ 118,326.40$
OPERATING
Operating Revenues
Revenues from Assessments 119,919.77 67,323.18 97,667.93 66,072.17 65,077.34$ 65,077.34$ 100%65,077.34$ 101,603.61$ 65,077.34$ 50,646.56$
Interest Income / Other 69.56 1,016.24 2,114.78 - -$ 501.58$ 501.58$ -$ -$ -$
Total Operating Revenues 119,989.33 68,339.42 99,782.71 66,072.17 65,077.34$ 65,578.92$ 101%65,578.92$ 101,603.61$ 65,077.34$ 50,646.56$
Operating Expenditures
Professional Services (EMI-Programming*)3,120.00 3,120.00 3,120.00 4,500.00 4,560.00$ 3,750.00$ 82%4,500.00$ 4,560.00$ 4,560.00$ 4,560.00$
Other Contractual Services 2,958.27 4,538.02 32,472.18 -$
Accounting 6,180.00 5,000.00$ 2,184.68$ 44%2,534.00$ 6,000.00$ 6,000.00$ 6,000.00$
Project Improvements 5,000.00 5,000.00$ 3,290.00$ 66%3,290.00$ 5,000.00$ 5,000.00$ 5,000.00$
Insurance 10,300.00 10,500.00$ 10,054.00$ 96%10,054.00$ 10,500.00$ 10,500.00$ 10,500.00$
Other Services 1,000.00 1,000.00$ 2,998.00$ 300%2,998.00$ 1,000.00$ 1,000.00$ 1,000.00$
Electricity 16,450.99 14,138.82 10,800.29 10,800.00 12,000.00$ 10,655.07$ 89%12,530.47$ 12,500.00$ 12,500.00$ 12,500.00$
Telephone 599.44 467.25 2,341.09 720.00 800.00$ 600.00$ 75%720.00$ 800.00$ 800.00$ 800.00$
Equipment M & R (EMI-Maintenance)11,856.00 11,856.00 11,856.00 10,140.00 10,440.00$ 8,450.00$ 81%10,140.00$ 10,440.00$ 10,440.00$ 10,440.00$
Insurance 4,194.00 4,236.00 - - -$ -$ -$ -$ -$
Project Improvements (Landscape)1,500.00 2,502.36 - - -$ -$ -$ -$ -$
Admin and Overhead 6,190.00 6,189.96 - 8,000.00 8,500.00$ -$ 0%8,500.00$ 8,500.00$ 8,500.00$ 8,500.00$
Interest Expense (Sign Repayment)10,233.85 9,433.00 8,435.74$ -$ 0%8,435.74$ 8,435.74$ 8,435.74$ 8,435.74$
Total Operating Expenditures 46,868.70 47,048.41 70,823.41 66,073.00 66,235.74$ 41,981.75$ 63,702.21$ 67,735.74$ 67,735.74$ 67,735.74$
Operating Reserve 33,117.87 33,117.87$ 33,867.87$ 33,867.87$ 33,867.87$
Operating Surplus / (Deficit)73,120.63 21,291.01 28,959.30 (0.83) (1,158.40)$ 23,597.17$ 1,876.71 -$ (2,658.40)$ (17,089.18)$
NON-OPERATING (Sign Loan)
Non-Operating Revenues
Sign Loan - 532,582.00 - - - - -$ -$ -$
Revenues from Assessments (Sign Repayment)- - 47,795.07 49,593.83 50,590.66$ 50,590.66$ 50,590.66$ 50,590.66$ 50,590.66$
Total Non-Operating Revenues - 532,582.00 47,795.07 49,593.83 50,590.66$ 50,590.66$ 50,590.66$ 50,590.66$ 50,590.66$
Non-Operating Expenditures
Sign Purchase - - 532,582.00 - -$ -$ -$ -$ -$
Sign Loan Repayment 49,593.83 50,590.66$ 50,590.66$ 50,590.66$ 50,590.66$ 50,590.66$
Total Non-Operating Expenditures - - 532,582.00 49,593.83 50,590.66$ 50,590.66$ 50,590.66$ 50,590.66$ 50,590.66$
Non-Operating Surplus / (Deficit)- 532,582.00 (484,786.93) - - - - - -
RESERVES
Fund Balance 67,404.67 88,695.68 117,654.98 117,654.15 120,511.40$ 128,398.15$ 127,679.84$ 127,679.84 125,021.44 60,000.00
Fund Balance Minus Operating Reserve 127,679.84 91,153.57 26,132.13
Loan Balance (532,582.00) (484,786.93) (434,371.54) (383,780.88)$ (383,780.88) (333,190.22) (333,190.22) (333,190.22)
ASSESSMENT PER DEALER (7)***9,625.00$ 9,625.00$ 20,943.59$ 20,943.59$ 16,524.00$ 21,742.04$ 16,524.00$ 7,235.22$
*EMI Agreements expire March 2022
** Association meets minimum six month operating reserve fund requirement for FY 2017-18, FY 2018-19 and FY 2019-20, per LED Sign Replacement Loan Agreement
***Assessment changes to 7 dealerships in FY 15-16
2018-2019 (83% of Year Complete)FY 2019-2020