06-16-2020 - AGENDA ITEM 05 WEST COVINA LANDSCAPE MAINTENANCE DISTRICT NO. 1 SETTING OF FISCAL YEAR 2020-21 ASSESSMENT RATEAGENDA ITEM NO.5
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AGENDA STAFF REPORT
City of West Covina I Office of the City Manager
DATE: June 16, 2020
TO: Mayor and City Council
FROM: David Carmany
City Manager
SUBJECT: WEST COVINA LANDSCAPE MAINTENANCE DISTRICT NO. 1 SETTING OF FISCAL
YEAR 2020-21 ASSESSMENT RATE
RECOMMENDATION:
It is recommended that the City Council adopt the following resolution:
RESOLUTION NO.2020-59 — 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, 2020
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 ("LMDI" or "District")) was formed as an ad valorem
assessment district pursuant to the Municipal Improvement Act of 1911. LMDI 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 assessments rates for ad valorem districts at their 1972
rate, which for LMDI was 18.75 cents per 100 dollars of assessed value.
DISCUSSION:
For Fiscal Year (`FY") 2020-21, 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 $464,178 including $4,178 in interest, which will continue to fund
the current maintenance. 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 since 2009.
LMD 1 contains landscaped hillside slopes vegetated with plants, shrubbery, and trees. The current scope of work
for the operations, maintenance, and care of these areas include 3 to 5-feet of fire clearing at the tops and toes of
slopes and irrigation maintenance and repairs. As costs have risen, maintenance has suffered. It is estimated that the
budget required for increased landscaping maintenance and operations scope is approximately double the existing
LMDI budget.
A full study is needed to ascertain what a proper level of maintenance would cost and explore how to properly set
the assessment rate accordingly. Such a study will take several months and, if rates are to be increased, would
require a vote by the affected property owners.
Pending completion of a further analysis, this report recommends that assessment rates be maintained at their
current levels for Fiscal Year 2020-21.
OPTIONS:
The City Council has the following options:
1. Approve staffs recommendation; or
2. Reduce the assessment rate; LMD 1'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: Michael Ackerman, City Engineer
Fiscal Impact
FISCAL IMPACT:
For FY 2020-21, 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, $4,178 is
projected to be received in interest. The total projected revenue is $464,178. The total funds available is
$2,553,173, including the $2,088,995 fund balance from the previous fiscal year.
For FY 2020-21, the proposed operating budget for LMDl is $357,954, which is an increase of 2.0% when
compared to the approved/amended budget for FY 2019-20. The proposed operating budget only funds regular
landscape maintenance service.
Attachments
Attachment No. 1 -Map
Attachment No. 2 - 15 Year Rate History
Attachment No. 3 - Financial Report
Attachment No. 4 - 10 Year Fiscal Projection
Attachment No. 5 - Resolution No. 2020-59
CITY COUNCIL GOALS & OBJECTIVES: Enhance City Facilities and Infrastructure
Enhance the City Image and Effectiveness
ATTACHMENT NO. 1
Landscape Maintenance
District 1
i
Legend
City of West Covina Boundary
r_ 3
1 Maintenance District 1
® Park
- Open Space 575 287.5 0 575 Feet
Parcels
ATTACHMENT NO. 2
West Covina
Landscape Maintenance District No. 1
15 Year Rate History
Proposed
11.88
$475.20
2020-2021
2019-2020
11.88
$475.20
2018-2019
11.88
$475.20
2017-2018
11.88
$475.20
2016-2017
11.88
$475.20
2015-2016
11.88
$475.20
2014-2015
11.88
$475.20
2013-2014
11.88
$475.20
2012-2013
11.88
$475.20
2011-2012
11.88
$475.20
2010-2011
11.88
$475.20
2009-2010
11.88
$475.20
2008-2009
11.65
$466.00
2007-2008
11.42
$456.80
2006-2007
11.04
$441.60
ATTACHMENT NO. 3
Existing Maintenance Optimal Maintenance
Previous Fiscal Year Fund Balance
$2,088,995
$2,088,995
Revenues
Assessment Income (Total Balance to Levy)
$460,000
$460,000
Interest
4,178
4,178
Total Projected Revenue
$464,178
$464,178
Expenditures
Direct Maintenance
Personnel Services
$112,062
$224,124
Materials and Services
Maintenance Contracts
118,526
237,052
Utilities (electricity & water)
70,000
140,000
Maintenance Supplies
5,000
10,000
Property & Liability Insurance
6,538
13,076
Administration & Overhead
45,828
91,656
Total Direct Maintenance
$357,954
$715,908
Capital Improvement
$0
$0
Total Operating and Capital Budget
$357,954
$715,908
Ending Fund Balance
$2,195,219
$1,837,265
Note: The variance is the amount needed to support the recommended increased scope of work for Landscape Maintenance District 1. The
recommended scope of work includes tree trimming of the hillside trees on a trimming cycle and landscape maintenance including trash
removal and clearing of the hillside plants and shrubbery.
ATTACHMENT NO.4
West Covina Landscape Maintenance District No. 1
10 Year Fiscal Projection
Assessment Income
$460,000
$460,000
$460,000
$460,000
$460,000
$460,000
$460,000
$460,000
$460,000
$460,000
Interest(')
4,178
4,390
4,478
4,568
4,659
4,752
4,847
4,944
5,043
5,144
Prior Year Balance
2,088,995
2,195,219
2,239,123
2,283,906
2,329,584
2,376,176
2,423,699
2,472,173
2,521,617
2,572,049
Total Funding
$2,553,173
$2,604,236
$2,656,321
$2,709,448
$2,763,637
$2,818,909
$2,875,287
$2,932,793
$2,991,449
$3,051,278
Maintenance Costs (2)
357,954
365,113
372,415
379,864
387,461
395,210
403,114
411,177
419,400
427,788
Capital Improvements
0
Total Cost
$357,954
$365,113
$372,415
$379,864
$387,461
$395,210
$403,114
$411,177
$419,400
$427,788
Ending Balance
$2,195,219
$2,239,123
$2,283,906
$2,329,584
$2,376,176
$2,423,699
$2,472,173
$2,521,617
$2,572,049
$2,623,490
Assess. Per $400k
Assessed Valuation(3)
$475.20
$475.20
$475.20
$475.20
$475.20
$475.20
$475.20
$475.20
$475.20
$475.20
Rate per $100
Assessed Valuation(4)
$0.1188
$0.1188
$0.1188
$0.1188
$0.1188
$0.1188
$0.1188
$0.1188
$0.1188
$0.1188
Notes: (1) Interest is 0.4 % of one- half of the previous year ending balance.
(2) 2 % increase in maintenance cost each year due to inflation.
(3) 1 % increase in assessed valuation each year is allowable.
(4) Previously approved maximum highest rate, $0.1875.
ATTACHMENT NO.5
RESOLUTION NO.2020-59
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 FISCAL YEAR
BEGINNING JULY 1, 2020
THE CITY COUNCIL OF THE CTI'Y OF WEST COVINA, CALIFORNIA, DOES
HEREBY RESOLVE AS FOLLOWS:
SECTION 1. As applicable, the assessment levied on the real property is exempt from
the application of Article XIII A, Section 1 (A) and Article X11 C of the Constitution of the State
of California and is levied for the benefit of the residents of the City of West Covina Landscape
Maintenance District No. 1("LMD1').
SECTION 2. The amount of funds necessary to be raised by the assessment, upon the
assessable property within LMD1, for the current Fiscal Year beginning July 1, 2020, is hereby
fixed as follows:
For the cost of maintaining and operating the open space, improvements, and facilities
thereon within the LMD1 in the amount of $357,954
SECTION 3. For the purpose of raising the funding necessary to be raised by the
assessment upon the assessable property within LMDI, as revenue to maintain and operate the
open space, improvements and facilities within the LMDl, the rate is hereby fixed and the
assessment is hereby set on all assessable real property in the LMDI for the Fiscal Year beginning
July 1, 2020, at the rate of 11.88 cents upon 100 dollars of assessed value of said assessable real
property as assessed by the County Assessor and equalized by the Assessment Appeals Board of
the County of Los Angeles and with respect to certain property as assessed by the State Board of
Equalization and equalized by said Board as follows:
Estimated Assessed Value of Land within Entire District $277,261,901
Benefit Assessment Rate $0.1188 per one hundred dollars
No separate tax is being levied upon the assessable property within any zone in LMDI for
the Fiscal year beginning July 1, 2020, and no fluids are being raised to finance special services
within LMD1.
SECTION 4. The City Council finds that the levy and collection of these assessments is
statutorily exempt from the California Environmental Quality Act under § 15273 of the Guidelines.
In addition, the capital improvements proposed for LMD1 are of minor nature and, therefore,
categorically exempt from the requirements for environmental compliance.
SECTION 5. The City Clerk shall certify to the adoption of this resolution and shall enter
the same in the book of original resolutions and it shall become effective imrnediately.
APPROVED AND ADOPTED this 16th day of June, 2020.
Tony Wu
Mayor
APPROVED AS FORM ATTEST
Thomas P. Duarte Lisa Sherrick
City Attorney Assistant City Clerk
I, LISA SHERRICK, ASSISTANT CITY CLERK of the City of West Covina, California,
do hereby certify that the foregoing Resolution No. 2020-59 was duly adopted by the City Council
of the City of West Covina, California, at a regular meeting thereof held on the 16th day of June,
2020, by the following vote of the City Council:
AYES:
NOES:
ABSENT:
ABSTAIN:
Lisa Sherrick
Assistant City Clerk