06-16-2020 - AGENDA ITEM 06 CONSIDER SETTING OF FISCAL YEAR 2020-21 ASSESSMENT RATE FOR WEST COVINA LANDSCAPE MAINTENANCE DISTRICT NO. 2AGENDA ITEM NO.6
xft
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: CONSIDER SETTING OF FISCAL YEAR 2020-21 ASSESSMENT RATE FOR WEST
COVINA LANDSCAPE MAINTENANCE DISTRICT NO. 2
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.
RESOLUTION NO.2020-60 — A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WEST
COVINA, CALIFORNIA SETTING THE ASSESSMENT RATE FOR WEST COVINA LANDSCAPE
MAINTENANCE DISTRICT NO.2 FOR THE FISCAL YEAR BEGINNING JULY 19 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. 2 ("LMD2") was formed as an ad valorem assessment district
pursuant to the Municipal Improvement Act of 1911. LMD2 is generally located north of Amar Road, between
Lark Ellen Avenue and Azusa Avenue and consists of 787 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 LMD2 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 6.60 cents
per 100 dollars of assessed value. At this rate, the annual assessment for a home and property valued at $400,000
would be $264.00 per year. The total projected revenue is $148,470 plus $737 in interest, which will continue to
fund the current maintenance activities. 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 four years.
LMD2 contains lighted paseos 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. Increased scope of work for LMD2 is recommended to
include the modification of the paseo lighting to LED for energy cost savings, repair and replacement of light
standards, hardscape repair and replacement of off -grade, cracked and broken areas, tree trimming of the hillside
trees on a trimming cycle, and landscape maintenance including trash removal and clearing of the hillside plants
and shrubbery. It is estimated that the budget required for the increased lighting, hardscape, and landscaping scope
is approximately double the existing LMD2 budget.
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 LMD2 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; LMD2'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 6.60 cents per 100 dollars
of assessed value. The projected income from the recommended rates is $148,470. In addition, $737 is projected
to be received in interest, thus the total projected revenue is $149,207. The total funds available is $517,752,
including the $368,545 fund balance from the previous fiscal year.
For FY 2020-21, the proposed operating budget for LMD2 is $151,393, which is an increase of 1.87% when
compared to the approved/amended budget for FY 2019-20. The proposed operating budget only funds regular
landscape maintenance service.
Furthermore, a portion of LMD2 is overlaid by Landscape Maintenance District No. 4 (LMD4). LMD4 benefit
assessment district was formed in 1975 to encompass the previously remaining undeveloped areas of the
Woodside Village planned community development. As a result, a portion of the assessment collected form
LMD2 is reimbursed to LMD 4. In turn, this benefit assessment within the overlaid portion of LMD4 is reduced
proportionately to reflect this reimbursement. For FY 2020-21, the reimbursement is $9,000 to reflect the
appropriate share of the actual assessment collections. LMD4 rates were adopted by the City Council on June 2,
2020.
In addition, for the 370 properties that are within the overlaid portion of LMD4, the property owners pay an
assessment to LMD4 that ranges from $77.89 to $260.98 per year. This assessment is based on the benefit
received by the property from the surrounding landscaping improvements.
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. 2020-60
CITY COUNCIL GOALS & OBJECTIVES: Enhance City Facilities and Infrastructure
Enhance the City Image and Effectiveness
ATTACHMENT NO.1
ATTACHMENT NO. 2
West Covina
Landscape Maintenance District No. 2
15 Year Rate History
Per $100 of Assessment for
Fiscal Year Assessed Value Assessed Value of
$400,000
Proposed
$0.0660
$264.00
2020-2021
2019-2020
$0.0660
$264.00
2018-2019
$0.0660
$264.00
2017-2018
$0.0660
$264.00
2016-2017
$0.0643
$257.20
2015-2016
$0.0643
$257.20
2014-2015
$0.0643
$257.20
2013-2014
$0.0643
$257.20
2012-2013
$0.0630
$252.00
2011-2012
$0.0630
$252.00
2010-2011
$0.0630
$252.00
2009-2010
$0.0630
$252.00
2008-2009
$0.0618
$247.20
2007-2008
$0.0606
$242.40
2006-2007
$0.0592
$236.80
ATTACHMENT NO. 3
Existing Maintenance
Optimal Maintenance
Previous Fiscal Year Fund Balance
$368,545
$368,545
Revenues
Assessment Income (Total Balance to Levy)
$148,470
$148,470
Interest
737
737
Total Projected Revenue
$149,207
$149,207
Expenditures
Direct Maintenance
Personnel Services
$72,845
$145,690
Materials and Services
Maintenance Contracts
28,437
56,874
Utilities (electricity & water)
8,620
17,240
Maintenance Supplies
1,000
2,000
Property & Liability Insurance
14,944
29,888
Administration & Overhead
16,547
33,094
Total Direct Maintenance
$142,393
$284 78B
Fund Transfer
$9,000
$9,000
Capital Improvement
$0
$0
Total Operating and Capital Budget
$151,393
$293,786
Ending Fund Balance
$366,359
$223,966
ATTACHMENT NO. 4
Assessment Income'
Interest(')
Prior Yr. Balance
Total Funding
Operating Exp.
Fund Transfers
CIP
Total Cost
Ending Balance
Assess. Per $400k
Assessed Valuation(3)
Rate per $100
WEST COVINA MAINTENANCE DISTRICT NO. 2
10-YEAR FISCAL PROJECTION - RECOMMENDATION (0.0% INCREASE)
$148,470
$149,955
$151,454
$152,969
$154,498
$156,043
$157,604
$159,180
$160,772
$162,379
737
733
715
697
679
661
643
625
607
589
368,545
366,359
357,359
348,359
339,359
330,359
321,359
312,359
303,359
294,359
$517,752
$528,107
$538,669
$549,443
$560,432
$571,640
$583,073
$594,734
$606,629
$618,762
142,393
145,241
148,146
151,109
154,131
157,213
160,358
163,565
166,836
170,173
9,000
9,000
9,000
9,000
9,000
9,000
9,000
9,000
9,000
9,000
$151,393
$154,241
$157,146
$160,109
$163,131
$166,213
$169,358
$172,565
$175,836
$179,173
$366,359
$357,359
$348,359
$339,359
$330,359
$321,359
$312,359
$303,359
$294,359
$285,359
$257.20 $257.20 $257.20 $257.20 $257.20 $257.20 $257.20 $257.20 $257.20 $257.20
Assessed Valuation (4) $0.0643 $0.0643 $0.0643 $0.0643 $0.0643 $0.0643 $0.0643 $0.0643 $0.0643 $0.0643
Notes: (1) 1% increase in maintenance cost each year due to inflation.
(2) Interest is 0.4% of one- half of the previous year ending balance.
(3) 1% increase in assessed valuation each year is allowable.
(4) Previously approved maximum highest rate, $0.1875 cents.
ATTACHMENT NO.5
RESOLUTION NO.2020-60
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF WEST COVINA, CALIFORNIA, SETTING THE
ASSESSMENT RATE FOR WEST COVINA LANDSCAPE
MAINTENANCE DISTRICT' NO. 2 FOR FISCAL YEAR
BEGINNING JULY 1, 2020
THE CITY COUNCIL OF THE C]TY 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 XIII 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. 2 ("LMD2').
SECTION 2. The amount of funds necessary to be raised by the assessment, upon the
assessable property within LMD2, 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 LMD2 in the amount of $151,393.
SECTION 3. For the purpose of raising the funding necessary to be raised by the
assessment upon the assessable property within LMD2, as revenue to maintain and operate the
open space, improvements and facilities within the LMD2, the rate is hereby fixed and the
assessment is hereby set on all assessable real property in the LMD2 for the Fiscal Year beginning
July 1, 2020, at the rate of 6.60 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 $232,909,638
Benefit Assessment Rate $0.0660 per hundred dollars
No separate tax is being levied upon the assessable property within LMD2 for the Fiscal
year beginning July 1, 2020, and no funds are being raised to finance special services within
LMD2.
SECTION 4. The City Council funds 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 LMD2 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 i nnnediately.
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 SHII2RICK, ASSISTANT CITY CLERK of the City of West Covina, California,
do hereby certify that the foregoing Resolution No. 2020-60 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