07-07-2020 - AGENDA ITEM 19 PUBLIC HEARING TO CONSIDER WEST COVINA AUTO PLAZA BUSINESS IMPROVEMENT DISTRICT FISCAL YEAR 2020-2021 ANNUAL REPORT AND ASSESSMENThttps://destinyhosted.com/print_ag_memo.cfm?seq=848&rev_num=0&mode=External&reloaded=true&id=93782 1/3
AGENDA ITEM NO. 19
AGENDA STAFF REPORT
City of West Covina | Office of the City Manager
DATE:July 7, 2020
TO:Mayor and City Council
FROM:David Carmany
City Manager
SUBJECT:PUBLIC HEARING TO CONSIDER WEST COVINA AUTO PLAZA BUSINESS
IMPROVEMENT DISTRICT FISCAL YEAR 2020-2021 ANNUAL REPORT AND
ASSESSMENT
RECOMMENDATION:
It is recommended that the City Council conduct the public hearing and then adopt the following resolution:
RESOLUTION NO. 2020-69 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WEST
COVINA, CALIFORNIA, CONFIRMING THE ANNUAL REPORT FILED BY THE WEST COVINA
AUTO PLAZA BUSINESS IMPROVEMENT DISTRICT ADVISORY BOARD AND LEVYING AN
ANNUAL ASSESSMENT FOR THE WEST COVINA AUTO PLAZA BUSINESS IMPROVEMENT
DISTRICT FOR FISCAL YEAR 2020-2021
BACKGROUND:
The Parking and Business Improvement Area Law of 1989 (Streets and Highways Code Section 36500 et
seq.) (PBIA 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. On June 1, 1993, the City Council adopted Ordinance No.
1923, which established the West Covina Auto Plaza Business Improvement District (Auto Plaza BID). The
City created this BID at the request of the businesses located in the area. Each year, the City Council holds a
noticed public hearing before deciding to renew the BID for another year.
The assessment revenue is collected from businesses located within the Auto Plaza BID and is used to pay for
the capital costs, operation and maintenance of a LED reader board sign located in the West Covina Auto
Plaza, adjacent to the I-10 freeway, and for the operation and maintenance of the Auto Plaza entry monument
sign and landscaping located at the southeast corner of Azusa Avenue and Garvey Avenue South. Assessment
revenue is also used for 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
make recommendations to the City Council on the expenditure of revenues derived from the levy of
assessments, on the classification of businesses, and on the method and basis of levying the assessments.
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Pursuant to the PBIA Law, for each fiscal year that assessments will be levied, the Advisory Board is
required cause a report to be prepared containing the following: (1) any proposed changes in the boundaries of
the BID or in any benefit zones within the area, (2) the improvements and activities to be provided for that
fiscal year, (3) an estimate of the cost of providing the improvements and the activities for that fiscal year, (4)
the method and basis of levying the assessment in sufficient detail to allow each business owner to estimate the
amount of the assessment to be levied against his or her business for that fiscal year, (5) the amount of any
surplus or deficit revenues to be carried over from a previous fiscal year, and (6) the amount of any
contributions to be made from sources other than assessments levied.
The purpose of this item is to request that the City Council conduct the required public hearing and then adopt
the resolution to confirm the Advisory Board's annual report as originally filed and levy the assessment for FY
2020-21.
DISCUSSION:
On June 9, 2020, the Auto Plaza BID Advisory Board held its annual meeting and approved the Annual
Report. The Annual Report was filed with the City Clerk as required by the PBIA Law. The Annual Report is
included as Attachment No. 2 to this report.
At the June 23, 2020 City Council meeting, the City Council approved the annual report and adopted
Resolution 2020-67, declaring the intention to levy the annual assessment and setting the public hearing for
July 7, 2020 at 7:00 p.m. in the City Council Chambers.
The Annual Report includes a total budget of $122,326.39, with an assessment of $16,524.00 per dealership
site. The 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 $70,202.78. The annual loan repayment is $52,123.61, totaling $122,326.39 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 2020-21. Since the annual expenditures increased, the assessments will not cover the total
annual expenditures, with a deficit of $6,658.39. The Advisory Board elected to utilize a portion of the FY
2019-20 year-end fund balance of $156,508.36 to cover the deficit and to cover the required six (6) month
operating reserve ($35,101.39). An assessment of $16,524.00 for each of the seven (7) dealership sites in the
Auto Plaza BID will be placed on the tax rolls by the County of Los Angeles Department of Auditor-
Controller.
The anticipated year-end fund balance for FY 2019-20 is anticipated to be $156,508.36, which includes the
operating reserves.
At the conclusion of the hearing, the City Council may order changes in the proposed assessment, the
proposed improvements to be funded, and/or the proposed boundaries of the BID. If the Council determines to
levy the assessment as proposed, it may adopt the attached resolution (Attachment No. 1), which confirms the
Annual Report and levies the assessment for FY 2020-21. Adoption of the resolution places direct assessments
on the auto dealers of the West Covina Auto Plaza BID. The BID boundaries are included as Exhibit A to the
resolution.
LEGAL REVIEW:
The City Attorney's Office has reviewed the resolution and approved it as to form.
OPTIONS:
The City Council has the following options:
1. Approve staff’s recommendation; or
2. Provide alternative direction.
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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 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, Economic Development Project Coordinator
Additional
Approval:
Paulina Morales, Economic Development & Housing Manager
Fiscal Impact
FISCAL IMPACT:
There is no impact to City funds by adopting the attached resolution that levies the assessment for the Auo
Plaza BID. 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. 2020-69
Attachment No. 2 - Annual Report
CITY
COUNCIL
GOALS &
OBJECTIVES:
Engage in Proactive Economic Development
ATTACHMENT NO. 1
RESOLUTION NO. 2020-69
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF WEST COVINA, CALIFORNIA, CONFIRMING THE
ANNUAL REPORT FILED BY THE WEST COVINA
AUTO PLAZA BUSINESS IMPROVEMENT DISTRICT
ADVISORY BOARD AND LEVYING AN ANNUAL
ASSESSMENT FOR THE WEST COVINA AUTO PLAZA
BUSINESS IMPROVEMENT DISTRICT FOR FISCAL
YEAR 2020-2021
WHEREAS, in adopting the Parking and Business Improvement Area Law of 1989
(Streets & Highways Code sections 36500 et seq.), the California Legislature authorized cities to
levy assessments on businesses in order to promote economic revitalization and tourism, create
jobs, attract new businesses, and prevent erosion of business districts; and
WHEREAS, 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 District to fund the construction, operation and maintenance
of an electronic readerboard to be located adjacent to the I-10 freeway and benefit the West Covina
Auto Plaza dealerships to be assessed. The District was established with one hundred percent
(100%) property owner consent; and
WHEREAS, on April 19, 1994, the City Council appointed the owners and/or their
representatives of the auto dealerships located in the West Covina Auto Plaza as the advisory board
of the District as required by Streets and Highways Code section 36530 (“Advisory Board”); and
WHEREAS, 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. The boundaries and benefit zones of the District are set forth in Exhibit A, attached
hereto and incorporated herein; and
WHEREAS, the Advisory Board has caused the annual report for Fiscal Year 2020-21
required by Streets and Highways Code section 36533 to be prepared and filed with the City Clerk;
and
WHEREAS, the City Council has approved said annual report; and
WHEREAS, the City Council proposes to levy and collect an assessment within the
District for Fiscal Year 2020-21; and
WHEREAS, on June 23, 2020, the City Council adopted Resolution No. 2020-67, a
resolution of intention to levy the assessment within the District for FY 2020-21 and setting the
date for a public hearing for July 7, 2020, in accordance with the requirements of Streets and
Highways Code section 36534; and
WHEREAS, the City Council has conducted a public hearing as required by Streets and
Highways Code section 36535; and
WHEREAS, the City Council now desires to confirm the annual report as filed by the
Advisory Board and adopt this Resolution to levy the assessment for the 2020-2021 Fiscal Year.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF WEST COVINA,
CALIFORNIA DOES HEREBY RESOLVE AS FOLLOWS:
SECTION 1. Annual Report. The City Council hereby confirms the annual report on the
District as originally filed by the Advisory Board in accordance with Streets and Highways Code
section 36535. The report shall be kept on file in the City Clerk’s Office.
SECTION 2. Assessment. An annual assessment for the District for Fiscal Year 2020-21
shall be levied pursuant to Streets & Highways Code sections 36500 et seq. The boundaries of the
District are set forth in Exhibit A. The amount of the annual assessment is $16,524.00. Pursuant
to Streets & Highways Code section 36531, new businesses commenced after the effective date of
the resolution levying the assessment will be exempt from the levy of the assessment for Fiscal
Year 2020-21.
SECTION 3. Types of Activities to Be Funded. The assessment revenue collected through
the levy of the annual assessment will be used for 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.
SECTION 4. Method and Basis of Levy. 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.
SECTION 5. Certification; Effective Date. 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 immediately.
APPROVED AND ADOPTED this 7th day of July, 2020.
Tony Wu
Mayor
APPROVED AS TO 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. 2020-69 as duly adopted by the City Council
of the City of West Covina at a regular meeting thereof held on the 7th day of July, 2020, by the
following vote of the City Council:
AYES:
NOES:
ABSENT:
ABSTAIN:
Lisa Sherrick
Assistant City Clerk
EXHIBIT A
WEST COVINA AUTO PLAZA BUSINESS IMPROVEMENT DISTRICT
BOUNDARIES
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 of West Covina
Envision Audi of West Covina
Former Clippinger Chevrolet
7New Proposed Benefit Zones Exhibit AFormer DriveTime
Performance Ford
ATTACHMENT NO. 2
WEST COVINA AUTO PLAZA
BUSINESS IMPROVEMENT DISTRICT
ANNUAL REPORT
FOR
FISCAL YEAR 2020-2021
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 2020-2021.
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
2020-2021.
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 $70,202.78. The annual loan repayment is
$52,123.61, totaling $122,326.39 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 2020-21. As the annual expenditures increased, the assessments will not cover the
total annual expenditures with a deficit of $6,658.39. The Advisory Board elected to
utilize a portion of the fund balance of $156,508.36 to cover the deficit of $6,658.39 and
to cover the required six (6) month operating reserve ($35,101.39). 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.
4. Method and basis of levying the assessment for Fiscal Year 2020-2021.
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 2019-
2020.
FY 2019-2020 is anticipated to have a surplus of $1,473.76 which will be carried over to
FY 2020-21. The anticipated fund balance starting for FY 2020-21 is $156,508.36. This
includes the six (6) month operating reserve of $35,101.39.
6. Amount of any contributions to be made from sources other than the assessments
levied.
None.
2.27 acres
3
7
8474-007-039, 040
8474-004-047, 048
2.23 acres
Envision Toyota of West Covina
Envision Mercedes BenzEnvision Mercedes Benz of West Covina
Envision Audi of West Covina
Former Clippinger Chevrolet
7New Proposed Benefit Zones Exhibit AFormer DriveTime
Performance Ford
West Covina Auto Plaza
Business Improvement District
2020 - 2021 (July 1 - June 30)
FY 2015-2016 FY 2016-2017 FY 2017-2018 FY 2018-2019
Assessment Among 7 Dealership/Sites
Actual
Assessment Among 7 Dealership/Sites
Actual
Assessment Among 7 Dealership/Sites
Actual
Assessment Among 7 Dealership/Sites
Actual Adopted Budget As of 06/02/20 % Budget Projected
Keeping Assessment
the Same
Fund Balance
Beginning Balance as of July 1 67,404.67$ 88,695.68$ 128,044.05$ 129,556.55$ 139,325.77$ 206,131.17$ 156,508.36$ 156,508.36$
TOTAL Revenues 115,668.00$ 99,115.93$ 115,668.00$ 115,668.00$ TOTAL Expenditures 118,326.40$ 122,326.39$
OPERATING
Operating Revenues
Revenues from Assessments 67,323.18 97,667.93 66,072.17 65,077.34 65,077.34$ 65,077.34$ 100%65,077.34$ 63,544.39$ Interest Income / Other 1,016.24 2,114.78 - - -$ 501.58$ 501.58$ -$
Total Operating Revenues 68,339.42 99,782.71 66,072.17 65,077.34 65,077.34$ 65,578.92$ 101%65,578.92$ 63,544.39$
Operating Expenditures
Professional Services (EMI-Programming*)3,120.00 3,120.00 4,500.00 4,500.00 4,560.00$ 4,125.00$ 90%4,500.00$ 4,560.00$
Other Contractual Services 4,538.02 32,472.18 26,500.00$ Accounting 6,180.00 5,182.68 6,000.00$ 7,805.86$ 130%10,805.86$ 10,000.00$
Project Improvements 5,000.00 3,290.00 5,000.00$ -$ 0%-$ 5,000.00$ Insurance 10,300.00 10,054.00 10,500.00$ 7,026.00$ 67%10,500.00$ 10,500.00$ Other Services 1,000.00 1,000.00$ -$ 0%-$ 1,000.00$ Electricity 14,138.82 10,800.29 10,800.00 14,261.45 12,500.00$ 9,046.93$ 72%11,009.47$ 12,500.00$ Telephone 467.25 2,341.09 720.00 720.00 800.00$ 660.00$ 83%720.00$ 800.00$
Equipment M & R (EMI-Maintenance)11,856.00 11,856.00 10,140.00 10,140.00 10,440.00$ 9,295.00$ 89%10,140.00$ 10,440.00$ Insurance 4,236.00 - - - -$ -$ -$
Project Improvements (Landscape)2,502.36 - - - -$ -$ -$ Admin and Overhead 6,189.96 - 8,000.00 - 8,500.00$ -$ 0%8,500.00$ 8,500.00$ Interest Expense (Sign Repayment)10,233.85 9,433.00 8,936.64 7,929.83$ -$ 0%7,929.83$ 6,902.78$
Total Operating Expenditures 47,048.41 70,823.41 66,073.00 57,084.77 67,229.83$ 37,958.79$ 64,105.16$ 70,202.78$
Operating Reserve 33,614.92 33,614.92$ 35,101.39$
Operating Surplus / (Deficit)21,291.01 28,959.30 (0.83) 7,992.57 (2,152.49)$ 27,620.13$ 1,473.76 (6,658.39)$
NON-OPERATING (Sign Loan)
Non-Operating Revenues
Sign Loan 532,582.00 - - - - - -$ Revenues from Assessments (Sign Repayment)- 47,795.07 49,593.83 50,089.76 51,096.57$ 51,096.57$ 52,123.61$
Total Non-Operating Revenues 532,582.00 47,795.07 49,593.83 50,089.76 51,096.57$ 51,096.57$ 52,123.61$
Non-Operating Expenditures
Sign Purchase - 532,582.00 - - -$ -$ -$
Sign Loan Repayment 49,593.83 50,089.76 51,096.57$ 51,096.57$ 52,123.61$
Total Non-Operating Expenditures - 532,582.00 49,593.83 50,089.76 51,096.57$ 51,096.57$ 52,123.61$
Non-Operating Surplus / (Deficit)532,582.00 (484,786.93) - - - - -
RESERVES
Fund Balance 88,695.68 117,654.98 117,654.15 125,646.72 137,173.28$ 203,978.68$ 156,508.36$ 149,849.97 Fund Balance Minus Operating Reserve 114,748.58
Loan Balance (532,582.00) (484,786.93) (434,371.54) (384,281.78) (306,286.00)$ (306,286.00) (254,162.39)
ASSESSMENT PER DEALER (7)***9,625.00$ 20,943.59$ 20,943.59$ 16,524.00$ 16,524.00$ 16,524.00$
*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
2019-2020 (92% of Year Complete)FY 2020-2021