01-15-2019 - AGENDA ITEM 04 ADOPTION OF ORDINANCE NO. 2452 AUTHORIZING THE EXTENSION OF THE TERMS AND PROVISIONS OF ORDINANCE NO. 2238 REGARDING FORECLOSURESAGENDA ITEM NO.4
AGENDA STAFF REPORT
City of West Covina I Office of the City Manager
DATE: January 15, 2019
TO: Mayor and City Council
FROM: Chris Freeland
City Manager
SUBJECT: ADOPTION OF ORDINANCE NO. 2452 AUTHORIZING THE EXTENSION OF THE
TERMS AND PROVISIONS OF ORDINANCE NO.2238 REGARDING
FORECLOSURES
RECOMMENDATION:
It is recommended that the City Council adopt the following ordinance:
ORDINANCE NO. 2452 - AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
WEST COVINA, CALIFORNIA, EXTENDING THE TERMS AND PROVISIONS OF
ORDINANCE NO.2238 FOR AN ADDITIONAL PERIOD OF THREE YEARS, AMENDING
CHAPTER 15 OF THE MUNICIPAL CODE TO REQUIRE REGISTRATION, MAINTENANCE
AND SECURITY OF PROPERTIES IN FORECLOSURE
DISCUSSION:
Ordinance No. 2452 was first introduced at the December 18, 2018 City Council Meeting. The purpose of the
Ordinance is to ensure that foreclosure properties are given the proper attention by lenders that own them, thus
reducing blight in West Covina. The Ordinance requires the registration and monitoring of residential
properties that go into foreclosure.
The Ordinance will take effect 30 days after its adoption on February 14, 2019.
Prepared by: Nikole Bresciani, Assistant City Manager/Public Services Director
Attachments
Ordinance No. 2452
Staff Report No. 13 December 18, 2018 City Council Meeting
ATTACHMENT NO.1
ORDINANCE NO.2452
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF WEST
COVINA, CALIFORNIA, EXTENDING THE TERMS AND PROVISIONS
OF ORDINANCE NO. 2238 FOR AN ADDITIONAL PERIOD OF THREE
YEARS, AMENDING CHAPTER 15 OF THE MUNICIPAL CODE TO
REQUIRE REGISTRATION, MAINTENANCE AND SECURITY OF
PROPERTIES IN FORECLOSURE
THE CITY COUNCIL OF THE CITY OF WEST COVINA, CALIFORNIA, DOES HEREBY
ORDAIN AS FOLLOWS:
SECTION NO. 1: The City Council finds that on November, 20, 2012, it adopted
Ordinance No. 2238 entitled "An Ordinance of the City Council of the City of West Covina
Amending Chapter 15 Of The Municipal Code To Require Registration, Maintenance And
Security Of Properties In Foreclosure."
SECTION NO. 2: The City Council finds that on November 17, 2015, it extended
the term of Ordinance No. 2238 for an additional term of three years, terminating on
December 20, 2018.
SECTION NO. 3: The City Council therefore ordains that Ordinance No. 2238 be
extended for an additional term of three years, terminating on December 20, 2021, subject
to aIl the terms and provisions contained in Ordinance No. 2238.
APPROVED, AND ADOPTED on this —day of _ 2019.
Mayor
ATTEST:
CITY CLERK
I, , CITY CLERK of the City of West Covina, California, do
hereby certify that the foregoing Ordinance was regularly introduced and placed upon its first
reading at a regular meeting of the City Council on the _ day of , 2019. That thereafter
said Ordinance was duly adopted and passed at a regular meeting of the City Council on the
day of , 20, by the foIlowing vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
Assistant City Clerk
APPROVED AS TO FORM:
City Attorney
AGENDA ITEM NO. 13
Xft
AGENDA STAFF REPORT
City of West Covina I Office of the City Manager
DATE:
December 18, 2018
TO:
Mayor and City Council
FROM:
Chris Freeland
City Manager
SUBJECT:
EXTENSION OF FORECLOSURE PROPERTIES ORDINANCE
RECOMMENDATION:
It is recommended that the City Council take the following actions:
1. Extend the Foreclosure Ordinance for an additional three years, to December 2021;
2. Introduce, waive further reading, and give first reading to the following ordinance:
ORDINANCE NO.2452 — AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF WEST
COVINA, CALIFORNIA, EXTENDING THE TERMS AND PROVISIONS OF ORDINANCE NO.2238
FOR AN ADDITIONAL PERIOD OF THREE YEARS, AMENDING CHAPTER 15 OF THE
MUNICIPAL CODE TO REQUIRE REGISTRATION, MAINTENANCE AND SECURITY OF
PROPERTIES IN FORECLOSURE
DISCUSSION:
On October 16, 2012, the Public Works Department presented the City Council with a proposed Ordinance
amending Chapter 15 of the Municipal Code concerning foreclosed properties and related fees and fines. The
overall goal of this Ordinance was to ensure that foreclosure properties were given the proper attention by lenders
that own them, thus reducing blight in West Covina. This Ordinance was adopted by the City Council and became
effective in December 2012, for an initial three-year term, as Ordinance No. 2238 (see Attachment No. 1), requiring
the registration and monitoring of residential properties that go into foreclosure. After three years, this Ordinance
was extended for an additional three-year term by the City Council on November 17, 2015 (agenda item it 22).
The foreclosure registration and penalty fee amounts under this program are included in the City's Fee and Charge
schedule. The Foreclosed Properties Registration fee is $375 per property registration, and the Administrative
Citation fees are $100 for the first citation, $200 for the second (within one year), $500 for the third (within one
year), with a 10% late fee. After the conclusion of a competitive bid process, the City Council awarded the bid to
implement this program to Nationwide Cost Recovery Services, through the life of the Foreclosure Ordinance. Per
the existing contract, the City retains 60% of the registration and penalty revenue, and pays 40% of the revenue to
Nationwide Cost Recovery Services.
Last fiscal year (July 2017 to June 2018), West Covina had 281 foreclosure registrations under this Ordinance.
Fees collected by the City during that fiscal year totaled $127,450 ($106,500 for registrations and $20,950 for
penalties). This revenue, which goes to the City's General Fund, pays for anti -blight efforts including Code
Enforcement. During the first quarter of the current fiscal year (July to September 2018), there were 24
registrations. During that same time, there were 23 newly filed notices of default, so there will be more foreclosure
activity in the months ahead.
Additionally, real estate data indicate that the median sales price of West Covina homes is at an all-time high, and
approaching affordability constraints for the median income of households in the City. With mortgage interest rates
increasing, and with U.S. macroeconomic trends indicating that the overall economy and real estate markets are
overdue for a correction, another wave of foreclosures could occur in the years ahead.
Because of the current and anticipated foreclosure activity described above, Staff recommends that the Foreclosure
Ordinance be extended by the City Council, for an additional three years —see Attachment No. 2. It is important to
note that this program is automatically scalable. If foreclosures in the City of West Covina fall to zero in the next
three years, then neither the City nor Nationwide Cost Recovery Services will receive any registration or penalty
revenue.
OPTIONS:
Alternatively, the City Council may choose to take no action and allow the Foreclosure Ordinance to expire on
December 20, 2018. This could result in the following:
• A reduction in General Fund revenues, leaving the City with less funding for anti -blight efforts including
Code Enforcement;
• Lenders would no longer be compelled to take immediate responsibility for foreclosure properties, or be held
accountable for giving proper attention and maintenance to those properties;
• Vacancies and blight could increase in West Covina, as properties could be neglected by lenders.
Prepared by: Alex B. Houston, Police Administrative Services Manager
Additional Approval: Marc Taylor, Chief of Police
Fiscal Impact
Fiscal Year: 2019
Budgeted Y/N: Y
FISCAL IMPACT:
The foreclosure registration and penalty fee amounts are included in the City's Fee and Charge schedule, and may
be changed by the City Council by action or resolution. Currently, the Foreclosed Properties Registration fee is
$375 per property registration, and the Administrative Citation fees are $100 for the first citation, $200 for the
second (within one year), $500 for the third (within one year), with a 10% late fee. Last fiscal year, the gross
revenue amount totaled $127,450, with the City retaining $76,470 (60%). Extending the Foreclosure Ordinance
will ensure that the City continues to receive revenue to contribute to anti -blight efforts including Code
Enforcement.
Attachments
Ordinance 2238
Ordinance 2452