5-18-2021 AGENDA ITEM NO.7 - CONSIDERATION OF WEST COVINA LANDSCAPE MAINTENANCE DISTRICT NO.1 SETTING OF FISCAL YEAR 2021-22 ASSESSEMENT RATEAGENDA ITEM NO.7
AGENDA STAFF REPORT
City of West Covina I Office of the City Manager
DATE: May 18, 2021
TO: Mayor and City Council
FROM: David Carmany
City Manager
SUBJECT: CONSIDERATION OF WEST COVINA LANDSCAPE MAINTENANCE DISTRICT NO. 1
SETTING OF FISCAL YEAR 2021-22 ASSESSMENT RATE
RECOMMENDATION:
It is recommended that the City Council adopt the following resolution:
RESOLUTION NO.2021-39 — 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,
2021
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") 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") 2021-22, the assessment rate is proposed to be maintained at the current rate of 11.88 cents
per 100 dollars of assessed value (Attachment No. 2). This rate has not been increased in the last twelve (12) years.
As such, the annual assessment for a home and property valued at $400,000 will continue to be $475.20. The total
projected revenue for the LMD 1 is $470,047, $464,600 in assessments income and $5,447 in interest. The
Operating and Capital Budget for FY 2021-22 is $365,113 (Attachment No. 3). The assessments for FY 21-22
(including interest) of $470,047 will cover the expenditures for FY 2021-22.
LMDI 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 and the assessments have not increased in the last twelve (12) years, the district's ability to
properly maintain the district has suffered. It is estimated that the budget for proper level of landscaping
maintenance and operations scope is approximately double the existing LMD 1 budget (see Attachment No. 3 -
Optimal Maintenance).
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, LMD 1 property owner meetings, 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 FY 2021-22.
OPTIONS:
The City Council has the following options:
1. Approve staffs recommendation; or
2. Reduce the assessment rate; LMD 1's fund balance 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.
Fiscal Impact
FISCAL IMPACT:
For FY 2021-22, 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 $464,600. In addition, $5,447 is
projected to be received in interest. The total projected revenue is $470,047. The total funds available is
$3,193,438, including the $2,723,391 fund balance from the previous fiscal year.
For FY 2021-22, the proposed operating budget for LMD 1 is $365,113, which is an increase of 2.0% when
compared to the approved/amended budget for FY 2020-21. The proposed operating budget only funds regular
landscape maintenance service. The annual administration cost is $3,187.50 and will be paid from Account No.
181.71.4133.6110.
Attachments
Attachment No. 1 - Map
Attachment No. 2 - Rate History
Attachment No. 3 - Financial Report
Attachment No. 4 - 10 Year Fiscal Projection
Attachment No. 5 - Resolution No. 2021-39
CITY COUNCIL GOALS & OBJECTIVES: Achieve Fiscal Sustainability and Financial Stability
Enhance City Facilities and Infrastructure
ATTACHMENT NO. 1
Legend
City of West Covina Boundary
rl Maintenance District 1
® Park
- Open Space
Parcels
go
Landscape Maintenance
District 1
i
575 287.5 0 575 Feet
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 $2,723,391 $2,723,391
Revenues
Assessment Income (Total Balance to Levy) $464,600 $464,600
Interest 5,447 5,447
Total Projected Revenue $470,047 $470,047
Expenditures
Direct Maintenance
Personnel Services $112,062 $224,124
Materials and Services
Maintenance Contracts
125,685
251,370
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
$365,113
$730,226
Capital Improvement
$0
$0
Total Operating and Capital Budget
$365,113
$730,226
Ending Fund Balance
$2,828,325
$2,463,212
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 Maintenance District No. 1
Assessment Income $464,600 $469,246 $473,938 $478,678 $483,465 $488,299 $493,182 $498,114 $503,095 $508,126
Interest')
Prior Year Balance
Total Funding
Operating Exp.
CIP
Total Cost
Ending Balance
Assess. Per $400k
Assessed Valuation(2)
5,447 5,657 5,862 6,061 6,256 6,445 6,628 6,806 6,977 7,141
2,723,391 2,828,325 2,930,812 3,030,748 3,128,027 3,222,537 3,314,167 3,402,801 3,488,321 3,570,605
$3,193,438 $3,303,227 $3,410,612 $3,515,488 $3,617,748 $3,717,282 $3,813,978 $3,907,721 $3,998,393 $4,085,872
365,113 372,415 379,864 387,461 395,210 403,114 411,177 419,400 427,788 436,344
0
$365,113 $372,415 $379,864 $387,461 $395,210 $403,114 $411,177 $419,400 $427,788 $436,344
$2,828,325 $2,930,812 $3,030,748 $3,128,027 $3,222,537 $3,314,167 $3,402,801 $3,488,321 $3,570,605 $3,649,528
$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(3) $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) 1 % increase in assessed valuation each year is allowable.
(3) Previously approved maximum highest rate, $0.1875.
ATTACHMENT NO.5
RESOLUTION NO.2021-39
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, 2021
THE CITY COUNCIL OF THE CITY 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. 1 ("LMD 1").
SECTION 2. The amount of funds necessary to be raised by the assessment, upon the
assessable property within LMDI, for the current Fiscal Year beginning July 1, 2021, is hereby
fixed as follows:
For the cost of maintaining and operating the open space, improvements, and facilities
thereon within the LMDI in the amount of $365,113.
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 LMDI, 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, 2021, 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 $280,034,520
Benefit Assessment Rate
$0.1188 per one hundred dollars
No separate tax is being levied upon the assessable property within any zone in LMD 1 for
the Fiscal year beginning July 1, 2021, and no funds are being raised to finance special services
within LMDI.
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 LMDI are of minor nature and, therefore,
categorically exempt from the requirements for environmental compliance.
APPROVED AND ADOPTED on the 18th day of May, 2021.
APPROVED AS TO FORM
Thomas P. Duarte
City Attorney
Letty Lopez-Viado
Mayor
ATTEST
Lisa Sherrick
Assistant City Clerk
I, LISA SHERRICK, ASSISTANT CITY CLERK of the City of West Covina, California,
do hereby certify that the foregoing Resolution No. 2021-39 was duly adopted by the City Council
of the City of West Covina, California, at a regular meeting thereof held on the 18th day of May
2021, by the following vote of the City Council:
AYES:
NOES:
ABSENT:
ABSTAIN:
Lisa Sherrick
Assistant City Clerk