5-18-2021 AGENDA ITEM NO.8 - CONSIDERATION OF WEST COVINA LANDSCAPE MAINTENANCE DISTRICT NO.2 SETTING OF FISCAL YEAR 2021-22 ASSESSMENT RATEAGENDA ITEM NO.8
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. 2
SETTING OF FISCAL YEAR 2021-22 ASSESSMENT RATE
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 of 6.60 cents per 100 dollars of assessed valuation.
RESOLUTION NO.2021-40 — 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 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. 2 ("LMD2") was formed as an ad valorem assessment district
pursuant to the Municipal Improvement Act of 1911. LMD 2 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 LMD 2 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 6.60 cents
per 100 dollars of assessed value (Attachment No. 1). This rate has not been increased in the last five (5) years. As
such the annual assessment for a home and property valued at $400,000 will continue to be $264 per year. The
total projected revenue for LMD2 is $151,255, $149,955 in assessments plus $1,300 in interest. The Operating and
Capital Budget for FY 2021-22 is $154,241 (Attachment No. 3), the assessments for FY 21-22 (including interest)
of $151,255 will not be sufficient to cover the expenditures for FY 2021-22. The balance of $2,983 will have to
come from LMD2 fund balance which is $650,139 from FY 2020-21.
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.
As costs have risen and the assessments have not increased in the last five (5) years, maintenance has suffered. It is
estimated that the budget required for the increased lighting, hardscape, and landscaping scope is approximately
double the existing LMD2 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, LMD2 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 Fiscal Year 2021-22.
OPTIONS:
The City Council has the following options:
1. Approve staffs recommendation; or
2. Reduce the assessment rate; LMD2'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 6.60 cents per 100 dollars
of assessed value. The projected income from the recommended rates is $149,955. In addition, $1,300 is
projected to be received in interest, thus the total projected revenue is $151,255. The total funds available is
$801,394, including the $650,139 fund balance from the previous fiscal year.
For FY 2021-22, the proposed operating budget for LMD 2 is $154,241, which is an increase of 2.00% 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 $2,542.50 and will be paid from Account No.
182.71.4133.6110.
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 2021-22, the reimbursement is $9,000 to reflect the
appropriate share of the actual assessment collections. LMD4 rates will be adopted by the City Council on June
1, 2021.
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 - Rate History
Attachment No. 3 - Financial Report
Attachment No. 4 - 10 Year Fiscal Projection
Attachment No. 5 - Resolution No. 2021-40
CITY COUNCIL GOALS & OBJECTIVES: Enhance City Facilities and Infrastructure
Enhance the City Image and Effectiveness
ATTACHMENT NO.1
Landscape Maintenance
District 2
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ATTACHMENT NO. 2
West Covina
Landscape Maintenance District No. 2
Proposed $0.0660 $264.00
2021-2022
2020-2021
$0.0660
$264.00
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
ATTACHMENT NO. 3
Existing Maintenance Optimal Maintenance
Previous Fiscal Year Fund Balance
Revenues
Assessment Income (Total Balance to Levy) $149,955
Interest 1,300
Total Projected Revenue
Expenditures
Direct Maintenance
Personnel Services $72,845
Materials and Services
Maintenance Contracts
31,285
Utilities (electricity & water)
8,620
Maintenance Supplies
1,000
Property & Liability Insurance
14,944
Administration & Overhead
16,547
Total Direct Maintenance
$145,241
Fund Transfer $9,000
$650,139 $650,139
$149,955
1,300
$151,255 $151,255
$145,690
62,570
17,240
2,000
29,888
33,094
$290,482
$9,000
Capital Improvement (1) $0 $0
Total Operating and Capital Budget $154,241 $299,482
Ending Fund Balance $647,153 $501,912
(1) The variance is the amount needed to support the recommended increased scope of work for Landscape Maintenance District
2. The recommended scope of work includes 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.
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 (2)
Rate per$100
Assessed Valuation(3)
West Covina Maintenance District No. 2
$149,955 $151,454 $152,969 $154,498 $156,043 $157,604 $159,180 $160,772 $162,379 $164,003
1,300 1,294 1,276 1,258 1,240 1,222 1,204 1,186 1,168 1,150
650,139 647,153 638,153 629,153 620,153 611,153 602,153 593,153 584,153 575,153
$801,394 $799,902 $792,398 $784,910 $777,437 $769,979 $762,537 $755,111 $747,701 $740,307
145,241 148,146 151,109 154,131 157,214 160,358 163,565 166,836 170,173 173,576
9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000
0
$154,241 $157,146 $160,109 $163,131 $166,214 $169,358 $172,565 $175,836 $179,173 $182,576
$647,153 $638,153 $629,153 $620,153 $611,153 $602,153 $593,153 $584,153 $575,153 $566,153
$264.00 $264.00 $264.00 $264.00 $264.00 $264.00 $264.00 $264.00 $264.00 $264.00
$0.0660 $0.0660 $0.0660 $0.0660 $0.0660 $0.0660 $0.0660 $0.0660 $0.0660 $0.0660
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
"I, RT17111y Y [li0MCCl 041507
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, 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. 2 ("LMD2').
SECTION 2. The amount of fiords necessary to be raised by the assessment, upon the
assessable property within LMD2, 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 LMD2 in the amount of $154,241.
SECTION 3. For the propose 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, 2021, 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 $235,238,734
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, 2021, and no fiords are being raised to finance special services within
LMD2.
SECTION 4. The City Council fords that the levy and collection of these assessments is
statutorily exempt from the California Environmental Quality Act render § 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.
APPROVED AND ADOPTED this 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, USA SHERRICK, ASSISTANT CITY CLERK of the City of West Covina, California,
do hereby certify that the foregoing Resolution No. 2021-40 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