6-15-2021 AGENDA ITEM NO.4 - CONSIDERATION OF A RESOLUTION OF INTENTION TO LEVY ASSESSMENTS FOR THE AUTO PLAZA BUSINESS IMPROVEMENT DISTRICTAGENDA ITEM NO.4
AGENDA STAFF REPORT
City of West Covina I Office of the City Manager
DATE: June 15, 2021
TO: Mayor and City Council
FROM: David Carmany
City Manager
SUBJECT: CONSIDERATION OF A RESOLUTION OF INTENTION TO LEVY ASSESSMENTS FOR
THE AUTO PLAZA BUSINESS IMPROVEMENT DISTRICT
RECOMMENDATION:
It is recommended that the City Council:
1. Approve the Annual Report for the West Covina Auto Plaza Business Improvement District.
2. Adopt the following resolution:
RESOLUTION NO.2021-60 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WEST
COVINA, CALIFORNIA, DECLARING ITS INTENTION TO LEVY AN ASSESSMENT WITHIN
THE BUSINESS IMPROVEMENT AREA KNOWN AS THE WEST COVINA AUTO PLAZA
BUSINESS IMPROVEMENT DISTRICT FOR FISCAL YEAR 2021-22 AND SETTING THE TIME
AND PLACE FOR A PUBLIC HEARING THEREON
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. Pursuant to the PBIA Law,
for each fiscal year that assessments will be levied, the Advisory Board is required to 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 report is to request that the City Council approve the annual report and adopt the resolution of
intention to levy the assessment for Fiscal Year (FY) 2021-22.
DISCUSSION:
On May 26, 2021, 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 next step is for the City
Council to approve the report. The City Council may approve the report as filed by the Advisory Board or may
modify any particular contained in the report and approve it as modified. After the City Council approves the
report, it is required to adopt a resolution of intention to levy the annual assessment. The PBIA Law requires that
the resolution of intention contain specified information, including fixing the time and place for the public hearing
to be held regarding the proposed assessment.
The attached resolution sets the date for the required public hearing for July 6, 2021 at 7:00 p.m. At the conclusion
of the public hearing, the City Council may adopt a resolution confirming the Annual Report as originally filed or
as changed by it. Adoption of the resolution constitutes levy of the assessment for FY 2021-22.
The Annual Report includes a total budget of $124,326.39, 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
$71,155.10. The annual loan repayment is $53,171.29, totaling $124,326.39 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
2021-22. Since the annual expenditures increased, the assessments will not cover the total annual expenditures, with
a deficit of $8,658.39. The Advisory Board elected to utilize a portion of the FY 2020-21 year-end fund balance of
$106,062.70 to cover the deficit and to cover the required six (6) month operating reserve ($35,577.55). 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.
As outlined above, the PBIA Law requires approval of the Annual Report and adoption of a resolution of intention
to initiate proceedings for the FY 21-22 assessment for the Auto Plaza BID.
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 staffs recommendation; or
2. Provide alternative direction.
Prepared by: Gerardo Rojas, Economic Development Project Coordinator
Additional Approval: Paulina Morales, Economic Development & Housing Manager
Additional Approval: Robbeyn Bird, Finance Director
Fiscal Impact
FISCAL IMPACT:
There is no impact to the City's General Fund by adopting the resolution of intention and setting the Public
Hearing for July 7, 2020. Part of the Annual Report approval by the Auto Plaza BID is the repayment of the City
loan. All costs are covered by assessments collected from the West Covina Auto Plaza Business Improvement
District dealerships. In addition, the Auto Plaza Business Improvement District is charged a nominal
administrative fee for City staffs time to administer the West Covina Plaza BID and monitor the annual budget.
Attachments
Attachment No. 1 - Resolution No. 2021-60
Attachment No. 2 - Annual Report
CITY COUNCIL GOALS & OBJECTIVES: Achieve Fiscal Sustainability and Financial Stability
Enhance the City Image and Effectiveness
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A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF WEST COVINA, CALIFORNIA, DECLARING ITS
INTENTION TO LEVY AN ASSESSMENT WITHIN THE
BUSINESS IMPROVEMENT AREA KNOWN AS THE WEST
COVINA AUTO PLAZA BUSINESS IMPROVEMENT
DISTRICT FOR FISCAL YEAR 2021-22 AND SETTING THE
TIME AND PLACE FOR A PUBLIC HEARING THEREON
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, the Advisory Board has caused the annual report for Fiscal Year 2021-22
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 assessments within the District
for Fiscal Year 2021-22; and
WHEREAS, this Resolution of Intention will commence proceedings under the Parking
and Business Improvement Area Law of 1989 to levy the annual assessment for the West Covina
Auto Plaza Business Improvement District for the 2021-22Fiscal Year.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF WEST COVINA,
CALIFORNIA DOES HEREBY RESOLVE AS FOLLOWS:
SECTION 1. Intention; Assessment. The City Council hereby declares its intention to
levy and collect assessments in the West Covina Auto Plaza Business Improvement District for
Fiscal Year 2021-22 pursuant to Streets & Highways Code sections 36500 et seq. The boundaries
of the West Covina Auto Plaza Business Improvement District are set forth in Exhibit A, attached
hereto and incorporated herein. The proposed 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 assessment.
SECTION 2. Annual Report. An annual report on the West Covina Auto Plaza Business
huprovement District has been prepared by the Advisory Board, as required by Streets &
Highways Code sections 36533 and 36534. Said report is on file in the City Clerk's Office.
SECTION 3. Types of Activities to Be Funded. The proposed use of the assessment
revenue collected through the levy of the annual assessment is 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 comer of Azusa Avenue and Garvey Avenue South. The assessment revenue is also
proposed to be used to finance landscape maintenance along Interstate 10 Freeway immediately
facing and parallel to the dealerships located within the West Covina Auto Plaza Business
Improvement District.
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. Time and Place of Public Hearing. The time and place of the public hearing
on the levy of an annual assessment for Fiscal Year 2021-22 shall be 7:00 p.m. on July 6, 2021, in
the City Council Chambers located at 1444 W. Garvey Avenue South, West Covina, California.
At the public hearing set forth above, the testimony of all interested persons for or against the
annual levy of the assessment for the West Covina Auto Plaza Business Improvement District, the
extent of the area, and/or the furnishing of specific types of improvements or activities will be
heard by the City Council.
SECTION 6. Protests. Consistent with Streets & Highways Code sections 36524 and
36525, the following rules shall apply to all protests:
(a) A protest may be made orally or in writing by any interested person. Any protest
pertaining to the regularity or sufficiency of the proceedings shall be in writing and
shall clearly set forth the irregularity or defect to which the objection is made.
(b) Every written protest shall be filed with the City Clerk's Office, West Covina City
Hall, 1444 West Garvey Avenue South, West Covina, California 91790, at or
before the time fixed for the public hearing as set forth above.
(c) The City Council may waive any irregularity in the form or content of any written
protest, and, at the public hearing, may correct minor defects in the proceedings.
(d) A written protest may be withdrawn in writing at any firm before the conclusion of
the public hearing.
(e) Each written protest shall contain a description of the business in which the person
subscribing the protest is interested sufficient to identify the business and, if a
person subscribing is not shown on the official records of the City as the owner of
the business, the protest shall contain or be accompanied by written evidence that
2
the person subscribing is the owner of the business. A written protest which does
not comply with this section shall not be counted in determining a majority protest.
(1) If written protests are received from the owners of businesses in the District which
will pay fifty percent (50%) or more of the assessments to be levied and protests
are not withdrawn so as to reduce the protests to less than the fifty percent (50%),
no further proceedings on the proposal to continue to levy the assessment, as
specified by this Resolution, shall be taken by the City Council for a period of one
year from the date of the filing of a majority protest.
(g) If the majority protest is only against the furnishing of a specified type or types of
improvement or activity within the District, those types of improvements or
activities shall be eliminated.
SECTION 7. Additional Information. Any person seeking additional information may
contact Paulma Morales, Assistant City Manager, 1444 West Garvey Avenue South, Room 205,
West Covina, California 91790; Telephone Number: (626) 939-8417.
SECTION 8. Publication. The City Clerk shall cause this Resolution of Intention to be
published once in a newspaper of general circulation in the City at least seven (7) days before the
July 6, 2021 public hearing.
SECTION 9. 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 15th day of June, 2021.
APPROVED AS TO FORM
Thomas P. Duarte
City Attorney
Letty Lopez-Viado
Mayor
ATTEST
Lisa Sherrick
Assistant City Clerk
3
I, LISA SBERRICK, ASSISTANT CITY CLERK of the City of West Covina, California,
do hereby certify that the foregoing Resolution No. 2021-60 was duly adopted by the City Council
of the City of West Covina, California, at a regular meeting thereof held on the 15th day of June,
2021, by the following vote of the City Council:
AYES:
NOES:
ABSENT:
ABSTAIN:
Lisa Sherrick
Assistant City Clerk
11
ATTACHMENT NO.2
WEST COVINA AUTO PLAZA
BUSINESS IMPROVEMENT DISTRICT
ANNUAL REPORT
FOR
FISCAL YEAR 2021-2022
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 2021-2022.
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
2021-2022.
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 $71,155.10. The principal loan amount is
$53,171.29 (paid in two installments), totaling $124,326.39 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 2021-22. As the annual expenditures increased, the
assessments will not cover the total annual expenditures with a deficit of $8,658.39. The
Advisory Board elected to utilize a portion of the fund balance of $106,052.70 to cover
the deficit of $8,658.39 and to cover the required six (6) month operating reserve
($35,577.55). 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 2021-2022.
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 2020-
2021.
FY 2020-2021 is anticipated to have a deficit of $368.11. The Advisory Board elected to
use a portion of the fund balance to cover the deficit. The anticipated fund balance
starting for FY 2021-22 is $106,062.70. This includes the six (6) month operating reserve
of $35,577.55.
6. Amount of any contributions to be made from sources other than the assessments
levied.
None.
TIMAGE NOT TO SCALE
N
WEST COVINA AUTO PLAZA
BUSINESS IMPROVEMENT DISTRICT BOUNDARIES
New Proposed Benefit Zones
DEALERSHIPS
APN
LOT SIZE
1
Envision Toyota of West Covina
8478-007-025, 30, 31
4.17 acres
2
Norm Reeves Honda Super Store
8478-007-028, 34, 38, 8478-008-015
5.52 acres
3
Former Clippinger Chevrolet
8474-004-047, 048
2.27 acres
4
Performance Ford
8478-004-046, 49
3.42 acres
5
Envision Mercedes Benz of West Covina
8478-004-042
4.16 acres
161
Envision Audi of West Covina
8478-004-026
3.72 acres
7
1 Former DriveTime
8474-007-039, 040
2.23 acres
aLam
SIM
FY 2016-2017
FY 2017-2018
I FY 2018.2019
FY 2019-2020
Assessment Among ]
Assessmen<Among T
Assessment Among ]
Asxssmen[ Among ]
Dealership/Sites
Dealership/Sites
Dealership/Sites
Dealership/Sites
Actual
Actual
Actual
Actual
Fund Balance
Beginning Balance as ofluly 1
$ 88,695.68 $
12$1 $
129,556.55
$ 139,325.77
TOTALRevenues
TOTAL Expenditures
OPERATING
Operating Revenues
Revenues from Assessments
97,667.93
66,072.17
65,077.34
$ 65,077.34
Interest Income/Other
2,114.78
$
Total Operating Revenues
99,782.71
66,072.17
65,077.34
$ 65,077.34
Operating Expenditures
Professional Services (EMI -Programming')
3,120.00
4,500.00
4,5c0.c0
$ 4,560.00
Other Contractual Services
32,472.18
Accounting
6,180.00
5,182.68
$ 6,000.00
Project Improvements
5,000.00
3,290.c0
$ 5,000.00
Insurance
10,300.00
10,054.00
$ 10,500.00
Other Services
1,000.00
$ 1,000.00
Electricity
10,800.29
10,800.00
14,261.45
$ 12,500.00
Telephone
2,341.09
720.00
730.00
$ 800.00
Equipment M & R (EMI -Maintenance)
11,856.00
10,140.00
10,140A0
$ 10,440.00
Insurance
-
-
-
$ -
ProlecTImprovements (Landscape)
-
-
-
$ -
AdminandOverhead
-
8,000.00
-
$ 8,500.00
Interest Expense (Sign Repayment)
10,233.85
9,433.00
8,936.64
$ 7,929.83
Total Operating Expenditures
70,82.3.41
66,073.OD
57,D&k"
$ 6$229.83
Operating Reserve
33,614.92
Operating Surplus /(DeERit)
28,959.30
(0.83)
7,992.57
$ (2,25149)
2020.2021 92%of Year Complete)
FY 2021-2022
Keeping Assessment
I 1
Adopted Budget
As of 05/24/21 % Budget
Proiected
the Same
$ 156,508.36
$ 159,075.66
$ 106,062.70
$ 106,062.70
$ 115,Sgiaw
$ 96,265.98
$ 115,Gg6.00
$ 115,668.00
$ 122,326.39
$ 124,326.39
$ 63,544.39 $ 63,544.39 100% $ 63,544.39
$ 63,544.39 $ 63,544.39 100% $ 61
4,560.00 $
4,125.00
90%
$
4,500.00
10,000.00 $
5,038.28
50%
$
8,038.28
5,000.00 $
679.63
14%
$
679.63
10,500.00 $
14,077.00
134%
$
14,077.00
1,000.00 $
-
0%
$
-
12,500.00 $
7,357.81
59%
$
30,354.81
800.00 $
660.00
83%
$
720.00
30,440.00 $
9,295.00
89%
$
30,140.00
$ 8,500.00 $
$ 6,902.78 $
- 0% 5
- On $
8,500.00
6,902.78
$ M,202.78 $
41,232.72 $
63,91250
35,101.39 $
35,101.39
35,101.39
$ (61 $
22,311.67
(368.11)
W
NON -OPERATING (Sign Loan)
Non-Operriine Reeenues
Sign Loan
-
-
-
-
Revenuesfrom Assessments(Sign Repayment)
47,795.07
49,593.83
50,089.76
$ 51,096.57
Total NonOperatingRevenues
47,795.07
49,593.83
50,089.76
$ 51,096.57
Non-Ooerat ne Expenditures
Sign Purchase
532,582.00
-
-
$ -
SIgnLOanRepayment
49,593.83
50,089.76
$ 51,096.57
Total Non,Operating Expenditures
532,582.00
49,593.83
50,089.76
$ 51,096.57
Non -Operating Surplus /)Deficit)
)484,786.93)
$ 52,123.61 $ 52,644.85
$ 52,123.61 $ 52,644.85
$ 52,123.61 $ 52,64al
$ 52,123.61 $ 52,644.85
RESERVES
Fund Balance #REFI #REFI 4REF1 $ 137,173.28 $ 149,849.97 $
Fund Balance Minus Operating Reserve
Iran Balance hi (434,371.54) (384,281.78) $ (M6,286.00) $ (M6,286.00)
$ 53,171.29
$ 53,171.29
$ 53,171.29
$ 53,171.29
152,417.27 $ 106,062.70 97,404.31
61,826.76
(106,286.00) (253,114.71)
ASSESSMENTPERDEAMR(7)"' $ 20,943.59 $ 20,943.59 $ 16,524A0 $ 16,524.00 $ 16,524.00 $ 16,524.00
'EMIAgreementsexpireMarch 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 dealershi as In FY 15-16