Item 6 - WEST COVINA LANDSCAPE MAINTENANCE DISTRICT NO. 2 SETTING OF FISCAL YEAR 2022-23 ASSESSMENT RATEAGENDA ITEM NO.6
AGENDA STAFF REPORT
City of West Covina I Office of the City Manager
DATE: July 19, 2022
TO: Mayor and City Council
FROM: David Carmany
City Manager
SUBJECT: WEST COVINA LANDSCAPE MAINTENANCE DISTRICT NO. 2 SETTING OF FISCAL
YEAR 2022-23 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. 2022-73 — 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,
2022
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") 2022-23, the assessment rate is proposed to be maintained at the current rate of
6.60 cents per 100 dollars of assessed value. At this rate, the annual assessment for a home and
property valued at $400,000 would be $264.00 per year. The total projected revenue is $257,000 plus
$1,250 in interest, which will continue to fund the current maintenance activities. Attachment No. 2
shows the history of assessment rates in this district for the last 15 years. There have been no increases
in assessment rates over the last six years.
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. It is estimated
that the budget required for the increased lighting, hardscape, and landscaping scope is approximately
double the existing LMD2 budget.
As costs have risen, maintenance has suffered. It is estimated that the budget required for increased
landscaping maintenance and operations scope is approximately double the existing LMD2 budget.
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 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 2022-23.
OPTIONS:
The City Council has the following options:
1. Approve staff's recommendation; or
2. Reduce the assessment rate; LMD2's reserves 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 ("CEQK) 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.
Prepared by: Michael Ackerman, PE, City Engineer
Fiscal Impact
FISCAL IMPACT:
For FY 2022-23, 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 $257,000. In
addition, $1,250 is projected to be received in interest, thus the total projected revenue is $258,250.
The total funds available is $1,090,337 including the $832,087 fund balance from the prior fiscal year.
For FY 2022-23, the adopted operating budget for LMD 2 is $159,891, which is a decrease of 13%
when compared to the approved/amended budget for FY 2021-22. The proposed operating budget only
funds regular landscape maintenance service.
LMD2
Amount
Estimated Beginning Fund Balance
832,08
Projected Revenue
258,25
FY2022-23 Budgeted Expenditures
159,891
Estimated Ending Fund Balance
$930,44
For FY 2022-23, below are the Capital Improvement Projects scheduled
Project Project 2022-23
Budget
Hillside clearing, landscape, irrigation, lighting, and appurtenant $100,000
improvements
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 2022-23, the
reimbursement is $0 to reflect the appropriate share of the actual assessment collections. LMD4 rates
will be adopted by the City Council on July 5, 2022.
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 Projection
Attachment No. 5 - Resolution No. 2022-73
CITY COUNCIL GOALS & OBJECTIVES: Enhance City Image and Effectiveness
Achieve Fiscal Sustainability and Financial Stability
A Well -Planned Community
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
2022-2023
2021-2022
$0.0660
$264.00
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
Attachment No.3
Existing Maintenance Optimal Maintenance
Previous Fiscal Year Fund Balance $832,087 $832,087
Revenues
Assessment Income (Total Balance to Levy)
$257,000
$257,000
Interest
1,250
1,250
Total Projected Revenue
$258,250
Expenditures
Direct Maintenance
Personnel Services
$31,048
$62,096
Materials and Services
Maintenance Contracts
55,678
111,356
Utilities (electricity & water)
15,341
30,682
Maintenance Supplies
1,780
3,559
Property & Liability Insurance
26,596
53,192
Administration & Overhead
29,449
58,897
Total Direct Maintenance
$159,891
$319,782
Fund Transfer
$0
$0
Capital Improvement (11
$100,000
$200,000
$258,250
Total Operating and Capital Budget $259,891 $519,782
Ending Fund Balance $830,446 $570,555
I1) 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
West Covina Maintenance District No. 2
10 Year Fiscal Projection
Assessment Income
$257,000
$257,000
$257,000
$257,000
$257,000
$257,000
$257,000
$257,000
$257,000
$257,000
Interest(')
1,250
1,661
1,661
1,661
1,661
1,661
1,661
1,661
1,661
1,661
Prior Yr. Balance
832,087
830,446
830,446
830,446
830,446
830,446
830,446
830,446
830,446
830,446
Total Funding
$1,090,337
$1,089,107
$1,089,107
$1,089,107
$1,089,107
$1,089,107
$1,089,107
$1,089,107
$1,089,107
$1,089,107
Operating Exp.
159,891
163,089
166,351
169,678
173,071
176,533
180,063
183,665
187,338
191,085
Fund Transfers
0
0
0
0
0
0
0
0
0
0
CIP
100,000
0
0
0
0
0
0
0
0
0
Total Cost
$259,891
$163,089
$166,351
$169,678
$173,071
$176,533
$180,063
$183,665
$187,338
$191,085
Ending Balance
$830,446
$830,446
$830,446
$830,446
$830,446
$830,446
$830,446
$830,446
$830,446
$830,446
Assess. Per $400k
Assessed Valuation (2)
$264.00
$264.00
$264.00
$264.00
$264.00
$264.00
$264.00
$264.00
$264.00
$264.00
Rate per $100
Assessed Valuation(3)
$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
RESOLUTION NO.2022-73
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, 2022
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 funds necessary to be raised by the assessment, upon the
assessable property within LMD2, for the current Fiscal Year beginning July 1, 2022, 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 $259,891.
SECTION 3. For the purpose 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, 2022, 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 $237,591,121
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, 2022, and no funds are being raised to finance special services within
LMD2.
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 LMD2 are of minor nature and, therefore,
categorically exempt from the requirements for environmental compliance.
APPROVED AND ADOPTED this 19th day of July, 2022.
APPROVED AS TO FORM
Thomas P. Duarte
City Attorney
Dario Castellanos
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. 2022-73 was duly adopted by the City Council
of the City of West Covina, California, at a regular meeting thereof held on the 19th day of July,
2022, by the following vote of the City Council:
AYES:
NOES:
ABSENT:
ABSTAIN:
Lisa Sherrick
Assistant City Clerk