AGENDA ITEM NO.5
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. 1 SETTING OF FISCAL YEAR 2022-23 ASSESSMENT RATE
RECOMMENDATION:
It is recommended that the City Council adopt the following resolution:
RESOLUTION NO. 2022-72 — 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, 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. 1 ("LMD1") was formed as an ad valorem assessment district pursuant to the Municipal Improvement Act of 1911.
LMD1 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 LMD1 was 18.75 cents per 100 dollars of assessed value.
DISCUSSION:
For Fiscal Year 2022-23, the assessment rate is proposed to be maintained at the current rate of 11.88 cents per 100 dollars of assessed value. At this rate, the annual assessment for a home and property valued at $400,000 would be $475.20. The total projected revenue is $656,930 including $5,030 in interest, which will continue to fund the current maintenance. 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 thirteen years.
LMD1 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, maintenance has suffered. It is estimated that the budget required for increased landscaping maintenance and operations scope is approximately double the existing LMD1 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; LMD1'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 ("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.
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 11.88 cents per 100 dollars of assessed value. The projected income from the recommended rates is $651,900. In addition, $5,030 is projected to be received in interest. The total projected revenue is $656,930. The total funds available is $3,930,910, including the $3,273,980 fund balance from the previous fiscal year.
For FY 2022-23, the proposed operating budget for LMD1 is $343,080 which is level when compared to the approved/amended budget for FY 2021-22. The proposed operating budget only funds regular landscape maintenance service.
LMD1
Amount
Estimated Beginning Fund Balance
1 3,273,98
Projected Revenue
656,93
FY2022-23 Budgeted Expenditures
343,08
Estimated Ending Fund Balance
$3,587,83
For FY 2022-23, below are the
IlProject
scheduled:
Hillside clearing, landscape, irrigation, lighting, and appurtenant Project 2022-23
Budget
$300,000
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. 2022-72
CITY COUNCIL GOALS & OBJECTIVES: Enhance City Image and Effectiveness Achieve Fiscal Sustainability and Financial Stability
A Well -Planned Community
ATTACHMENT NO. 1
Legend
City of West Covina Boundary
rl Maintenance District 1
® Park
- Open Space
Parcels
go
Landscape Maintenance
District 1
-gmar
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
2022-2023
2021-2022
11.88 $475.20
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
Attachment No.3
Existing Maintenance Optimal Maintenance
Previous Fiscal Year Fund Balance $3,273,980 $3,273,980 Revenues
Assessment Income (Total Balance to Levy) $651,900 $651,900 Interest 5,030 5,030
Total Projected Revenue $656,930 $656,930
Expenditures
Direct Maintenance
Personnel Services $45,292 $90,584
Materials and Services
Maintenance Contracts
146,043
292,086
Utilities (electricity & vrater)
81,338
162,677
Maintenance Supplies
5,810
11,620
Property & Liability Insurance
7,597
15,194
Administration & Overhead
57,000
114,000
Total Direct Maintenance
$343,080
$686,160
Capital Improvement
$300,000
$600,000
Total Operating and Capital Budget
$643,080
$1,286,160
Ending Fund Balance
$3,287,830
$2,644,750
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
Assessment Income
Interest('
Prior Year Balance
Total Funding
Operating Exp.
CIP
Total Cost
Ending Balance
Assess. Per $400k
Assessed Valuation(�)
Rate Per $100
Assessed Valuation(3)
West Covina Maintenance District No. 1
$651,900 $651,900 $651,900 $651,900 $651,900 $651,900 $651,900 $651,900 $651,900 $651,900 5,030 6,576 7,193 7,797 8,388 8,966 9,530 10,080 10,616 11,137 3,273,980 3,287,830 3,596,364 3,898,516 4,194,134 4,483,062 4,765,140 5,040,206 5,308,095 5,568,639 $3,930,910 $3,946,306 $4,255,457 $4,558,213 $4,854,422 $5,143,928 $5,426,570 $5,702,187 $5,970,612 $6,231,676 343,080 349,942 356,940 364,079 371,361 378,788 386,364 394,091 401,973 410,012 300,000 0 0 0 0 0 0 0 0 0
$643,080 $349,942 $356,940 $364,079 $371,361 $378,788 $386,364 $394,091 $401,973 $410,012 $3,287,830 $3,596,364 $3,898,516 $4,194,134 $4,483,062 $4,765,140 $5,040,206 $5,308,095 $5,568,639 $5,821,664 $475.20 $475.20 $475.20 $475.20 $475.20 $475.20 $475.20 $475.20 $475.20 $475.20 $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.2022-72
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, 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. 1 ("LMDI").
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, 2022, 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 $643,080.
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 LMD1, 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, 2022, 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 $282,835,885 Benefit Assessment Rate
$0.1188 per one hundred dollars
No separate tax is being levied upon the assessable property within any zone in LMDI for the Fiscal Year beginning July 1, 2022, and no funds are being raised to finance special services within LMD 1.
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 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 SBERRICK, ASSISTANT CITY CLERK of the City of West Covina, California, do hereby certify that the foregoing Resolution No. 2022-72 was duly adopted by the City Council of the City of West Covina, California, at a regular meeting thereof held on the 5th day of July, 2022, by the following vote of the City Council:
AYES:
NOES:
ABSENT:
ABSTAIN:
Lisa Sherrick
Assistant City Clerk