La Mirada, Whittier Municipal Service Review (March 2021)

Local Agency Formation Commission for the County ` of Los Angeles 80 S Lake Ave #870 Pasadena, CA 91101 Municipal Service Review and Sphere of Influence Update City of La Mirada City of Whittier Adopted by the Commission (LA LAFCO) on March 10, 2021 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 TABLE OF CONTENTS EXECUTIVE SUMMARY ...................................................................................................... 1 Legal Requirements and Purpose .................................................................................................. 1 Summary of MSR Findings ............................................................................................................. 2 COVID-19 Pandemic and Potential Consequences ....................................................................... 2 INTRODUCTION ................................................................................................................. 4 LAFCO Responsibilities .................................................................................................................. 7 Sphere of Influence ......................................................................................................................... 7 Disadvantaged Unincorporated Communities ......................................................................... 8 Sphere of Influence Updates and LAFCO Policy ..................................................................... 8 Municipal Service Review (MSR) Requirements ............................................................................ 9 Previous MSR Findings ................................................................................................................ 10 Purpose of this MSR and Scope of Work ..................................................................................... 11 Methodolgy ............................................................................................................................ 11 SERVICE REVIEW – CITY OF LA MIRADA ........................................................................ 16 History and Incorporation .............................................................................................................. 17 Form of Government and Staffing ................................................................................................. 17 Current Sphere of Influence .......................................................................................................... 19 Extraterritorial Services .......................................................................................................... 22 Services Provided ......................................................................................................................... 22 Fiscal Health ................................................................................................................................. 29 Annual Audit Findings ............................................................................................................ 29 Operating Revenues .............................................................................................................. 30 Operating Expenditures ......................................................................................................... 35 Performance Standards ................................................................................................................ 36 Reserve Fund Balance .......................................................................................................... 36 Pension and OPEB Obligations ............................................................................................. 37 COVID-19 Pandemic Response ............................................................................................ 39 California State Auditor Fiscal Health Evaluation .................................................................. 40 Housing Needs and Housing Element Reporting .................................................................. 40 SERVICE REVIEW – CITY OF WHITTIER ........................................................................... 42 History and Incorporation .............................................................................................................. 43 Form of Government and Staffing ................................................................................................. 43 i Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 Current Sphere of Influence .......................................................................................................... 45 Extraterritorial Services Provided ........................................................................................... 48 Services Provided ......................................................................................................................... 48 Fiscal Health ................................................................................................................................. 55 Annual Audit Findings ............................................................................................................ 55 Operating Revenues .............................................................................................................. 56 Operating Expenditures ......................................................................................................... 61 Performance Standards ................................................................................................................ 62 Reserve Fund Balance .......................................................................................................... 62 Pension and OPEB Obligations ............................................................................................. 62 COVID-19 Pandemic Response ............................................................................................ 64 California State Auditor Fiscal Health Evaluation .................................................................. 66 Housing Needs and Housing Element Reporting .................................................................. 66 SPHERE OF INFLUENCE .................................................................................................. 68 Methodology ................................................................................................................................. 68 Determination ................................................................................................................................ 69 City Interest ............................................................................................................................ 69 Public Facilities in Proximity ................................................................................................... 70 Proximity of Local Shopping .................................................................................................. 70 School Attendance ................................................................................................................. 71 City Fiscal Condition .............................................................................................................. 71 Conclusion .................................................................................................................................... 73 MSR DETERMINATIONS ................................................................................................... 74 Population, Growth, and Housing ................................................................................................. 74 Disadvantaged Unincorporated Communities in SOI ................................................................... 76 Present and Planned Capacity of Facilities .................................................................................. 77 Financial Ability to Provide Services ............................................................................................. 78 Opportunities for Shared Facilities ................................................................................................ 78 Accountability for Community Service Needs ............................................................................... 78 La Mirada ............................................................................................................................... 79 Whittier ................................................................................................................................... 80 SOI Determinations and Recommendations ................................................................................. 82 APPENDICES .................................................................................................................... 84 Appendix 1: Current La Mirada and Whittier Spheres of Influence ............................................... 85 ii Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 Appendix 2: City of La Mirada Organizational Chart ..................................................................... 86 Appendix 3: City of Whittier Organizational Chart ......................................................................... 87 Appendix 4: Whittier SOI and Disadvantaged Unincorp. Communities ........................................ 88 Appendix 5: Park and Recreational Facilities near Joint SOI ....................................................... 89 Appendix 6: School Attendance Boundaries in Joint SOI Area .................................................... 90 Appendix 7: Recommended Sphere of Influences ........................................................................ 91 TABLE OF FIGURES Figure 1: Locator Map .............................................................................................................................. 4 Figure 2: Demographic Comparison - La Mirada and Whittier ................................................................. 6 Figure 3: Land Use Summary - La Mirada ............................................................................................. 17 Figure 4: Demographic Summary of La Mirada SOI .............................................................................. 21 Figure 5: La Mirada Service Provider Matrix .......................................................................................... 23 Figure 6: City of La Mirada Operating Revenue History ......................................................................... 30 Figure 7: La Mirada General Tax Revenues as Compared to All California Cities ................................ 32 Figure 8: City of La Mirada Operating Expenditure History .................................................................... 35 Figure 9: La Mirada Department Expenditures and Personnel .............................................................. 36 Figure 11: La Mirada Pension and OPEB Liabilities .............................................................................. 37 Figure 12: La Mirada Pension Ratios ..................................................................................................... 38 Figure 13: La Mirada OPEB Ratios ........................................................................................................ 38 Figure 14: La Mirada 5th Housing Element Cycle Production ................................................................ 41 Figure 15: Land Use Summary - Whittier ............................................................................................... 43 Figure 16: Demographic Summary of Whittier SOI ................................................................................ 47 Figure 17: Whittier Service Provider Matrix ............................................................................................ 49 Figure 18: Whittier Operating Revenue History ...................................................................................... 56 Figure 19: Whittier Revenues as Compared to Average California City ................................................ 58 Figure 20: City of Whittier Operating Expenditure History ...................................................................... 61 Figure 21: Whittier Department Expenditures ........................................................................................ 62 Figure 23: Whittier Pension and OPEB Liabilities .................................................................................. 63 Figure 24: Whittier Pension Ratios ......................................................................................................... 64 Figure 25: Whittier 5th Housing Element Cycle Production ................................................................... 67 Figure 24: Current and Potential Annual RHNA Housing Goals - La Mirada ......................................... 75 Figure 25: Current and Potential Annual RHNA Housing Goals - Whittier ............................................. 76 iii Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 Figure 26: Screenshot of City of La Mirada Website Home Page .......................................................... 80 Figure 27: Screenshot of City of Whitter Website Home Page .............................................................. 81 iv Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 LIST OF ABBREVIATIONS USED ACS American Community Survey CAFR Consolidated Audited Financial Report CalPERS California Public Employees' Retirement System CDBG Community Development Block Grant(s) CFPD Consolidated Fire Protection District CKH Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000 COVID-19 Coronavirus Disease DOF California Department of Finance DUC Disadvantaged Unincorporated Community GIS Geographic Information System HCD California Department of Housing and Community Development LAFCO Local Agency Formation Commission LMHIF Low and Moderate Income Housing Fund MSR Municipal Service Review MVLF Motor Vehicle License Fees OPEB Other Post-Retirement Benefits RHNA Regional Housing Needs Allocation RPTTF Redevelopment Property Tax Trust Fund SCAG Southern California Association of Governments SOI Sphere of Influence TRA Tax Rate Area v Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 EXECUTIVE SUMMARY The Local Agency Formation Commission (“LAFCO”) for the County of Los Angeles is preparing this Municipal Service Review (“MSR”) and Sphere of Influence (“SOI”) review for the cities of La Mirada and Whittier. LAFCO acts as the county-wide oversight agency that coordinates logical and timely changes to local government boundaries. The last time La Mirada and Whittier were reviewed by LAFCO was part of a larger MSR (LAFCO’s Gateway Municipal Services Review, prepared by Burr Consulting dated November 30, 2005 and adopted by LAFCO on December 14, 2005, herein referred to as the “2005 MSR”). Since that time, the cities have experienced several changes but neither has annexed or modified their SOI. This MSR reviews both cities’ corresponding services within the requirements of State law and LAFCO policies, including their corresponding SOIs. A primary objective for this MSR is to provide LAFCO a recommendation on an existing joint SOI over the East La Mirada/East Whittier1 unincorporated area, which both La Mirada and Whittier have for some time retained in their respective spheres jointly. LEGAL REQUIREMENTS AND PURPOSE The Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000, Government Code Section 56430 et. seq., (“CKH”) requires that LAFCOs prepare periodic reviews of services provided by most local agencies and provides discretion on the manner in which a commission may go about undertaking these reviews. These reviews are instrumental in making 1 The 2005 Gateway MSR referred to this area as “East La Mirada” although it is commonly referred to as “East Whittier” as well 1 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 determinations on jurisdictional and SOI boundaries, informing commissions, affected agencies, and the general public of opportunities for improving service delivery. SUMMARY OF MSR FINDINGS § Both La Mirada and Whitter face increasing pressures on housing supply and potentially increased demands for new housing and population growth under the growth forecast in the 6th Round Housing element cycle. § Meeting these growth forecasts will be challenging not only from a processing standpoint but also from an infrastructure perspective. For example, La Mirada reports concern over the capacity of current sewer infrastructure to accommodate future growth. § Both La Mirada and Whittier are relatively sound fiscally, with La Mirada considered overall a low risk city by the State Auditor and its condition of retirement liabilities and reserves. Whitter is less favorable but still relatively healthy overall. § RSG did not identify opportunities for shared facilities or services beyond what is currently occurring in these communities today. § Both cities employ best practices to provide transparency and accountability to meeting the municipal service needs of the public they serve. § RSG recommends removing the joint SOI from the Whittier SOI and reconfirming the existing La Mirada SOI. An analysis of the joint SOI is contained beginning on page 68. See page 82 for SOI recommendations in their entirety. COVID-19 PANDEMIC AND POTENTIAL CONSEQUENCES During the time of preparation of this MSR, the COVID-19 virus pandemic has continued its spread across the world and the United States, resulting in the infection of nearly 2,973,174 Californians as of the writing of this MSR. As of January 17, 2021, LA County had a total of 2 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 1,024,190 confirmed cases of COVID-19. La Mirada had a total of 3,471 confirmed cases and Whittier had a total of 9,295 confirmed cases. Efforts to control the spread of the coronavirus have included a statewide stay-at-home order by Governor Newsom on March 19, 2020, the ensuing shutdown of many parts of the State economy, and a nationwide spike in unemployment with nearly 40 million Americans filing for unemployment by the end of May 2020. State and Federal resources have been directed to support the economic effects of the pandemic as well, and the long-term economic consequences of an apparent recession are not yet known. Along with the uncertainty of these health and economic impacts, public agencies are likely to experience more fiscal challenges in the coming months, if not much longer, due to the ongoing pandemic. Due to these evolving circumstances, RSG cannot provide a complete determination regarding the forthcoming fiscal and operational impacts on the two cities studied in this MSR, or any public agency, at this time. Rather, the findings in this MSR should be contextualized with the ongoing COVID-19 pandemic and its possible consequences by LAFCO, City management, and the respective elected officials. 3 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 INTRODUCTION Both La Mirada and Whittier are located in the 4th Supervisorial District in southeastern Los Angeles County (“County”), east of Interstate 605 between State Route 60 and Interstate 5. Notable landmarks in La Mirada include Biola University, and the City-operated La Mirada Theatre for the Performing Arts and Splash! La Mirada Regional Aquatics Center. Within Whittier, major landmarks include Uptown Whittier, the Presbyterian Intercommunity Hospital, the historic Fred C. Nelles Youth Correctional Facility (currently being redeveloped), and Whittier College. Figure 1 shows the general location of the two cities studied in this MSR. Figure 1: Locator Map 4 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 The City of La Mirada is located in the southeastern portion of Los Angeles County, along the border shared with Orange County. La Mirada shares borders with the cities of Buena Park and Fullerton to the south, La Habra to the east, Norwalk and Santa Fe Springs to the west, and unincorporated County lands within its sphere of influence to the immediate north. La Mirada is home to 48,877 residents2, 1,406 business, and a workforce of 15,353 employees3. The City was incorporated on March 23, 1960 under the name Mirada Hills, which was changed to La Mirada following the 1960 November elections. At present, La Mirada spans an area of approximately 7.8 square miles and four unincorporated sphere of influence areas totaling another 1.5 square miles. All four unincorporated SOI areas border the northern edge of La Mirada. La Mirada’s current 9.3 square mile SOI was initially established in 1976, expanded in 1977, and reconfirmed in 2005. Located north of La Mirada’s sphere of influence is the City of Whittier. The Whittier city limits share borders with unincorporated Hacienda Heights to the north, the cities of La Habra Heights and La Habra to the east, unincorporated County to the south, and Pico Rivera and Santa Fe Springs to the west. As of the beginning of this year, Whittier contains 86,801 residents, 2,903 businesses, and 34,388 employed persons. Whittier incorporated by charter in 1898, making it one of the oldest cities in the County. Whittier city limits span a total of 14.8 square miles and together with 6 unincorporated areas has a SOI of approximately 23.7 square miles. The 9 square mile unincorporated SOI area consists of three areas to the south of the City, two areas to the west, and one large area north of the City. 2 Department of Finance Population Estimates, January 2020 3 ESRI Business Analyst Online, November 2020 5 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 Whittier’s current SOI was initially established in 1975, expanded in 1976 & 1980, and reconfirmed in 2005. Figure 2 presents a demographic and land use profile of both cities reviewed in this MSR. Figure 2: Demographic Comparison - La Mirada and Whittier La Mirada Whittier Population as of 2020 4 8,877 8 6,801 Population in 2010 4 8,527 8 5,331 Annual Growth Rate (2010-2020) 0.07% 0.17% Housing Units 1 5,285 3 0,021 Persons / Unit 3 .20 2 .89 City Area (sq mi) 7 .8 1 4.7 Persons / Sq Mi 6 ,234 5 ,925 Median HH Income $ 9 6,403 $ 8 1,547 Projected Population in 2035 5 1,000 9 3,700 Annual Proj. Growth 2020-2035 0.28% 0.51% Projected Population in 2040 5 2,100 9 6,900 Annual Proj. Growth 2020-2040 0.32% 0.55% Sources: California Department of Finance, Southern California Association of Governments, US Census, ESRI Business Analyst Online (Growth rates are presented as annual growth rates) As illustrated in Figure 2, Whittier’s population and land area are roughly twice as large as La Mirada’s. Population growth was moderate between 2010 and 2020 in both communities, however populations over the next 15 to 20 years are expected to grow 3 to 4 times the recent annual growth rate based on 2014 projections from the Southern California Association of Governments (“SCAG”). Housing development will be a necessity to accommodate this growth; SCAG has proposed significantly higher production targets for both cities for the 2021-2028 6th Round regional housing needs allocation (“RHNA”) which are discussed later in this MSR. Additionally, the two cities differ in terms of their governance model (La Mirada is a General Law city, while Whittier is a Charter City) and service model (La Mirada is generally regarded as a 6 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 contract service city while Whittier is more of a full service city). These differences are discussed later in this MSR. LAFCO RESPONSIBILITIES CKH directs LAFCOs in California to discourage urban sprawl, encourage the orderly formation and development of cities and special districts, and to preserve agricultural land. LAFCOs act as the county-wide oversight agency that is responsible for coordinating logical and timely changes in local governmental boundaries, including annexations and detachments of territory, incorporations of cities, formations of special districts, and consolidations, mergers, and dissolutions of districts. In this manner, LAFCOs play an important role in assuring the thoughtful, appropriate, and efficient reorganization, simplification, and streamlining of quality local governmental services. As part of these objectives, LAFCOs establish and periodically review spheres of influence for local agencies through a process known as a municipal service review and sphere of influence update. These processes are described below. SPHERE OF INFLUENCE In 1972, LAFCOs throughout the state were tasked with determining and overseeing the sphere of influence for local government agencies. A sphere of influence is a planning boundary that may be outside of an agency’s jurisdictional boundary (such as a special district service area or city limits) that designates the agency’s probable future boundary and service area. Factors considered in a sphere of influence include current and future land use, capacity needs, and any relevant areas of interest such as geographical terrain, location, and any other aspects that would influence the level of service. Per Government Code Section 56425, a sphere of influence shall consider and prepare a written statement of its determinations on the following factors: 1. the present and planned land use in the area, including agricultural and open space lands; 7 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 2. the present and probable need for public facilities and services in the area; 3. the present capacity of public facilities and adequacy of public services that the agency provides or is authorized to provide; 4. the existence of any social or economic communities of interest in the area; and 5. the present and need for those public facilities and services of any disadvantaged unincorporated communities within the existing sphere of influence. The purpose of a sphere of influence is to ensure the of efficient services while discouraging urban sprawl and the premature conversion of agricultural and open space lands by preventing overlapping jurisdictions and duplication of services. On a regional level, LAFCOs coordinate the orderly development of a community through reconciling differences between different agency plans. This is intended to ensure the most efficient urban service arrangements are created for the benefit of area residents and property owners. DISADVANTAGED UNINCORPORATED COMMUNITIES As part of the MSR, RSG considered the impact of the SOI related to Disadvantaged Unincorporated Communities. A Disadvantaged Unincorporated Community (“DUC”) is defined as an area of inhabited territory located within an unincorporated area of a county in which the annual median household income is less than 80 percent of the statewide median household income. State law considers an area with 12 or more registered voters to be an inhabited area. LAFCO designated the DUCs in the County using 2014-2018 ACS Census data, meaning any unincorporated area wherein the median household income is less than $56,982. SPHERE OF INFLUENCE UPDATES AND LAFCO POLICY From time-to-time, a sphere of influence may be modified as determined by the Commission; the procedures for making sphere amendments are outlined in CKH, and in some cases, further 8 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 refined by a Commission’s own guidelines. Pursuant to Government Code Section 56430, a Commission must first conduct a municipal services review prior to updating or amending a SOI. The Commission adopted a “Sphere of Influence Policy” on November 13, 2019, which provides a framework for SOI updates considered after an MSR is completed. The policy defines three types of SOIs for cities and special districts: • Coterminous Sphere of Influence: A SOI for a city or special district that includes the same physical territory as the jurisdictional boundaries of that city or special district. The Commission adopts a Coterminous SOI if there is no anticipated need for services outside the jurisdictional boundaries of a city or special district, or if there is insufficient information to support inclusion of additional territory within the sphere. • Larger than Sphere of Influence: A SOI for a city or special district which includes territory that is larger than the jurisdictional boundary of the subject city or special district. The Commission adopts a Larger than SOI if there is an expectation of future growth of the agency’s physical boundaries and associated service area. • Zero Sphere of Influence: A SOI for a city or special district that includes no territory. The Commission adopts a Zero SOI if the functions, services assets, and liabilities of that city or special district should ultimately be re-assigned to another public agency or service provider. RSG analyzes the spheres in the “SOI Recommendations” section (page 82) of this MSR. MUNICIPAL SERVICE REVIEW (MSR) REQUIREMENTS Section 56425(g) of CKH requires that LAFCOs evaluate a given SOI every five years, or as necessary; and the vehicle for doing this is known as a Municipal Service Review. Pursuant to Government Code Section 56430, Municipal Service Reviews are to make determinations considering the seven (7) required topics based on the Cortese-Knox-Hertzberg Act. These seven topic areas include the following: 1. Growth and population projections for the affected area; 9 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 2. Location and characteristics of any disadvantaged unincorporated communities within or contiguous to the sphere of influence(s); 3. Present and planned capacity of public facilities and adequacy of public services, adequacy of public services, infrastructure needs, or deficiencies related to sewers, municipal and industrial water, and structural fire protection in any disadvantaged, unincorporated communities within or contiguous to the sphere of influence; 4. Financial ability of agencies to provide services; 5. Status of, and opportunities for, shared facilities; 6. Accountability for community service needs, including government structure and operational efficiencies; and 7. Any other matter related to effective or efficient service delivery, as required by Commission Policy. The focus of an MSR is to ensure that public services are being carried out efficiently and the residents of any given area or community are receiving the highest level of service possible, while also discouraging urban sprawl and the premature conversion of agricultural lands. If an MSR determines that certain services are not being carried out to an adequate standard, LAFCO can recommend changes be made through making sphere changes and dissolution or consolidation of service providers to provide the best service possible to the population. PREVIOUS MSR FINDINGS The 2005 MSR made several findings with respect to the two cities but recommended no changes to either SOI. For context, these findings are identified below: • With little vacant land available, La Mirada had been experiencing modest growth at the time and expected a commensurate increase in service demands. 10 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 • The 2005 MSR indicated that La Mirada did have a number of recent sewage overflows as a result of rainwater inflow into the sewage collection system, pointing out a concern about the wastewater infrastructure in the city at the time. • Growth in Whittier was projected to be “at a moderate rate” with comparable increasing demand in services. The 2005 MSR concluded that municipal services (were) adequate, except for wastewater and solid waste. • Specifically, the 2005 MSR reported that Whittier’s sewer system experiences a relatively high overflow rate due to rainwater inflows and may need system improvements. • The 2005 MSR also indicated that solid waste disposal rates per capita within Whittier were relatively high compared other jurisdictions and the City had not met required diversion rates. PURPOSE OF THIS MSR AND SCOPE OF WORK The primary objective of this MSR is to meet the periodic review requirements of La Mirada and Whittier pursuant to the CKH and LAFCO guidelines. In addition, this MSR studies in particular the joint SOI area in East La Mirada/East Whittier that has been shared by the two cities. METHODOLGY RSG worked in coordination with LAFCO staff throughout the duration of this MSR. Key tasks and activities in the completion of this MSR include data collection, interviews, city profile development, determination analysis, public review of MSR, and the adoption of the final MSR. Data Collection To fully understand key factors and current issues involving the two cities, RSG conducted an initial working session with LAFCO staff to determine the project scope and process and formalize overall MSR objectives, schedules, policy and fiscal criteria, city service standards, and roles and responsibilities. The MSR began with a complete and thorough review of available data and documents. In collecting data, adopted budgets, comprehensive financial reports, capital 11 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 improvement plans, strategic plans, and general plans were assessed to develop a comprehensive overview of both cities. In addition, various reports and documents were utilized from SCAG, California Department of Finance, California State Controller, the Census Bureau, LAFCO, Costar (a commercial real estate database), and ESRI Business Analyst. Population growth rates were determined by utilizing Department of Finance estimates through 2020 and projected figures from SCAG for the years 2035 and 2040. Interviews In coordination with LAFCO, during the month of December 2019, RSG met with the executive leadership of both cities including the City of Manager for La Mirada, and the Assistant City Manager and Director of Community Development for Whittier. These interviews allowed RSG to gain insight on the current operations and any unique challenges of each city. The content of these interviews included the following topics: • Financing constraints and opportunities; • Growth and population projections, including RHNA allocations and long-term strategy for service delivery; • Infrastructure needs or deficiencies; • Cost avoidance opportunities; • Opportunities for rate restructuring regarding services provided; • Opportunities for shared facilities with other cities or agencies; • Government structure options, including advantages or disadvantages of consolidation or reorganization of service providers; • Evaluation of management efficiencies; and 12 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 • Local accountability and governance, specifically the structures in place to support public engagement and participation. In November 2020, RSG staff conducted telephone interviews with the City Manager of Whittier and the Assistant City Manager of La Mirada to follow up on outstanding questions and receive an update on the current issues facing the cities, including the COVID-19 crisis. Agency Profiles Following Data Collection and Interviews, RSG developed city profiles based on the criteria noted prior and required for the completion of the MSR per the Cortese-Knox-Hertzberg Act. This includes key characteristics including services offered, staffing levels, population and growth, service providers, infrastructure, financial condition, and boundary areas and maps. Department profiles can be found in the following sections of this MSR. California State Controller’s Office Raw Data Cities in California are required by Government Code Section 53891 to provide the State Controller’s Office (“SCO”) with an annual report of all financial transactions, commonly known as the Cities Financial Transactions Report. According to the SCO, the purpose of this report is to collect and compile statewide financial and statistical data on as uniform a basis as possible. Cities are required to submit information about financial balances and transactions within seven (7) months of the end of the fiscal year. The reported balances and transactions are derived from audited financial statements prepared in accordance with generally accepted accounting principles. The data collected in the Financials Transactions Report is published on the SCO’s “By the Numbers” website and in raw data format. The raw dataset is reports general revenues, functional tax revenues, and other revenue sources, including charges for services, special benefit assessments, use of money, and intergovernmental revenues. The dataset provides current expenditures by department (general government, public safety, community development, 13 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 transportation, etc.), and operating expenditures (salaries and wages, retirement benefits, materials and supplies, contract services, debt service, and capital outlay). RSG utilized the State Controller’s raw data to review historical operating revenues and expenditures for each city and compare local revenues and expenditures to statewide averages. From this data, RSG can make generalizations about each city’s fiscal health, including tax revenue and expenditure trends. Housing Estimate Methodologies The California Department of Finance (“DOF”) prepares annual population and housing estimates using the Housing Unit Method. The Housing Unit Method is a commonly used methodology for estimating housing units for small areas. To produce these estimates annually, DOF distributes housing estimates according to the US Census into five housing categories, including single family detached, single family attached, two to four units, five or more units, and mobile homes. Housing unit estimates are adjusted by unit additions, as a result of new construction or annexations, and demolitions, as reported by local jurisdictions and the US Census. Because DOF’s estimate of housing units is not an actual inventory of units, figures are likely to vary from other sources. Since 1969, local governments in California have been required to plan to meet the housing needs of their community. As such, cities adopt housing elements as part of the general plan and must provide opportunities to fulfill housing needs through zoning. The City’s regional government, SCAG, develops and allocated housing for each jurisdiction. Housing Elements are prepared in cycles and cities submit Annual Progress Reports to the California Department of Housing and Community Development (“HCD”) by April 1 of each year. The 5th Cycle for SCAG, the most recent cycle, spanned from January 1, 2014 through October 31, 2021. Comparatively, HCD’s inventory of housing units is based on Annual Progress Reports, which includes an inventory of the number of housing units permitted by cities annually. HCD’s housing estimates fail to account for units that are permitted but not developed and units that are permitted in years that a city fails to submit an Annual Progress Report. Between 2013 and 2018, HCD 14 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 received 2,354 Annual Progress Reports from cities and counties in California. However, 51 percent of cities (275 cities) failed to submit all six Annual Progress Reports due between 2013 and 2018, and a total of 874 Annual Progress Reports (27 percent) were not submitted to HCD. 15 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 SERVICE REVIEW – CITY OF LA MIRADA The City of La Mirada was incorporated as a general law city in 19604 and currently has a population of 48,8875. The City’s incorporated area includes 7.8 square miles and is bounded by unincorporated territory, the cities of Cerritos and Santa Fe Springs, unincorporated areas of Los Angeles County, and the County of Orange. The largely urbanized City of La Mirada consists mostly of residential areas, including planned residential developments, recreational and open space, and neighborhood-serving commercial land uses. The southern portion of the City of La Mirada, south of the Burlington Northern Santa Fe Railroad tracks, is primarily industrial with freeway-oriented commercial uses adjacent to the Santa Ana Freeway (Interstate Highway 5).6 The City’s major employers include the Norwalk-La Mirada Unified School District (3,457 employees), Biola University (1,383 employees), US Food Service (650 employees), Kindred Hospital (216 employees), Home Depot (180 employees), and Makita USA Inc (169 employees). The two largest employers are educational institutions. Figure 3 provides a land use summary of residential and commercial development in La Mirada. As compared to the greater County, single family housing is the predominant residential building type, representing over 85 percent of the 15,175 housing units in the City. Only 83 of these 15,175 units have been constructed since 2010, or less than 0.5 percent. Among commercial uses, industrial makes up over 81 percent of the commercial building area in La Mirada. 4 Source: City of La Mirada Adopted Budget Fiscal Year 2020-21 5 Source: California Department of Finance Demographic Research Unit Population Estimates for Cities, Counties, and the State January 1, 2020 6 Source: City of La Mirada Zoning Map 16 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 Figure 3: Land Use Summary - La Mirada La Mirada LA Co. % Residential Units /1 Units % Single Family 12,922 85.2% 54.8% Multifamily 2,081 13.7% 43.6% Mobile Home 172 1.1% 1.6% Total 15,175 100.0% 100.0% Units Built Since 2010 83 0.5% Commercial /2 Gross SF % Retail 1,801,870 11.1% Industrial 13,155,046 81.2% Office 432,920 2.7% Other 809,869 5.0% Total 16,199,705 100.0% New Construction Since 2010 721,546 4.5% 1/ Source - DOF (2020) 2/ Source - Costar HISTORY AND INCORPORATION After two unsuccessful attempts to incorporate, the City of La Mirada (originally under the name Mirada Hills) voted in favor of incorporation on March 23, 1960, becoming the 68th City in Los Angeles County. FORM OF GOVERNMENT AND STAFFING The City of La Mirada is a general law city that is governed by a five (5) member City Council that is elected by eligible registered voters according to five (5) district boundaries. Each year, the City Council select a Mayor and Mayor Pro Tem to preside over meetings. City Council 17 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 Districts 1 and 2 vote for Councilmembers during Congressional Midterm Elections (the next being 2022) and Districts 3, 4, and 5 vote during Presidential Elections (the most recent being 2020). City Councilmembers are elected to four (4) year terms.7 The City Council appoints a City Manager to serve as the administrative head of the City government responsible for the efficient operation of the City.8 Additionally, the City Council appoints a City Attorney, City Clerk, Community Services Commission, Planning Commission, Public Safety Commission, Community Foundation, Historical Preservation Advisory Council, Senior Council, and Youth Council. According to the 2020-21 budget, the City of La Mirada operates with an annual general fund budget of $33 million and employs a total of 76 full-time employees and an additional 230 hourly employees. La Mirada is generally regarded as a contract city, meaning that it outsources administration of many municipal services rather than using staff. La Mirada largely contracts out with other agencies to provide services such as law enforcement and fire suppression to its residents, but it also provides other services in house such as planning and parks and recreation. The City of La Mirada is organized into several departments operating under the direction of the City Manager, including Administrative Services, Community Development, Community Services, Public Safety and Public Works. The City Council of La Mirada also serves as the Successor Agency of the former Redevelopment Agency, as well as the governing body for four (4) blended component units9 including the Public 7 Source: La Mirada Municipal Code Chapter 2.02 City Council Elections 8 Source: La Mirada Municipal Code Chapter 2.08 City Manager 9 Definition: The California Secretary of State defines a blended component unit as a legally separate entity that is in substance part of the primary government’s operations. 18 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 Financing Authority, Parking Authority, Housing Successor Agency, and Theatre for the Performing Arts Foundation. The City prides itself on providing a safe, attractive, and family-friendly community for residents to enjoy quality recreational programs, beautiful parks, and well-maintained civic facilities.10 The City’s 2020-21 Adopted Budget, which is branded with the phrase “Dedicated to Service”, is decorated with photographs of the civic center, park playgrounds, the City-operated Aquatics center, and public works storm and wastewater improvements. The City’s Vision Statement is to offer a “safe, well-maintained, responsive, innovative, and financially sound community that celebrates families, businesses, and an exceptional quality of life.” Appendix 2 contains the current organization chart of City of La Mirada from the Adopted Budget for Fiscal Year 2020-21. CURRENT SPHERE OF INFLUENCE Appendix 1 shows the La Mirada boundaries and SOI as of November 2020. La Mirada’s 9.3 square mile SOI is larger than the current city limits, encompassing a total of 7.8 square miles within the city boundaries and four (4) adjacent unincorporated areas of approximately 1.5 square miles generally located north of the city limits. LAFCO’s adopted La Mirada SOI includes a portion of the unincorporated community of East La Mirada/East Whittier, which was adopted as a joint SOI between the City of La Mirada and City of Whittier.11 (See more below under the Sphere of Influence section.) 10 La Mirada Living newsletter, Winter 2020 11 Source: LAFCO Gateway Final Municipal Service Review, November 30, 2005 19 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 The four (4) areas include Study XV Area 1-C(1), 1-C(2), 2(A), and 2(C), as indicated on La Mirada’s SOI map12 by LAFCO and dated September 16, 2014. The SOI areas are described below: • Study XV Area 1-C(1) was established in 1976 and is a triangular area that is generally adjacent to the City’s north western boundary and is bound roughly by Imperial Highway to the south, Telegraph Road to the north east, and Burgess Avenue to the west. • Study XV Area 1-C(2) was established in 1977 and is immediately to the west of Area 1- C(1) on the City’s north western boundary, and extends from Burgess Avenue on the east, Imperial Highway on the south, Valley View Avenue on the west, and Telegraph Road on the north. • Study XV Area 2(A) was established in 1976 and is a rectangular area on the northern boundary of the City that extends to the City of Whittier boundary, and is generally bound by Santa Gertrudes Avenue on the east, Lemon Drive on the south, Stamy Road on the west, and Leffingwell Road on the north. • Study XV Area 2(C) is the Joint SOI with the City of Whitter, and subject of this MSR. Area 2(C) was established in 1976 and is generally bound by an extension of Valley Home Avenue on the east (also the County of Orange boundary), Imperial Highway on the south, Santa Gertrudes Avenue on the west, and Lambert Road on the north. This area is commonly referred to as East La Mirada but is also referenced on some maps as East Whittier. 12 LAFCO City Maps, La Mirada Sphere of Influence Map, revised September 16, 2014. https://lalafco.org/en/city-maps/ 20 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 According to LAFCO designations, none of La Mirada’s unincorporated SOI areas are designated a Disadvantaged Unincorporated Community, including but not limited to the joint SOI in East La Mirada/East Whittier. Figure 4 presents a summary of the demographics of the La Mirada city limits as compared to the unincorporated SOI and County overall. Figure 4: Demographic Summary of La Mirada SOI City SOI County Population as of 2020 48,877 14,916 10,173,432 Population in 2010 48,527 13,559 9,818,605 Population Growth Since 2010 0.07% 0.96% 0.36% Housing Units 15,285 4,723 3,571,222 Persons / Unit 3.20 3.16 2.85 Land Area (sq mi) 7.8 1.5 4,057.9 Persons / Sq Mi 6,234 10,147 2,507 Median HH Income $ 96,403 $ 69,795 Projected Population in 2025 49,641 14,451 10,311,054 Annual Proj. Growth 2020-2025 0.31% -0.63% 0.27% Projected Population in 2035 51,000 11,145,100 Annual Proj. Growth 2020-2035 0.28% 0.61% Projected Population in 2040 52,100 11,514,800 Annual Proj. Growth 2020-2040 0.32% 0.62% Sources: California Department of Finance, Southern California Association of Governments, US Census, ESRI Business Analyst Online (Growth rates are presented as annual growth rates) Approximately 14,916 people reside in the City’s unincorporated SOI as compared to 48,877 residents inside the city limits. While the city limits and unincorporated SOI are similar in terms of average persons per household, population densities are higher in the SOI because it is more residential in character. RSG also notes that population within the unincorporated SOI has grown by nearly 1 percent annually compared to 0.07 percent within the city limits. 21 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 According to LAFCO designations, none of the La Mirada SOI are within a designated Disadvantaged Unincorporated Community. These designations are subject to change as new Census data is released. EXTRATERRITORIAL SERVICES Based on consultation with City management, RSG understands that La Mirada does not provide any extraterritorial services at the present time. SERVICES PROVIDED In the City of La Mirada general government, culture and leisure, and public works services are provided largely by City staff. Public safety and community development services are primarily provided by contractors, other government agencies, or private entities. The following section discusses municipal services provided within La Mirada and identifies the service provider. Figure 5 provides an inventory of the primary services offered within La Mirada and how they are provided to City residents. 22 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 Figure 5: La Mirada Service Provider Matrix Public Service Responsible Agency Provider General Government City La Mirada City Council and City Manager Law Enforcement City (Contract) Los Angeles County Sheriff's Department Traffic & Accident Investigation City (Contract) Los Angeles County Sheriff's Department Animal Services City (Contract) Los Angeles County Department of Animal Care and Control Fire Protection/EMS CFPD Consolidated Fire Protection District of Los Angeles County Ambulance / Transport City (Contract) American Medical Response Mosquito Control LA County VCD Greater Los Angeles County Vector Control District Land Use Planning City Community Development Department - Planning Division Building and Safety City (Contract) County of Los Angeles Building and Safety Division Code Enforcement City Code Enforcement Division Engineering City (Contract) County of Los Angeles Building and Safety Division Parks and Recreation City Community Services Department Road Maintenance City (Contract) Los Angeles County Department of Public Works Streetlighting City (Contract) Los Angeles County Department of Public Works Sewer LA Co. Sanitation Districts Los Angeles County Sanitation District 18 Storm Drainage City (Contract) Los Angeles County Department of Public Works Domestic Water CBMWD / Suburban Water Central Basin MWD and Suburban Water Systems Solid Waste Disposal City (Contract) Contract - EDCO Disposal Cable / Communications City (Contract) AT&T, Frontier Communications, and Time Warner Transit City (Contract) MV Transportation, Inc., Norwalk Transit, and Whittier Transit Gas City (Contract) Southern California Gas Company Public Education NLMUSD Norwalk - La Mirada Unified School District Library LA County County of Los Angeles Public Library System Government Services General government services are primarily provided by elected officials and city management. The City’s elected officials are responsible for all legislative and policy functions that establish the quality of City services. In addition to the City Council, the City’s legislative bodies include special citizen advisory commissions and other bodies, including the Community Services Commission, Planning Commission, and Public Safety Commission. The City Clerk and City Attorney provide support to the City’s legislative bodies. Other general government services are provided by the City’s administration and support staff, which is responsible for implementing the policies and legislation created by the City Council and other legislative bodies, administering the daily operations, and promoting economic development in La Mirada. These functions are performed by city administration, support 23 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 services, human resources, risk management, finance administration, information technology, and the economic development and housing staff. Police Services City of La Mirada contracts with the County Sheriff’s Department for the provision of policing services. The Sheriff’s La Mirada substation is located in the Civic Center and provides office facilities and a staging area for deputies and civilian public safety officers. La Mirada provides public safety administration. La Mirada provides public safety administration and emergency preparedness services. The City’s public safety administration includes planning, organization, and coordination of public safety activities. Emergency preparedness includes coordination of a comprehensive emergency management program, on-going planning and training of City personnel, educational programs for residents, and maintenance of a network of communication and cooperation within the community and with outside agencies. Fire Protection and Ambulatory Services La Mirada is within the Consolidated Fire Protection District of Los Angeles County. The CFPD Stations 49 and 194 are located in the city limits. The City separately contracts with American Medical Response for ambulatory services. Animal Services Under contract with the City, the County Animal Care and Control Department provides animal control and rescue services to La Mirada. Vector Control The Greater Los Angeles County Vector Control District, an independent special district of the County, provides ongoing mosquito and vector control within La Mirada. 24 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 Community Development The City’s Community Development Department oversees the physical development of the City and includes the Planning and Building and Safety Divisions. La Mirada contracts with Los Angeles County for planning and building services, but the department also employs several personnel with planning and building expertise. These divisions are responsible for implementing the City’s land use and building policies, including the General Plan, Zoning Ordinance, California Environmental Quality Act and building codes. The Planning Department also prepares the City’s Housing Element and Housing Annual Progress Reports. The City also acts as the Housing Successor Agency, overseeing the assets of the former Redevelopment Agency’s Low and Moderate Income Housing Fund (“LMIHF"). Income generated from the LMIHF are reinvested for housing purposes. Code Enforcement The City of La Mirada provides code enforcement services, including elimination of blight, and improvements to appearances and safety within the community. The Code Enforcement Division monitors landscaping and vegetation, trash cans and recycling, animal maintenance, signs, and graffiti. The Code Enforcement Division is partially funded with Community Development Block Grant funds. Public Works The City’s Public Works Department performs general maintenance for the City’s fleet, road medians, parks, public facilities, streets, and capital projects. Until it sunset in 2018, Measure I was responsible for funding approximately $28 million in neighborhood infrastructure repairs. The Public Works Departments includes administration and engineering, Civic Center maintenance, street and right-of-way maintenance, fleet and equipment maintenance, parks maintenance, right- of-way landscape maintenance, and Resource Center and Sheriff Station custodial services, maintenance and preparation for community events. Administrative and engineering functions include environmental management and compliance reporting, and planning, management, and control of all activities related to Public Works. 25 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 La Mirada’s adopted budget for FY 2020-21 budgeted $10.1 million for Capital Improvements. A majority of this was designated for streets, sidewalks, and storm drains ($7.3 million), public facilities ($1.5 million), and parks and recreation areas ($1.2 million). The 2020-2 Capital Improvement budget represents 30.5% of total General Fund expenditures and equates to $206.11 per capita based on 2020 population. The FY 2019-20 adopted budget allocated $23.3 million for capital improvements, with a majority of funding designated for streets, sidewalks, and storm drains ($12.4 million), public facilities ($4.1 million), and medians/landscaping and panels ($3.7 million). Capital Improvements for 2019-20 represent 63.75% of General Fund Expenditures and $748 per capita (2020 population). The FY 2018-19 adopted budget allocated $24.8 million for Capital Improvements. The majority of this funding was designated for streets, sidewalks, and storm drains ($13.1 million), medians/landscaping and panels ($3.95 million), and public facilities ($3.4 million). Capital Improvements for 2018-19 represent 69.7% of total General Fund expenditures and $508 per capita (2020 population). The FY 2018-19 and 2019-20 capital improvements relied on Measure I funding that was allocated for street and road improvements. Measure I is no longer generating revenue, but it will not create a hole in the General Fund due to a majority of the street improvements being complete. Public Works oversees all National Pollutant Discharge Elimination System (“NPDES”) permits for all City facilities that require NPDES permits. Public Works does not handle the permits for commercial businesses within the City but is now responsible for ensuring that businesses have the required NPDES permits and reporting on the status of the permit through Senate Bill 215. Water La Mirada is within the Water Replenishment District Central Groundwater Basin Division 3. The Water Replenishment District of Southern California was formed in 1959 to protect and manage groundwater resources. Additionally, the Central Basin Municipal Water District provides wholesale water in the City of La Mirada. Finally, water is provided to retail customers in the City by Suburban Water Systems, a subsidiary of South West Water Company, an investor-owned 26 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 water utility with a 42-square mile service area covering portions of Los Angeles and Orange counties with a population of over 300,000 people. Storm Drainage Under contract with the city, the County Public Works Department primarily manages the City’s storm drain system, including channels, drains, laterals, and catch basins. La Mirada manages and maintains a limited number of drains, laterals, and catch basins. Additionally, other entities, such as Caltrans, maintain individual storm water drains, laterals, and catch basins. The City has concerns about the affordability of the Los Angeles County Municipal Separate Storm Sewer System (MS$) permit as well as with group sampling as opposed to sampling at each City discharge point. Wastewater Wastewater services are provided by the County Sanitation District No. 18, a dependent special district that has provided wastewater management services since 1923. County Sanitation District No. 18 is a member of the Los Angeles County Sanitation District, which is a public agency that consists of 24 separate independent special districts. The LA County Sanitation District covers 850 square miles and 78 cities to provide wastewater services to 5.6 million citizens of Los Angeles County. All wastewater improvements are handled through the La County Sanitation District and the LA County Sewer Maintenance District. Solid Waste The City of La Mirada approved a franchise agreement with EDCO Disposal Service in 2009 for the provision of solid waste collection services. EDCO Disposal Service provides residential and commercial recycling and refuse collection services within the City. The City’s Public Works department oversees and ensures that the City complies with AB 939, which sets diversion goals that cities must meet in recycling and solid waste diversion programs. The City’s CalRecycle Annual Report for 2019 shows that La Mirada’s recycling and diversion programs are in compliance with AB 939 requirements. 27 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 Utilities Utilities are provided by third parties under franchise agreements with the City. This includes Southern California Edison (electricity) and Southern California Gas Company (natural gas). La Mirada is eligible to join a community choice aggregate, which shifts more energy decision- making to local control and can accelerate the adoption of renewables. According to the Clean Power Exchange website, La Mirada is considered in the earliest stage of adoption by virtue of other countywide efforts underway. Communications Under franchise agreements with the City; AT&T, DirecTV, Frontier Communications, and Spectrum provide communications services within La Mirada. Community Services One of the City’s larger departments, the Community Services Department provides recreational facilities management and recreation services; organizes community events; offers family, youth and senior services; and manages the aquatics center. The facility management function includes scheduling the use of city facilities and providing supervisory oversight of over 1,000 annual facility reservations and bookings for a variety of events including meetings, weddings, receptions, baby and bridal showers, birthday parties, banquets, picnics, and private parties. The recreation and community events components provide a variety of services, including administration of Summer Day Camp, Tiny Tots, and Leaders in Training programs, and various holiday events. La Mirada’s recreational facilities includes the community gymnasium, activity center, and Splash! Regional Aquatics Center. The family services component provides social services information and referrals to La Mirada residents, including family health services, Helping Hands program information and referrals, employment related services, and funding support to partner agencies providing direct service. 28 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 Performing Arts The Theatre for the Performing Arts is also operated by the City, providing theatre programming, administration, and rental services of the 1,250 seat live performance theater. The City’s Theatre department oversees maintenance, operations, and promotion of the theatre. The theatre’s productions function is offset by revenues and includes the organization and promotion of major production events, which run for several weeks. Presentations are largely single-night special events include Programs for Young Audiences. Theatre department provides rental services to the community, civic and local organizations on a year-round basis. Resident groups, including the La Mirada Symphony and Phantom Projects, hold performances at the Theatre as well. Cemetery Portions of southern and eastern La Mirada are located within the Little Lake Cemetery District, an independent special district that provides burials, endowment care vaults, cremation, grave sites, marker setting, and services for all religions and denominations. Residents of the Little Lake Cemetery District benefit from lower fees compared to residents outside the district’s boundaries. FISCAL HEALTH The sections that follow evaluate the City’s fiscal health, inclusive of revenue sources and major expenditure categories. ANNUAL AUDIT FINDINGS La Mirada is required to undergo an annual financial audit with the results published in an annual Comprehensive Annual Financial Report (“CAFR”) where the auditors are required to issue a report of whether the financial statements of the city accurately present the financial position of the city. The CAFRs from FY 2016-17 through FY 2018-19 did not present any findings and stated that La Mirada’s financial statements accurately presented the financial position of the City. 29 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 As of the date of this MSR, the 2019-20 CAFR (due by December 31, 2020) had not yet been released to the public. OPERATING REVENUES RSG compiled three (3) years of financial history, plus the City’s current fiscal years’ 2019-20 and 2020-21 adopted budgets. The primary source of the City’s financial history was the California State Controller’s Office (“SCO”). The SCO’s dataset was compared to the City’s audited financial reports for accuracy. While categorization of revenues and expenditures varied in some cases, the SCO’s dataset and City’s audited financial reports yielded identical results. In the City’s last audited fiscal year of 2018-19, General Fund revenues exceeded $35.1 million. Figure 6 illustrates the City’s General Fund revenue sources. Figure 6: City of La Mirada Operating Revenue History Revenues 2016-17 2017-18 2018-19 General Tax Revenues Sales Tax 16,374,977 15,038,776 11,123,367 Property Tax 6,371,690 6,745,788 5,950,111 Property Tax in-lieu of MVLF 4,614,439 4,836,980 5,100,667 Franchise Tax 2,795,690 3,025,456 3,043,023 Utility User Tax - - - Other Taxes 2,108,613 1,984,226 3,234,740 Total General Tax Revenues 3 2,265,409 3 1,631,226 2 8,451,908 Functional Tax Revenues 2 ,215,526 2 ,790,403 3 ,822,028 Total Tax Revenues 3 4,480,935 3 4,421,629 3 2,273,936 Charge for Services 9 ,707,253 9 ,702,420 1 0,556,105 Intergovernmental 6 ,114,415 3 ,045,941 3 ,608,300 Special Benefit Assessments - - - Revenue from Use of Money 7 99,674 9 90,143 3 ,742,267 Fines and Forfeitures 4 12,549 3 92,532 3 67,195 Licenses and Permits 1 ,606,646 1 ,749,347 1 ,448,976 Miscellaneous 1 09,932 7 5,720 9 8,412 Total Revenues 5 3,231,404 5 0,377,732 5 2,095,191 Source: California State Controller's Office Tax revenues have historically averaged about 65 percent of all revenues collected by the City of La Mirada, inclusive of sales tax, property tax, property tax in-lieu of motor vehicle license fees, franchise tax, and other taxes. As shown in Figure 6, sales tax is consistently the City’s greatest 30 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 single revenue source, averaging about 46 percent of general tax revenues annually. The City’s functional tax revenues, averaging about 5.7 percent of historical annual revenues, came mostly from the City’s Measure I sales tax override (discussed in more detail later in this report), which sunset collections in March 2018. The City’s second largest revenue source are charges for services, which include zoning fees, contract policing services, infrastructure repairs, and other revenues, but is largely derived from charges for parks and recreation services – including operations of the City’s theatre and aquatics center. As seen in Figure 7, the City of La Mirada has a unique general tax revenue profile. Most surprising is La Mirada’s dependence on sales tax revenues. Unlike most cities in California, that rely more heavily on property tax revenue, La Mirada’s single largest revenue source is from sales tax – by a significant margin. While this may be a sign of either successful economic development efforts, geographic fortune, or some other favorable characteristic, it also leaves the City of La Mirada exposed to sharp changes in market conditions, such as the impact of the COVID-19 pandemic. 31 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 Figure 7: La Mirada General Tax Revenues as Compared to All California Cities13 15% Other Taxes 3% Transient Occupancy Tax 9% 5% 7% Utility User Tax 0% Franchise Tax 4% 10% 11% PT in-lieu of MVLF 16% Property Tax 29% 21% Sales Tax 25% 46% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% Average California City La Mirada Sales Tax Cities receive one percent of gross receipts from the sale of tangible personal property sold within city municipalities. Approximately 46 percent of general tax revenues collected by the City of La Mirada is derived from sales tax. According to the City’s 2017-18 CAFR, La Mirada’s sales tax base is largely due to companies engaged in business-to-business sales and several larger 13 California State Controller’s Office, Local Government Financial Data FY 2018-19 32 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 retailers, including Living Spaces and Home Depot. As noted in the CAFR, a relocation of any major sales tax producer to or from the City of La Mirada would have a significant impact on sales tax revenue. The City’s 2020-21 Adopted Budget provides forward-guidance on future sales tax revenues. During the budget process, the City’s 2019-20 budget sales tax revenues were revised downward by $265,000 (2.5 percent), and the 2020-21 adopted budget sales tax revenues project a 22 percent decline in sales tax revenues. General Sales Tax Measure I The voters of La Mirada approved Measure I in 2012, which became effective April 1, 2013. Measure I generated over $29 million through March 31, 2018. The expiration of Measure I in the first quarter of 2018 explains the three-year decline in sales tax revenues. The sales tax revenues from Measure I were primarily appropriated to infrastructure improvements in the City’s residential neighborhoods. As per the Measure, the City formed a citizens advisory committee to oversee the expenditure of these proceeds on infrastructure projects and continues to post updates on the City’s websites even after the Measure sunset. Property Tax The City receives approximately 6.71 percent of the property tax collected within the City, as a general tax revenue, and 2.76 percent of property tax for the former Southeast Park and Recreation District which was dissolved in 1980 with its property taxes within the cities of La Mirada and Norwalk distributed proportionately. Property taxes for unincorporated areas within the former district are received by the City for the provision of park and recreational services outside the City limits. Approximately 21 percent, or about $6.3 million annually, of the City’s general tax revenues are derived from property taxes. At the time La Mirada adopted the 2020-21 Budget, the effects of COVID-19 on the housing market and taxable assessed value were unclear. The City opted to take a conservative approach to property tax projections. While the City projected an increase in 33 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 property tax revenue in 2019-20, the 2020-21 adopted budget projects a $2.3 million (18 percent) year-over-year decline in property tax revenues. Charges for Services Charges for services account for an average of almost $10 million per year. While the City of La Mirada charges for services related to planning and zoning services, police services, emergency responses, damages to City property, and miscellaneous administrative charges, a vast majority of the City’s charges for services are derived from theatre revenues and community service fees. Approximately $3.3 million is attributed to revenues from the City’s Splash! Regional Aquatics Center. The Aquatics Center is operated by the Community Services Department and includes a family-oriented water park, a 50-meter competition pool, 25-meter recreation pool, and spa. The Community Services Department also charges for services related to contract services for special interest activities, reservations of City facilities, revenues from child supervision and equipment use at City playgrounds, community event fees, gymnasium memberships and league fees, and courses and events held at the City’s Activity Center. Almost $5.5 million is derived from theatre operations, including theatrical production ticket sales, presentations for young audiences and single night events, processing fees charged for ticket sales sold over the internet, telephone or mail, credit card convenience fees, and theatre rental fees. 34 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 Intergovernmental Revenues In general, intergovernmental revenues consist of Federal, State, and local reimbursements for disasters and mutual aid agreements, and specific use grants. By their nature, these revenues tend to fluctuate more than other revenue sources. The City of La Mirada receives intergovernmental revenues related to road maintenance and rehabilitation act, vehicle license fees in excess, homeowner’s property tax exemption reimbursement, Community Development Block Grant funds, Air Quality Management District funds, California Oil Recycling Enhancement Act funds, Beverage Container Recycling grants, State COPS grants, and other appropriations from the Federal government, State of California, and Los Angeles County. The City received between $3.0 and $6.1 million annually between 2016-17 and 2018-19. The City’s Adopted Budget also treats Property Tax in-lieu of motor vehicle license fees (“MVLF”) as intergovernmental revenues. Property tax in-lieu of VLF averages about $4.8 million in revenues annually. OPERATING EXPENDITURES Figure 8 shows the actual City of La Mirada expenditures from 2016-17 through 2018-19, based on the State Controller’s Office dataset and City CAFR for these respective years. Total operating expenditures amounted to $31.7 million 2016-17 increasing to $35.4 million in 2018-19. As shown in Figure 8, the City’s major expenditure categories include private contract services, salaries and wages, governmental agencies, retirement benefits, and materials and supplies. Figure 8: City of La Mirada Operating Expenditure History Operating Expenditures 2016-17 2017-18 2018-19 Private Contract Services 6 ,963,726 1 6,807,248 1 0,237,170 Salaries and Wages 8 ,328,408 8 ,840,229 9 ,061,051 Governmental Agencies 7 ,565,593 4 70,180 8 ,647,968 Retirement Benefits 3 ,632,006 3 ,980,010 4 ,112,272 Materials and Supplies 1 ,379,106 3 ,411,753 3 ,307,254 Other Operating Expenditures 3 ,809,149 - - Other Employee Benefits - - - Total Operating Expenditures 3 1,677,988 3 3,509,420 3 5,365,715 Source: California State Controller's Office 35 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 The City of La Mirada contracts with contractors, other public agencies, and private firms for services provided in the City. As a result of outsourcing for contract services, the City of La Mirada has historically (2010 through 2019) carried between 72 and 85 full time equivalent government employees. The City contracts for public safety services with the County Sheriff, and for building and safety services with the County Public Works department, among other contract services. Figure 9 breaks down the City’s departmental operating expenditures and full time equivalent employment by function or program between 2016-17 and 2018-19. Figure 9: La Mirada Department Expenditures and Personnel Department Expenditures and Employment 2016-17 FTE 2017-18 FTE 2018-19 FTE General Government 3 ,403,925 19 4 ,089,825 21 4 ,209,300 22 Public Safety 8 ,450,901 6 8 ,737,816 6 9 ,139,757 6 Community Development 1 ,209,563 4 1 ,298,584 4 1 ,425,437 3 Culture and Leisure 1 2,432,003 20 1 2,894,242 20 1 3,904,251 22 Public Works 6 ,181,596 29 6 ,488,956 28 6 ,686,987 32 Total Expenditures 3 1,677,988 78 3 3,509,423 79 3 5,365,732 85 Source: 2018-19 La Mirada CAFR PERFORMANCE STANDARDS RSG utilized three different methodologies to evaluate the City of La Mirada’s performance. The three approaches to evaluating performance include reserve fund balances, pensions and other post-employment benefits (“OPEB”), and third-party fiscal health evaluations. The methodologies and findings are outlined below. RESERVE FUND BALANCE The City of La Mirada has an emergency uncertainty fund balance policy for General Fund reserves, requiring 20 percent of operating expenditures to be held in reserve. The City’s projected economic uncertainty reserve is about $7 million for fiscal year 2020-21. The City’s remaining unreserved or undesignated General Fund reserve balance is $21.6 million. 36 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 La Mirada’s General Fund reserve balance is approximately 30 percent of the 2019-20 estimated revenues and 24 percent of the 2019-20 estimated expenditures. PENSION AND OPEB OBLIGATIONS The City of La Mirada contributes toward a California Public Employees’ Retirement System (“CALPERS”) pension plan. Over the last two decades, demographic shifts, underfunding, changing economics, and changes to retirement plan accounting and monitoring have directed considerable scrutiny towards public pension plans. The City’s efforts to take proactive corrective action to pension plan health have included a tiered contribution plan including higher employee contributions and later retirement dates for new plan members. Additionally, by relying heavily on contract services, the City has mostly avoided the pension problem. The City implemented its OPEB program in 2018. The City had a long-term net pension liability of $1.3 million and net OPEB asset of $4.8 million at the end of fiscal year 2018-19. The City’s historical pension liability and OPEB liability are outlined in Figure 10. Figure 10: La Mirada Pension and OPEB Liabilities Liability 2017-18 2018-19 2019-20 Net Pension Liability 1,535,316 1,455,615 1,331,061 Net OPEB Liability/(Asset) - (4,991,670) (4,848,257) Net Pension and OPEB Liability 1,535,316 (3,536,055) (3,517,196) Source: 2017-18 and 2018-2019 CAFR RSG evaluated the City of La Mirada’s pension plan and OPEB funded ratio and funding policies independently. The funded ratio measures pension plan assets as a proportion of pension liability. While the funded ratio is a point-in-time measure of whether a pension plan was adequately funded, it is worth reviewing changes to funded ratios over time. Additionally, the City’s funding policies provide insight into the City’s efforts to correct funding deficiencies, if any exist. The City’s actuarially determined contribution is provided as well, as a recommended employer contribution based on the pension plan-specific economic and demographic assumptions. 37 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 The City of La Mirada’s pension and OPEB evaluations are outlined in Figure 11 and Figure 12, respectively. Figure 11: La Mirada Pension Ratios Pension Ratios 2017-18 2018-19 2019-20 Plan Fiduciary Net Position 8,990,302 9,595,723 10,239,134 Total Pension Liability 10,525,618 11,051,338 11,570,195 Funded Ratio 85.41% 86.83% 88.50% Actuarially Determined Contribution 591,611 432,747 531,374 Employer Contribution 591,611 432,747 531,374 Covered Payroll 4,699,822 4,592,516 4,416,054 Employer Contribution Rate 12.59% 9.42% 12.03% Source: 2017-18 and 2018-2019 CAFR The City of La Mirada’s pension plan is considered well-funded with pension funded ratios between 85.4 and 88.5 percent over the last three years. Furthermore, while the employer contribution rate is relatively low, the City has made contributions equal to the actuarially determined contribution over the last three years. Figure 12: La Mirada OPEB Ratios OPEB Ratios 2017-18 2018-19 2019-20 OPEB Fiduciary Net Position - 20,699,467 21,670,584 Total OPEB Liability - 15,707,797 16,822,327 Funded Ratio 0.00% 131.78% 128.82% Actuarially Determined Contribution - 294,620 213,881 Employer Contribution - 397,582 317,080 Covered Payroll - 5,380,000 5,500,000 Employer Contribution Rate 7.39% 5.77% Source: 2017-18 and 2018-2019 CAFR La Mirada’s OPEB program was implemented in 2018, therefore only two years of historical audited financials are available at this time. Over the two year history of the program, the funded ratio has exceeded 100 percent, indicating that the City’s OPEB program is over-funded. Relative to covered payroll, the employer contribution is relatively low, however, the City’s contributions have been greater than the actuarially determined contribution. 38 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 COVID-19 PANDEMIC RESPONSE On March 16, 2020, the City of La Mirada City Council proclaimed the existence of a local emergency and outlining special actions related to the COVID-19 pandemic.14 The Council followed up by closing public facilities on April 14, 2020. The City was allocated $157,648 in Community Development Block Grant funding from the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, and allocated it to a new mortgage and rental assistance grant program. On May 12, 2020, City staff provided City Council with a fiscal year 2019-20 budget update and revised projections for the fiscal year 2020-21 budget. As a result of non-essential businesses closing, non-essential travel ceasing, restaurants operating at very limited capacities, and the City’s community services and Theatre operations closing, the City projected significant revenue declines. Sales tax and transient occupancy tax revenues were expected to decline for the remainder of the 2019-20 fiscal year and property tax and sales tax were conservatively projected for fiscal year 2020-21. The City typically takes a conservative approach to projecting tax revenues. The largest budget impacts, however, are expected to be on charges for services. For fiscal year 2019-20, the City projected a $4.4 million decrease in revenues as a result of cancellations of Theatre productions, single-night events, and private rentals. Additionally, the community services department ceased all spring and summer recreation classes, aquatics programs, and sports activities. The County Department of Public Health released guidelines and protocols for re-opening of restaurants in May 2020. In July, as a result of an increase in COVID-19 cases, the County 14 City of La Mirada, City Council Resolution 20-08 adopted March 16, 2020, “A resolution of the City Council of the City of La Mirada proclaiming the existence of a local emergency and taking certain actions due to that emergency.” 39 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 suspended indoor operations of a variety of commercial businesses, including gyms, barber shops, and personal care businesses. Between June and September, the City implemented programs to allow for outdoor dining and outdoor commercial operations for existing businesses. On September 22, 2020, the City Council directed staff to use a portion of the City’s $600,000 CARES Act funding for a small business relief program. The small business relief program was allocated $175,000 that would be available to eligible small businesses as $5,000 grants. Small businesses can use the grants for payroll, capital or equipment expenses, and operational costs including utilities, loans, lease and mortgage payments. CALIFORNIA STATE AUDITOR FISCAL HEALTH EVALUATION The California State Auditor completed an audit of local governments in the State to determine which cities may be facing fiscal challenges by assessing risk associated with various fiscal indicators. The fiscal health analysis examined liquidity, debt burden, general fund revenues, revenue trends, pension obligations, pension funding, pension costs, future pension costs, OPEB obligations, OPEB funding, and overall risk. The Auditor ranked all 471 cities in California on each fiscal indicator, with 1 being the highest risk, and 471 the lowest risk. The City of La Mirada ranked 461 out of 471 cities and is considered low risk. Two fiscal indicators, revenue trends and pension funds, were ranked moderate risk by the State Auditor. All other fiscal indicators were ranked as low risk. HOUSING NEEDS AND HOUSING ELEMENT REPORTING Since 1969, local governments in California have been required to plan to meet the housing needs of their community. As such, cities adopt housing elements as part of the general plan and must provide opportunities to fulfill housing needs through zoning. SCAG, the City’s regional government, develops and allocates housing for each jurisdiction. Housing Elements are prepared in cycles and cities submit Annual Progress Reports to HCD by April 1 of each year. The 5th Cycle for SCAG, the most recent cycle, spanned from January 1, 2014 through October 31, 2021. 40 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 As previously discussed, the City of La Mirada submitted its 5th Cycle Housing Element to HCD on February 25, 2014. The Housing Element was reviewed by HCD on April 30, 2014 and was ruled in compliance with Housing Element law. However, the City does not have a consistent record of submitting Housing Element Annual Progress Reports. La Mirada submitted an annual progress report in 2017. HCD did not report receipt of the City’s Annual Progress Report in 2013, 2014, 2015, 2016 and 2018. Because Annual Progress Reports were not received consistently throughout the 5th Cycle, the number of permitted units presented in Figure 13 may vary from other housing production estimates (such as those reported in Figure 3). As previously stated, SCAG allocates housing needs within the region to each member city through a process called the Regional Housing Needs Assessment (“RHNA”). The City’s progress towards meeting it’s RHNA allocation is a component of the Annual Progress Report. HCD reports every city’s progress towards meeting it’s RHNA allocation annually. The City’s RHNA progress is outlined in Figure 13. Figure 13: La Mirada 5th Housing Element Cycle Production Above Very Low Moderate Moderate 5th Cycle Housing Needs Income Low Income Income Income RHNA Allocation 62 37 40 96 Permitted Units 0 0 1 31 Allocation Surplus/(Shortage) (62) (37) (39) (65) Source: HCD Annual Progress Report September 24, 2020 The City has only developed one (1) unit for moderate income households, and 31 units for above moderate income households. With the 5th Cycle nearly complete, the City has not made progress on encouraging the development of very low or low income housing. The forthcoming 6th Housing Element cycle is expected to have much higher production targets at all income levels for most cities in the County. 41 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 SERVICE REVIEW – CITY OF WHITTIER The City of Whittier is a charter city that was incorporated in 189815 and has a population of 86,80116. The City’s incorporated area includes 14.8 square miles17 and is bounded by the cities of Pico Rivera, La Habra Heights, and Santa Fe Springs, unincorporated areas of Los Angeles County as well as the County of Orange. The City’s existing SOI includes six (6) distinct study areas, which includes some areas designated by LAFCO as Disadvantaged Unincorporated Communities. The City of Whittier is bound on the east by the Puente Hills and includes a significant amount of open space. The City includes a variety of land uses, including residential, planned residential, historic downtown commercial, neighborhood-serving commercial, manufacturing, and hospitality. The largest employers in the City include PIH Health Hospital (3,500 employees), Interhealth Corporation (2,600 employees), Rio Hondo Community College (1,800 employees), Los Angeles County Sanitation District (1,000 employees), Whittier Hospital Medical Center (850 employees), Rose Hills Memorial Park (600 employees), FedEx Freight (525 employees), Los Angeles Freightliner Inc (400 employees), and Humana Inc (373 employees). Four of the largest employers listed provide healthcare services. As shown in Figure 14, Whittier has approximately 29,721 residential units, of which over 69 percent are single family dwellings. Since 2010, the Whittier has seen the number of new units 15 Source: City of Whittier Adopted Budget Fiscal Year 2020-21 16 Source: California Department of Finance Demographic Research Unit Population Estimates for Cities, Counties and the State, January 1, 2020 17 Source: City of Whittier website “About – A Short History” accessed November 10, 2020 42 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 increase by 130, or 0.9 percent. Whittier also has over 15.9 million square feet of commercial buildings, or which retail is the largest share at over 39 percent of the total. Figure 14: Land Use Summary - Whittier Whittier LA Co. % Residential Units /1 Units % Single Family 20,629 69.4% 54.8% Multifamily 8,899 29.9% 43.6% Mobile Home 193 0.6% 1.6% Total 29,721 100.0% Units Built Since 2010 130 0.9% Commercial /2 Gross SF % Retail 6,333,365 39.7% Industrial 4,592,224 28.8% Office 2,102,683 13.2% Other 2,943,567 18.4% Total 15,971,839 100.0% New Construction Since 2010 400,925 2.5% 1/ Source - DOF (2020) 2/ Source - Costar HISTORY AND INCORPORATION Whittier is a charter law city and was incorporated in 1898. The charter form of city government was ratified in 1955. FORM OF GOVERNMENT AND STAFFING The City of Whittier City Charter established a municipal government colloquially known as a “Council – Manager” form over government. In 2016, the City converted to a district election from 43 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 an “at-large” election structure. The City Council is a five (5) member board elected by district. Beginning in 2016, Councilmembers for Districts 1 and 3 were elected to four (4) year terms. In 2018, Councilmembers for Districts 2 and 4 were elected to four (4) year terms. Beginning in 2016, the City’s Mayor was elected citywide “at-large” to a two-year term, although the City Council continues to appoint a Mayor Pro Tempore. The City Council is responsible for selecting a City Manager. The City Manager is the head of the administrative branch of the City Government and reports to the City Council. Several boards and commissions carry out assignments at the request of the City Council, including the Board of Appeals, Board of Library Trustees, Design Review Board, Personnel Board, Cultural Arts Commission, Historic Resources Commission, Parking and Transportation Commission, Parks, Recreation and Community Services Commission, Planning Commission, and Social Services Commission. Additionally, several committees, task forces, and foundations cooperate with the City Council on specific functions, such as accessibility or art in public places.18 The City Manager oversees the day-to-day operations of the City, including a General Fund budget of nearly $75 million and a total of 490.64 positions, 410.24 positions solely from the General Fund. The City provides a majority of services, including law enforcement and planning, but also contracts out many services such as fire suppression and animal services. The City Council also serves as the Whittier Redevelopment Successor Agency, Whittier Public Financing Authority Board, Whittier Utility Authority, and the Whittier Housing Authority. The City’s 2020-21 Adopted Budget is adorned with the slogan “People, Pride, Progress” and features a photo of a well-maintained City park with trees showing fall colors. Whittier has a 18 City of Whittier website, Government accessed November 13, 2020 44 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 strong sense of history and vision for the future, making it an upscale and dynamic residential community. The City proudly provides a healthy and safe community and a well-maintained infrastructure enhanced by planned patterns of growth and development. The City strives to balance economic, social, political, cultural, and recreational opportunities.19 Appendix 3 contains the current organization chart for the City of Whittier from the Adopted Budget for the Fiscal Year 2020-21. CURRENT SPHERE OF INFLUENCE Appendix 4 presents a map of the Whittier SOI, including the corporate city boundaries and unincorporated areas. LAFCO’s adopted Whittier SOI encompasses an area of approximately 23.7 square miles consisting of the 14.7 square mile city limits and a 9 square mile unincorporated SOI that includes portions of unincorporated communities commonly referred to as West Whittier- Los Nietos, South Whittier, East La Mirada/East Whittier, a few small unincorporated islands and peninsulas near the 605 Freeway, and a large area mostly consisting of open space north of the City. The City’s SOI was established in 1975, expanded in197620 & 1980,21 and reconfirmed in 200522. The unincorporated areas include Study XIV Areas 2(A) and 2(B), Study XV Areas 1(A-1), 1(A), and 2(A), and Puente Hills Study area as outlined by LAFCO’s Whitter SOI map23. The SOI areas are described below: 19 City of Whittier website, “About – A Short History” accessed November 19, 2020 20 Sphere of Influence Study XV Re Those Unincorporated Areas Surrounded by the Cities of La Mirada, Santa Fe Springs, and Whittier, December 8, 1976 21 Whittier Sphere of Influence Map, Revised August 3, 2016 22 Gateway Final Municipal Service Review, November 30, 2005 23 LAFCO City Maps, Whittier Sphere of Influence Map, revised August 3, 2016. https://lalafco.org/en/city-maps/ 45 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 • Study XIV Area 2(A) was established in 1975 and is an irregularly shaped area commonly known as West Whittier-Los Nietos and is generally to the west of the City. Area 2(A) is roughly bound by Whittier Boulevard to the north, Sorenson Avenue to the east, Washington Boulevard to the south, and Interstate 605 to the west. • Study XIV Area 2(B) was established in 1975 and includes two small islands or peninsulas generally north west of the City between the City limits and Interstate 605. • Study XV Area 1(A-1) was established in 1976 and is an area generally south west of the City between the City’s boundary and the municipal boundary of Santa Fe Springs. • Study XV Area 1(A) was established in 1976 is an area commonly known as South Whittier and is generally south of Lambert Road, west of Scott Avenue, north of Leffingwell Road and Telegraph Road, and east of the City of Santa Fe Springs. Within this Study Area, a portion of territory immediately west of Gunn Avenue, between Mulberry Drive and the Union Pacific Right of Way, is designated by LAFCO as a DUC, because it is an inhabited area with a median income of less than 80 percent of the County median income. The Gunn Avenue/Mulberry Drive area is the only DUC located within the Whittier SOI, Appendix 4. • Study XV Area 2(C) was established in 1976 and is the East La Mirada/East Whittier joint SOI with the City of La Mirada, described earlier in this MSR. • Puente Hills Study Area was established in 1980 and includes a large area of undeveloped hillside known as the Hellman Wilderness Park, and a sub-urban housing development off Workman Mill Road to the north of Whittier. Figure 15 provides a summary of the demographics of the Whittier city limits and unincorporated SOI as compared to the County as a whole. 46 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 Figure 15: Demographic Summary of Whittier SOI City SOI County Population as of 2020 86,801 53,009 10,173,432 Population in 2010 85,331 51,933 9,818,605 Population Growth Since 2010 0.17% 0.21% 0.36% Housing Units 30,021 15,396 3,571,222 Persons / Unit 2.89 3.44 2.85 Land Area (sq mi) 14.7 9 4,057.9 Persons / Sq Mi 5,925 5,877 2,507 Median HH Income $ 81,547 $ 69,795 Projected Population in 2025 87,203 52,383 10,311,054 Annual Proj. Growth 2020-2025 0.09% -0.24% 0.27% Projected Population in 2035 93,700 11,145,100 Annual Proj. Growth 2020-2035 0.51% 0.61% Projected Population in 2040 96,900 11,514,800 Annual Proj. Growth 2020-2040 0.55% 0.62% Sources: California Department of Finance, Southern California Association of Governments, US Census, ESRI Business Analyst Online (Growth rates are presented as annual growth rates) Approximately 53,009 persons reside in the Whittier unincorporated SOI, compared to 86,801 within the City limits. As noted earlier, a portion of the Whittier unincorporated SOI is within a LAFCO-designated DUC, specifically the area in the vicinity of Gunn Avenue and Mulberry Drive. As compared to demographics within the City, Whittier’s unincorporated SOI has a higher average number of persons per household (3.44 as compared to 2.89), but a similar population density (persons per square mile). Population growth rates have been relatively close since 2010, and below the overall rate of growth in the County overall. As noted earlier, the DUC designations are updated periodically by LAFCO based on the release of Census data, so designations noted in this MSR are subject to change. 47 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 EXTRATERRITORIAL SERVICES PROVIDED Based on consultation with the City of Whittier, RSG identified one instance of extraterritorial services provided by the City of Whittier. In 1995, the City of Whittier began providing police services to the City of Santa Fe Springs, including 35 sworn and 6 support Whittier Police personnel who are assigned directly to the City. The City of Whittier operates a Police Services Center as the Whittier Police Sub Station in the City of Santa Fe Springs at 11576 Telegraph Road. Government Code Section 56133 require LAFCO approval, in advance, for a city or special district to extend services outside of the involved city or district’s own jurisdictional boundary. There are several exemptions, one of which, in Government Section 56133(e)(4), exempts “an extended service that a city or district was providing on or before January 1, 2001.” Because Whittier extended police services to Santa Fe Springs in 1995, it falls under this exemption. Going forward, should Whittier desire to extend any additional service outside its jurisdictional boundary, advance approval from LAFCO is required pursuant to Government Code Section 56133. SERVICES PROVIDED The City of Whittier city staff provides public safety, culture and leisure, transportation, general government, and community development services. The following section describes municipal services provided within Whittier and identifies the service provider. Figure 16 presents a matrix summarizing the services provided by Whittier including the department or contractor/franchisee responsible for doing so. 48 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 Figure 16: Whittier Service Provider Matrix Public Service Responsible Agency Provider General Government City Whittier City Council and City Manager Law Enforcement City Whittier Police Department Traffic & Accident Investigation City Whittier Police Department Animal Services City (Contract) Los Angeles County Department of Animal Care and Control Fire Protection/EMS CFPD Consolidated Fire Protection District of Los Angeles County Ambulance / Transport City (Contract) American Medical Response Mosquito Control Greater LA County VCD Greater Los Angeles County Vector Control District Land Use Planning City Comm Dev Dept - Planning Division Building and Safety City Comm Dev Dept - Building and Safety Division Code Enforcement City Whittier Police Department - Code Enforcement Division Engineering City Public Works Department - Engineering Division Parks and Recreation City Parks Division Road Maintenance City Public Works Department Streetlighting City City, SCE, & Assessment District No. 01-91 Sewer LA Co. Sanitation Dist. / City County Sanit District 18, City Sewer Maintenance Division Storm Drainage LA Co. Flood Cntrl/City Los Angeles County Department of Public Works Domestic Water City/SWS/SGVWC City, Suburban Water Systems& SGValley Water Co City Water Department, and Suburban Water Systems Solid Waste Disposal City (Contract) Athens Services and Republic Services Cable / Communications City (Contract) Charter Communications and Frontier Communications Transit City (Contract) MTA, Southland Transit, Whittier Transit Gas City (Contract) Southern California Gas Company Public Education Several Whittier City SD, Lowell Joint SD, WUHSD, and EWCSD Library City Whittier Public Library Government Services General government services are primarily provided by elected officials and city management. The City provides community development services, which provides building and safety, planning, community development, and economic development services. The City Council is Whittier’s primary policy-making legislative body, setting goals policies and directives, which are implemented by the City Manager and staff. Four City Council members are elected by district on staggered four-year terms, and the Mayor is directly elected citywide on biennially. The City Manager is appointed by the City Council as the administrative head of municipal government operations, and is responsible for planning and implementation, city administration, and public information services. The City Attorney represents the City Council and City officials in all matters of law. The City Attorney is appointed by the City Council on a contractual basis. The City Clerk administers 49 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 processes such as elections, access to city records, and legislative actions ensuring transparency to the public. Other functions under administrative and general government services includes public information services, non-departmental actions, support for the chamber of commerce, employee special events, elections and information technology. Whittier’s Administrative Services Department oversees the City’s accounting, budgeting, human resources, risk management, emergency management, revenues, and treasury functions. The accounting function includes budgeting, general ledger and fund accounting, financial planning and analyses, financial management system maintenance and operations, utility billing, bond administration, accounts payable and accounts receivable, and payroll accounting. The revenue management function includes cashiering, issuance and renewal of business licenses, banking, investing, cash management, and animal control management. The risk management function oversees worker’s compensation compliance, general liability, property insurance, safety coordination, emergency management, and wildlife management. The human resources function includes human resources management, non-industrial medical disability, and the health insurance flex-rap program. Police Services City of Whittier provides policing services throughout the limits and in the City of Santa Fe Springs as noted on page 22. The largest City department by expenditure and employment, the Police Department is organized into several divisions, including investigation, patrol services, support services, and administration. The investigation team oversees criminal investigations, special enforcement, the narcotics team, forensics, S.W.A.T., and crime analysis. The patrol operations manage PSA policing teams, the K-9 unit, special enforcement team, code enforcement, and traffic and parking enforcement. The support services function provides organization and management of communications, records, property and evidence, information systems, and grants management. The Police Department’s administration function operates the professional standards function, training and recruitment, and the City’s jail operations. Additionally, the Santa Fe Springs Policing Team operates under the City of Whittier Police Department. 50 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 Fire Protection and Ambulatory Services Whittier is within the territorial jurisdiction of CFPD, which is responsible for fire protection and emergency medical services. The City contracts with American Medical Response for ambulance services. The Los Angeles County Fire Department Stations 17, 28, and 59 are located in the City of Whittier. Fire Station 28 also serves as the Battalion 8 headquarters. Animal Services Under contract with the City, the County Animal Care and Control Department provides animal control and rescue services to Whittier. Vector Control The Greater Los Angeles County Vector Control District, an independent special district , provides ongoing mosquito and vector control within Whittier. Community Development The City’s Community Development Department is responsible for planning, building and safety, economic development, and activities related to the former Redevelopment Successor Agency and Housing Successor Agency. Each division has separate responsibilities. The Building and Safety Division is responsible for establishment and enforcement of minimum building standards for safeguarding public health, safety and general welfare. The Planning Division handles administration of City ordinances and policies related to land use and development such as zoning changes, design standards, historic preservation, environmental review procedures, congestion management programs, and attainment of housing goals. The Economic Development Division creates and preserves economic opportunities, including advantageous development of commercial property. The Community Development Department also oversees the administration of the City’s HUD and CDBG grant programs, housing rehabilitation, HOME Program, and non-housing capital projects that were previously within the Whittier Redevelopment Agency’s responsibilities. 51 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 Additionally, the City reactivated the Whittier Housing Authority in 2012. The Housing Authority is responsible for managing existing housing assets, including bond funds, notes receivable, and real property. Code Enforcement The Code Enforcement division is within the City of Whittier’s Police Department. The Code Enforcement division enforces the City municipal code with regard to public nuisances, safety, and zoning violations. Public Works Whittier’s Public Works Department is divided into three divisions – street maintenance, mobile equipment, and engineering. The street maintenance function involves street division management, greenway and trail maintenance, public works inspections, weed abatement, graffiti removal, street lighting, toxic waste disposal programs, and the uptown maintenance district. The mobile equipment function primarily manages and maintains the City’s fleet of vehicles and equipment. The engineering function manages traffic, capital improvements, permitting, underground utility districts, construction inspections, civic center maintenance, and maintenance of the City’s parking lots. The Public Works department seeks funds for capital improvement projects through the annual budget process. Water The City of Whittier is within the Water Replenishment District Central Groundwater Basin Division 5. The Water Replenishment District of Southern California was formed in 1959 to protect and manage groundwater resources. Domestic water supply is provided by the City, San Gabriel Valley Water Company, and Suburban Water Systems. The San Gabriel Valley Water Company provides water service to several small areas on the western boundary of the City. Suburban Water Systems is a subsidiary of South West Water Company, an investor-owned water utility with a 42-square mile service area covering portions of Los Angeles and Orange counties with a population of over 300,000 people. 52 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 The City of Whittier Utility Authority provides water, sewer maintenance and solid waste disposal services. The Utility Authority’s Water Division provides nearly 2.5 billion gallons of water per year to over 11,500 residents and businesses in the City of Whittier, and has approximately 12,000 total customers serving just under 50,000 residents. Wastewater Wastewater services are provided by the County Sanitation District No. 18 and the City of Whittier. The County Sanitation District is a public agency that has provided wastewater management services since 1923. The County Sanitation District No. 18 is one of 24 member dependent districts of the Los Angeles County Sanitation Districts, a public agency that covers approximately 850 square miles within 78 different cities and unincorporated areas of Los Angeles County. The LA County Sanitation Districts provide wastewater services to 5.6 million citizens of Los Angeles County. The City’s sewer maintenance division also maintains approximately 194 miles of sewer lines and 5,012 manholes within the City. The City’s system is a 100 percent gravity collection system that feeds into the County’s trunk mains throughout the City. The 2005 MSR identified concerns related to the capacity of existing sewer capacity to handle rainfall overflows in both cities, while an additional concern regarding solid waste diversion rates in Whittier. In Whittier, the City’s 5-year Capital Improvement Summary includes estimated annual expenses ranging from $3.4 to 3.7 million annually for the Sewer Repair Program, adding up to more than $17.7 million over the next 5 years. Storm Drainage The County Public Works Department primarily manages the City’s storm drain system, including channels, drains, laterals, and catch basins. The City manages maintenances of a limited number of drains, laterals, and catch basins. In rare instances there are privately maintained catch basins within the City’s boundaries. According to the Public Works Director, the City oversees wastewater runoff management including the NPDES permit, in conjunction with the Lower San Gabriel River Watershed 53 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 Management Group of which the City is one of 14 member agencies. The City reports concerns about the Los Angeles County Municipal Separate Storm Sewer System permit charges as well as group sampling as opposed to sampling at each discharge for the City, but they have not taken issues with any of the contaminants. Solid Waste Whittier eliminated the Solid Waste Collection Enterprise Fund in 2018-19 and solid waste collection is now the responsibility of two private refuse collection haulers under exclusive franchise agreements. Under two separate franchise agreements, Athens Services provides solid waste collection services to the western side of the City, and Republic Services provides solid waste collection services to the eastern side of the City. According to the City’s Public Works Manager who files the Electronic Annual Report to CalRecycle, the City is in compliance with diversion rates under AB939. Staff provided a copy of the 2019 Electronic Annual Report to RSG that demonstrated compliance for that year. Utilities Whittier has franchise agreements with Southern California Edison for electricity services and Southern California Gas Company for natural gas services. Whittier is also a member of the Clean Power Alliance, a community choice aggregate in Southern California that is the locally- operated electricity provider across Los Angeles and Ventura counties, offering clean renewable energy at competitive rates. Communications Pursuant to their respective franchise agreements with the City; Charter Communications provides cable broadband services, and Frontier Communications provides telephone and cable broadband services. 54 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 Parks, Recreation and Community Services The City’s Parks, Recreation and Community Services Department administers park operations and maintenance, patriotic events, social services, senior and youth services, and air quality improvement. The Department’s transit services include administering the transit programs, fixed route system, dial-a-ride services, and air quality program. Senior and youth services include organizing and implementing recreation classes, special events, senior social services, Whittier Youth Network, family special events, after school programs for teenagers, developmental programs, and inter-agency youth committee programs. In addition to parks operations and tree management, the Department also provides aquatic and tennis program services, city-wide special events programming, recreational classes and activities, cultural arts, therapeutic programs and sporting programs. City Library The City’s Library Department provides branch services, information services, children’s services, support services, and audio-visual services. The Public Library has provided over 120 years of service to residents of Whittier and is the City’s most popular and essential resource for learning and information. FISCAL HEALTH The City of Whittier is funded by tax revenues and charges for services. As an older city in Los Angeles County, the City operates many of its services internally rather than contracting with other providers. The sections that follow evaluate the City’s fiscal health, inclusive of revenue sources and major expenditure categories. ANNUAL AUDIT FINDINGS The CAFRs from FY 2016-17 through FY 2018-19 did not present any findings and stated that Whittier’s financial statements accurately presented the financial position of the City. 55 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 OPERATING REVENUES RSG compiled three (3) years of financial history, plus the City’s current 2019-20 and 2020-21 adopted budgets. The financial history was largely derived from SCO reports and then compared to the City’s audited financial reports for accuracy. While categorization of revenues and expenditures varied in some cases, the SCO’s dataset and City’s audited financial results yielded similar results. In the City’s last audited fiscal year of 2018-19, General Fund revenues exceeded $84 million. Figure 17 illustrates the City’s General Fund revenue sources. Figure 17: Whittier Operating Revenue History Revenues 2016-17 2017-18 2018-19 General Tax Revenues Sales Tax 9,395,957 10,266,545 10,432,988 Property Tax 5,466,917 6,194,936 6,277,305 Property Tax in-lieu of MVLF 8,663,199 8,957,680 9,646,050 Franchise Tax 2,828,545 2,795,486 2,936,158 Utility User Tax 6,800,830 6,694,671 6,524,856 Transient Occupancy Tax 831,643 1,070,661 1,097,585 Other Taxes 1,824,165 1,414,980 1,342,939 Total General Tax Revenues 3 5,811,256 3 7,394,959 3 8,257,881 Functional Tax Revenues 4 ,417,919 5 ,714,371 7 ,821,141 Total Tax Revenues 4 0,229,175 4 3,109,330 4 6,079,022 Charge for Services 1 9,429,948 1 7,861,023 1 7,845,472 Intergovernmental 4 ,322,915 8 ,240,520 4 ,324,629 Licenses and Permits 1 ,495,650 1 ,458,171 1 ,578,918 Revenue from Use of Money 8 64,783 1 ,156,306 5 ,352,921 Fines and Forfeitures 7 81,779 7 66,490 8 15,492 Miscellaneous 2 ,867,276 3 ,800,209 7 ,854,455 Total Revenues 7 0,240,789 7 6,824,990 8 4,141,176 Source: California State Controller's Office Taxes represent approximately 56 percent of historical revenues collected by the City, inclusive of sales tax, property tax, property tax in-lieu of MVLF, utility user tax, franchise taxes, transient occupancy tax and other taxes. While the City’s sales tax revenues have been the largest tax revenue source over the last three (3) years, averaging 27 percent of total tax revenues, the City also receives substantial tax revenues from property tax in-lieu of MVLF (24 percent of total tax revenues), utility user tax (18 percent of total tax revenues), and property tax (16 percent of total 56 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 tax revenues). The City’s functional tax revenues, representing an average of 8 percent of total revenues, are derived from transportation taxes. The City’s second largest revenue source is derived from charges for services. One of the largest charges for services is the City’s contract policing service provided to the City of Santa Fe Springs. The City also charges for zoning, plan check, engineering fees, library fines and fees, parking facility charges, parks and recreation fees, and transit services. As illustrated in Figure 18, Whittier receives a disproportionate amount of property tax in-lieu of MVLF, when compared to all other California city revenues. Also noteworthy, the City’s utility user tax generates substantial income for the City compared to the average California city. With that said, the City of Whittier has a relatively diverse tax base. With approximately 40 percent of tax revenues coming from property tax and property tax in-lieu of MVLF, and an additional 18 percent of tax revenues derived from utility user tax, the City of Whittier has a stronger fiscal foundation than other California cities. While sales tax makes up a large portion of tax revenues, the City is not overly reliant on transient occupancy tax – these two categories are expected to be most affected by economic shifts, such as the impact of the COVID- 19 pandemic. 57 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 Figure 18: Whittier Revenues as Compared to Average California City24 15% Other Taxes 4% Transient Occupancy Tax 9% 3% 7% Utility User Tax 18% Franchise Tax 4% 8% 11% PT in-lieu of MVLF 24% Property Tax 29% 16% Sales Tax 25% 27% 0% 5% 10% 15% 20% 25% 30% 35% Average California City Whittier 24 California State Controller’s Office, Local Government Financial Data FY 2018-19 58 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 Property Taxes and Property Tax in-lieu of Motor Vehicle License Fees The City of Whittier receives between 7.29 and 7.41 percent of property tax revenues collected within the City’s boundaries annually. As stated, about 40 percent of the City of Whittier’s tax revenues are derived from property tax and property tax in-lieu of MVLF. The City’s property tax revenues have remained stable throughout the past decade.25 For the fiscal years 2019-20 and 2020-21, the City projects a 5.1 and 1.1 percent decline in property tax revenues. At the direction of the City’s budget consultant, the City is projecting a 6.9 and 0.7 percent increases in property tax in-lieu of MVLF in 2019-20 and 2020-21 respectively. Sales Tax, Measure R, Measure H, Measure M, and Measure W Cities receive one percent of gross receipts from the sale of tangible personal property sold within their municipalities. Approximately 27 percent of general tax revenues collected by the City of Whittier is derived from sales tax revenues. Aside from the general sales tax revenues, the City has passed four sales tax measures, known as Measures R, H, M, and W. Measure R is a 0.5 percent sales tax designated for traffic relief and transportation projects. Measure H is a 0.25 percent sales tax designated for prevention and support services for individuals experiencing homelessness in Los Angeles county. Measure M is an additional 0.5 percent sales tax designated for transportation upgrades. Measure W was approved by voters in March 2020 and adds 0.75 percent sales tax on taxable sales within the City of Whittier. Measure W is expected to generate about $6.4 million annually and funds will be designated for a variety of uses, including policing and crime reduction, 911 25 City of Whittier, Adopted Budget 2020-21 59 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 response times, addressing homelessness, streets, sidewalk, and parks maintenance, senior services, afterschool programs, and general services. Utility Users Tax The City imposes a 5 percent tax on all charges for telephone, electricity, gas, water and cable television services. The City recognizes that this revenue source has fluctuated in recent years, likely due to changes in consumer conservation, green energy generation, utility rates, and consumption projections. This revenue source represents an average of 18 percent of general tax revenues annually. In 2018-19, the City recognized a negative variance of $625,000 below the budget projections for the utility user’s tax. The City does not project increases in utility user tax revenues for the fiscal year 2020-21. Charges for Services Whittier’s charges for services account for 24 percent of annual total revenues. While the City’s single-largest charge for services is associated with the contract policing services it provides to the City of Santa Fe Springs, the City also charges for zoning, plan check, engineering fees, library fines and fees, parking facility charges, parks and recreation fees, and transit services. Charges for services account for almost $18.4 million annually. As stated, the City’s single largest charge for services is related to the contract policing services provided to Santa Fe Springs. Over the last three years, this contract has resulted in between $10.6 and 11.9 million in revenues – varying according to use of overtime. The City’s other charges for services can vary from year to year, but the largest categories in 2018-19 included public works ($5.9 million) and general government ($4.4 million). The general government was largely attributed to a $1.6 million lease of excess water rights. Intergovernmental Revenues In general, intergovernmental revenues consist of Federal, State, and local reimbursements for disasters and mutual aid agreements, and specific use grants. By nature, these revenues tend 60 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 to fluctuate the more than other revenue sources. The City of Whittier has averaged about $5.6 million in annual intergovernmental revenues. The City receives intergovernmental revenues from a variety of sources, including Community Development Block Grants, Workforce Investment Act, homeowners property tax relief, gasoline tax, Peace Officers standards and training, Off-Highway Motor Vehicle in-lieu fees, Public Safety Proposition 172, and other appropriations from the Federal government, State of California, and County of Los Angeles OPERATING EXPENDITURES Figure 19 shows the actual City of Whittier expenditures from 2016-17 through 2018-19, based on the SCO’s dataset and City CAFR for these respective years. Total operating expenditures amounted to between $65.3 and 69.1 million annually between 2016-17 and 2018-19. As shown in Figure 19, the overwhelming majority of Whittier’s annual expenditures are allocated to employee salaries and benefits. Figure 19: City of Whittier Operating Expenditure History Operating Expenditures 2016-17 2017-18 2018-19 Salaries and Wages 3 1,614,387 3 1,587,791 3 2,101,179 Retirement Benefits 7 ,365,197 6 ,871,491 1 0,258,632 Materials and Supplies 9 ,144,860 1 1,560,694 9 ,648,911 Other Employee Benefits 6 ,714,958 7 ,041,962 7 ,339,772 Private Contract Services 6 ,228,037 5 ,888,464 5 ,386,218 Other Operating Expenditures 3 ,335,838 3 ,572,106 3 ,304,142 Governmental Agencies 9 93,509 1 ,036,783 1 ,059,320 Total Operating Expenditures 6 5,396,786 6 7,559,291 6 9,098,174 Source: California State Controller's Office In 2018-19, the total number of full-time City employees was 387, and part time employees amounted to 104 full time equivalent employees. The Police Department alone accounts for 172 full time positions, including 121 sworn officers and 51 civilian employees. Figure 20 breaks down the City’s departmental operating expenditures by function or program between 2016-17 and 2018-19. 61 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 Figure 20: Whittier Department Expenditures Current Expenditures 2016-17 2017-18 2018-19 Public Safety 3 2,700,229 3 2,468,090 3 5,912,367 Culture and Leisure 1 5,252,252 1 4,282,557 1 4,435,823 Transportation 7 ,722,324 7 ,543,996 8 ,175,905 General Government 5 ,660,802 7 ,413,177 6 ,382,509 Community Development 4 ,061,179 5 ,851,471 4 ,191,570 Total Expenditures 6 5,396,786 6 7,559,291 6 9,098,174 Source: California State Controller's Office The City of Whittier’s expenditures on public safety account for more than half of the City’s expenditures, more than all other departmental expenditures combined. PERFORMANCE STANDARDS RSG utilized three different methodologies to evaluate the City of Whittier’s performance. The three approaches to evaluating performance include reserve fund balances, pensions and OPEB, and third-party fiscal health evaluations. The methodologies and findings are outlined below. RESERVE FUND BALANCE The City of Whittier has a fund balance policy for the General Fund and emergency contingency commitment. The City’s emergency contingency commitment is 5 percent of the following fiscal year’s budgeted operating expentiures, net of transfers and capital improvement projects. For the fiscal year ended June 30, 2020, the City’s emergency contingnecy was $3.3 million. The City reported that it had not utilized any of the emergency contingency reserve balance during the COVID-19 pandemic. The City’s General Fund balance reflected an $13.4 million reserve as of Juen 30, 2020, including a $4.7 million PERS reserve and $3.3 million emergency contingency, among other reserve balances. PENSION AND OPEB OBLIGATIONS The California Public Employees’ Retirement System, which provides pensions for most public employees, is earning less on investments in the stock market. Because retirees are living longer, the State has moved to require cities to provide more funding in the retirement funds. In fact, one 62 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 of the City’s frequently asked questions26 asks what the City has done to address pension costs. According to Whittier’s website, the City has been a leader by proactively addressing pension cost increases. City employees now contribute 12 percent of their salary to cover their pension – one of the highest employee contribution rates in the region. Furthermore, Whittier has a two-tier pension system in which newer employees receive more modest benefits. Finally, the City created a local pension trust to help cover future pension liabilities. The local pension trust reflected a $4.7 million balance as of June 30, 2020. At the end of 2018-19 fiscal year, the City of Whittier had a long-term net pension liability of $123.2 million and total OPEB liability of $9.5 million. The City’s OPEB liability is funded on a pay-as-you-go basis and no assets are accumulated in a trust, therefore, OPEB liabilities are not examined here in the same way that pension liabilities are evluated. The City’s historical long- term net pension liability and OPEB liability are outlined in Figure 21. Figure 21: Whittier Pension and OPEB Liabilities Fiscal Year 2017-18 2018-19 2019-20 Net Pension Liability 106,642,000 121,609,000 123,170,000 Total OPEB Liability 4,155,000 9,419,000 9,544,000 Total Benefit Liability 110,797,000 131,028,000 132,714,000 Source: 2017-18 and 2018-2019 CAFR To evaluate pension obligations, RSG examined the City of Whittier’s pension plan funded ratio and funding policies. The funded ratio measures a pension plans assets as a proportion of pension liability. The funded ratio provides a point-in-time measure of whether a pension plan was adequately funded, therefore it is also important to consider how the funded ratio changes over time. Further, the City’s funding policies provide insight into the City’s efforts to correct funding deficiencies, if any exist. The City’s actuarially determined contribution is provided as 26 City of Whittier frequently asked questions website, accessed November 11, 2020 63 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 well, which is a recommended employer contribution based on the economic and demographic assumptions specific to the pension plan. Figure 22 demonstrates recent pension ratios over the past three years. Figure 22: Whittier Pension Ratios Pension Ratios 2017-18 2018-19 2019-20 Plan Fiduciary Net Position 244,374,685 261,671,611 275,446,950 Total Pension Liability 357,770,803 391,174,078 405,761,575 Funded Ratio 68.30% 66.89% 67.88% Actuarially Determined Contribution 6,302,389 9,474,460 10,302,090 Employer Contribution 6,302,389 9,474,460 10,302,090 Covered Payroll 30,056,829 31,110,485 30,719,429 Employer Contribution Rate 20.97% 30.45% 33.54% Source: 2017-18 and 2018-2019 CAFR Whittier’s employer contribution rate has trended upward over the last three years, indicating that the City’s actions to address pension issues is making progress. However, the City’s Funded Ratio provides only a slightly positive indication of pension plan funding improvements. Overall, a funded ratio in the 66.8 to 68.3 percent is below average, but the City has made higher contributions through three consecutive years. COVID-19 PANDEMIC RESPONSE The City of Whittier discussed an undisclosed threat to public services and facilities at a March 13, 2020 City Council Special Meeting closed session. Given the timing, and the declarations that occurred in the following week, the Special Meeting was likely called to discuss the rapidly developing COVID-19 pandemic. The Whittier City Manager declared a local state of emergency on March 17, 2020, and the City Council ratified the declaration of emergency on March 24, 2020. In the months that follow, the City of Whittier adopted policies and approved programs to alleviate economic and public health damage from the pandemic. The City quickly introduced a temporary eviction moratorium and sought to expand a County- funded temporary supplemental meal delivery program for seniors and homeless individuals. By the end of April, the City had a working Whittier Recovery Plan that monitored the City’s response efforts, including actions by the police department, public works department,community 64 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 development department, economic development department, library, city administration, and the newly created Whittier Coronavirus Crisis Team. The City began monitoring local business and public facility closures, suspended water service shut offs, worked with service providers to ensure that electricity and gas services would not be cut off, began calling 4,200 Whittier seniors for wellness check ins, cancelled or postponed City events, and began developing revenue and financial projections for fiscal years 2019-20 and 2020-21. Due to recurring concerns over fiscal health in Whittier, voters had previously approved Measure W, a ¾ cent sales tax increase, on March 3, 2020 (discussed in greater detail elsewhere in this report). Revenues generated by Measure W are deposited to the General Fund and are expected to be utilized for hiring and retention of police officers; reductions to 911 response times; address homelessness; increase neighborhood, park and business patrols; maintain streets, sidewalks, parks, senior services, afterschool programs, and provide general services. In May, the Council extended the local emergency and received reports on the City’s budget and financial position, the community services department response and recovery plan, local homelessness navigation centers, and hygiene facilities for homeless persons. The City also adopted policies for buying materials locally (increased from 2 percent to 10 percent) and reduced business license fees by 30 percent. During the City’s budget update, City staff projected revenue decreases of $1.4 million in sales tax, $140,000 in utility users tax, $70,000 in transient occupancy tax, and $39,000 in business license tax. The City projected 2020-21 revenue increases in sales tax ($6.3 million as a result of Measure W), property tax in-lieu of MVLF ($478,000), and various fees for services ($380,000). For fiscal year 2020-21, the City expects decreases in sales tax ($654,000), business license fees ($300,000), utility users tax ($140,000), and transient occupancy taxes ($100,000), and increases in expenditures on general liability insurance ($1.7 million), salaries and wages ($506,000), and health insurance ($219,000). In June 2020, the City renewed an annual contract with the Chamber of Commerce and allocated an additional $30,000 in emergency funding to the Chamber. In August, the City approved a business recovery grant program, and allocated $100,000 to business impacted by the pandemic – the funds were designated to be used for business reopening expenses, such as personal protective equipment purchases. The City continues to monitor revenues and expenses closely, and reports financial position to the City Council on a quarterly basis. 65 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 CALIFORNIA STATE AUDITOR FISCAL HEALTH EVALUATION The California State Auditor completed an audit of local governments in the State to determine which cities may be facing fiscal challenges by assessing risk associated with various fiscal indicators. The fiscal health analysis examined liquidity, debt burden, general fund revenues, revenue trends, pension obligations, pension funding, pension costs, future pension costs, OPEB obligations, OPEB funding, and overall risk. The Auditor ranked all 471 cities in California on each fiscal indicator, with 1 being the highest risk, and 471 the lowest risk. The City of Whittier ranked 214 out of 471 and received an overall ranking of moderate risk. Four (4) fiscal indicators were given a high risk rating – pension obligations, pension funding, future pension costs, and other postemployment benefits fund. As previously discussed, the pension and OPEB funding is a financial concern. The City received moderate risk ratings in debt burden, revenue trends, and pension costs, and low ratings on all other fiscal indicators. HOUSING NEEDS AND HOUSING ELEMENT REPORTING Since 1969, local governments in California have been required to plan to meet the housing needs of their community. As such, cities adopt housing elements as part of the General Plan and must provide opportunities to fulfill housing needs through zoning. SCAG, the City’s regional government, develops and allocates housing for each jurisdiction. Housing Elements are prepared in cycles and cities submit Annual Progress Reports to HCD by April 1 of each year. The 5th Cycle for SCAG, the most recent cycle, spanned from January 1, 2014 through October 31, 2021. The City of Whittier submitted its 5th Cycle Housing Element to HCD on December 30, 2013. The Housing Element was reviewed by HCD on February 6, 2014 and was ruled in compliance with Housing Element law. Whittier submitted Housing Element Annual Progress Reports annually between 2014 and 2018, as required by law. As previously stated, SCAG allocates housing needs within the region to each member city through a process called the RHNA. The City’s progress towards meeting it’s RHNA allocation is a component of the Annual Progress Report. HCD reports every city’s progress towards meeting it’s RHNA allocation annually. The City’s RHNA progress is outlined in Figure 23. 66 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 Figure 23: Whittier 5th Housing Element Cycle Production Above Very Low Moderate Moderate 5th Cycle Housing Needs Income Low Income Income Income RHNA Allocation 228 135 146 369 Permitted Units 0 8 214 50 Allocation Surplus/(Shortage) (228) (127) 68 (319) Source: HCD Annual Progress Report September 24, 2020 Whittier has made minor progress on encouraging the development of low income housing, and has managed to permit a surplus of moderate income housing units. With the 5th Cycle nearly complete, the City remains well-behind in meeting it’s housing production needs in very low, low, and above moderate income categories. 67 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 SPHERE OF INFLUENCE As part of the MSR, RSG was tasked with addressing the joint sphere of influence that is located between Whittier and La Mirada (generally referred to as both East La Mirada and East Whittier) as seen in Appendix 1. The purpose of this analysis is to provide the Commission with a basis to identify which of the two cities, Whittier or La Mirada, may be best suited to be the ultimate provider of municipal services to the joint SOI. As described in this section, RSG is recommending a reduction in the Whittier SOI to remove the joint SOI as La Mirada is better suited to be the ultimate provider of municipal services. METHODOLOGY The 0.86 square mile joint SOI consists of mostly residential land use along with four schools and one small university. According to ESRI Business Analyst, RSG estimates the current population is approximately 7,731. RSG identified several approaches that could be considered in the determination of the SOI disposition in this area. In order of weight given to each, our methodology consisted of the following: • City Interest: First and foremost, we interviewed management of both cities to ascertain their interest in retaining their SOI in the East La Mirada/East Whittier area. If either city expressed a desire to annex this area at some point in the future, this would weigh significantly in our consideration and recommendation to LAFCO. • Public Facilities in Proximity: Next, RSG studied the proximity of public facilities (parks, senior center, etc.) relative to the subject area. If one city has more public facilities in closer proximity to the joint SOI, we believe it would be a prudent basis for LAFCO to determine that the city with those facilities would be better suited to serve the area. 68 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 • Proximity of Local Shopping: Our third criteria focused on the economic factors that may favor one city over the other. East La Mirada/East Whittier does not have any significant commercial area to support its population, so residents need to choose nearby stores outside the area for shopping. The economic and fiscal benefits from their consumer activity may therefore accrue to one or both cities, and this data may enable LAFCO to establish a justification for which city is better suited for the provision of municipal services. • School Attendance: We considered whether there may be stronger community ties to either of the two cities formed from school attendance patterns within the area. For example, if East La Mirada/East Whittier students attend classes at a disproportionally greater number of one city’s schools, this would reveal existing community ties among families that merit LAFCO consideration. • City Fiscal Condition: Finally, RSG evaluated whether either of the two cities are in a better fiscal condition to ultimately annex and serve the joint SOI. These criteria consider current fiscal health indicators as well as the challenges that may lie ahead in annexing areas in both cities SOIs. DETERMINATION The following is a summary of our analysis into this question and ultimate recommendation. CITY INTEREST In both sets of interviews with City management in late 2019 and again in November 2020, neither city expressed an interest in annexing the joint SOI area. City staff stated their opinion that the area is not fiscally beneficial (i.e. prospective tax revenue may be less than the cost of providing a standard level of City services). They also noted the joint SOI area has deferred maintenance in its public infrastructure that would require city investments without any additional financial means to do so. While neither city expressed a desire to annex the joint SOI area, neither did they state a desire to have it removed from their SOI. 69 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 PUBLIC FACILITIES IN PROXIMITY After review of the public parks and other facilities nearby, RSG could not conclude that either city had an advantage in terms of serving the East La Mirada/East Whittier joint SOI. See Appendix 5: Park and Recreational Facilities near Joint SOI for a map of the proximate city parks and public facilities available to the joint SOI. La Mirada may have a more likely advantage due to La Mirada Regional Park along with its Splash! La Mirada Regional Aquatics Center, which is a little over a mile from the joint SOI area. This facility includes an 18-hole golf course, softball and baseball leagues, fishing and more. Creek Park and Anna J. Martin Park are also located nearby and are accessible to East La Mirada/East Whitter residents. On the other hand, Whittier has similar recreational facilities in relatively close proximity. Murphy Ranch Park is less than 2 miles from the joint SOI and includes a 1.7 mile trail through the wilderness that is family-friendly, as well as dog- and even horse-friendly. The smaller Parnell and Leffingwell Parks in Whittier are nearby as well. PROXIMITY OF LOCAL SHOPPING Both Whittier and La Mirada have shopping centers and stand-alone businesses that likely are patronized by residents in the joint SOI. Yet while residents of East La Mirada/East Whittier shop frequently outside their area for basic goods and services, RSG could not ascertain whether they favor La Mirada, Whittier, or some other jurisdiction. RSG completed a supply and demand analysis using ESRI Business Analyst to compare the retail potential of an area with the area’s actual sales. Subtracting an area’s potential retail demand by its actual retail supply creates what is called a "retail gap", which provides a sense of what level of retail earnings (or potential tax dollars) are leaving the area. RSG concluded that a large majority of retail shopping is occurring outside the East La Mirada/East Whittier area. According to our analysis, $88,985,611 or 87 percent of the shopping needs for these residents is being either online or in retail stores elsewhere. 70 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 Unfortunately, from the data available RSG could not conclude where precisely these consumers are shopping, and whether they favor Whittier, La Mirada, or stores in other areas. Both La Mirada and Whittier have several larger shopping centers in close proximity offering a variety of stores to meet the retail needs of these residents. In La Mirada, this includes the 179,573 square foot Home Depot Center less than one mile away at La Mirada Boulevard and Imperial Highway, as well as several others less than 2 miles away. In Whittier, the 787,226 square foot Whittwood Town Center located on Whittier Boulevard and Santa Gertrudes Avenue is within 2 miles of the joint SOI, as are several other retail stores in the city. SCHOOL ATTENDANCE The joint SOI area of East La Mirada/East Whittier is located in the Lowell Joint School District. Students in the joint SOI area generally attend Meadow Green Elementary and Rancho Starbuck Intermediate, both of which happen to be located within the joint SOI. According to the School District website, the Meadow Green Elementary attendance boundaries are coterminous with the joint SOI, Rancho Starbuck Intermediate serve the entire district territory, including large portions of City of La Habra, located in Orange County, as well as small relatively sparsely populated area of Whittier. Based on the locations of these schools and the school districts to which they belong, it does not appear that school attendance would provide a meaningful determinant that the joint SOI population is more closely affiliated with La Mirada or Whittier and, in fact, could be more associated with neighboring La Habra to the East of the subject cities. CITY FISCAL CONDITION Finally, RSG evaluated the fiscal condition of both the two cities to ascertain whether either is better suited to absorb the costs for providing municipal services upon annexation. We presented an analysis of the fiscal condition of cities in the “Performance Standards” for both cities, beginning on page 36 for La Mirada and page 62 for Whittier. In evaluating the fiscal condition, RSG considered several factors: 71 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 • Relative amount of unincorporated land within their respective SOIs, including whether any contain any DUCs. • Condition of reserves and city policy • Pension and OPEB liabilities • Overall fiscal health score based on the State Auditor report of fiscal indicators Including the joint SOI, La Mirada’s unincorporated SOI contains an estimated 14,916 persons within 1.5 square miles (see Figure 4). If all of the SOI were annexed into La Mirada today, the population of the City would increase by 30.5 percent, while the geographic area of the city would grow by 19.2 percent. La Mirada is one of the healthiest cities in California, and deemed “low risk” by the State Auditor. As of 2019-20, the City’s has funded approximately 88.5 percent of its pension liabilities and 128.8 percent of its OPEB liabilities. As of 2019-20, the City reserve was at 24 percent of expenditures compared to the City’s policy of 20 percent. Whittier has a relatively larger unincorporated SOI and has compares less favorably to La Mirada in terms of many fiscal conditions. As shown on Figure 15, inclusive of the joint SOI, Whittier’s 9 square mile SOI would increase the size of the city by 61.2 percent and the population by 61.0 percent (or by 53,009 residents). Unlike La Mirada (which has no DUCs within its SOI) Whittier does have one DUC within this 9 square mile area. Moreover, Whitter’s overall fiscal condition is not as strong as La Mirada. Whittier’s reserve fund is well below La Mirada, has larger unfunded pension and OPEB liabilities (as of 2019-20) and rank as overall as “moderate risk” by the State Auditor, with high risk rankings in pension obligations, pension funding, future pension costs, and OPEB. The City also receive “moderate risk” rankings in debt burden and revenue trends. 72 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 CONCLUSION While most other factors provided a neutral conclusion, the fiscal health indicators, taken in context of the size and nature of the unincorporated SOIs in both cities, clearly demonstrate that La Mirada is in a better position to absorb additional residents and property within the joint SOI. RSG recommends that the joint SOI designation be removed by LAFCO and the East La Mirada / East Whittier area be removed from Whittier’s SOI and retained within the SOI of La Mirada. 73 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 MSR DETERMINATIONS Requisite CKH determinations for this MSR are presented by topic below: POPULATION, GROWTH, AND HOUSING As described in this MSR, both cities are anticipated to see additional growth in population and housing in the coming decades, likely in greater numbers than what has been experienced in the past decade. See Figure 2 on page 6 for these historic and projected population growth rates. Based on SCAG projections, population growth rates may be three or four times greater than recent trends. While both SOIs are generally developed, redevelopment opportunities do exist, including the potential redevelopment of the former correctional facility in Whittier where several hundred housing units have been proposed (though not yet entitled). State housing is shaping how communities grow more than ever. In the current 5th Housing Element Cycle, both La Mirada and Whittier have fallen well short of production goals, and developers may take advantage of streamlining projects under SB 35 provided they include at least affordable units in 10 percent of the proposed project. The next 6th Round RHNA cycle may likely cause even further pressures on the local housing market with more ambitious housing production targets for both cities. Currently, La Mirada has an annual production goal of approximately 29 units annually, while Whittier’s production goals are approximately 75 units annually. Under SCAG’s draft proposed housing production allocations for these two cities, La Mirada’s annual production may increase from 29 units to 245 units each year, while Whittier’s could see an increase production goal increase from 75 units to 429 units annually. See Figure 24 and Figure 25 for the annual housing production goals in the current (5th Round) and proposed 6th round RHNA cycles for La Mirada and Whittier, 74 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 Figure 24: Current and Potential Annual RHNA Housing Goals - La Mirada 300 250 200 150 100 50 - 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 75 stinU gnisuoH Market Rate Built Affordable Built Annual Goal Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 Figure 25: Current and Potential Annual RHNA Housing Goals - Whittier 500 450 400 350 300 250 200 150 100 50 - 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 While SCAG, HCD, and all cities wrestle over the proposed 6th Round allocations, it is clear that SB 35 project streamlining may be a continued reality for both cities and provided sites can be assembled additional population growth is very likely. DISADVANTAGED UNINCORPORATED COMMUNITIES IN SOI As part of the MSR, RSG considered the impact of the SOI related to Disadvantaged Unincorporated Communities. A Disadvantaged Unincorporated Community (“DUC”) is defined as an area of inhabited territory located within an unincorporated area of a county in which the annual median household income is less than 80 percent of the statewide median household income. State law considers an area with 12 or more registered voters to be an inhabited area. 76 stinU gnisuoH Market Rate Built Affordable Built Annual Goal Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 LAFCO designated the DUCs in the County using 2014-2018 ACS Census data, meaning any unincorporated area wherein the median household income is less than $56,98227. As discussed earlier and shown on Appendix 4, a portion of the unincorporated Whitter SOI is a designated DUC. With the upcoming Census, LAFCOs designations may change the location and number of DUCs in these and other unincorporated areas of the County. PRESENT AND PLANNED CAPACITY OF FACILITIES The 2005 MSR identified concerns related to the capacity of existing sewer capacity to handle rainfall overflows in both cities, while an additional concern regarding solid waste diversion rates in Whittier. In Whittier, the City’s 5-year Capital Improvement Summary includes estimated annual expenses ranging from $3.4 to 3.7 million annually for the Sewer Repair Program, adding up to more than $17.7 million over the next 5 years. In our interviews with staff, capacity of existing and planned facilities was not voiced as a concern. However, accommodating SCAG’s proposed housing production will indeed be a significant challenge for both La Mirada and Whittier given the lack of available land today. La Mirada’s recent RHNA Appeal letter stated that “the majority of the City’s neighborhoods would require major water and sewer upgrades to accommodate the new infill development that would total approximately 2,000 new units… The existing infrastructure is unable to support the water and wastewater requirements of the existing and previous RHNA” 7 Source: LAFCO DUC Map, data from 2012-16 American Communities Survey (ACS) 5-Year Summary, Bureau of the Census, US Department of Commerce. 77 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 FINANCIAL ABILITY TO PROVIDE SERVICES Both La Mirada and Whittier are regarded as relatively fiscally healthy cities but face difference challenges in coping with the COVID-19 Pandemic. Both cities have historically relied heavily on sales taxes to fund General Fund and (in the case of La Mirada) infrastructure investments. Now that Measure I has sunset, future funding for infrastructure will need to rely on other sources such as federal or state dollars. Both cities also have to face additional potential revenue reductions, use of cash reserves, and possibly service reductions if the Pandemic continues to force businesses to close as has been occurring during this difficult period. However, these issues are not unique to the two cities, and there remains hope for additional Federal stimulus funds to help small businesses and local government cope with the economic challenges they face. OPPORTUNITIES FOR SHARED FACILITIES Despite their close proximity, the cities have not embarked on any shared services between them or other jurisdictions, with the exception of the public safety services Whitter Police Department provides to the City of Santa Fe Springs. La Mirada generally relies heavily on contracts with the County for law enforcement, as well as many building and safety, public works and other services, so opportunities for shared services may be generally limited and of less value given the economies of scale the County brings. RSG did not find specific areas where shared services should be explored but encourages LAFCO and the cities to be open to this in the face of the current fiscal challenges the cities face with the COVID-19 Pandemic. ACCOUNTABILITY FOR COMMUNITY SERVICE NEEDS Both cities employ best practices for outreach to the community, having recently shifted to district elections in recent years. Both La Mirada and Whittier exercise transparency by employing active social media and website updates to inform the general public of city events and activities and have embraced the use of online meetings during the COVID-19 Pandemic. 78 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 Both of the cities use their official websites and social media to communicate with the public and share relevant information and news about their activities. LA MIRADA The La Mirada website includes posted agenda material, meeting dates, links to departments including planning projects, Measure I transparency, and audit/budget information. Users may interact with City Hall by providing messages through the website, as well as access public services and provide service questions through the City’s “My La Mirada” mobile application. The website also offers users the option to register for email alerts on a variety of topics of interest. Within the Community Development Department, project applicants may open and track permit applications electronically, while residents have access to information on major projects. Two such major projects were listed on the La Mirada website, but it is not clear how frequently this information is updated or maintained. The City website also contains extensive information on the functions of the City, including backgrounds on City Council members, rosters of city commissions, and general information on the proceedings of local government to aid the public in understanding how their city functions. According to the City website, the city uses Twitter and Facebook as its official social media communication channels. 79 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 Figure 26: Screenshot of City of La Mirada Website Home Page WHITTIER Similar to La Mirada, Whittier’s website includes extensive information and links of primary interest to residents, businesses, and the general public. Visitors may receive notification of agenda postings, view agenda materials, obtain budget and audit documents, and learn about department and services offered by the City. Whittier also provides a smartphone app (Whittier 24/7) that allows users to access services and communicate with City Hall directly. Applications for many city permits are available on the City’s website, although it does not appear Whitter has yet accommodated digital submittals thorough the website or another portal. As for resident transparency on development projects, the City’s website does not appear to offer 80 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 project-specific pages for major projects, but does contain information on specific plans within the city as well the access to the municipal code and General Plan. Whittier’s website provides information about the current elected officials and appointees to City boards and commissions, access to the City’s television municipal access channel (where council meetings are broadcast), as well as extensive information as to how to access various public services. Whittier is active on three social media networks: Twitter, Instagram, and Facebook. Figure 27: Screenshot of City of Whitter Website Home Page 81 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 SOI DETERMINATIONS AND RECOMMENDATIONS Government Code Section 56025 (e) requires the Commission to consider the following determinations prior to updating the Sphere of Influence for a city: 1. The present and planned land uses in the area, including agricultural and open-space lands. The respective La Mirada and Whittier SOIs contain a mix of single and multifamily residential, commercial, industrial, public and institutional uses. Both jurisdictions contain passive and active recreational and open space areas, and a very limited amount of agricultural land. Future development would be governed by each city’s General Plan and Zoning ordinance, including unincorporated areas once annexed. 2. The present and probable need for public facilities and services in the area. With respect to both La Mirada Whittier, and as developed communities which includes a mix of single and multifamily residential, commercial, industrial, public and institutional uses, the need for public facilities and services in the area exists at present. That need for public facilities and services will continue to exist indefinitely into the future. 3. The present capacity of public facilities and adequacy of public services that the agency provides or is authorized to provide. The current public facilities and infrastructure existing within the communities is generally sufficient to meet future planned growth in both jurisdictions, with the exception of water and wastewater infrastructure in La Mirada, who has reported that additional upgrades and expansion are necessary to meet the potential demand from new housing units proposed in the preliminary SCAG 6th Round RHNA cycle. The City of La Mirada filed an appeal to SCAG’s housing allocation to the city. 4. The existence of any social or economic communities of interest in the area if the commission determines that they are relevant to the agency. There are no significant social or economic communities of interest in La Mirada and Whittier. 5. For an update of a sphere of influence of a city or special district that provides public facilities or services related to sewers, municipal and industrial water, or structural fire protection, that 82 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 occurs pursuant to subdivision (g) on or after July 1, 2012, the present and probable need for those public facilities and services of any disadvantaged unincorporated communities within the existing sphere of influence. One disadvantaged unincorporated community presently exists within the subject SOIs. Within the Whittier SOI, a portion of territory immediately west of Gunn Avenue, between Mulberry Drive and the Union Pacific Right of Way, is designated by LAFCO as a DUC, because it is an inhabited area with a median income of less than 80 percent of the County median income. Future Census data may alter the size and location of DUCs within the County, including within the subject SOIs. Because the territory within this SOI includes a mix of single and multifamily residential, commercial, industrial, public and institutional uses; the need for public facilities and services in the area exists at present. That need for public facilities and services will continue to exist indefinitely into the future. Additionally, RSG recommends that the La Mirada SOI be reconfirmed to the current boundaries and the Whittier SOI be reduced to remove the joint SOI area in East La Mirada / East Whittier from its SOI based on the analysis contained in this MSR. Notwithstanding this change, both cities SOIs would still be designated than “Larger than Sphere of Influence” under LAFCO policy. 83 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 APPENDICES 84 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 APPENDIX 1: CURRENT LA MIRADA AND WHITTIER SPHERES OF INFLUENCE 85 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 APPENDIX 2: CITY OF LA MIRADA ORGANIZATIONAL CHART CITIZENS OF LA MIRADA CITY COUNCIL SUCCESSOR AGENCY Organization Chart OF THE FORMER RDA CITY ATTORNEY CITY MANAGER Legal Services City Administration Community Services Commission CITY CLERK Elections Planning Records Management Commission Public Safety Commission Administration Administrative Community Community Public Safety Public Works Theatre for the Legislation Services Development Services General Law Air & Water Performing Arts Commissions and Support Services Building & Safety Facilities Management Enforcement Resource Management Administration Community Foundation Advisory Councils Human Resources Planning Recreation Traffic Law Enforcement Capital Projects Presentations De E H v c e o o l n u o o s p i m m ng i e c n t/ Risk M Fi a n n a a n g ce ement C F om am m il u y n S ity e r E vi v c e e n s ts Alco E h n o fo l r & c e N m a e rc n o t tics Ge M n e e c ra h l a M ni a c i a n l t / e F n le a e n t ce Pr R od e u n c ta ti l o s ns His A to d r v ic is a o l r P y r e C s o e u r n v c a i t l ion M C a D na B g G e m Pr e o n g t r a a n m d Information Technology Senior Services Com P m ro u g n r it a y m S s afety Media P n a s r / k P s anels Resident Groups Rehabilitation Youth Services Emergency Public Facilities Senior Council Aquatics Preparedness Streets and Right-of-Way Transit Administration Code Enforcement Refuse & Recycling Youth Council KEY Elected Council Appointed Programs 86 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 APPENDIX 3: CITY OF WHITTIER ORGANIZATIONAL CHART XXII 2020-21 Budget - City of Whittier 87 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 APPENDIX 4: WHITTIER SOI AND DISADVANTAGED UNINCORP. COMMUNITIES 88 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 APPENDIX 5: PARK AND RECREATIONAL FACILITIES NEAR JOINT SOI 89 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 APPENDIX 6: SCHOOL ATTENDANCE BOUNDARIES IN JOINT SOI AREA 90 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 APPENDIX 7: RECOMMENDED SPHERE OF INFLUENCES 91 Municipal Service Review and Sphere of Influence Update City of La Mirada / City of Whittier Adopted March 10, 2021 92