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HomeMy WebLinkAboutRESO 9505DocuSign Envelope ID: 7BDDA766-DAAC-4C88-B32C-DCAD6CC9524F Resolution No. 9505 Resolution of the Council of the City of Palo Alto Declaring Its Intention to Levy an Assessment Against Businesses Within the Downtown Palo Alto Business Improvement District for Fiscal Year 2016 and Setting a Time and Place for May 18, 2015 at 7:00PM or Thereafter, in the Council Chambers RECITALS The Council of the City of Palo Alto DECLARES as Follows: A. The Parking and Business Improvement Area Law of 1989 (the "Law't California Streets and Highways Code Sections 36500 et seq., authorizes the City Council to levy an assessment against businesses within a parking and business improvement area which is in addition to any assessments, fees, charges, or taxes imposed in the City. B. Pursuant to the Law, the City Council adopted Ordinance No. 4819 establishing the Downtown Palo Alto Business Improvement District (the "District") in the City of Palo Alto. C. The City Council, by Resolution No. 8416, appointed the Board of Directors of the Palo Alto Downtown Business & Professional Association, a California nonprofit mutual benefit corporation, to serve as the Advisory Board for the District (the "Advisory Board"). D. In accordance with Section 36533 of the law, the Advisory Board prepared and filed with the City Clerk a report entitled "Downtown Palo Alto Business Improvement District, Annual Report 2015-2016" (the "Report"). The City Council hereby preliminarily approves the report. E. The boundaries of the District are within the City limits of the City of Palo Alto (the "City") and encompass the greater downtown area of the City, generally extending from El Camino Real to the East, Webster Street to the West, Lytton Avenue to the North and Addison Avenue to the South (east of Emerson Street, the boundaries extend only to Forest Avenue to the South). Reference is hereby made to the map of the District attached hereto as Exhibit "A" and incorporated herein by reference for a complete description of the boundaries of the District. F. The City Council hereby declares its intention, in addition to any assessments, fees, charges or taxes imposed by the City, to levy and collect an assessment against businesses within the District for fiscal year 2016 (July 1, 2015 to June 30, 2016). Such assessment is not proposed to increase from the assessment levied and collected for the prior fiscal year. The method and basis of levying the assessment is set forth in Exhibit "B" attached hereto, and incorporated herein by reference. 150331 jb 0131329 1 DocuSign Envelope 10: 7BDDA766-DAAC-4C88-B32C-DCAD6CC9524F G. The types of improvements to be funded by the levy of an assessment against businesses within the District are the acquisition, construction, installation or maintenance of any tangible property with an estimated useful life of five years or more. The types of activities to be funded by the levy of an assessment against businesses within the District are the promotion of public events which benefit businesses in the area and which take place on or in public places within the District; the furnishing of music in any public place in the District; and activities which benefit businesses located and operating in the District. H. New businesses established in the District after the beginning of any fiscal year shall be exempt from the levy of the assessment for that fiscal year. In addition, non-profit organizations, newspapers and professional "single-person businesses," defined as those businesses which have 25% or less full time equivalent employees, including the business owner, shall be exempt from the assessment. I. The City Council hereby fixes the time and place for a public hearing on the proposed levy of an assessment against businesses within the District for fiscal year 2016 as follows: TIME: DATE: PLACE: 7:00p.m. or soon thereafter Monday, May 18, 2015 City Council Chambers 250 Hamilton Avenue Palo Alto, California 94301 At the public hearing, the testimony of all interested persons regarding the levy of an assessment against businesses within the District for fiscal year 2016 shall be heard. A protest may be made orally or in writing by any interested person. Any protest pertaining to the regularity or sufficiency of the proceedings must be in writing and shall clearly set forth the irregularity or defect to which the objection is made. Every written protest must be filed with the City Clerk at or before the time fixed for the public hearing. The City Council may waive any irregularity in the form or content of any written protest and at the public hearing may correct minor defects in the proceedings. A written protest may be withdrawn in writing at any time before the conclusion of the public hearing. Each written protest must contain a description of the business in which the person subscribing the protest is interested sufficient to identify the business and, if a person subscribing is not shown on the official records of the City as the owner of the business, the protest shall contain or be accompanied by written evidence that the 150331 jb 0131329 2 DocuSign Envelope ID: 7BDDA766-DAAC-4C88-B32C-DCAD6CC9524F person subscribing is the owner of the business . A written protest which does not comply with the requirements set forth in this paragraph will not be counted in determining a majority protest (as defined below). If, at the conclusion of the public hearing, written protests are received from the owners of businesses in the District which will pay SO percent or more of the assessments proposed to be levied and protests are not withdrawn so as to reduce the protests to less than SO percent (i.e., there is a majority protest), no further proceedings to levy the proposed assessment, as contained in this resolution of intention, shall be taken for a period of one year from the date of the finding of a majority protest by the City Council. If the majority protest is only against the furnishing of a specified type or types of improvement or activity within the District, those types of improvements or activities shall be eliminated. J. Fo r a full and detailed description of the improvements and activities to be provided for fiscal year 2016, the boundaries of the District and the proposed Assessments to be levied against the businesses within the District for fiscal year 2016, reference is hereby made to the Report of the Advisory Board. The Report is on file with the City Clerk and open to public inspection. K. The City Clerk is hereby authorized and directed to provide notice of the public hearing in accordance with law. II II II II II II II II II 150331 jb 0131329 3 DocuSign Envelope ID: 7BDDA766-DAAC-4C88-B32C-DCAD6CC9524F L. The Council finds that the adoption of this resolution does not meet the definition of a project under Section 21065 of the California Environmental Quality Act and, therefore, no environmental impact assessment is necessary. INTRODUCED AND PASSED: April 27, 2015 AYES: BURT, DUBOIS, FILSETH, HOLMAN, SCHMID, WOLBACH NOES: ABSENT: BERMAN, KNISS, SCHARFF ABSTENTIONS : ATIEST: City Clerk APPROVED AS TO FORM : rc:_·;~kr L c2CEDD84ABC3429 ... Senior Assistant City Attorney 150331 jb 0131329 4 Mayor APPROVED: QDocuSigned by: odcr:r 39E7298FB2064DB ... City Manager GDocuSigned by: f,t. /), ..... B2AOF35ED7C5496 ... Director of Administrative Services Director of Planning and Community Environment DocuSign Envelope 10: 7BDDA766-DAAC-4C88-832C-DCAD6CC9524F El Camino Real Legend ~ Zone A (Ground Floor)-Zone B (Upper Floors) :: .~~c: ~ Zone B Th e C i t y o f Palo Alto rrivera, 2012-04-30 16:57:54 CPA BID (\\cc-maps\gis$\gis\admin\Personal\rrivera.mdb) EXHIBIT A E/ Camino Reat Downtown Palo Alto Business Improvement District Area Map This map is a product of the City of Palo Alto GIS --o· 500' This document is a graphic representation only of bast available sources. The City of Palo Alto assumes no responsibility for any errors ©1989 to 2012 City of Palo Alto DocuSign Envelope 10: 7BDDA766-DAAC-4C88-B32C-DCAD6CC9524F EXHIBITB Retailers and Restaurants (100%) Service Businesses (75%) Professional Businesses (50%) Lodging Businesses (100%) Financial Institutions Downtown Palo Alto Business Improvement District , Annual BID Assessments ZONE A $225.00 (Under 6 FTE employees) (50%) $340.00 (6 to under 11 FTE employees) (75%) $450.00 (11+ FTE employees) (100%) $170.00 (Under 4 FTE employees) (50%) $260.00 (4 to under 7 FTE employees) (75%) $340.00 (7+ FTE employees) (100%) ZONEB (75%) $170.00 $260.00 $340.00 $130.00 $200.00 $260.00 EXEMPT (25% or fewer FTE employees, including the business owner) _ $ 60.00 (26% to under 1 FTE employees) (25%) $ 50.00 $110.00 (2 to 4 FTE employees) (50%) $ 90.00 $170.00 (5 to 9 FTE employees) (75%) $130.00 $225.00 (10+ FTE employees) (100%) $170.00 $225.00 (up to 20 rooms) (50%) $340.00 (21 to 40 rooms) (75%) $450.00 (41+ rooms) (100%) $500.00 $170.00 $260.00 $340.00 $500.00 Note 1: For retail, restaurant, service, and professional businesses, size will be determined by number of employees either full-time or equivalent (FTE) made up of multiples of part-time employees. A full FTE equals approximately 2000 hours annually. Lodging facilities will be charged by number of rooms available and financial institutions will be charged a flat fee. Note 2: Second floor (and higher) businesses located within Zone A, will be assessed the same as similar street-level businesses located within Zone B. Note 3: Assessment amounts are rounded to the nearest ten dollars. The minimum assessment will be $50.00. DocuSign Envelope 10: 7BDDA766-DAAC-4C88-B32C-DCAD6CC9524F Palo Alto Downtown Business Improvement District 2015-16 Annual Re ort Prepared for: Palo Alto City Council Prepared by: Russ Cohen, Executive Director, Palo Alto Downtown Business and Professional Association There are dozens of great places to shop and eat and thousands of great ideas being generated every day. Only in downtown Palo Alto. PALO ALTO DOWNTOWN BUSINESS & PROFESSIONAL ASSOCIATION 0 DocuSign Envelope ID: 7BDDA766-DAAC-4C88-B32C-DCAD6CC9524F Introduction This report from the Advisory Board of the Palo Alto Downtown Business & Professional Association ("PAd") was prepared for City Council to review for the' annual reauthorization of the Downtown Palo Alto Business Improvement District ("BID") pursuant to Section 36533 of the Parking and Business Improvement Law of 1989 (Section 36500 and following of the California Streets and Highways code) (the "Law"). This report is for the proposed fiscal year for the BID commencing July 1, 2015 and ending June 30,2016. ("Fiscal Year 2016-16"). As required by the Law, this rep01t contains the following information: I. Any proposed changes in BID boundaries and benefit zones within the BID; II. The improvements and activities to be provided for Fiscal Year 2015-16; III. An estimate of the cost of providing the improvements and the activities for Fiscal Year 2015-16; IV. The method and basis of levying the assessment in sufficient detail to allow each business owner to estimate the amount of the assessment to be levied against his or her business for Fiscal Year 2015-16. V. The amount of any surplus or deficit revenues to be carried over from a previous fiscal year. VI. The amount of any contributions to be made from sources other than assessments levied pursuant to the Law. Submitted by Brad Ehikian, Chair, and Russ Cohen, Executive Director on behalf of the Advisory Board ("Advisory Board") of the Palo Alto Downtown Business & Professional Association ("PAd"). The Advisory Board approved this report on April8, 2015. Received on file in the Office of the City Clerk of the City of Palo Alto on April g 2015. 1 DocuSign Envelope 10: 7BDDA766-DAAC-4C88-B32C-DCAD6CC9524F Section 1: BID boundaries and Benefit Zones There have been no changes in the BID boundaries or benefit zones within the BID and no changes are proposed. The current boundaries are depicted on the map below. The area of the BID is referred to as "Downtown." I E/ Camino Real Legend ~ Zone A (Ground Floor)-Zone B (Upper Floors) ~.~lie.'~ Zone B T h e C i I y 0 f Palo Alto .......... 2012-04-3016:57:54 CPA.BID(\'o:-m&>'I'9:~$'Qltladmon1Ptl1ot'lalllri'vol,..mdb) Downtown Palo Alto Business Improvement District Area Map This map is a product of the City of Palo Alto GIS nildoo.lmant~•orapl'lkttpttlti'IU!<InOtllyolb.>IIVIflb:.aourcn . ll>eCII)'ot P•lo Al;o IUWMt1 no IHpotllrt>il!y fOI Uy trtOI'I C\"910 2012 Ciy ol PaiDA.to 2 DocuSign Envelope ID: 7BDDA766-DAAC-4C88-B32C-DCAD6CC9524F Downtown Palo Alto: A snapshot Methodology: Ratio estimates based on one time data collection through quick probability samplings considered a "windshield survey. " Margin of enor is estimated to be 10-15%. At a glance, there are approximately 88 restaurants and 72 retail establishments. 13 national chain restaurants or franchises exist amongst 7 5 privately owned restaurants. Amongst retail, there are approximately 21 national retailers and 51 independently owned stores. Summary of findings: Many perceive that there is a preponderance of restaurants vs. retail, but in reality the mix is quite balanced. That is also true for the number of chains vs. the number of independently owned businesses-it's clear that there is much more in the way of independently owned businesses than chain or franchised businesses-thus breaking the commonly held perception of downtown being dominated by chains and restaurants. 3 DocuSign Envelope ID: 7BDDA766-DAAC-4C88-B32C-DCAD6CC9524F Section II: 2014-15 Year in Review and Planned Activites for Fiscal Year 2015-2016 "Keeping Downtown Palo Alto Safe, Spotless and Successful. Creating a spotless downtown. The sidewalks downtown are steam cleaned once per month with powerful equipment that helps remove stubborn stains like chewing gum. (For the record, individual businesses can sweep but are prohibited from using water to "hose down" the sidewalks, as that debris will flow directly to the bay. Steam cleaning is the most effective and the most environmentally responsible method.) These methods are an improvement over years past. These increases in frequency along with better equipment and the help of the Downtown Streets Team, (founded by The Palo Alto Downtown Business and Professional Association in 2004) help to keep downtown Palo Alto "spotless." Working in conjucntion with the city fo Palo Alto Public Works Division, other projects, like the repainting of the University Avenue tunnels, for example, (photos below) have served as a great improvement for those entering the downtown from, in particular, Caltrain. 2 DocuSign Envelope ID: 7BDDA766-DAAC-4C88-B32C-DCAD6CC9524F Creating a safe downtown. The Palo Alto Downtown Business and Improvement Association also administers the standing committee known as the Downtown Parking Committee, a committee charged with oversight of the funds and activities associated with the garages. As a reminder, in addition to the association fees, many merchants in the downtown district also contribute fees to the downtown parking district which helped fund the building of the parking garages downtown (an ongoing cost) and fund the ongoing maintenance of the garages at an approximate cost of $1 million each year. The garages are patrolled by the Palo Alto Police Department and outreach efforts by the Downtown Streets Team-both are currently funded by these fees. The return of dedicated patrols downtown with two officers assigned to the beat also ensure a presence downtown that helps deter crime and provides rapid response to downtown incidents was initiated two years ago and this year, the number of dedicated officers was increased to four. 3 DocuSign Envelope 10: 7BDDA766-DAAC-4C88-832C-DCAD6CC9524F Creating a destination. Keeping downtown a great place to do business, whether you are a retailer, restaurant, start-up or a one- person office is our mission. There was a time before the existence of the business association that downtown was not a thriving, vibrant place to do business. Today, it is abuzz with activity due in some part to the efforts of the Palo Alto Downtown Business and Professional Association. Making certain that downtown is its own unique brand, one that differentiates itself from any other downtown, is an area of focus for The Association. Creating this brand comes from not only ensuring an attractive downtown, but one that doesn't mind tooting its own horn. 4 DocuSign Envelope 10: 7BDDA766-DAAC-4C88-B32C-DCAD6CC9524F PALO ALTO c~.·. nne~ o-,rm, · DOWN\'OWN ,, :: ., ,, I PALO ALTO DOWN\' OWN . - Sun1n1er 1nOowntown:J:Jio.AJ to (, HU>I !'\' < Ol'l-l I II 0\ I f I c~.•.mr:~ cnrm·,· ... : I I• I 5 DocuSign Envelope ID: 7BDDA766-DAAC-4C88-B32C-DCAD6CC9524F Creating an environment that is business friendly. The Palo Alto Downtown Business and Professional Association provides a conduit to leaders and staff at city hall. We don't work for the city of Palo Alto; we work with it on behalf of all the business located downtown. From helping to develop public policy regarding public parking to smoking in downtown parks to noise ordinances to issues surrounding outdoor dining, we are a stakeholder with a voice that can be heard amongst other stakeholders and Palo Alto's civic leaders. The "Downtown Crown" as presented to each business that chooses to open downtown. 6 DocuSign Envelope 10: 7BDDA766-DAAC-4C88-B32C-DCAD6CC9524F PROJECT STATUS EXPECTED COMPLETION Beautification and Safet~ Monthly sidewalk Worked with the City to increase frequency and improve Ongoing cleaning equipment used for sidewalk cleaning. Public Art: Downtown In conjunction with Palo Alto Public Arts Commission. Exec. June 15 Tunnel Light and sound Dir. will serve on review committee. Project awarded. Possible Project installation in June 2015 Downtown Ambassador PAd continues to explore sponsorship of "ambassadors" with Seeking funding. Program the Downtown Streets Team, with individuals who would be Meetings have able to provide information regarding Downtown and commenced direction to visitors. Funding being sought. Downtown Streets Team PAd continues to explore ways to raise awareness of the TBD Business Advisory benefits of donating to social services organizations rather Council than to give directly to panhandlers. The Business Advisory Group is working with DST to develop a public awareness campaign Downtown gateway Development of feature to mark entrances to Downtown Meetings have been feature being considered postponed until further notice Camera installation in Waiting for the city of Palo Alto to install equipment in CDC as . Under development garages to be consistent with further installations Administration Yearly audit Annual required financial statement audit and tax return In progress for 2014-15 completed by independent accounting firm. Annual database update Annual census of new and departed businesses within In progress for 2015 Downtown in progress. Annual invoices Separate communications from PAd added to all City invoices, Scheduled for July 1, including separate welcome letter for new businesses. 2015. RFP going out for outsourcing of this service Membership ' Communications and programming Downtown Palo Alto Update of merchants and locations is complete; contents In Pending data transfer Walking Maps conjunction with the San Mateo/Silicon Valley Visotirs Bureau, Accepted funding Pad will be developing a printed and interactive walking map. through San Mateo County Convention 7 DocuSign Envelope ID: 7BDDA766-DAAC-4C88-B32C-DCAD6CC9524F Bureau "Made in Downtown Magazine devoted to Downtown businesses under Under development as Palo Alto" Magazine development. Partial issue was released during the Palo Alto another Institute Fi lm Festival in October 2012, but full issue remains communications vehicle to be released. When complete, it wi ll be available for free distribution at Downtown businesses. Media Coverage The past fiscal year has seen at least 15 articles, citations, Ongoing listings or other references in media outlets . Facebook presence .photos, posts and calendar items are all included in facebook Ongoing content. The facebook presence also provides "friends" with updates on new and departing businesses as well as events and activities in the Downtown Twitter Account launched Jan 13 Ongoing Events Holiday Tree Lighting 2014 tree lighting occurred on November 30. The 2015 Scheduled for Nov 30 lighting is currently scheduled for November 30 to coincide with Small Business Day World Music Day PAd is involved with this annual Father's Day event through Scheduled for June 16 assistance with securing insurance for the event and providing outreach to the Downtown business community regarding street closures and ways to participate in the event. "The Downtown Crown" At the grand opening of each new Downtown business, PAd Ongoing welcomes the business to the district by presenting a crown. Breakfast Roundtable Breakfast roundtables have been held in the past. One was Ongoing. New series entitled, "Let the brainiacs of Si licon Valley improve your under consideration downtown business" and featured three local startups, Euclid Elements, FiveStars loyalty and Google interior mapping. Another featured parking experts from San Francisco and Redwood City. 2015 will bring another with a subject relevant to the district Downtown Parking PAd is actively involved in ensuring the Downtown parking Ongoing Committee assessment district is running effectively. It engaged in considerable outreach with Downtown neighbors regarding impacts including the development of a pilot RPP program . PAd continues to be involved with ongoing Downtown parking studies, working with City staff and working on outreach to Downtown business and property owners. Concert Series Pad brought live music back to downtown in 2014 with its Under development for sponsorship noontime summer concert series. PAd is currently building 201S.Venuechangeto relationships and seeking underwriters to resume its outdoor King Plaza, Sponsorships concerts Downtown. To date, we have been successful and being sought anticipate a robust concert series with top notch talent Event outreach PAd provides continuous member outreach regarding street Ongoing closures, special events, construction impacts, transportation studies, traffic disruptions and more. Completed Projects 2011-present 8 DocuSign Envelope ID: 7BDDA766-DAAC-4C88-B32C-DCAD6CC9524F Cogswell Park Worked with the City to initiate the rehabilitation project Complete Dec-12 and rehabilitation and provided input on design. Grand re-opening was 13 December 12, 2012. Wi fi zone added with funding help from PAD University Ave. Tunnel Worked with the City to initiate new paint, water proof Complete Dec-12 rehabilitation sealing and cleaning along with some new signage to brighten and provide a more welcoming entrance to Downtown. Art coming. See Mural project below. Cogswell Park wi-fi hot Contributed funds to pilot free wi-fi hot spot program at Complete March -13 spot Cogswell Park; assisted TopCorner.org with fundraising. No Amplified Music In response to PAd member complaints, worked with the Complete Jan-13 Ordinance for Lytton City to draft language and provide outreach to Plaza and Cogswell Downtown community. Ordinance is now in effect. Park Operation Flagpole: an Holes installed as part of the University Ave landscaping Complete July -13 initiative to decorate improvements. Palo Alto Rotary and the University and ongoing University Ave with Rotary Club funded and volunteered to assemble, install flags for special and remove flags each national holiday occasions University Avenue Working with the city of Palo Alto on outreach to Complete Apr-13 landscape and business community to add awareness and address irrigation rehabilitation concerns on scheduled improvements. Began the first of 9 phases of 1-2 weeks each on Feb 7. Work completed. Public Art: Aurora PAd worked with the Pal Alto Arts Commission to move Complete Nov -13 installation at King this installation to King Plaza. Fundraising, website and Plaza print material distribution involving, among others, the Black Rock Art Foundation. Seasonal lamp post Expectation of expanding the program to include a Complete Spring 13 banner design greater variety of banners and more frequent and Summer 13, replacement. Additional funding will come from private Holiday 13 Spring public partnerships. /Summer 14 complete Lytton Plaza To make Lytton Plaza more welcoming, umbrellas have Complete. Spring 14 been added to outdoor seating. A partnership with the Friends of LP has funded the effort. Foliage has also been added to enhance the plaza. Sleeping in Vehicles Served on the committee to develop a pilot program Complete and then subcommittee with the faith community to address this issue. put on hold pending Ordinance on hold. out of state litigation No smoking ordinance Suggested new ordinance to City staff as a result of PAd Complete June-13 for Lytton Plaza and member complaints. Ordinance approved by city council. 9 DocuSign Envelope 10: 7BDDA766-DAAC-4C88-B32C-DCAD6CC9524F Cogswell Park In effect as of June 13 Palo Alto Downtown Re-branding began in fiscal year 2012-2013 to increase Complete Oct-12 Business visibility to members within Downtown and to create a and Professional recogni zable brand to Downtown visitors. Logo redesign Association re-and initial implementation were completed in October branding 2012. New website, facebook and other branded media complete and in the pipeline "Made in Downtown Launched in partnership with FiveStars, Inc. in late 2012. Complete and ongoing Palo Alto" Reward s Currently, over [20] Downtown businesses are Card participating. Thousands of cards have been distributed. Website redesign Board authorization given for ED to proceed with Complete Dec 13 development. Outdoor dining In conjunction with the City, PAd hosted a meeting on Complete June-13 March 18 and in April with Downtown restaurant owners Enforcement to begin to provide information regarding encroachment permit as of 10/13 requirements for outdoor dining. Efforts to facilitate compliance with City ordinances will be ongoing. Concert Series PAd has brought back outdoor concerts Downtown. Complete Summer 14. sponsorship Under development for 2015 10 DocuSign Envelope ID: 7BDDA766-DMC-4C88-B32C-DCAD 6CC9524F Section III. Budget for 2015-16 The total funds available for activities for this fiscal year are estimated to be $148,000. The budget for providing the activities is set forth as follows: BID 2015/16 Budget Non-Assessment INCOME Total Sources Assessments $175,000 Allowance for Uncollectible Assessments ($35,0001 Other Revenue $57,000 $57,000 IOIAL INCOME S\197_000 S\197.000 EXPENSES Operating Expenses Staff Salaries Executive Director Salary & Benefits $72,600 Payroll taxes and expense $7,260 Office Supplies & Expenses $150 Internet/Website Maintenance $500 Telephone 0 Rent $7,200 Reauthorization Advertising $2,650 Audit-Tax Returns $5,700 Legal $1,000 $1,000 Insurance -Liability $2,300 Workman's Comp $800 Nominating $1,500 Contingencies $2,000 Subtotal--Operating Expenses $103,660 $1,000 Programs, Marketing and Events Seasonal Banners $24,000 $16,000 Location Specific Banners $6,000 Summer Concert Series $40,000 $40,000 Events $3,500 Outreach & Communication $1,250 $1,000 Downtown Streets Team $5,000 District Opportunity Reserve $13,590 Subtotal--Programs, Marketing & Events $93,340 $56,000 IOIAL EX~ENSES $197.000 $57.000 11 DocuSign Envelope ID: 7BDDA766-DAAC-4C88-B32C-DCAD6CC9524F Section IV: Method and Basis of Levying the Assessment Cost Benefit Analysis I Bid Assessments The method and basis of levying the assessment is provided in sufficient detail to allow each business owner to estimate the amount of the assessment to be levied against his or her business for Fiscal Year 2015-16 and is not changed from the FY 2014-15 assessment. There have been no changes made to the Cost-Benefit Analysis or to the BID Assessments since they were approved by City Council on February 2, 2004. The method of calculation used to determine the cost and benefit to each business located in the BID is described below. The BID assessments are based on three criteria: the type of business, the location of the business and the size ofthe business. It has been consistently demonstrated that the typical BID program places a higher priority on activities such as commercial marketing. As a result, the retail and restaurant establishments in the BID are assessed more than service and professional businesses in the district. While service-oriented businesses benefit from a BID less than retailers and restaurateurs, they benefit more than professional businesses such as medical, dental, architectural, consultant and legal offices with their minimal advertising and promotion needs. For these reasons, various business types are assessed according to the benefit that they receive from the BID, as follows : );> Retail and Restaurant 100% ofbase amount );> Service 75% of base amount );> Professional 50% of base amount Exceptions to this rule include financial institutions that are traditionally charged a flat rate regardless of location or size and lodging businesses that are typically charged by total rooms. The location of a business also determines the degree of benefit that accrues to that business. Centrally located businesses tend to benefit more, as do businesses located on the ground floor. For this reason, A and B benefit zones have been identified for the BID. In Palo Alto, Zone A benefit businesses are assessed 100% of the base benefit assessment while Zone B businesses are assessed 75%. A third criterion is used in the BID to determine benefit. This criterion, the size of the business, takes into consideration the number of full time employees employed by the business. Please refer to Attachment I for a more complete understanding of the application of these three variables to establish BID benefit. Attachment 2 is the BID assessment for each business located within the BID boundaries. Applying the criteria identified in Attachment 1, a summary of the assessment that applies to each business by size, 12 DocuSign Envelope 10: 7BDDA766-DAAC-4C88-B32C-DCAD6CC9524F type and location is outlined. In addition to the Cost-Benefit Analysis, the assessments include the following criteria: ~ An exemption for "single person professional businesses" that have 25% or fewer full time equivalent ("FTE'~, including the business owner. This covers employees who work less than 10 hours a week (based on a 40 hour work week; an FTE equals approximately 2000 hours annually) ~ An assessment specifically for "single person businesses" that have 26% FTE to 1 FTE in the professional business category of the BID (An FTE equals approximately 2000 hours annually) ~ The tiering of other professional businesses by size based (according to benefit) on the "single person business" criteria This outline provides inf01mation by which a business can determine its annual assessment based on objective criteria. Except where otherwise defined, all terms shall have the meanings identified below: Definitions of Business Types in the Downtown Business Improvement District Retailers and Restaurants: Businesses that buy or resell goods such as clothing stores, shoe stores, office supplies as well as businesses that sell prepared food and drink. Service Businesses: Businesses that sell services such as beauty or barber shops, repair shops, most automotive businesses, dry cleaners, art and dance studios, printing firms, film processing companies, travel agencies, entertainment businesses such as theatres, etc. Hotel and Lodging: These include businesses that have as their main business the lodging of customers. This is restricted to residential businesses that provide lodging services to customers for less than 30 days. Professional Businesses: Businesses that require advanced and/or specialized licenses or academic degrees such as architects, engineers, attorneys, chiropractors, dentists, doctors, accountants, optometrists, realtors, insurance brokers, venture capital firms, consultants, advertising and marketing professionals and mortgage brokers and similar professions. Financial Institutions: Includes banking, savings and loan institutions and credit unions. Additional clarification on business definitions will be defined according to Section 18.04.030 (Definitions) of the Palo Alto Municipal Code. The Advisory Board recommends that the following businesses be exempt from the BID assessment: ~ New businesses established in the BID area following the annual assessment for the year in which they locate in the BID area ~ Non-profit organizations ~ Newspapers ~ "Single person professional businesses" that have 25% or less FTE, including the business owner 13 DocuSign Envelope 10: 7BDDA766-DAAC-4C88-B32C-DCAD6CC9524F The Assessment calculated shall be paid to the City no later 30 days after receipt of the invoice with the amount of the annual assessment sent by the City. A second notice will be mailed as a reminder to businesses that have not remitted payment by that date. Late payment will be subject to a 10% late fee. Section V: Non-assessment Income It is estimated that $57,000.00 will be raised in fundraising, and sponsor support. Additionally, we anticipate in kind contribution towards expenses for Fiscal Year 2014-15. Projected Income for Fiscal Year 2015-16 Legal (donation) $1,000 Banners $16,000 Summer Concert Series $40,000 Outreach & Communication $1,000 Total $57,000 14 DocuSign Envelope 10: 7BDDA766-DAAC-4C88-B32C-DCAD6CC9524F Section VI: PAd Board of Directors by Business Type Retailers and Restaurants Georgie Gleim, Gleim the Jeweler Alex Giovanotto, Joya Travis Nichols, Keen Garage Susan Graf, Susan Graf Service Businesses Robert Peterson, Peterson Architects Hospitality Barbara Gross, Garden Court Hotel Financial Institutions Ali Agah, Boston Private Bank & Trust Company Katie Seedman, Presidio Private Bank and Trust Professional Organizations Brad Ehikian, Premier Properties Patty McGuigan, Cornish & Carey Commercial Michael Lee1, Palantir Sheila Liskar, Palo Alto Laser Skin Care Non Profit Organizations Chris Richardson, Downtown Streets Team Phil Carter, Palo Alto Farmer's Market COMMUNITY PARTNERS Palo Alto Chamber of Commerce Judy Kleinberg, President & CEO Downtown Streets Team Eileen Richardson, Executive Director City Of Palo Alto Eric Filseth, Palo Alto City Council Thomas Fehrenbach, Manager of Economic Development 15 DocuSign Envelope ID: 7BDDA766-DAAC-4C88-B32C-DCAD6CC9524F ATTACHMENT 1 A General Statement Regarding Cost-Benefit Analysis For BID Businesses Using The Traditional Three Criteria Formula Criteria 1) Type of Business: Statement Concerning Cost-Benefit Formula For BID Businesses Regarding Type Of Business: In a review of 200 California Business Improvement Districts, it is consistently demonstrated that the typical BID Program places a higher priority on Commercial Marketing Programs than on Civic Beautification and Commercial Recruitment Programs. With that trend in mind, retail and restaurant businesses, with their emphasis on, and need for, commercial marketing, are traditionally assessed more than less marketing-sensitive service-oriented or professional-oriented businesses. However, while service-oriented businesses benefit from a BID less than retailers and restaurateurs, they benefit more, (from commercial marketing programs), than professional businesses such as medical, dental and legal offices with their minimal advertising and promotion needs. Therefore, set forth below, is an example of how various business types might be considered regarding the computation of the annual benefit assessment. o Retail and Restaurant: o Service: o Professional: 100% ofbase amount 75% of base amount 50% of base amount Exceptions to this rule include financial institutions that are traditionally charged a flat rate regardless of location or size and lodging businesses that are typically charged by total rooms. Lodging businesses are assessed based on the total number of rooms because it is a more equitable manner of determining size. Many lodging businesses have many part time employees, but revenues are based on the room occupancies of the hotel, not the goods sold or serviced provided by employees. Criteria 2) Location of Business: Statement Concerning Cost-Benefit Formula For BID Businesses Regarding Location of Business: It has also been consistently demonstrated that the more centrally located businesses tend to benefit from BID activities and services to a greater degree than businesses located toward the periphery of the proposed BID boundaries. Events and activities tend to originate in the central core of the Downtown area and spread benefit to the outer areas with diminishing energy and impact, much like the ripple effect of a stone tossed into a body of calm water. Furthermore, ground floor businesses tend to benefit to a greater degree than businesses located in upper floors. Therefore, in some cases, a new BID's annual benefit assessment formula also takes these street level criteria into account. As mentioned above, special events, fairs, festivals and other activities tend to take place within, or along, the Main Street core rather than in the areas at the periphery of the Downtown core. Additionally, BID-sponsored seasonal decorations, public art projects, street banners and street furniture tend to be located within the immediate core area. Attachment 1 DocuSign Envelope ID: 7BDDA766-DAAC-4C88-B32C-DCAD6CC9524F Therefore, businesses located within the most central area of the proposed BID are considered to be within "Zone A" which should be considered the primary benefit zone. There is typically a "secondary zone" or "Zone B" within most proposed BID areas. This area receives less benefit than Zone A and should be assessed accordingly. An example of how different zones might be treated regarding the computation of the annual benefit assessment is as follows . • Zone A: 100% of base benefit assessment • Zone B: 75% of base benefit assessment In the case of Downtown Palo Alto, it is recommended that all Zone A upper floor businesses, as well as any other businesses located at the periphery of the proposed BID, be considered as Zone B businesses. Please refer to the map in Attachment I. Criteria 3) Size of Business: Statement Concerning Cost-Benefit Formula For BID Businesses Regarding Size of Business: In approximately 50% of newly established BIDs, a third assessment criterion is used. This criterion involves the size of each individual business that is based upon the businesses' total number of full-time employees. Full-time employees are those working a total of 2,000 hours per year. Part-time employees are grouped into full-time job positions, i.e., two half-time employees total one full-time. Fractions are rounded down to the nearest whole number with no less than one person as a minimum for business. An example of how various business sizes might be treated regarding the computation of the annual benefit assessment is as follows: Retail/Restaurants Service Businesses Small 50% ofbase amount Under 6 FTE* Under4 FTE Medium 75% ofbase amount 6 to under 11 FTE 4 to under 7 FTE Large 100% of base amount 11 or more FTE 7 or more FTE * FTE = full time employees Additionally, an exemption was established for "single person professional businesses" that have 25% or less FTE, including the business owner. This covers employees who work less 10 hours a week (based on a 40 hour work week) Since "single person businesses" that have 26% FTE to 1 FTE in the professional business category of the BID benefit the very least from the assessment, their assessments have been tiered by size based (according to benefit) on the new "single person business" criteria. Attachment 1 DocuSign Envelope ID: 7BDDA766-DAAC-4C88-B32C-DCAD6CC9524F ATTACHMENT 2 Downtown Palo Alto Business Improvement District Annual BID Assessments ZONE A Restaurants & Retailers Under 6 FTE (50% ofbase amount) $225 6 to under 11 FTE (75% of base amount) $340 11 or more FTE (100% ofbase amount) $450 Service Businesses Under 4 FTE (50% of base amount) $170 4 to under 7 FTE (75% of base amount) $260 Over 7 FTE (100% of base amount) $340 Professional Businesses 25% or fewer FTE, including owner (0% of base Exempt amount) 26% FTE to under 1 FTE (25% of base amount) $60 2 to 4 FTE (50% ofbase amount) $110 5 to 9 FTE (75% of base amount) $170 10+ FTE (100% ofbase amount) $225 Lodging Businesses Up to 20 rooms (50% of base amount) $225 21 to 40 rooms (75% of base amount) $340 41+ rooms (100% ofbase amount) $450 Financial Institutions $500 ZONEB (75% of Zone A amount) $170 $260 $340 $130 $200 $260 Exempt $50 $90 $130 $170 $170 $260 $340 $500 Note 1: For retail, restaurant, service, and professional businesses, size will be determined by number of employees either full-time or equivalent (FTE) made up of multiples of part-time employees. A full FTE equals approximately 2000 hours annually. Lodging facilities will be charged by number of rooms available and financial institutions will be charged a flat fee. Note 2: Second floor (and higher) businesses located within Zone A will be assessed the same as similar street-level businesses located within Zone B. Note 3: Assessment amounts are rounded to the nearest ten dollars. The minimum assessment will be $50.00. Attachment 1 Docu~ . Certificate of Completion Envelope Number: 7BDDA766DAAC4C88B32CDCAD6CC9524F Status: Completed Subject: Please DocuSign these documents: RESO 9505 Declaring Intention to Levy BID FY 16.pdf, RESO 9505 A ... Source Envelope: Document Pages: 27 Certificate Pages: 5 AutoNav: Enabled Envelopeld Stamping: Enabled Record Tracking Status: Original 4/28/2015 2:26:57 PM PT Signer Events Cara Silver cara.silver@cityofpaloalto.org Senior Assistant City Attorney Security Level: Email, Account Authentication (None) Electronic Record and Signature Disclosure: Accepted: 5/12/2015 4:53:25 PM PT ID: d061fe1 b-94f9-45fe-89db-f67778ec22f6 Hillary Gitelman Hillary.Gitelman@CityofPaloAito.org Security Level: Email, Account Authentication (None) Electronic Record and Signature Disclosure: Accepted: 5/12/2015 5:25:05 PM PT ID: ea5a3c78-7e39-421a-8e47-c8b751eae9d8 Lalo Perez Lalo. Perez@CityofPaloAito.org Security Level: Email, Account Authentication (None) Electronic Record and Signature Disclosure: Accepted: 5/12/2015 6:55:07 PM PT ID: 486c8cb3-3d00-4a26-b2c0-7aa1 d0c20c11 James Keene James.Keene@CityofPaloAito.org City Manager City of Palo Alto Security Level: Email, Account Authentication (None) Electronic Record and Signature Disclosure: Accepted: 4/14/2015 5:40:07 PM PT ID: 44fe333a-6a81-4cb 7 -b 7d4-9254 73ac82e3 In Person Signer Events Editor Delivery Events Signatures: 4 Initials: 0 Holder: Kim Lunt kimberly.lunt@cityofpaloalto.org Signature JrDocuSigned by: ~:.0~::,. Using IP Address: 199.33.32.254 Using IP Address: 199.33.32.254 GOocuSigncd by: /At. /),.._ .. B2ADF35ED7C5496 ... Using IP Address: 199.33.32.254 Signed using mobile 0 DocuSigned by: L£.::2:t! Using IP Address: 199.33.32.254 Signature Status Envelope Originator: Kim Lunt 250 Hamilton Ave Palo Alto , CA 94301 kimberly.lunt@cityofpaloalto.org IP Address: 199.33.32.254 Location: DocuSign Timestamp Sent: 5/4/2015 9:03:11 AM PT Viewed: 5/12/2015 4:53:25 PM PT Signed: 5/12/2015 4:53:40 PM PT Sent: 5/12/2015 4:53 :43 PM PT Viewed: 5/12/2015 5:25:06 PM PT Signed: 5/12/2015 5:25:17 PM PT Sent: 5/12/2015 5:25:19 PM PT Viewed: 5/12/2015 6:55:07 PM PT Signed: 5/12/2015 6:55:48 PM PT Sent: 5/12/2015 6:55:51 PM PT Resent: 5/18/2015 11:53:56 AM PT Viewed: 5/18/20151:55:41 PM PT Signed: 5/18/2015 1:55:52 PM PT Timestamp Timestamp • SECURED