HomeMy WebLinkAboutStaff Report 244-07City of Palo Alto
City Manager’s Report
TO:HONORABLE CITY COUNCIL 12
FROM:CITY MANXGER DEPARTMENT: PLANNIN~ AND
COMMUNITY ENVIRONMENT
DATE:
SUBJECT:
MAY 21, 2007 CMR: 244:07
PUBLIC HEARING ON THE PALO ALTO DOWNTOWN BUSINESS
IMPROVEMENT DISTRICT AND APPROVAL OF A RESOLUTION OF
THE CITY-COUNCIL CONFIRMING THE REPORT OF THE
ADVISORY BOARD AND LEVYING AN ASSESSMENT FOR FISCAL
YEAR 2007-08 IN CONNECTION WITH THE DOWNTOWN PALO
ALTO BUSINESS IMPROVEMENT DISTRICT
RECOMMENDATION
Staff recommends that the City Council:
1.Hold a public hearing on the levy of proposed assessments in fiscal year 2007-08 in
connection with the Downtown Palo Alto Business Improvement District and
2.Approve a resolution confirming the report of the Advisory Board and levying an
assessment for Fiscal Year 2007-08 in connection with the Downtown Palo Alto Business
Improvement District
BACKGROUND
On May 7, 2007, the City Council:
Adopted a resolution preliminarily approving the report filed by the Palo Alto Downtown
Business Improvement District Advisory Board for the 2007-08 fiscal year;
Adopted a resolution of intention to levy the annual assessment for 2007-08; and
Set May 21, 2007 at 7:00 p.m. as the date and time for the public hearing on the levy of
the proposed assessments.
CMR 244:07 Page 1 of 3
DISCUSSION
The City Council is required to annually hold the public heating, approve the 2007-08 Budget
Report and determine whether or not to levy the annual assessment for the Palo Alto Downtown
Business Improvement District (BID) for fiscal year 2007-08.
Absent a majority protest at the public heating, at the conclusion of the public heating the
Council may adopt a resolution approving the report for Fiscal Year 2007-08 as filed or as
modified by the Council at the conclusion of the public hearing. The adoption of the resolution
constitutes the levying of the BID assessments for fiscal year 2007-08.
The staff report is attached from May 7, 2007 which describes the actions related to the BID,
including the report of the Palo Alto Downtown Business and Professional Association
(PADBPA) to the City Council. (Attachment 2).
RESOURCE IMPACTS
Adoption of the proposed BID budget does not directly impact City revenue. BID assessments
are restricted for use exclusively by the BID. It is anticipated that a healthy BID will encourage
growth of the retail community and consequently result in additional sales tax revenue for the
City. The Attorney’s Office will continue to provide legal oversight to the BID during the
annual reauthorization process. Administrative Services staff provides assistance to the Planning
Department in the collection of BID assessments. The Economic Development Manager will
continue to provide oversight to the BID and will prepare the annual reauthorization.
Estimates indicate that the cost of collection by the City will continue at the current level of
$16,000 yearly. If costs significantly exceed the estimated $16,000 estimate of administering
assessments, staff will consider an administrative charge to the Palo Alto Downtown Business
and Professional Association (which administers the BID), as allowed for under the contract, to
offset these costs.
ENVIRONMENTAL REVIEW
This action by the City Council is not considered a project under the California Environmental
Quality Act.
CMR 244:07 Page 2 of 3
ATTACHMENTS
Attachment 1:
Attachment 2:
Resolution of the City Council of the City of Palo Alto Confirming the
Report of the Advisory Board and Levying an Assessment for Fiscal year
2007-08 in Connection with the Downtown Palo Alto Business
Improvement District
CMR: 170:07 Adoption of Resolution Preliminarily Approving BID
Advisory Board’s 2007-08 Budget Report and Adoption of Resolution of
Intention to Levy 2007-08 Assessments in the Palo Alto Downtown
Business Improvement District and Setting a Public Heating on the Levy
of Assessments
~USAN BARNES ARPAN, Economic Development and
DEPARTMENT HEAD REVIEW: ....~X ///:_~7 ~.
/ STE~~ ’
Directo~f Planing and Co--unity Environment
CITY MANAGER APPROVAL:
EMILY H’~k~ISON, Assistant City Manager
CMR 244:07 Page 3 of 3
NOT YET APPROVED ATTACHMENT 1 ~
RESOLUTION NO.
RESOLUTION OF THE COUNCIL OF THE CITY OF PALO
ALTO CONFIRMING THE REPORT OF THE ADVISORY BOARD
AND LEVYING AN ASSESSMENT FOR FISCAL YEAR 2007-
08 IN CONNECTION WITH THE DOWNTOWN PALO ALTO
BUSINESS IMPROVEMENT DISTRICT
THE CITY COUNCIL OF THE CITY OF PALO ALTO DOES HEREBY
FIND, DECLARE AND ORDER AS FOLLOWS:
SECTION i. The Parking and Business Improvement Area
Law of 1989, California Streets and Highways Code Sections 36500
et seq. (the "Law"), authorizes the City Council to !evy 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.
SECTION 2. 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.
SECTION 3. 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 E1 Camino Real to the West, Webster Street to the
East, 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.
SECTION 4. 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").
SECTION 5. 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, 2007-08 Annual Report" (the ~Report"), and, by
previous resolution,the City Council preliminarily approved
such report as filed.
SECTION 6. The City Council has adopted a Resolution of
Intention, Resolution No. 8708, declaring its intention to levy
070516 jb O130069 1
NOT YET APPROVED
and collect an assessment for
businesses in the District.
fiscal year 2007-08 against
SECTION 7.Following notice duly given pursuant to law,
the City Council has held a full and fair public hearing
regarding the levy and collection of an assessment within the
District for fiscal year 2007-08.All interested persons were
afforded the opportunity to hear and to be heard regarding
protests and objections to the levy and collection of the
assessment for fiscal year 2007-08.The City Council finds that
there was no majority protest within the meaning of the Law.
All protests and objections to the levy and collection of the
assessment and any and al! other protests and objections are
hereby overruled by the City Council.
SECTION 8. Based upon its review of the Report, a copy
of which has been presented to the City Council and which has
been filed with the City Clerk, and other reports and
information, the City Council hereby finds and determines that
(i) the businesses in the District will be benefited by the
expenditure of funds raised by the assessment, (ii) the District
includes all of the businesses so benefited; and (iii) the net
amount of the assessment levied within the District for the
2007-08 fiscal year in accordance with the Report is apportioned
by a formula and method which fairly distributes the net amount
in proportion to the estimated benefits to be received by each
such business.
SECTION 9. The City Council hereby confirms the Report
as orlginally filed by the Advisory Board.
SECTION i0. The adoption of this Resolution constitutes
the levy of an assessment for the fiscal year 2007-08
(commencing July i, 2007, and ending June 30, 2008). The
assessment formula, including the method and basis of levying
the assessment, is set forth in Exhibit "B" attached hereto and
incorporated herein by reference. New businesses established in
the District after the beginnlng of any fiscal year shall be
exempt from the levy of the assessment for that fiscal year. In
addition, nonprofit organizations, newspapers, and professional
"single-person businesses", defined as those businesses which
have 25% of less full time equivalent employees, including the
business owner, shall be exempt from the assessment.
SECTION ii. The City Council hereby declares that the
proposed uses of the revenues derived from the assessments
levied against businesses in the District are for the following
070516 ]b O130069 2
NOT YET APPROVED
facilities and activities: 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.
SECTION 12. The Council finds that this is not a project
under the California Environmental Quality Act and, therefore,
no environmental impact assessment is necessary.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
City Clerk
APPROVED AS TO FORM:
Mayor
APPROVED:
Sr. Asst. City Attorney City Manager
Director of Administrative
Services
070516 jb O130069 3
:E T
Th~ Cily of
Palo Alto
P alo Alto Downtown
Business Improvemen.t
District
EXHIBIT "A"
Thi~ map i; a p~ductofl~e
Cly of Pab AID GIS
Downtown Pato Alto Business Improvement District
Annual BID Assessments
Retailers and
Restauran ts
(100%)
ZONE A ZONE B
(75%)
$225.00 (Under 6 FTE employees) (50%)
$340:00 (6 to under 11 FTE employees) (75%)
$450.00 (11 + FTE employees) (lOO%)
$170.00
$260.00
$340.O0
Service
Businesses
(75%)
$170.00 (Under 4 FTE employees) (50%)
$260.00 (4 to under 7 FTE employees) (75%)
$340.00 (7+ FTE employees) (lOO%)
$130.00
$200.00
$260.00
Professional
Businesses
(50%)
EXEMPT (25% or fewer FTE employees, including the business owner)
$ 60.00 (26% FTE to 1 FTE employees) (25%)$ 50.00
$1-10.00 (2 to 4 FTE employees) (5o%)$ 90.00
$170.00 (5 to 9 FTE employees) (75%)$130.00
$225.00 (10+ FTE employees) (10o%)$17-0.00
Lodging
Businesses $225.00 (up to 20 rooms) (5o%) "$170.00
(lOO%)$340.00 (21 to 40 rooms) (75%).$260.00
$450.00 (41+ rooms) (~oo%)$340.00
Financial
Institutions $500.00 $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.
EXHIBIT
TO:HONORABLE CITY COUNCIL
FROM:CITY MANAGER
ATTACHEMENT 2
City of Palo Alto
City Manager’s Report
9
DEPARTMENT: PLANNING AND
COMMUNITY ENVIRONMENT
DATE:
SUBJECT:
MAY 7, 2007 CMR: 170:07
APPROVAL OF THE REPORT OF THE ADVISORY BOARD FOR
FISCAL YEAR 2007-08 IN CONNECTION WITH THE PALO ALTO
DOWNTOWN BUSINESS IMPROVEMENT DISTRICT; AND
RESOLUTION DECLARING INTENT TO LEVY AN ASSESSMENT
AGAINST BUSINESSES WITHIN THE DOWNTOWN PALO ALTO
BUSINESS IMPROVEMENT DISTRICT FOR 2007-08 AND SETTING A
TIME AND PLACE FOR A PUBLIC HEARING FOR MAY 21, 2007 AT
7:00 PM
RECOMMENDATION
Staff recommends that the City Council:
(a) Adopt a resolution preliminarily approving the BID Advisory Board’s 2007-2008 Budget
Report for the Downtown Palo Alto Business Improvement District.
(b) Adopt a Resolution of intention to Levy Assessments in the Palo Alto Downtown Business
Improvement District for fiscal year 2007-2008 and setting a date and time for the public hearing
on the levy of the proposed assessments for May 21, 2007 at 7:00 p.m.
BACKGROUND
The Palo Alto Downtown Business Improvement District (BID) was established by the City
Council in 2004 pursuant to the California Parking and Business Improvement Area Law to
promote the economic revitalization and physical maintenance of the Palo Alto Downtown
business district.
The Council appointed the Board of Directors of the Palo Alto Downtown Business and
Professional Association, a non-profit corporation, as the Advisory Board (Advisory Board) for
the BID. The Board’s purpose is to advise the Council on the method and basis for levy of
assessments in the BID and the expenditure of revenues derived from the assessments.
CMR: 170:07 Page 1 of 3
Pursuant to BID law, the Advisory Board must annually submit to the Council a report that
proposes a budget for the upcoming fiscal year for the BID. The report must: 1) propose any
boundary changes in the BID; 2) list the improvements and activities to be provided in the fiscal
year; 3) estimate the cost to provide the improvements and activities; 4) set forth the method and
basis for levy of assessments; 5) identify surplus or deficit revenues carried over from the prior
fiscal year; and 6) identify amounts of contributions from sources other than assessments.
The Council must then: 1) review the report and preliminarily approve it as proposed or as
changed by the Council; 2) adopt a resolution of intention to levy the assessments for the
upcoming fiscal year; and 3) set a date and time for the public hearing on the levy of assessments
in the BID. Absent a majority protest at the public hearing on May 21, 2007, at the conclusion of
the public hearing, the Council may adopt a resolution confirming the report for Fiscal Year
2007-08 as filed or as modified by the Council. The adoption of the resolution constitutes the
levying of the BID assessments for fiscal year 2007-08.
DISCUSSION
The Advisory Board has prepared a report (Attachment 1), for the Council’s consideration which
includes the budget for the Palo Alto Downtown BID for fiscal year 2007-08. As required by
BID law, the report has been filed with the City Clerk and contains a list of the improvements,
activities, and associated costs proposed in the BID for fiscal year 2007-08. The Advisory Board
has recommended no change in the BID boundaries or the method and basis for levying
assessments. Many of the activities and improvements are an extension of those initiated last
year.
A map of the Palo Alto Downtown BID is attached as Attachment 2. The proposed assessments
in the BID for fiscal year 2007-08 are the same as the assessments in fiscal year 2006-07.
The budget report for fiscal year 2007-08 is a part of the report.of the Advisory .Board and was
reviewed and approved by the Palo Alto Downtown Business and Professional Association at its
board meeting on April 25, 2007 and is attached to this staff report. (Attachment 1)
RESOURCE IMPA CTS
Adoption of the proposed BID budget does not directly impact City revenue. BID assessments
are restricted for use exclusively by the BID. It is anticipated that a healthy BID will encourage
growth of the retail community and consequently result in additional sales tax revenue for the
City.
Some staff effort is expended annually to administer the collection of the BID This year, staff
will monitor the collection of BID assessments to control costs because of substantial increases
in medical and retirement costs that the City has incurred.
If costs significantly exceed the estimated $16,000 to administer assessments, staff will consider
an administrative charge to the Palo Alto Downtown Business and Professional Association who
administer the BID, as allowed for under the contract, to offset these costs.
CMR: 170:07 Page 2 of 3
The Attorney’s Office will continue to provide legal oversight to the BID during the annual
reauthorization process. Administrative Services staff provides assistance in the collection of
BIDassessments. The Economic Development Manager will continue to provide oversight to
the BID and will prepare the annual reauthorization.
ENVIRONMENTAL REVIEW
This action by the City Council is not considered a project under the California
Environmental Quality Act.
PREPARED BY:
DEPARTMENT HEAD REVIEW:
CITY MANAGER APPROVAL:
Director of Planning and Community Environment
EMILY H~’~RISON, Assistant ~ity Manager
ATTACHMENTS
Attachment 1:
Attachment 2:
Attachment 3:
Attachment 4:
Report of the Advisory Board with Regard to the Reauthorization of the
Downtown Palo Alto Business Improvement District for Fiscal Year
2007-08
Downtown Palo Alto Business Improvement District Map
Resolution of the City Council of the City of Palo Alto Approving
the Report of the Advisory Board for Fiscal Year 2007-08 in
Connection with the Palo Alto Downtown Business Improvement
District
Resolution of the City 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
2007-08 and Set a Time and Place for hearing Objections
Thereto
CMR: 170:07 Page 3 of 3
ATTACHMENT 1
PALO ALTO
DOWNTOWB
200%2008
As approved by the
PAD Advisory Board
on April 25, 2007
Business Improvement District
:. . V Revenuesurplus/Deficit
VI Non-Assessment Contributions -
byBusine~s:Typ~
Attachments ,::::--~":.¯- ".
1. Cost Benefit Analysis i, ....
" ;2: ’Annual BID Assessments -~
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, 2007 and
ending June 30, 2008. ("Fiscal Year 2007-08").
As required by the Law, this report 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 2007-08
III.An estimate of the cost of providing the improvements and the activities for Fiscal Year 2007-
08
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 2007-08
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 Barbara Gross, Chair, on behalf of the Advisory Board ("Advisory Board") of the Palo
Alto Downtown Business & Professional Association ("PAd").
The Board approved this Report April 25, 2007 at a publicly noticed meeting of the Advisory Board.
Received on file in the Office of the City Clerk of the City of Palo Alto on April 25, 2007.
Section I: 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.
£-ff ’t
Palo Allo
Palo Ailo Downtown
B u siness Improvement
District
2
Section II
Improvements and Activities Completed in 2006-07
Marketing and Events
Programs
-Expanded the web site that is more user friendly for members and consumers
-It includes current activities, a comprehensive business directory, maps for parking and directions,
and other links. (www.paloaltodowntown.com)
-Continuous updating of the database of all downtown businesses for display and use via the website
-Cross referenced & categorized sectors
Events
The Dine Downtown event was launched in August ’05 and continues successfully on a bi-annual
basis and is well received by the restaurants and their patrons
Through a collaboration and partnership with the City of Palo Alto, Stanford Athletics and the
Chamber of Commerce, PAd participated in the promotion of the opening of the new Stanford
Stadium through ticket sales and advertising for downtown merchants. PAd co-sponsored events of a
noon rally and kick off block party held downtown leading up to the Stadium grand opening
PAd produced the complimentary, well-attended Music Fest on January 25 ’07
PAd held the first Roundtable discussion on April 10, ’07 on Panhandling & Loitering. The panel of
speakers included Mayor Yoriko Kishimoto, City Manager Frank Benest and Police Captain Dennis
Bums. The event was attended by approximately 75 business leaders/owners, human services
organizations, concerned citizens, and city leaders from surrounding communities
PAd participated in the Stanford University Admit Weekend, April 19-22 events to promote visitor
ship to downtown Palo Alto
PAd will participate in the 85th annual May Fete Parade with pre & post parade festivities on May
05,’07, through activities for children and live entertainment, and promote downtown shopping and
patronage
PAd remains a contributing partner in promoting Destination Palo Alto
Plans are under consideration for the creation of a promenad~ on University Avenue or select side
streets to encourage a pedestrian friendly environment
Downtown Streets
This highly successful program started in January 2005. Though PAd still supports the program, it has bern
spun off into its own non-profit corporation. The Downtown Streets Team was created to address twl
problems identified by PAd members: concerns regarding the unhoused as well as dirty streets an,
sidewalks.
To ensure the ongoing partnership and continuity, the President of the DST is a voting member of th
Board of Directors of the PAd
The program’ s participants clean the streets for food and shelter vouchers
The program has built successful working relationships with Innvision, The Opportunity Cente
Catholic Charities, Alliance for Community Care, City Council, PAPD, City Management
The program has received funding and is expecting continued funding from the City of Palo Alt,
Federal funding, and local businesses and residents. The BID/PAd will continue to make quarter
financial contributions to the DST
The program has provided the platform for several members to find jobs and permanent housing
3
Environmental/Beautification
Created the Loitering Task Force (LTF) to further address the issue of panhandling and loitering
downtown
Key areas were identified and plans are underway to address upgrading the alleyways, increase
plantings,, and signage and installation of directories in certain areas of the district
PAd initiated the resurrection of plans for the upgrading and renovation of Lytton Plaza through a
private/public partnership
PAd installed updated directory maps at the two public toilets downtown, as well as the flag signs on
Centennial Walk
PAd meets quarterly and works closely with City of Palo Alto Departments to address necessary
improvements within the district
Parking
Representatives from PAd attend the Palo Alto Chamber of Commerce’s parking committee to learn
of programs underway and contribute the downtown business perspective
PAd conducted a parking survey to determine the needs of the business community
Executive Committee
Created a budget for 2007-08 and Fiscal Year 2007-08
Completed the 2007-08 Annual Report
Created an Advocacy team to address issues and lobby on behalf of downtown businesses
Hosted a Community/Town Hall meeting on Loitering and Panhandling
Adopted a partnership with the Palo Alto Chamber of Commerce. The Chamber CEO is a voting
member of the Board of Directors of the PAd
Outreach to the PA Police Department to improve communications and build a strong working
relationship
Nominating
Recruited new members to the Advisory Board to ensure all business sectors are represented.
Coordinated the annual member meetings and election of directors of PAd
Finance
Maintain accounting systems for PAd bookkeeping
Oversaw the billing of annual fee assessments
Improved the invoicing process
Planned and implemented delinquent member collections
Completed year-end tax filing
Audit completed through June 30, 2006 and submitted to the City
Section II
Expected Improvements and Activities for 2007-08
Marketing and Events
Programs
Maintain and grow website aimed for consumer and member use and for cross promotion of downtown
businesses. It will include current activities, a comprehensive business directory, maps for parking and
directions, and other links. (www.paloaltodowntown.com)
-Create a property owners Bulletin Board listing downtown vacancies/leases
-E-newsletter will be prepared and distributed quarterly
4
Events
Dine Downtown will produce its programs in August ’07 & January ’08
PAd will continue to produce venues that include music, performers, and artists through out the year
PAD will produce a holiday event combined with music & entertainment
PAD will co-market events with Destination Palo Alto to accommodate the influx of visitors to
Stanford events
PAd will sponsor events on side streets and promote participating retailers & restaurants through
fashion shows, art shows, and live entertainment
PAd will create a Promenade on University Avenue to promote a pedestrian friendly environment on
select Fridays through out the year that will feature entertainment
Downtown Streets
Downtown Streets Team
PAd will continue its support of the program financially as well as event promotions
Environmental
Seasonal banners featuring business promotion will be designed and displayed
Renovation of Lytton Plaza will be pursued
Through assistance from the City’s Planning & Public Works Departments, additional lighting will be
installed on the downtown side streets
Removal and or replacement of benches will be recommended
Certain key areas will be identified for landscaping. Hanging baskets from light posts and at City Hall
Plaza and Centennial Walk will be considered
Continued efforts through the partnership between the LTF and PAPD to minimize loitering and
panhandling
ParMng
Education and outreach programs will be put in place to inform business owners and managers of the
parking options
-Continue to advocate for transferable business parking permits
-Advertisements and other outreach programs will be used to educate public of the ample free parking
-Survey results will be evaluated and implemented
-Security enforcement in the parking structures will be addressed. PAd will support the use of the DST
for ongoing maintenance/graffiti removal within the structures
Executive Committee
Continue to refine PAd structure and organizational development
Continue to update and refine information provided to Advisory Board Members
Continue to advocate and lobby on behalf of downtown businesses
Hold quarterly Roundtable discussions
Create visibility within the business community
Begin Urban Planning initiative for the downtown area
Work closely with Destination Palo Alto to increase tourism
Nominating
Continue to recruit effective, active members to the Advisory Board.
Manage the annual election notification and voting process
Finance
Oversee the filing of year end tax return
Oversee the filing of the Annual Audit
Review and advise on annual budget and explore income/fundraising opportunities
Section IIh Budget for 2007-08
The total funds available for activities for this fiscal year are estimated to be $125,000. The budget for
providing the activities is set forth as follows:
BID 2007/08 Budget
INCOME
Assessments $135,000
Uncollectible Fees $(20,000)
Total Assessments $115,000
Income/Fundraising $10,000 $10,000
TOTAL INCOME $ 125,000
EXPENSES
Operating Expenses
Staff Salaries
Executive Director Salary
Support Staff Salary
Payroll taxes
Expenses
$55,000
$3,500
$ 10,000
$ 68,5o0
Office Supplies & Expenses $3,500
Bookkeeping $2,500
Internet/Website Maintenance $3,500
Telephone $1,000
Rent $3,000
Audit $3,000
Legal $2,000
insurance - Liability $2,000
-Workman’s Comp $1,000
Contingencies $1,000
Total Operating Expenses $91,000
Income
6
Marketing and Events
Programs
PAD Newsletter $2,000
PAD Outreach $4,000
Events
Event Permit Fees $1,500
Dine Downtown $4,000
Events $3,000
Promenade $5,000
$15,500
$
$
$
4,000
1,000
5,000
Downtown Streets
DST $10,000
Environmental/Beautification $2,500
Nominating $2,000
14,500
Total $30,000
Total Expenses/Income $121,000 $10,000
Section IV: Method and Basis of Levying the Assessment
Cost Benefit Analysis / Bid Assessments
The.method and basis of levying the assessment is provided sufficient detail to allow each business
owner to estimate the amount of the assessment to be levied againsthis or her business for Fiscal Year
2007-08 and is not changed from the FY 2006-07 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 of the 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.
7
For these reasons, various business types are assessed according to the benefit that they receive from the
BID, as follows:
>Retail and Restaurant 100% of base amount
>Service 75% of base amount
~Professional 50% of base amount
Exceptions to this rule include financial institutions that are traditionally charged a fiat 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 1 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,
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 ("FIE"), including the business owner, This covers employees who work less than 10
hours a week (based on a 40 hour work week (A full FIE 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 (A full FTE equals approximately 2000 hours annually)
The tiring of other professional businesses by size based (according to benefit) on the "single
person business" criteria
This outline provides information 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 full time equivalent (FTE),
including the business owner
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: Revenue Surplus or Deficit
It is not expected that any funds will be carried over from the FY 06-07 budget. This is based on the
revenue balance on 3/31/06 as $27,107. Expected expenses for the remainder of FY 06-07 are as
follows:
Current revenue balance
Expected ex penses for remaining FY
Staff Salaries
Elections and Annual Report
Office + operating expenses
Outside Audit
Website/newsletter
Total expected expenses
$16,607
$2,500
$2,000
$3,000
$3,000
$27,107
$27,107
Expected carry-over $<0>
9
Section Vh Non-assessment Income
It is estimated that $10,000 will be raised in fundraising and sponsor support for Fiscal Year 2007-08.
Projected Income for Fiscal Year 07-08
Marketing and Events
Events
-Dine Downtown
-Promenade
-Festive Events
$ 4,000
$ 5,000
$ 1,ooo
Total $ 10,000
Section VII: PAD Board of Directors by Business Type
Retailers and Restaurants
Reza Moodi, Magnolia Audio/Video
Claudia Cornejo, Caffe del Doge
Sam Markert, Blue Chalk Cafd
Ashwani Dharwan Mantra Restaurant & Lounge
Israel Zehavi, Diamonds of Palo Alto
Georgie Gleim, Gleim Jewelers
Phil Lonardo, Whole Foods Market
Hotel and Lodging
Barbara Gross, Garden Court Hotel
Professional Businesses
Sunny Dykwel, Alain Pinel Realtors
Jerry Moorman, C.P.A., Moorman and Company
Service Buisnesses
Stacey Yates, Skin Spirit
Del Robertson, Vivre Fitness
Financial Institutions
Deborah Pappas, Borel Bank
Chamber of Commerce
Sandra Lonnquist
Downtown Streets Team
Eileen Richardson
10
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.
¯Retail and Restaurant:
¯Service:
o Professional:
100% of base 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.
11
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 1.
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:
o
°
o
Retail/Restaurants Service Businesses
Small: 50% of base assessment under 6 FTE*under 4 FTE*
Medium: 75% of base assessment 6-under 11 FTE*4 to under 7 YTE*
Large: 100% of base assessment 11+ FTE*7+ FTE*
* Full-time employees (FTE)
Additionally, an exemption was established for "single person professional businesses"
that have 25% or less full time equivalent (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.
12
ATTACHMENT 2
Downtown Palo Alto Business Improvement District
Annual BID Assessments
Retailers and
Restaurants
(loo%)
ZONE A ZONE B
(75%)
$225.00 (Under 6 FTE employees) (50%)
$340.00 (6 to under 11 FTE employees) (75%)
$450.00 (11+ FTE employees) (lOO%)
$170.00
$260.00
$340.00
Service
Businesses
(75%)
$170.00 (Under 4 FTE employees) (50%)
$260.00 (4 to under 7 FTE employees) (75%)
$340.00 (7+ FTE employees) (100%)
$130.00
$2oo.oo
$260.00
Professional
Businesses
EXEMPT (25% or fewer FTE employees, including the business owner)
$ 60.00 (26% FTE to 1 FTE employee) (25%)$ 50.00
$110.00 (2 to 4 FTE employees) (50%)$ 90.00
$170.00 (5 to 9 FTE employees).(7~%)$130.00
$225.00 (10+ FTE employees) (lOO%)$170.00
Lodging
Businesses $225.00 (up to 20 rooms) (50%)$170.00
(loo%)$340.00 (21 to 40 rooms) (75%)$260.00
$450.00 (41+ rooms) (lo0%)$340.00
Financial
Institutions $500.00 $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. Afull 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.
13
ATTACHMENT 2
neA
The City of
P alo Alto
Palo Alto Downtown
Business Improvement
District
Thg m ap i~ a p[oductoflhe
Cly of Pab AID G IS
o’
**NOT YET APPROVED ATTACHMENT3
RESOLUTION NO.
RESOLUTION OF THE COUNCIL OF THE CITY OF PALO
ALTO APPROVING THE REPORT OF THE ADVISORY BOARD
FOR FISCAL YEAR 2007-08 IN CONNECTION WITH THE
PALO ALTO DOWNTOWN BUSINESS IMPROVEMENT DISTRICT
THE CITY COUNCIL OF THE CITY OF PALO ALTO DOES HEREBY
FIND, DECLARE, AND ORDER AS FOLLOWS:
SECTION i.The Parking and Business Improvement Area
Law of 1989, California Streets and Highways Code Sections 36500
et seq., (the "Law"), 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.
SECTION 2. 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.
SECTION 3. The Law requires the City Council to appoint
an advisory board which shall make recommendations to the City
Council on the expenditure of revenues derived from the levy of
assessments, on the classification of businesses, as applicable,
and on the method and basis of levying theassessments.
SECTION 4. In accordance with Section 36530 of the Law,
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").
SECTION 5. In accordance with Section 36533 of the Law,
the Advisory Board has prepared and filed with the City Clerk,
and the City Clerk has presented to the City Council, a report
entitled "Downtown Palo Alto Business Improvement District,
2007-08 Annual Report" (the ~Report").
SECTION 6. The City Council has examined and reviewed
the Report, and hereby preliminarily approves the Report as
filed by the Advisory Board.
070503 sdl 7061008 1
**NOT YET APPROVED**
SECTION 7. The Council finds that this is not a project
under the California Environmental Quality Act and, therefore,
no environmental impact assessment is necessary.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
City Clerk
APPROVED AS TO FORM:
Mayor
APPROVED:
Sr. Assistant City Attorney City Manager
Director of Administrative
Services
070503 sd17061008 2
NOT YET APPROVED
ATTACHMENT 4
RESOLUTION NO.
RESOLUTION OF THE COUNCIL OF THE CITY OF PAL0
ALTO DECLARING ITS INTENTION TO LEVY AN
ASSESSMENT AGAINST BUSINESSES WITHIN THE
DOWNTOWN PALO ALTO BUSINESS IMPROVEMENT DISTRICT
FOR FISCAL YEAR 2007-08 AND SETTING A TIME AND
PLACE FOR HEARING OBJECTIONS THERETO
THE CITY COUNCIL OF THE CITY OF PALO ALTO DOES HEREBY
FIND, DECLARE, AND ORDER AS FOLLOWS:
SECTION i. The Parking and Business Improvement Area
Law of 1989 (the "Law"), California Streets and Highways Code
Sections 36500 ~t 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.
SECTION 2. Pursuant to the Law, the City Council
adopted Ordinance No. 4819 (adopted February 2, 2004)
establishing the Downtown Palo Alto Business Improvement
District (the "District") in the City of Palo Alto.
SECTION 3. The City Council, by Resolution No. 8416
(adopted May 3, 2004), 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").
SECTION 4. 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 2007-2008" (the "Report"), and, by
previous resolution, the City Council preliminarily approved
such report as filed by the Advisory Board.
SECTION 5. 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 E1 Camino Real to the west, Webster Street to the
east, 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.
070501 jb 0130069A
NOT YET APPROVED
SECTION 6. 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 2007-08
(July i, 2007 to June 30, 2008). Such assessment is not
proposed to increase from the assessmenz levied and collected
for fiscal year 2006-07. The method and basis of levying the
assessment is set forth in Exhibit "B," attached hereto and
incorporated herein by reference.
SECTION 7. 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.
SECTION 8. 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 rime equivalent employees, including the business owner,
shall be exempt from the assessment.
SECTION 9. The City Council hereby fixes the time and
place for a public hearlng on the proposed levy of an assessment
agains< businesses within the District for fiscal year 2007-08
as follows:
TIME:
DATE:
PLACE:
7:00 p.m.
Monday, May 21, 2007
City Council Chambers
City Hall
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 2007-2008 shall be heard. A
protest may be made, orally or in writing, by any interested
person.
070502 jb 0130069A
NOT YET APPROVED
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 Dot 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 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 50 percent or more of the assessments
proposed to be levied and protests are not withdrawn so as to
reduce the protests to less than that 50 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 filed only against the
furnishing of a specified type or types of improvement or
activity within the District,those types of i.mprovements or
activities shall be eliminated.
SECTION i0. For a full and detailed description of the
improvements and activities to be provided for fiscal year 2007-
08, the boundaries of the District and the proposed assessments
to be levied against the businesses within the District for
fiscal year 2007-08, 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.
070501 jb 0130069A
NOT YET APPROVED
SECTION ii. The City Clerk is hereby authorized and
directed to provide notice of the public hearing in accordance
with law.
SECTION 12. The Council finds that this is not a project
under the California Environmental Quality Act and, therefore,
no environmental ±mpact assessment is necessary.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
City Clerk
APPROVED AS TO FORM:
Mayor
APPROVED:
St. Assistant City Attorney City Manager
Director Of Administrative
Services
070501jb 0~30069A
neA
Palo Alto
Palo Alto Downtown
Business Improvement
District
IThi~ map i~ a p~ductofhe
Cry ofP ab Ab G IS
EXHIBIT "A"
Downtown Palo Alto BusinessImprovement District .
Annual BID Assessments
Retailers and
Restaurants
(!oo%)
ZONE A ,ZONE B
,,¯ (;5%)
$225.00 (Under 6 FTE employees) (50%)
$340~00 (6 to under 11 FTE employees) (75%)
$450.00.(11 + FTE"employees) (lOO%)
$1 70.00
$260.00
$340.00
Service
Businesses
(75%}
$170.00 (Under 4 FTE employees) (50%)
$260.00 (4 to under 7 FTE. employees) (75%)
$340.00 (7+ FTE employees) (lOO%)
$130.00
$200.00
$260.00
Professional
Businesses
(50%)
EXEMPT (25% or fewer FTE employees, including the business owner
$ 60.00 (26% FTE to 1 FTE employees) (25%)$ 50.00
$1,t 0.00 (2 to 4 FTE employees) (50%)$ 90.00
$170.00 (5 to g FTE employees) (z5%)$1 30.00
$225.00 (10+ FTE employees) (lOO%)$1 70.00
Lodging
Businesses
(1oo%)
$225.00 (up to-20 rooms) (5o%) ¯
$340.00 (21 to 40 rooms) (75%)
$450.00 (41+ rooms) (!oo%)
$1 70.00
$260,00
$340.00
Financial
Institutions $500:00 $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 albproximately 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.
EXHIBIT "B~