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HomeMy WebLinkAboutStaff Report 190-10TO: HONORABLE CITY COUNCIL FROM: CITY MANAGER DATE: APRIL 19,2010 REPORT TYPE: CONSENT DEPARTMENT: PLANNING AND COMMUNITY ENVIRONMENT CMR: 190:10 SUBJECT: Preliminary Approval of the Report of the Advisory Board for Fiscal Year 2011 in Connection with the Palo Alto Downtown Business Improvement District and Adoption of Resolution Declaring its Intention to Levy an Assessment Against Businesses within the Downtown Palo Alto Business Improvement District for Fiscal Year 2011 and Setting a Time and Place for a Public Hearing on May 17, at 7:00 PM or Thereafter, in the City Council Chambers EXECUTIVE SUMMARY Since the Business Improvement District (BID) inception in 2004, a number of activities consistent with State BID law have been accomplished by the Palo Alto Downtown Business and Professional Association (P ADBP A), the entity with which the City contracts to provide services to the 740+ businesses assessed in the Downtown. These include addressing the two main issues facing downtown businesses: cleanliness and homeless issues that affect downtown business operations, as well as participation in zoning and other matters affecting downtown businesses. Assessments for BID businesses are based on the size, type and location of the business. Assessments range from $50 to $500 annually for individually owned professional businesses to banks. The P ADBP A has monthly open meetings governed by the Brown Act which any business or individual can attend. This Council action would include preliminary approval of the BID's annual report and setting a public hearing to determine any objections to assessments. RECOMMENDATION Staff recommends that the City Council: (a) Preliminarily approve the BID Advisory Board's 2011 Budget Report for the Business Improvement District (BID) (Attachment 1); and (b) Adopt a Resolution of Intention to Levy Assessments in the Palo Alto Downtown Business Improvement District for fiscal year 2011, setting a date and time for the public hearing on the levy of the proposed assessments for May 17,2010, at 7:00 p.m. or thereafter, in the City Council Chambers (Attachment 3). CMR: 190:10 Page 1 of4 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 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. 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 17,2010, at the conclusion of the public hearing, the Council may adopt a resolution confirming the report for Fiscal Year 2011 as filed or as modified by the Council. The adoption of the resolution constitutes the levying of the BID assessments for fiscal year 2011. DISCUSSION The Advisory Board has prepared a report (Attachment 1) for the Council's consideration which includes the proposed budget for the Palo Alto Downtown BID for fiscal year 2011. 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 2011. 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 or In prIor years. For example, in the past year the BID participated in the renovation of Lytton Plaza, a' public/private partnership that reinvigorated the Plaza, addressed loitering and other issues and provided a lovely gateway into the City's downtown. In addition, in partnership with the City, the BID leadership developed a "master encroachment permit" effort, that will provide a master ARB submission for downtown tables and chairs and individual (more affordable) encroachment permits for downtown restaurants. A map of the BID is attached (Attachment 2). The proposed assessments in the BID for fiscal year 2011 are the same as the assessments in fiscal year 2009-10. No increases are proposed. CMR: 190:10 Page 2 of4 The budget report for fiscal year 2011 was reviewed and approved by the Palo Alto Downtown Business and Professional Association at its board meeting on March 17, 2010, (Attachment 1). RESOURCE IMPACT 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. Staff will continue to monitor staff administrative time devoted to the collection of BID assessments to assure that City costs do not exceed estimates for these services. The cost and collection of BID assessments past 60 days is borne by the BID. 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 BID assessments. 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 does not meet the definition of a project under Section 21065 of the California Environmental Quality Act, and therefore no environmental assessment is necessary. ATTACHMENTS Attachment 1: Attachment 2: Attachment 3: CMR: 190:10 Report of the Advisory Board with Regard to the Reauthorization of the Downtown Palo Alto Business Improvement District Annual Report for Fiscal Year 2011. Downtown Palo Alto Business Improvement District Map 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 2010-11 and Setting a Time and Place for hearing Objections Thereto Page 3 of4 PREPARED BY: Sl/SANLBARNES ( Economic Development Manager DEPARTMENT HEAD: ~ W~ CURTIS ILLIAMS, DIrector Planning and Community Environment CITY MANAGER APPROVAL: CMR: 190:10 Page 4 of4 BID MANAGEMENT www.paloattodowntown.com Business Improvement District Annual Report 2010-2011 Approved by the Advisory Board of Directors Palo Alto Downtown Business & Professional Association April 01 , 2010 > ~ s;: (1 ::r: ~ ~ ~ ~ Introduction This report from the Advisory Board of the Palo Alto Downtown Business & Professional Association ("P Ad") 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 365'00 and following of the California Streets and Highways code) (the "Law"). This report is for the proposed fiscal year for the BID commencing July 1,2010 and ending June 30, 2011. ("Fiscal Year 2010-11"). 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 2010-11 ; III. An estimate of the cost of providing the improvements and the activities for Fiscal Year 2010-11; 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 2010-11 ; 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 Anne E. Senti-Willis, Chair, on behalf of the Advisory Board ("Advisory Board") of the Palo Alto Downtown Business & Professional Association ("P Ad"). The Advisory Board approved this report on April 01, 2010. Received on file in the Office of the City Clerk of the City of Palo Alto on April 01,2010. 1 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. The current boundaries are depicted on the map below. Palo Alto Do\vuto\vn Business IOlproveIllenl [)istrict 2 Section II Improvements and Activities Completed in 2009-10 Marketing and Events Programs -PAd maintained a comprehensive website that is 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). We track nearly 4200 unique hits on the site per month. P Ad offered members the opportunity to advertise their businesses by posting a link to their website on the "Home" page for a fee. We have updated the "What's Happening" page daily with specific information including merchant sales, specials and promotions. PAd updates the database of all downtown businesses continuously for display and use via the website. -On the website, PAd has cross referenced & categorized comprehensive business sectors. -Frequently, PAd has sent email blasts to notify members of pertinent on-goings in the downtown, such as upcoming events, street closures, police alerts and other activities. Events -The Dine Downtown event was launched in August '05 and continued successfully on a bi-annul basis in August 2009, and January 2010. - P Ad participated in a collaboration and partnership to support events with the City of Palo Alto, Stanford University and the Chamber of Commerce. P Ad remains an active partner and contributing participant in the promotion of Visitorship to Palo Alto. -Advocated for and saved the Community Farmshop by securing funding and participation from the BID members. The weekly market is held at the renovated Lytton Plaza on Wednesday s from 3:30 -6:30 pm. -The PAd secured management of talent and entertainment for Friday night jam sessions at Lytton Plaza. - P Ad held breakfast Roundtable discussions, hosted by the Garden Court Hotel. The Fall presentation was on identity theft. Guest speakers included P APD special agents James Reifschneider and Jason Jenkins. The Spring discussion addressed the issue of an improved consetual plan for the downtown district, moderated by Curtis Williams, the Director of Planning for the City of Palo Alto. PAd intends to hold these roundtable community/town hall discussions twice a year to encourage member attendance and participation on topics of importance within the BID. Downtown Streets The Downtown Streets Team ("DST") was founded in May 2005 by the PAd, after its initial survey to business owners. The survey was sent to all BID constituents to better understand how PAd could serve its members. Overwhelmingly, homelessness and cleanliness of the downtown area were the issue of most concern. 3 The program participants clean the streets of downtown in exchange for food and shelter. DST is a platform for many formerly homeless to find hobs and housing. This highly successful program was spun off as a separate, self-supporting non-profit entity in 2006 .. PAd continued to support the program through joint promotions and fund raising efforts, as well as a financial pledge of$5,000 to help ensure its continued success. To further the ongoing partnership and continuity, the President of the DST, Eileen Richardson, serves as a liaison to the PAd. DST has built successful working relationships with Innvision, The Opportunity Center, Catholic Charities, Alliance for Community Care, City Council, Palo Alto Police Department ("P APD") , Palo Alto City Management, The Emergency Housing consortium ("EHC"), and now holds a place on the Steering Committee for the County's 10-year plan to end homelessness. The program has received funding and is expecting continued funding from the City of Palo Alto, in both HSRAP and contracts for cleaning, EHC and Innvision contracts, foundation grants and local businesses and residents. PAd will increase the financial contribution to $10,000 in Fiscal Year 2010-11 to the DST, with the provision that said funds will be directed towards increased cleanliness and security within the district. Environmental/Marketing -Worked with the City and district members to adopt and implement a master outdoor seating plan. P Ad negotiated a one time fee reduction of the required encroachment fees for outdoor seating and displays. With assistance from Bellomo Architects, P Ad has further secured a blanket ARB permit for such outdoor seating in order to provide a maintained, uniform look and facilitate compliance with City ordinance and state requirements for outdoor dining. PAd worked closely with the P APD to address the issue of panhandling and homelessness in the downtown. Further efforts were made to address the issue of security in the district. The P APD ran a month long pilot program with increased patrol and security in the downtown. Key areas were identified and the P Ad worked with the City in creating signage and installation of way finders in certain areas of the BID. The P Ad supported the introduction of K wikcarts within the downtown district, and worked with various stakeholders to secure private parking for the carts. PAd initiated the resurrection of plans for the upgrading and renovation of Lytton Plaza through a private/public partnership. PAd, through its President Sherry Bijan, served as a me~ber of the Friends of Lytton Plaza Park. Through a collaborative partnership between the City of Palo Alto and the Friends of Lytton Plaza Park, the renovation project including new landscaping, a water feature and community gathering space which recognize and respect this location's importance as a center of community dialogue and free speech was completed in December 2009. PAd has obtained bids for the lighting at Elinor Cogswell Plaza. The park was selected because the existing available lighting is inadequate, and electrical outlets are available. The lighting of the park will be scheduled once the City approves the public contribution portion of the cost. PAd meets quarterly and works closely with City of Palo Alto Departments to address necessary improvements within the BID. 4 I i' 1 ••. 11 ! I I ! I -Through a partnership with the City of Palo Alto, P Ad produces and installs seasonal banners on the Avenues in the district. The intent is to dress up the downtown and promote the BID. Parking -Representatives from PAd attend the Palo Alto Chamber of Commerce's parking committee meetings to learn of programs underway and contribute the downtown business perspective. -Through the parking district, the PAd and other stakeholders have issued RFPs for added . security and maintenance in the structures. -PAd will advocate to secure contracts for the DST with the City for the ongoing maintenance and security in the parking structures. Executive Committee -During the current fiscal year, the Executive Committee created a budget for Fiscal Year 2010-11 and completed the 2009-2010 Annual Report. -P Ad created an Advocacy task force to address issues on behalf of downtown businesses. On an ongoing basis, PAd promotes and develops a working partnership with the Palo Alto Chamber of Commerce. -P Ad has reached out to the P APD to improve communications and build a strong working relationship. The PAd had advocated for greater police patrol and presence within the district. Advocacy -PAd will listen to find out what is on constituent business owners' minds. We regularly speak with prospective tenants and work closely with property owners and manag~rs to ensure the maintenance of a balanced retail mix in the district. The P Ad participated and was instrumental in the discussions and ultimate adoption of the Ground Floor Zoning Ordinance within the district. Through a collaboration with the P ACC, the P Ad will advocate for streamlining the permit process for new business. , The P Ad will continue to perform outreach, identify and attract additional businesses to the downtown district. -PAd will lead dialogue on improving the district through aesthetic enhancements, the flow of traffic, the creation of a more welcoming pedestrian and cycling environment. -PAd is represented at the Palo Alto Chamber of Commerce ("P ACC") Government Action Committee ("GAC") meetings. -During Fiscal Year 2010-2011, PAd will continue to represent the voice of businesses. Nominating -During the past year, PAd has recruited new members to the Advisory Board to ensure all business sectors are represented, including new Advisory Board members, Adam Mason, partner at Jungle Digital Imaging and Abraham Khalil, who owns and operates both retail and professional businesses in the downtown. -P Ad coordinates the annual member meetings and election of directors of PAd. 5 Finance During the past year, PAd has: -Maintained accounting systems for PAd bookkeeping. Assisted in the billing of annual fee assessments. Improved the invoicing process. Planned and implemented delinquent member collections. Completed year-end tax filing. Scheduled an annual Audit to be completed through June 30, 2009 for submittal to the City. 6 Section II Expected Improvements and Activities for 2010-11 During Fiscal Year 2010-2011, PAd plans the following improvements, activities and programs. 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. The website (www.paloaltodowntown.com) provides opportunities for members to self promote on the website through advertising. Regular e-blasts will be prepared and distributed. Encourage and develop business to business exchange. Support the launch of the eMax online business networking site, dedicated to downtown Palo Alto. -Support the launch of the magazine, Made in Palo Alto, promoting downtown district business. Through a joint effort with the California Shoe and Luggage repair, to address both the environmental impact and address fundraising, the P Ad will recycle the street banners into tote bags. These bags will be available for purchase at various downtown establishments, where the profits from sales will be. shared. Events' -Review and Revamp the Dine and Shop Downtown promotional campaign. Support the Weekly Palo Alto Community Farm Shop. Support the Made In Palo Alto Fashion Show & fundraiser for the "Awearness" campaign against domestic violence. Support and maintain ongoing entertainment and events at Lytton Plaza, through the Friday night music jam sessions. Support and sponsor the World Music Day, through the extension of the PAd liability insurance for the event and participation of member businesses. Support the City of Palo Alto Recreation Dept with various events including the May Fete Parade, and the B&W Ball. Continue to produce seasonal banners for the Avenues and additional pieces highlighting upcoming events on the bridges and side streets. Support the SMCVB to accommodate the influx of visitors to local business and Stanford University, and Stanford Athletics events. Work with the City to promote a pedestrian-friendly environment through events that will feature entertainment and a draw to the BID. Downtown Development Downtown Streets Team -Continue support of the program financially with a pledge of $5,000.00 for the year, with the provision that it be used towards the security and cleanliness efforts within the district, including the parking structures. 7 Environmental -Design and display seasonal banners featuring business promotion. P Ad will work with the City to amend the current banner ordinance that precludes advertising on the banners which is currently limited to seasonal, historical and event driven messages. Identify areas for installation of additional directional and way finding signs. Identify areas for installation of additional lighting. Recommend removal and or replacement of benches. Identify certain key areas for landscaping, hanging baskets or potted plants. Continue efforts through the partnership with the P APD to monitor panhandling and enforcement of the sit/lie ordinance. P Ad will work closely with other business districts to help promote the expansion of the sit/lie ordinance if requested. Work with the P APD to retain police patrol in the district. Improve lighting at the Transit Station. Parking Create education and outreach programs to inform business owners and managers of the downtown parking options. Advocate for parking & directional signage. -Continue to work with the City and the parking committee to enable transferable parking permits. Use outreach programs to educate public of the ample free parking. Evaluate and implement parking survey results. Address security enforcement in the parking structures. P Ad will support the use of the DST for ongoing maintenance and security within the downtown parking structures. Encourage City contracts with the DST to provide additional maintenance in the district. Executive Committee -Continue to refine P Ad structure and organizational development. -Continue to update and refine information provided to Advisory Board Members. -Continue to advocate on behalf of downtown businesses. -Hold bi-annual roundtable meetings to encourage discussion among members, participation in P Ad and information about relevant topics. -Create visibility within the business comlnunity. -Begin conceptual planning initiative for the downtown area. -Continu~ to partner with property owners and leasing agents to ensure a good retail mix in the district. Nominating -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. 8 Section III: Budget for 2010-11 The total funds available for activities for this fiscal year are estimated to be $131,390. The budget for providing the activities is set forth as follows: BID 2010/11 Budget INCOME Assessments Uncollectible fees Total Assessments Income/Fundraising 09-10 Surplus Carryover TOTAL INCOME EXPENSES Operating Expenses Staff Salaries Executive Director Salary Health Insurance Payroll Taxes Surplus Carryover from Prior Year 09-10 fiscal Office Supplies & Expenses . Internet/Website Maintenance Telephone Rent Reauthorization Advertising Audit-Tax Returns Legal Insurance-Liability Workman's Comp Nominating Contingencies Total Operating Expenses Marketing and Events Programs & Member Outreach Permit Fees Banners Roundtable $130,000 $(20,000) $110,000 $17,650 $3,740 $131,390 Expenses $60,000 $4,200 $6,000 $66,000 $3,740 $1,500 $ 500 $1,000 $6,000 $2,500 $4,000 $1,000 $1,500 $1,000 $1,000 $3,500 $97,440 $1,000 $2,000 $7,650 9 $17,650 Income (Donation) $1,000 (Donation) $6,650 Events & Fundraising Dine/Shop Downtown $3,000 Events $5,000 Promotional Sales/Fundraising $2,000 Total EnvironmentaV Marketing & Events $20,650 $ DST $5,000 District Improvement $8,300 Environmental Total $13,300 Total Expenses/lncome $131,390 Section IV: Method and Basis of Levying the Assessment Cost Benefit AnalysislBID Assessments $3,000 $5,000 $2,000 $17,650 $17650 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 against his or her business for Fiscal Year 2010-11 and is not changed from the FY 2009-10 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 the 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. F or these reasons, various business types are assessed according to the benefit that they receive from the BID, as follows: 10 ~ Retail and Restaurant ~ Service ~ 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. 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. F or this reason, A and B benefit zones have been identified for the BID. In Palo Alto, Zone A benefit business 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 ("FTE"), including the business owner. This covers employees who work less than 1 0 hours a week (based on a 40 hour work week(A full 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 (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 theaters, etc. 11 Hotel and Lodging: These include businesses that have as their main busitless 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 than 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 Based on the revenue balance on 04/01110 of$41,740, the PAd expects a surplus carryover of $3,740. Expected expenses for the remainder ofFY 09-10 are as follows: Current revenue balance Expected expenses for remaining FY Staff Salaries Staff Health Insurance Elections and Annual Report Office + Operating Expenses Outside Audit Advertising DST donation Total expected expenses Expected carry-over $41,740 $25,000 1,000 2,000 1,000 4,000 2,500 2,500 $38,000 $ 3,740 12 Section VI: Non-assessment Income It is estimated that $17,650.00 will be raised in fundraising and sponsor support. Additionally, anticipate in-kind contribution towards expenses for Fiscal Year 2010-11. Projected Income For Fiscal Year 10-11 -Roundtable (donation) -Legal (donation) Dine/Shop Downtown -Events -Promotional SaleslFundraising Total $6,650 $1,000 $3,000 $5,000 $2,000 $ $17,650 13 Section VII: PAd Board of Directors by Business Type Retailers and Restaurants Robert Beschiem, Tamarine Restaurant Claudia Cornejo, Caffe del Doge Whitney Denson, Five Ten Gifts Georgie Gleim, Gleim Jewelers Jeff Selzer, Palo Alto Bicycles Abraham Khalil, A.K. Insurance Services, KanZeman, Abby's, Med Wraps Hotel and Lodging Barbara Gross, Garden Court Hotel Services Businesses Stacey Yates, Skin Spirit Financial Institutions Deborah Pappas, Borel Bank Professional Organizations Anne E. Senti-Willis, Thoits, Love, et al. Elliot Lee, e-Max Sherry Bijan, PAd LIAISONS Chamber of Commerce Paula Sandas Downtown Streets Team Eileen Richardson City of Palo Alto Susan Barnes *Termed member(s) of the Board of Directors who continue to serve as officers or volunteer heads of PAd committees. 14 / 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: • 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 services 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 crossed 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. 15 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. 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: • Small: • Medium: • Large: 50% of base assessment 75% of base assessment 100 % of base assessment *Full-time employees (FTE) RetaillRestaurants under 6 FTE* 6-under 11 FTE* 11+ FTE* Service Businesses Under 4 FTE* 4 to under 7 FTE * 7+ 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 than 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, page 2 16 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%) ATTACHMENT 2 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 N otel: 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 $50.00. 17 The City of Palo Alto 1101>&<2.2003.07.2514,17:39 Proposed BID Mop 7125103 (llcc-prmlral<\GIs$ID&lalPorsonaillope<2.mdb) ATTACHMENT 2 Downtown Palo Alto Business Improvement District This map is a product of the City of Palo Alto GIS -. 0' 500' This document I. a Vraphlc ' ...... ntaU'"' only 01 best .vallable sour ..... The City 01 Palo AIIo a.sum .. no ,_olbIliIy lor any...,.".. ATTACHMENT 3 Not Yet Approved Resolution No. --- 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 2011 and Setting a Time and Place for May 17, 2010 at 7:00 PM or Thereafter, in the Council Chambers THE CITY COUNCIL OF THE CITY OF PALO ALTO DOES HEREBY FIND, DECLARE, AND ORDER AS FOLLOWS: SECTION 1. The Parking and Business Improvement Area Law of 1989 (the "Law"), 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. 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 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 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 2010-2011" (the "Report). The City Council hereby preliminarily approves the report. 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 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. 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 2010-2011 (July 1, 2010 to June 30, 2011). Such assessment is not proposed to increase from the assessment levied and collected for fiscal 1 100331 jb 0130568 Not Yet Approved year 2009-2010. 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 withi;n 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 time 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 hearing on the proposed levy of an assessment against businesses within the District for fiscal year 2010-2011 as follows: TIME: DATE: PLACE: 7:00p.m. Monday, May 17,2010 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 2010-2011 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 person subscribing is the owner of the 2 100331 jb 0130568 Not Yet Approved 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 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 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. SECTION 10. For a full and detailed description of the improvements and activities to be provided for fiscal year 2010-2011, the boundaries of the District and the proposed assessments to be levied against the businesses within the District for fiscal year 2010- 2011, 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. SECTION 11. 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 II II II 3 100331 jb 0130568 Not Yet Approved SECTION 12. 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: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: City Clerk APPROVED AS TO FORM: . Senior Assistant City Attorney 100331 jb 0130568 4 Mayor APPROVED: City Manager Director of Administrative Services Director of Planning and Community Environment The City of P,a loA 1 t 0 11opet2.2003.(J1.2514:17:39 Proposed BID Map 7125103 (I~\GIs$\DaI8\P_oI\IIopez2,mdO) EXHIBIT A Downtown Palo Alto Business Improvement District This map Is a product of the City of Palo Alto GIS -. 0' This documenlll a graphic ropr_nlaUon only 01 beslavalltble sources. The CMy 01 Palo Allo as....., ... "" .. spon_My for ""1/""" ... Retailers and Restaurants (100%) Service Businesses (75%) Professional Businesses (50%) Lodging Businesses (100%) Financial Institutions EXHIBITB 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%) ZONED (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 N otel: 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.