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HomeMy WebLinkAbout2004-02-02 City Council (4)City of Palo Alto City Manager’s Report TO: FROM: DATE: SUBJECT: HONORABLE CITY COUNCIL CITY MANAGER 6 DEP3~RTMENT: CiD~ Manager FEBRUARY 2, 2004 CMR: 132:04 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALO ALTO LEVYING AN ASSESSMENT FOR FISCAL YEAR 2003-2004 IN CONNECTION WITH THE DOWNTOWN PALO ALTO BUSINESS IMPROVEMENT DISTRICT RECOMMENDATION Staff recommends that the City Council adopt a resolution to levy the assessment for fiscal year 2003-04 in connection with the Downtown Palo Alto Business Improvement District. BACKGROUND On January 12, 2004, the Palo Alto City Council held a public hearing on the establishment of a Downtown Business Improvement District (BID) and adopted an ordinance establishing the Palo Alto Business Improvement District (BID). A second reading of the ordinance will occur tonight under the legislative portion of the City Council meeting. DISCUSSION To complete the actions necessary to make the BID fully operational in this fiscal year, a resolution to levy the assessment for fiscal year 2003-04 on businesses located in the BID must be adopted by City Council. That resolution is attached to this staff report as Attachment 1. Following adoption of the resolution to levy the assessment for fiscal year 2003-04, notices will be sent out to each business in the BID. Businesses will be given 30 days before a second notice is mailed and a penalty for late payment is assessed. Funds CMR.1~2:04 Page 1 of 3 collected will be used to fund the activities described in the Report to the City Council from the Advisory Board. Staff anticipates that the City will contract with a non-profit to carryout the BID activities. The nonprofit will be reimbursed from the assessments collected from the businesses in the BID. Typically, the nonprofit’s board of directors (constituted according to the bylaws of the contracting nonprofit) will be appointed by the City Council as the BID Advisory Board. These actions will be brought to the City Council in the near future. In subsequent years, an annual reauthorization of the BID will be required for its ongoing operation including the levy of the annual assessment on BID businesses. Since this is a partial year, the annual reauthorization will take place no later than June 2004 for the upcoming fiscal year. RESOURCE IMPACT The City Manager’s Office has provided staff support to the Advisory Ad Hoc Committee and Advisory Board. Economic Development staff has overseen the creation of a business database and other activities associated with the formation of a Downtown BID. The City Attorney’s office has provided legal oversight and direction regarding the noticing and scheduling of required BID actions. In addition to internal legal oversight, outside legal services have been utilized. Estimates for this work are $10,000, with $5,000 being paid from the City Attorney’s budget for contractual services. The City Manager has agreed to pay the additional $5,000 from the City Manager’s contingency. Preliminary estimates of costs to the Administrative Services Department are estimated to be $16,000 for the payment processing of BID assessments. Of this cost, $5,000 will be paid from BID funds collected, and the balance of the funds ($11,000) will be paid through the City Manager’s contingency in this initial year of operation. An additional initial cost of $4,000 is estimated for data input and reporting. This amount will also be funded through the City Manager’s contingency. It is anticipated in future years that the database will be maintained by and assessment notices will be sent out by the organization with which the City contracts to provide BID activities administration and operations. The ongoing cost for processing of BID payments is estimated to be $5,000 annually. These costs will be paid with revenues generated from BID assessments. If additional expenses for payment processing occurs, CMR: 132:04 Page 2 of 3 these costs will be will be reviewed by the City Council at the time of the annual BID reauthorization and a determination will be made regarding the funding of any additional costs. POLICY IMPLICATIONS The establishment of a Downtown BID is consistent with Comprehensive Plan Policies and was a part of the recommendations for downtown Palo Alto identified in the Retail Strategy for the City of Palo Alto prepared by Sedway and Associates in June 2000. The establishment of a BID supports the following Comprehensive Plan Policies: Policy B-4 Nurture and support established businesses as well as new businesses. Program B-1 Initiate assessment districts or other programs to facilitate neighborhood shopping center improvements such as landscaping, parking and access to public transportation. Policy B-11 Encourage the use of public/private partnerships as a means of redeveloping and revitalizing selected areas. Policy B-20 Support and enhance the University Avenue/downtown area as a vital mixed use area containing retail, personal service, office, restaurant, and entertainment uses. Recognize the importance of an appropriate retail mix, including small local businesses, to the continued vitality of downtown. ENVIRONMENTAL REVIEW This action by the City Council Environment Quality Act. ATTACHMENTS is not considered a project under the California Attachment 1: Resolution Of The City Council Of The City Of Palo Alto Levying An Assessment For Fiscal Year 2003-2004 In Connection With The Downtown Palo Alto Business hnprovement District PREPARED BY: Sfisan Arpan, Economic Degelop~ent Manager CITY MANAGER APPROVAL: Emil Harrison, As City Manager CMR: 132:04 Page 3 of 3 NOT YET APPROVED RESOLUTION NO. RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO LEVYING AN ASSESSMENT FOR FISCAL YEAR 2003- 2004 IN CONNECTION WITH THE DOWNTOWN PAL0 ALTO BUSINESS IMPROVEMENT DISTRICT The Council of the City of Palo Alto does hereby find, determine and resolve as follows: SECTION !. The Parking and Business Improvement Area Law of 1989, California Streets and Highways Code Sections 36500 et seq. (the "Act"), authorizes the City Council (the "City Council") of the City of Palo Alto (the "City") 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 Act, the City Council adopted Ordinance No. establishing the Downtown Paio Alto Business Improvement District (the "District") in the City. SECTION 3. The boundaries of the~District are set forth on Exhibit "A", attached hereto and incorporated herein by reference. SECTION 4. The City Council adopted its Resolution of Intention, Resolution No. 8387, declaring its intention to levy and collect an assessment for fiscal year 2003-2004 against businesses in the District. SECTION 5. Following notice duly given pursuant to law, the City Council has held a full and fair public meeting and hearing regarding the formation of the District and the levy and collection of an assessment within the District for fiscal year 2003-2004. At the public meeting and public hearing, the testimony of all interested persons for and against the proposed establishment of the District, the extent of the proposed District, or the furnishing of specified types of improvements and activities within the proposed District and regarding the levy of an assessment against businesses within the proposed District for fiscal year 2003-2004 was heard and considered. The City Council found that there was no majority protest within the meaning of the Act. All protests and objections to the levy and collection of the assessment and any and all other protests and objections were overruled by the City Council. 040121 sm 010018"7 1 NOT YET APPROVED SECTION 6. Based upon reports and information presented to the City Counci!, 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 fiscal year 2003-2004 in accordance with Resolution No. 8387 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 7. The adoption of this Resolution constitutes the levy of an assessment for fiscal year 2003-2004. The assessment for fiscal year 2003-2004 shall be prorated, with businesses within the District assessed one-half the amount of the annual assessment. Reference is hereby made to Exhibit "B," attached hereto and incorporated herein by reference, for the assessment amounts for fiscal year 2003-2004. SECTION 8. 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: Senior Asst. City Attorney City Manager Director of Administrative Services 040126 sm 0100187 2 The City of Palo Alto This map is a produ~ of the l City of Palo Alto GIS Proposed Downtown Pa!o A!to ,(,~,~) Business ImproYement Disv:ict EXHIBIT "A" Downtown Palo Alto Business Improvement District Prorated BID Assessment for Fiscal Year 2003-2004 Retailers and Restaurants (100%) ZONE A ZONE B (75%) $112.50 (Under 6 FTE employees) (50%) $170.00 (6 to under 11 FTE employees) (75%) $225.00 (11+ FTE employees) (lOO%) $ 85.00 $130.00 $170.00 Service Businesses (75%) $ 85.00 (Under 4 FTE employees) (50%) $130.00 (4 to under 7 FTE employees) (75%) $170.00 (7+ FTE employees) (10o%) $ 65.00 $1o0.o0 $130.00 Professional Businesses (50%) EXEMPT (25% or fewer FTE employees, including the business owner) $ 30.00 (26% FTE to 1 FTE employees) (25%)$ 25.00 $ 55.00 (2 to 4 FTE employees) (5o%)$ 45.00 $ 85.00 (5 to 9 FTE employees) (75%)$ 65.00 $112.50 (10+ FTE employees) (lOO%)$ 85.00 Lodging Businesses (lOO%) $112.50 (up to 20 rooms) (50%) $170.00 (21 to 40 rooms) (75%) $225.00 (41+ rooms) (lOO%) $ 85.00 $130.00 $170.00 Financial Institutions $250.00 $250.00 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. EXHIBIT "B"