HomeMy WebLinkAbout2004-06-07 City Council (5)City of Palo Alto
City Manager’s Report
TO:
FROM:
HONORABLE CITY COUNCIL 20
CITY MANAGER DEPARTMENT: CITY MANAGER
DATE:JUNE 7, 2004 CMR: 290:04
SUBJECT: ADOPTION OF A RESOLUTION TO APPROVE THE 2004-2005
BUDGET REPORT AND TO LEVY. THE ANNUAL ASSESSMENT FOR THE
PALO ALTO DOWNTOWNBUSINESS IMPROVEMENT DISTRICT (BID)
FOR FISCAL YEAR 2004-05
RECOMMENDATION
Staff recommends that the City Council adopt a resolution to approve the 2004-05
Budget Report and to levy the annual assessment for the Palo Alto Business
Improvement District for 2004-05.
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 Palo Alto Downtown Business
and Professional Association as the Advisory Board (Advisory Board) for the BID, 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.
The budget report for fiscal year 2004-2005 was reviewed and approved by the Palo Alto
Downtown Business and Professional Association at its board meeting on May 5, 2004.
in preparation for the public hearing, City Council took the following actions on May 10,
2004, as required by BID law:
Adopted the resolution preliminarily approving the BID Advisory Board’s 2004-
05 Budget Report
Adopted the resolution of intention to levy 2004-05 assessments in the Palo Alto
Downtown Business Improvement District and set June 7, 2004 at 7:00 p.m. as the
date for the public hearing on the levy of assessments
CMR:290:04 Page 1 of 3
DISCUSSION
The Advisory Board has prepared a report (Attachment 2), for the Council’s
consideration that includes the budget for the Palo Alto Downtown BID for fiscal year
2004-05. 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
in fiscal year 2004-05. The Advisory Board has recommended no change in the BID
boundaries or the method and basis for levying assessments. A map of the Palo Alto
Downtown BID is attached as Attachment 3. The proposed assessments in the BID for
fiscal year 2004-05 are the same as the assessments in fiscal year 2003-04, although
because the BID was in operation for only six months, the assessments sent to businesses
were only 50% of the annual BID assessment for FY 2003-04. The assessment for the
full year will be assessed in FY 2004-05.
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.
Absent a majority protest at the public hearing, at the conclusion of the public hearing the
Council may adopt a resolution approving the report for Fiscal Year 2004-05 as filed or
as modified by the Council. The adoption of the resolution constitutes the levying of the
BID assessments for fiscal year 2004-05.
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 in the collection of BID assessments. Estimates indicate that the
cost of collection by the City will continue at the current level of $16,000. Any amount
over the $5,000 allocated in the BID budget will paid out of the City Manager’s
contingency fund up to that level. City Manager staff will continue to provide oversight
to the BID and will prepare the annual reauthorization.
CMR:290:04 Page 2 of 3
ENVIRONMENTAL REVIEW
This action by the City Council
Environmental Quality Act.
is not considered a project under the California
ATTACHMENTS
Attachment 1"
Attachment 2:
Attachment 3"
Resolution of Intention to approve the 2004-05 Budget Report and to
levy the annual assessment for the Palo Alto Business Improvement
District for 2004-05
Report of the Advisory Board with Regard to the Reauthorization of
the Downtown Palo Alto Business Improvement District for Fiscal
Year 2004-2005
Downtown Palo Alto Business Improvement District Map
PREPARED BY:
SUS’~N’ARPAN,Econb~nic Development and
Redevelopment Manager
CITY MANAGER APPROVAL:
FRANI~ BENEST, ~ity Manager
CMR:290:04 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 2004-
05 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 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 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. By previous resolution, the City Council
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") and directed the Advisory
Board to prepare a report in connection with the proposed levy
of an assessment against businesses in the District for fiscal
year 2004-05.
SECTION 5. In accordance with Section 36533 of the Law,
the Advisory Board prepared and filed with the City Clerk a
report entitled "Downtown Pa!o Alto Business Improvement
District, 2004-05 Annual Report" (the "Report"), and, by
previous resolution,the City Council preliminarily approved
such report as filed.
040524 sm 0100247 1
NOT YET APPROVED
SECTION 6. The City Council has adopted a Resolution of
Intention, Resolution No. 8421, declaring its intention to levy
and collect an assessment for fiscal year 2004-05 against
businesses in the District.
SECTION 7.Following notice duly given pursuant to law,
the City Counci!has held a full and fair public hearing
regarding the levy and collection of an assessment within the
District for fiscal year 2004-05.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 2004-05.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 all 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 Counci! 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
2004-05 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 originally filed.
SECTION i0. The adoption of this Resolution constitutes
the levy of an assessment for the fiscal year 2004-05
(commencing July i, 2004, and ending June 30, 2005). 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 beginning 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.
040524 sm 0100247 2
NOT YET APPROVED
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
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 environmenta! 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
040524 sm 0100247 3
<~1 I I I
neA
B
Th~ City of
Palo Alto
Palo Alto Downtown
Business Improvement
District
Thi~ m ap ~ a productofl~e
C[’y ofP ab A b G IS
EXHIBIT "B"
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 serviced 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.
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 Pato 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:50% of base assessment
¯Medium:75% of base assessment
¯ Large: 100% of base assessment
* Full-time employees (FTE)
Retail/Restaurants
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 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.
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) (lOO%)
$130.00
$200.00
$26O.00
Professional
Businesses
~o%)
EXEMPT (25% or fewer FTE employees, including the business owner)
$ 60.00 (26% FTE to 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 (1 O+ FTE employees) (lOO%)$170.00
Lodging
Businesses
(100%)
$225.00 (up to 20 rooms) (50%)
$340.00 (21 to 40 rooms) (75%)
$450.00 (41+ rooms) (lOO%)
$170.00
$26O.00
$340.0O
Financ~l
Ins#tutions $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 F-rE equals approximately 2000 hours annually. Lodging facilities will be
charged by number of rooms available and financial institutions will be charged a flat fee.
Note 2: Second floor (and higher) businesses located within Zone A will be assessed the same
as similar street-level businesses located within Zone B.
Note 3: Assessment amounts are rounded to the nearest ten dollars. The minimum
assessment will be $50.00.
ATTACHMENT 2
Report of the Advisory Board
With Regard to the
Reauthorization of the
Downtown Palo Alto
Business improvement District
FUi FibL.cii ~o~ /’t~u~-ZUUD
As approved by the Advisory Board on
May 5, 2004
Submitted by Stephanie Wansek
Chair, Palo Alto Downtown Busine~
Introduction
This ~Ft ~ ~k~, Advisory Board ~ the Palo Alto Dow~ .....~Jl I 1 L~JVV I I
Business& Professional Association (PADBPA) was prepared for
City Council to review for the annual reauthorization of the
Downtown Palo Alto Business Zmprovement District (B]]D)
pursuant to Section 36533 of the Parking and Business
Zmprovement Law of ~989 (Section 36500 and following of the
California Streets and Highways code) (the "Law"). This report is
for the proposed fiscal year for the BZD commencing July.Z, 2004
and ending June 30, 200S. ("Fiscal year 2004-05").
As required by the Law, this report contains the following
information’
Any proposed changes in BID boundaries and b~n=r~
zones within the BID;
The improvements and activities to be prov,oed for Fiscal
Year 2004-05;
An estimate of the cost of providing the improvements
and the activities for that fiscal year;
The method and basis of levying the assessment in
sufficient detail to allow each business owner to estimate
u ~ amou~ ~L U~ L~ ~ dba~bbitient to be levied against his or
her ku<in~s for ~i~ Year ~nn,~ n<
The amount of any surplus or deficit revenues to be
carried over from a previous fiscal year.
The amount of any contributions to be made from
sources other than assessments levied pursuant to the
law.
,.~MUIIIILL~LI aLcloha~C VVdI~a~,, ~ d~r, ON U~[}d~t of the Advisory
Board of ~he Palo Alto Downtown Business & Professional
~qqnr~r~nn ~P~ ~R~A~
The Board approved this Report may 5, 2004 at a publicly
~,~ ,, ,~e~,ng of ~, ,e tm~,, v ~ ~J i )~
Received on file in the Office of the City Clerk of the City of Palo
Alto on ~ay 6, 2004.
Section i’ Any PrOposed changes in BID boundaries and benefit
-’znn:c \^~if’hin "t-h,-, ~T~
There have been no changes in the BiD boundaries and benefit
zones within the BID.
A map of the BID Boundaries and benefit zones is available in
Aff~r’hrn~nf- T n~ "khic r~nnre
Section 2’ The improvements and activities to be provided for
Fiscal Year 2004-05.
The activities listed in Attachment 2 of this P, eport are proposed
to be provided annually.
Section 3" An estimate of the cost of providing the
improvements and activities for Fiscal Year 2004-05.
The total funds available for activities for this fiscal year are
estimated to be’ $ 157,000. The budget for providing the
activities is set forth in Attachment 2 of this Report.
Section 4" The method and basis of levying ~h=~=ssme,,Lin
sufficient detail to allow each business owner to estimate the
a .....~ of ~ .......~- ....’ ~,,,~u.~~,,~ a~s~m~,L to be l~vi~d against his or n~r
business for Fiscal Year 2004-05 and is not changed from the FY
2003-04 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 _January !2, 2004.
Attachment 3 de_~cnbes Lhe me:hod of calculation ,used to
BiD. The BiD assessments are based on three criteria’ the type
of business, the location of the business and the size of the
UUbli
="~ ~=,,,onst, oLcd L, ~at the typical BID!t hasb~ ~nsistentlyd-~-~ ~
Program places a hioher prinrit-V nn mrt-i\zil-i~,< m,~rh m< rnrnm.~,rri~l
2
marketing. As a result, the retail and restaurant establishments
in the BID are assessed more than service and professiona!
businesses in the district.
While service-oriented businesses benefit from a B!D less than
retailers and restaurateurs, they benefit more than professional
businesses such as medical, dental, architectural, consultant and
legal offices with their minimal advertising and promotion needs,
For these reasons, various business types are assessed according
to the benefit that they receive from the BID, as follows"
Retail and Restaurant
Service
Professional
i00% of base amount
75% of base amount
50% of base amount
Exceptions to this ru!e 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. Centraiiy located businesses tend
to benefit more, as do businesses located on the ground floor.
For this reason, A and B benefit zones have ~~en ide~’~ ~1[f~ ~u tOT
the BiD.
In Palo Alto, Zone A benefit businesses are assessed 100% of the
base benefit assessment while Zone B businesses are assessed
75%,
Athird criterion is used in the BZDto determine benefit. This
c_ ~ter~on., the size of the business, takes into consideration the
o iednumber of full timeen-~ployeesempl ~ by the business. Please
refer to A~achment 3 for a more complete understanding of the
Attachment 4 is the B!D assessment for each business located
within the BID boundaries. Applying the criteria identified in
3
Attachment 3, a summary of ~’ =~n~. assessment that applies to each
Cost- ~ ~:~~~n~,,~ Analysis, u,e assessments include the following
cdteda ’
An exemption for "single person professional
businesses" that have 25% or fewer full time
pr~l~i\/~l~nt- fFT, El in,-, ,iHir~ the h,,~i T,"~o,neSS ~1 lel ,11113
covers employees who work less thanl0 hours a week
(based on a 40 hour work week (A full ~E equals
approximately 2000 hours annualiy)
An assessment spedfically for "single person
businesses" that have 26% ~E to I ~E in the
professional business category of the ~iD (A full ~E
equals approximately 2000 hours annually)
The tiering of other professional businesses by size
based (according to benefit) on the new "single person
bus[mess" criteria
This outline provides information by which a business can
determine its annual assessment based on objective criteria.
Except where otherw~ ~,s~ defined, all terms shall have the
meanings "dentfieo below’
Definitions of ....-musme=s Types in the Downtown Business
Impro veto en t District (BID)
Retai[ers and Restaurants: Businesses that buy or resell goods
such as clothing stores, shoe stores, office supplies as well as
businesses that se!l prepared food and drink.
Service Busine_~ses: Businesses that se!! services such as
IIIU~L O~LUtlIULIVC
businesses, dry cleaners, art and dance studios, printing firms,
film processing companies, travel agencies, ente~ainment
~’:--~ ......etc.UUblll~bb~b such db tll~dti ~bt
Hote! and ~dq~.,g. These include businesses that have as their
main business the lodging of customers. This is restricted to
4
residential busine~e~ that ~rovide lodging services to customers
for less than _30 days.
Profe~siona! BusL~e~em 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, mortgage brokers and similar professions.
Financia! Zns#itutions: Includes bankingt 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
Hunicipal 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 orga "nlzaL,ons
"Single~r~nn~, nr~£~c~’nn~l h,,~in~¢~c" that have
25% or less fulitim= ’: ~ ".~ equ,v=,=n: (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. Asecond notice will be
payment by that date. Payments received after 30 days of
Section 5" The amount of any surplus or deficit revenues to be
~-~’i~H over t:t-mr~ a D~’~ imUS ~:i~-~-~1year,~I,~ 1 I I ~,,~,.~I I ~.,~1 I I ~ I ~-- ~/ I ~,-~/1 ,.~ ~,~ ~,.-I I ’
We andcl_nate ~h~: the City of P~ln A!to wil! approve ~ contract
with the Palo Alto Downtown Business & Professional Association
5
(PADBPA) prior to June 7, 2004 to provide administration and
PaloAlto BiD Budget for fiscal year 2003-2004. We anticipate
this will happen in mid-May 2004. Any funds not used by June
30, 2004 will be carried over into the contingency line of Budget
for Fiscal Year 2004-2005.
qection 6’ The a..m~,,ne of =n,, ~,~-~,,~,~ to be de
sources other than assessments levied pursuant to the law.
Assessment proceeds are estimated to be approximately
122,000 for Fiscal Year 2004-05...~,~,,~ent proceeds will be
spent only on acdv,de~ authorized inthe annual reauthorization
of the Downtown Palo Alto Business Improvement District by the
City Council of the City of Pa!o Alto.
!n this first year of operations, there could be additional funds
generated through BID sponsored events and/or fundraising.
BID Activities / Accomplishments for FY 2003-2004
The Advisory Board has completed the Bylaws of PADBPA,
created a non-profit organization of the 501C6 category.
We. - will have. hi
furniture and office equipment,
We have began the branding process for PADBPA and created a
logo design, banner design and a website for the organization.
PADBPA will also be involved in a downtown PA event, which wil!
involve closing off Ramona St. for a Brazilian night in conjunction
with PA Art Cpnf,~r’q wepl4 Innn
BiD Activities anticipated for FY 2004-05 (See Attachment 2)
P .....~:~-- ;-- FY ~" 05,ouu~u activ fall under three.LI ~::::) IUI i_.uu~-
categories.
6
1) Operations costs which include staff salary, printing costs,
\^lphqitp m~infpn~nrp m~ilinnc nhan~ ~nH fh~ r~n~ir~H
audit and
2) IVlarketing and Promotion which include producing a
Business Directory, a BiD newsletter, the development of
directional signs, and events planning and execution.
li~ ~ T~
includes enhanced tree lighting and seasonal planting.
For FY 2004-05
/-~ tLd t~l I I II,._."~’ I tb :
Attachment 1:
Attachment 2:
Activities
Attachment 3:
Attachment 4:
Attachment 5:
B!D Boundaries
Budget of Recommended FY 2004-05 BiD
BiD Cost Benefit Analysis
BiD Assessment Schedule
BiD Advisory Board Members by Business Type
7
ATTACHMENT I
ATTACH~iENT 2
CARDt NAL HOTEL BUDGETIOPERATING EXPENSES 2004 5/5/200411:41 AM
Assessments
non-assessment income
carry over FY 2003-04
TOTAL INCOME
EXPENSES
ODeratinc~ Expenses
$122,000!
S5,000i
S30,000i
s157,oooi
3.18%
19.11%
100%
-seasonal planting
iTotai Operating Expense $i43.000 9i.08%
TOTAL OPERATING INCOME $14,000 8.92%
s52,ooot
Staff Salaries $55,000i 35.03%
Incentive Pay $5,000 3.18%
Admin.Supplies & Expense $1,000~:0.64%
Mailing $2,500!1.59%
Printing Supplies $5,000 3.18%
website $1,000 0.64%
Travel & Auto $500 0.32°/
Telephone $1,000 0.64%
Audit $3,000 0.64°/
Collections $5,000 3.18%
Utilities 0.00%
Insurance Liability $1,000 0.64%
Payroll Tax 0.00o/,
Contingencies $1,000 0.64%
Marketina and Promotions 33.12%
~ Business Director).,
- Development of Directional Signs
~ Design / advertising
~ Banners / Hardware (1 time)
-Newsletter
~ BID information
Beautification ,~ ~0,000 6.37°/
A u~n.ra~ btatemen~ r~.egaraing 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
, ,~u,~,,,o than on Civic Bu~u[nluc~[Iun and~o,~,,,~e~~" ---- -Cla~ ’ 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 o~ces with their minimal
~v....s,n~ and needs.H~ OmOD~. ~
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 fiat
-~" " ~ ~’~typically charged ~,,,rate regardless of location or siT~ and lodging b.sme.s., that are
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 rnany part time employees, but revenues are based on the room occupancies of
the hotel, not the goods sold or serviced by emplow~s.
~.,’-"l,er,~,~- 2) Location of Business:
Statement Concerninq Cost-Benefit Formula For B!D .~ .~ine=£=< Rr~n~.rrlinn
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 a!so takes these street level criteria into account.
As mentioned above, special =,,=~+o ~ ~........ ~a~,s, festioals and other activities tend to take
place within, or along, the Main Street core rather than in the areas at the periphery of
t~he 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~. ~"7<o,,.,/o of base benefit assessment
In the case of Downtown Pato 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 Attachme.nt 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. PaR-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 va.rious business sizes might be tr#ated regarding the computation
of the annual benefit assessment is as follows:
. r~edium:
50% of base assessment
75% of base assessment
Large: i00% of base assessment
Full-time employees (FTE)
RetaiiiRestaurants
under 6 FTE*
6-under 11 FTE*
11 + FTE*
SeP;ice
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 I&ss 10 hours a week (based on a 40 hour work week)
Since "single person businesses" that have 26% FTE to ! FTE in the professional
b~Jsiness category of the B!D benefit the very least from the assessment, their
assessments have been ÷~,~, ~’r~’~ by slze’ ~s~u~’~ ~’~~.,.,~ru,ng~ .... "~; to~,~n~,l~ ~"~ on ~’~, ~ new "~;"~^~,
person bus~ness criteria.
Retailers and
Restaurants
(~ 00%)
ZONE A ZONE B
(75%)
$225.00 (Under 6 FTE employees) (50%)
$340.00 (6 to under 11 FTE employees) (75%)
$450.00 (! 1+ FTE employees) (lOO%)
$170.00
$260.00
$34O.OO
Service
Businesses
(75%)
$170.00 (Under 4 FTE employees) (50%)
$260.00 (4 to under 7 FTE employees) (75%)
$130.00
$200.00
$260.00
Professional
Businesses
(5o%)
EXEMPT (25% or fewer FTE employees, including the business owner)
$ 60.00 (26% FTE to 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) (loo%)$170.00
L o dging
Businesses
(100%)
$225.00 (up to 20 rooms) (50%)
$340.00 (21 to 40 rooms) (75%)
$450.00 (41+ rooms) (;00%)
$170.00
$260.00
$340.00
Financial
Note 1: For retail, restaurant, seFvice, 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 ocated within Zone A .wi!! be assessed the same
~i ’ mr street-!eve! ~,~i ~o ~o ~,~.~÷~x ¢~,,h~,, Zone B.as ~,mll~,b~,n,~s ........., ,i÷ "~
Note 3: Assessmentamounts are rounded to the nearestten dollars. The minimum
assessment wilibe~o0.0u.’- n
and Restaurants
Georgie Gleim, Gleim the 3eweler
I,~,D~~.., ,~,..~, ,, University~,.^~+
Faith Bell, Bei!’s Books
Israel Zehavi, Diamonds of Palo Alto
3ohn Aylward, Car6 Niebaum Coppola
Alex Resnik, Spago
Hotel and Lodoinq
Stephanie Wansek, Cardinal, ,~,
Barbara Gross, Garden Court Hotel
Professional
Sunny Dykwel, Alain Pinel Realtors
Warren Thoits, Thoits Brothers :insurance
3irn Maliksi, Jim Maliksi Architects
Beth Rosenthai, Psychoiogist
Victoria Lukanovich, F:l iT Consulting
Service Business
Marc Dickow, ]ungie Copy
Chamber of Commerce
Sandra Lonnq "~ul~L, PA Chamber off Commerce
ATTACHMENT 3
LLI
C ov7 per S ~eet
The City of
Palo Alto
A
B
J
C aw oerS
~ VVaveCev S beet
Palo Alto Downtown
Business hnprovement
District
Thg m ap g a p~oductofDe
C[y ofP ab AIo G IS