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HomeMy WebLinkAbout2004-06-07 City Council (7)TO: FROM: DATE: City of PaiD Alto City Manager’s Report HONORABLE CITY COUNCIL 13 CITY MANAGER DEPARTMENT: City Manager JUNE 7, 2004 CMR: 292:04 SUBJECT:APPROVAL OF AGREEMENT WITH PALO ALTO DOWNTOWN BUSINESS AND PROFESSIONAL ASSOCIATION (PADBPA) FOR THE OPERATION AND ADMINISTRATION OF THE DOWNTOWN PALO ALTO BUSINESS IMPROVEMENT DISTRICT (BID) RECOMMENDATION Staff recommends that the City Council approve the Agreement with the Palo Alto Downtown Business and Professional Association (PADBPA) for the operation and administration of the Downtown Palo Alto Business Improvement District (BID). BACKGROUND The Downtown Palo Alto BID was established by the City Council on January 12, 2004 pursuant to state law (California Streets and Highway Code Section 36500). The purpose of a BID is to promote and improve a specific geographic area for the benefit of the businesses in the BID area. PADBPA formed as a California non-profit corporation and registered with the State of California on March 24, 2004. On May 10, 2004, the City Council named the Board of Directors of PADBPA as the Advisory Board to make recommendations regarding BID assessments, boundaries, operations and activities and to prepare the BID Annual Report for each fiscal year. The Annual Report includes the improvements and activities to be provided in that fiscal year and a budget for carrying out those improvements and activities. The City Council has preliminarily approved the Ammal Report for the upcoming fiscal year. Annual assessments paid by the businesses in the district fund the BID activities and improvements. The City collects the assessments from the businesses each fiscal year. With the establishment of PADPA the City may contract with PADPA to carryout the BID activities and improvements as approved by Council in the Annual Report. CMR:292:04 Page 1 of 3 DISCUSSION At this time, staff recommends that the City Council enter into contract with PADBPA to provide BID administration and carry out the BID improvements and activities. The contract is Attachment 1 to this staff report. The contract provides that meetings of the PADBPA Board of Directors will be open meetings subject to the public notice requirement of the Brown Act when the Board discusses proposed or approved BID activities. Under the contract, PADBPA will provide services related to administration of the BID and BID activities. PADBPA will carry out the activities and improvements contained in the approved Annual Report. The City will reimburse PADPA from the assessment proceeds. In addition, PADBPA will prepare the Annual Report each year, maintain a database of businesses within the BID, and provide information to assist the City to prepare the assessment invoices. The agreement will automatically renew each year upon Council approval of the BID Annual Report and annual BID reauthorization each year. PADBPA will not expend BID assessment funds except in accordance with the Annual Report and Budget as approved by the City Council. 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. 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. POLICY IMPLICATIONS The establishment of a Downtown BID and contract to carryout BID activities is consistent with Comprehensive Plan Policies and was one of the recommendations for CMR:292:04 Page 2 of 3 Downtown Palo Alto identified in the Retail Strategy for the City of Palo Alto prepared by Sedway and Associates in June 2000. ENVIRONMENTAL REVIEW This action by the City Council Environment Quality Act. is not considered a project under the California Attachment 1: Agreement Between the City of Palo Alto and the Palo Alto Downtown Business and Professional Association for the Operation and Administration of the Downtown Palo Alto Business Improvement District PREPARED BY: SUgAN ARPAN, Econom’~.ic Development/Redevelopment Manager CITY MANAGER APPROVAL: FRANK BENEST, City Manager CMR:292:04 Page 3 of 3 ATTACHMENT 1 AGREEMENT BETWEEN THE CITY OF PALO ALTO AND THE PALO ALTO DOWNTOWN BUSINESS & PROFESSIONAL ASSOCIATION FOR THE OPERATION AND ADMINISTRATION OF THE PALO ALTO DOWNTOWN BUSINESS IMPROVEMENT DISTRICT THIS AGREEMENT is made and entered into on the day , 2004, by and between the CITY OF PALO ALTO, a municipal corporation ("City") and the Palo Alto Downtown Business & Professional Association, a California nonprofit mutual benefit corporation (the "Corporation"). WHEREAS City Ordinance No. 4819, adopted February 2, 2004 (the "Ordinance"), established the Palo Alto Downtown Business Improvement District (the "District") under the provisions of the Parking and Business Improvement Area Law of 1989, Section 36500 et seq. of the California Streets and Highways Code (the "Law"); and WHEREAS, pursuant to the Law and the Ordinance, the City is authorized to levy and collect an annual assessment (the Assessment") from non-exempt businesses in the District for the purpose of acquiring, constructing, installing or maintaining improvements and promoting activities which will benefit the business !ocated and operating within the District; and WHEREAS, the City has appointed the Board of Directors of the Corporation (the "Board of Directors") as the advisory board for the District; and WHEREAS the Corporation has available personnel, resources ~nd expertise to undertake improvements and implement activities within the District which are permitted under the Law and the Ordinance to be funded with proceeds of the Assessment; and WHEREAS, the Corporation is qualifigd to undertake and administer such improvements and activities within the District and is wi!ling to do so. NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, the City and the Corporation hereby agree as follows: i.CONTRACT ADMINISTRATION. A. Except as expressly provided herein, the City’s Economic Development Manager or his or her designated representative shall be the City’s representative for the administration of this Agreement. All activities performed by the Corporation shall be coordinated with this person. 040528 sm 0100241 i B. The Corporation shall designate a person, to be the Corporation’s representative for the administration of this Agreement and, subject to the direction and authorization of the Board of Directors, to be the contact person for and in charge of al! actions to be taken on behalf of the Corporation pursuant to this Agreement. 2.TERM. A. Initial Term. The term of this Agreement commences on the date first written above and shal! continue unti! June 30, 2004, inclusive, unless earlier terminated or renewed in accordance with this Agreement. B. Automatic Renewal. Approval by the City Council of the Corporation’s Annual Report (defined in Section 3, below), including the proposed District budget, for each subsequent July !st - June 30th fiscal year shall automatically renew this Agreement with respect to such fisca! year. C. Termination. The City may terminate this Agreement immediately upon any breach of Sections 15 (Insurance Requirements or 17 (Conflict of Interest). In addition, either the City or the Corporation, upon at least 90 days prior written notice, may terminate this Agreement with or without cause. Within 45 days of the effective date of any termination, the City shall reimburse the Corporation for work which has been performed as of the termination date or which is in progress and cannot prematurely be terminated by virtue of contractua! commitments. Unexpended and unencumbered funds provided to the Corporation by the City pursuant to this Agreement and al! tangible assets purchased wholly with such funds shall be immediately returned to the City. It is the intent of the Corporation not to purchase assets using a combination of funds derived from Assessments and other resources available to the Corporation (a "Mixed Purchase"). In the event, however, that any Mixed Purchase shall be made, the Corporation shall provide the City with prior notice of the Mixed Purchase, and the City and the Corporation shall agree, prior to the Mixed Purchase, on how such asset shal! be al!ocated in the event of a termination of this Agreement. 3. SERVICES TO BE RENDERED;ANNUAL REPORT AND BUDGET. A. Except as provided in Section 3.B. below, on or before May ist of each calendar year the Corporation shall submit to the Economic Development Manager,on a form approved by the City, a report setting forth in general terms: the proposed improvements, activities, programs and events for the ensuing fiscal year commencing on the following July !st; the proposed Assessments for the ensuing fiscal year; a budget for the ensuing fiscal year; and any other information required by the Law (each collectively, an "Annual Report"). To the extent feasible, specific improvements, activities, programs and events shall be identified. The proposed 040528 sm 0100241 2 budget for the District for the ensuing fiscal year shall list the proposed expenditures and the amount designated for each proposed improvement, activity, program and event. Pursuant to the Law, the City Council may accept or modify the proposed Annual Report, including the budget. The Corporation agrees to carry out such improvements, activities, p<ograms and events as are contained in the City Council approved Annual Report, including the budget, in accordance with all applicable laws. The Corporation shall not spend any funds derived from Assessments except in accordance with the Annual Report approved by the City Council. If funds are disbursed to the Corporation in any fiscal year on other than a reimbursement basis, the Corporation shal! submit to the Economic Development Manager by the 15th of the first month of each quarter, beginning October 2004 a progress report containing a description of activities for the previous quarter and an expenditure report for the previous quarter. B. In any year when the corporation proposes that the City Council increase the Assessment and/or expand the boundaries of the District for the ensuing fiscal year, the Annual Report shall be submitted to the Economic Development Manager on or before February ist of the calendar year preceding the start of such ensuing fiscal year. 4.MODIFICATION OF ANNUAL REPORT. The parties understand and acknowledge that the Law requires that each year: A. The City Council approve the Annual Report as filed by the Corporation or as modified by the City Council prior to adopting the resolution of intention to levy Assessments and setting the public hearing on the levy of Assessments; and B. The City Council confirm the Annual Report as originally filed by the Corporation or modified by the City Council following the public hearing on the levy of the Assessments. In the event it appears at any stage of the proceedings (initial approval of an Annual Report or confirmation of an Annual Report) that the City Council intends to modify the Annual Report submitted by the Corporation, the City Manager shall recommend to the City Counci! that further action be stayed in order to allow time for the Corporation to respond to the City Council’s concerns and for City staff and Corporation’s staff to meet and discuss the matter. It is understood and agreed that the public hearing to confirm the Annua! Report shall not be continued beyond a total of 30 days from the initial date set for the hearing. The foregoing shall not apply to a case in which a majority protest against the furnishing of a specified type or types of improvement or activity within the District has been made which requires elimination of the improvement or activity. 040528 sm 0100241 3 5.REPORT ON APPROVED ASSESSMENTS. Each year, within i0 days following adoption by the City Council of a resolution levying Assessments, the Corporation shall submit to and in a form approved by the Economic Development Manager, a list of the Assessments, by business type, approved by the City Council for levy in the then-commencing July 1 - June 30 fisca! year together with a complete and updated list, in electronic form or database, of businesses, with business name and address, in the District for use by the City in the preparation of the Assessment invoices. 6.CORPORATION AN INDEPENDENT CONTRACTOR. The Corporation, in the performance of the rights and obligations existing pursuant to this Agreement, shall act as and be an independent contractor and not an agent or employee of the City. The City shall not exercise control over the Corporation’s method of performance of its obligations or duties, except as set forth herein, and desires to obtain only an end result. The City shal! have no liability or responsibility for payments of any wages or benefits to the Corporation’s employees, for whom the Corporation shall bear sole responsibility and liability. 7.BOOKS AND RECORDS. The Corporation shall keep all related books and records in connection with the services performed under this Agreement for a period of at least three years, and agrees, upon the City’s request, to make them available to the City or any authorized representative of the City for inspection during normal business hours. 8.PUBLIC MEETINGS. A. All meetings of the Board of Directors or any group of representatives of the Corporation that would constitute a "legislative body" as defined in California Government code section 54952 (a "committee or subcommittee") where proposed or approved District activities and/or expenditures (collectively, "District Matters") will be discussed shall be open to the public, including without limitation meetings held at District businesses, as required by the Ralph M. Brown Act, Government Code Section 54950, et seq. (the "Brown Act"). Prior notice of such meetings, including an agenda prepared and posted in accordance with the Brown Act, of the District Matters to be discussed and the time and location of the meeting, shall be given in accordance with the Brown Act. No District Matters shall be discussed at any meeting of the Board of Directors or a committee or subcommittee unless such public notice has been given. B. Notwithstanding the foregoing, the Board of Directors shal! be permitted to meet in sessions closed to the public, so 040528 sm 0100241 4 long as nay such closed session conforms with the requirements of the Brown Act. C. The City shall, at the request of the Corporation, post notices and agendas prepared and provided by the Corporation for Corporation meetings on the City’s website and other !ocations along with notices of other City meetings. 9.DATABASE OF DISTRICT BUSINESS. A. Upon the reasonable request of the City, the Corporation shal! provide the City with the most current list, in electronic form or database, of all businesses located within the District. The Corporation shall make reports regarding closed businesses and delinquencies available upon request by the City. The Corporation shall provide the City with street and address ranges within the District. B. The Corporation agrees that it shall be the responsibility of the Corporation to maintain a database of District Businesses. The Corporation shal! use reasonable efforts to maintain a complete and accurate database, but the Corporation and City acknowledge and agree that constant updating of such database could require an unreasonable use ~of Corporation resources. Accordingly, the City and the Corporation agree that the Corporation shal! update such database on at least a semi-annua! basis. C. Each party, upon the request of the other shall make available to the other any additional information in their possession as may be reasonably necessary to operate and administer activities within the District. !0.COLLECTION OF ASSESSMENTS. A. The Corporation understands and agrees that the levy of Assessments by the City shal! be in the sole discretion of the City Council. No provision of this Agreement shall be construed as a promise, warranty or agreement by the City to levy Assessments against businesses in the District. The City shall have no liability to the Corporation for its decision to not levy Assessments or in connection with the amounts of any Assessments levied. The Corporation understands and agrees that the Ordinance may be amended from time to time by the City Council. B. In any fiscal year, if the City levies Assessments against businesses in the District, pursuant to the terms of the Ordinance, the City shall bil! and collect Assessments from businesses in the District to finance District improvements and activities. For each fiscal year subsequent to fiscal year 2003- 2004, the City shall, prior to each July is~ generate and print a written invoice for each assessable business within the District for that fiscal year. Each invoice shall provide the amount of the Assessment, that the Assessment is due and payable on or before 040528 srn 0100241 5 July 10th of that fiscal year and that the Assessment shall become delinquent 30 days thereafter. The City shal! provide such invoices to the Corporation, and the Corporation shall collate and mail such invoices, a!ong with any notices requested by the City, by July I0th of each year. Each fiscal year, the City will prepare and send a second invoice to those business owners within the District that have not paid their Assessment by the 30th day following the date of the original invoice. Any costs incurred by the City or the Corporation to be borne by the District for the generation, printing and mailing of such invoices shall be included in the District’s annual budget submitted and approved in accordance with Section 3. C. After 90 days of delinquency upon the written request of the Corporation, the City shall assign past due Assessments to the Corporation for collection action by the Corporation, and shal! assign the right to receive any amounts so collected (net of reasonable expenses incurred in such collection) to the Corporation for benefit of the District. To the extent any past due Assessments are assigned to the Corporation pursuant to this Subsection 9.C, the Corporation shall submit a written report to the City detailing the status of all then-on-going collection actions undertaken by the Corporation upon the City’s reasonable request, but no more frequently than quarterly. At the City’s option, to be exercised by written notice to the Corporation, the Corporation’s authority from the City over any collection action that has continued for more than 12 months without resolution of the delinquent Assessments may be terminated by the City. ii.DISBURSEMENT OF FUNDS; AUDIT REQUIREMENT. A. So long as the Corporation is not in breach of this Agreement, the City (i) shall disburse at least quarterly to the Corporation all collected Assessments, or (ii) alternatively, if the Corporation so requests, the City shall disburse such funds to the Corporation on a reimbursement basis upon proof of expenditures by the Corporation satisfactory to the City. Disbursements shall be made in such manner and timeframe as the parties shal! mutually agree in writing. The Corporation may expend any funds received pursuant to this Agreement. only for the purposes authorized by the Ordinance and only in accordance with the Annual Report, including the budget, as approved by the City Counci! for the applicable fisca! year. B. If funds are disbursed to the Corporation in any fiscal year on other than a reimbursement .basis, the Corporation will establish and maintain on a current basis an adequate accrual accounting system in accordance with generally accepted accounting principles and standards. The system shall detail all costs chargeable to the District under this Agreement and shall substantiate all such costs, meeting acceptable standards for major 040528 sm 0100241 public entities in Northern California and complying with any applicable Federal standards. The system shall meet the minimum fiscal and interna! contro! requirements as reasonably determined by the City. In addition, within 120 days after the end of such fiscal year or the effective date of a termination pursuant to Section 2 above, the Corporation shall submit to the Economic Development Manager an audit report, prepared by a person or company reasonably approved by the City in accordance with the City’s policies, of the District’s expenditures and completed activities for the preceding fiscal year. 12.ASSIGNMENT. The parties agree that the identity, expertise and experience of the Corporation are material considerations for this Agreement. The Corporation shall not assign or transfer any interest in this Agreement nor the performance of any of the Corporation’s obligations hereunder without the prior written consent of the City. 13.NO OTHER CONTRACTS. During the term of this Agreement, City agrees that it shall not contract with any other person or entity to operate and administer the District. 14.INDEMNIFICATION OF CITY. The Corporation agrees to indemnify the City, its officers and employees against any and all claims, damages or liability arising out of or resulting in any way from activities or improvements undertaken by the Corporation pursuant to this Agreement. Acceptance of any work or services of the Corporation by the City shall not operate as a waiver of such right of indemnification 15.-INSURANCE REQUIREMENTS. Without limiting the Corporation’s indemnification of the City, the Corporation agrees to have and maintain the policies set forth in Exhibit "A", entitled INSURANCE which is attached hereto and incorporated herein by this reference. All policies, endorsements, certificates and/or binders shal! be subject to approva! by the Risk Manager of City as to form and content. These requirements are subject to amendment or waiver if so approved in writing by the Risk Manager. The Corporation agrees to provide the City with copies of said policies, certificates and/or endorsements before work commences under this Agreement. The City shal! have the right to treat any violation of this Section as a material breach of this Agreement, and shal! have the right to terminate this Agreement immediately and pursue any and all legal or equitable remedies for such breach. // 040528 srn 0100241 16.NONDISCRIMINATION. The Corporation shall not discriminate, in any way, against any person on the basis of age, sex, race, color, creed, sexual orientation or national origin in connection with or related to the performance of this Agreement. 17.CONFLICT OF INTEREST. The Corporation shall~ at all times avoid conflict of interest or appearance of conflict of interest in the performance of this Agreement. The Corporation shall disclose to the City any conflict of interest, or potential conflict of interest, which exists or arises at any time during the term of this Agreement within a reasonable time after discovery of such conflict of interest by the Corporation. The City shall have the right to treat any violation of this Section as a material breach of this Agreement, and shall have the right to terminate this Agreement immediately and pursue any and all legal or equitable remedies for such breach. 18. WAIVER. The City and the Corporation agree that waiver by the City or the Corporation of any breach or violation of any term or condition of this Agreement shal! not be deemed to be a waiver of any other term or condition contained herein or a waiver of any subsequent breach or violation of the same or any other term or condition. 19.NOTICES. All notices and other communications required or permitted to be given under this Agreement shall be in writing and shall-be personally served or mailed, postage prepaid and return receipt requested, addressed to the respective parties as follows: To City:Office of the City Manager City of Palo Alto 250 Hamilton Avenue, 7~h Floor Palo Alto, CA 94303 With a copy to: Office of the City Clerk City of Palo Alto 250 Hamilton Avenue, 7th Floor Palo Alto, CA 94301 To Corporation:Palo Alto Downtown Professional Association 542 High Street Palo Alto, CA 94301 Attention: President Business 040528 sm 0100241 8 With a copy to: Palo Alto Downtown Business Professional Association 542 High Street Palo Alto, CA 94301 Attention: Chairman of the Board With a copy to: Thoits, Love, Hershberger & McLean, P.C. 245 Lytton Ave., Suite 300 Palo Alto, CA 94301 Attn: Anne E. Senti-Willis, Esq. or to such other address or addressee as may be designated by notice in accordance with this Section. Notice shall be deemed effective on the date personally delivered or, if mailed, upon receipt. A copy of any notice of a legal nature, including, but not limited to, any claims against the City, its officers or employees shall also be served in the manner specified above to the following address: City of Palo Alto City Attorney 250 Hamilton Avenue, 8~h Floor Palo Alto, CA 94301 20.PRIOR AGREEMENTS AND AMENDMENTS. This Agreement, including all Exhibits attached hereto, represents the entire understanding of the parties as to the matters contained herein. No prior oral or written understanding shall be of any force or effect with respect to the matters covered hereunder. This Agreement may be modified only by a written amendment duly executed by both parties to this Agreement. 21.GOVERNING LAW. This Agreement shall be governed by the laws of the State of California. 22.TIME OF ESSENCE. Time is of the essence of each and every provision of this Agreement. 23.ATTORNEY’S FEES. If a legal action or proceeding is brought by any party because of default under this Agreement, or to enforce a provision 040528 sm 0100241 9 hereof, the prevailing party therein shall be entitled, in addition to any other relief, to recover reasonable attorney’s fees and court costs from the losing party as determined by the court in which said action or proceeding is pending. WITNESS THE EXECUTION hereinabove written. HEREOF the day and year first ATTEST:CITY OF PALO ALTO City Clerk APPROVED AS TO FORM: Mayor Senior Asst. City Attorney APPROVED: Assistant City Manager Director of Administrative Services Risk Manager "CORPORATION" PALO ALTO DOWNTOWN BUSINESS PROFESSIONAL A,.S,S O,C rrAT I ON Print Jame Print Title By: Print Name Print Title Exhibit "A" -INSURANCE 040528 sm 0100241 l 0