HomeMy WebLinkAboutStaff Report 13901
City of Palo Alto (ID # 13901)
City Council Staff Report
Meeting Date: 4/4/2022
City of Palo Alto Page 1
Title: Approve Finance Committee Recommendation for FY 2023 to (a) Return
to the Customary Pre-Pandemic Business Registry Certificate Requirement
and Fee, and (b) Pause for One Year the Downtown Business Improvement
District Assessment Program
From: City Manager
Lead Department: Administrative Services
Recommendation
The Finance Committee and staff recommend that Council approve the following for FY
2023:
1) Return to the historic and routine structure and timeline for the business registry
certificate program (BRC) that applied prior to two years of fee waivers during
the Covid-19 emergency.
2) Pause the business improvement district (BID) program in FY 2023, with
anticipation of a program resumption in FY 2024, and direct staff to work with
the Chamber of Commerce and the Palo Alto Downtown Business and
Professional Association (PADBPA) on the transfer of BID management.
Summary
On March 1, 2022 the Finance Committee discussed options for the FY 2023 BRC and
BID processes (CMR 13902; Minutes). The Committee reviewed three options for the
BRC and decided to continue the process in FY 2023 using the established structure
used in pre-pandemic years. This structure includes notifying businesses of the renewal
due date, past due dates, the $54 BRC fee, and how to complete the registration
process via the online system. The timeline for FY 2023 will need to be revised from the
routine timeline, which typically starts in February. For FY 2023 the due date will be
June 1, 2022 with a late fee of $25 applied to payments received after July 1 and an
additional late fee of $25 applied after August 1, 2022. Staff expects to mail BRC
renewal notices to businesses in the mid-April timeframe pending final system
configuration, which is typically around 30 days.
In 2020 when the pandemic emerged, Council adopted Resolution No. 9885, refunding
BRC fees that had been paid for FY 2020 and waiving fees that would soon be due for
FY 2021. In 2021, Council adopted Resolution No. 9956, waiving BRC fees for FY 2022.
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Each of these resolutions temporarily waived requirements for a limited period defined
in the resolution. After June 30, 2022, the existing waiver will expire and the
requirements in the Municipal Code will apply. Accordingly, for the FY 2023 cycle, the
BRC program is returning to the full requirements in the Municipal Code, Chapter 4.6.
For the BID the Committee considered three options and decided to pause the BID
assessment and program for FY 2023 with anticipation that the program would resume
in FY 2024. Staff is directed to work with the Chamber and PADBPA to transition the
management of the BID during this time. The Committee heard oral comments from
the Chamber and PADBPA that highlighted the need to first build support for a
resumption of the BID assessment within the business community before collecting a
new assessment and establishing a new management agreement. Both entities
supported placing the BID on pause for FY 2023.
Timeline
Staff will return with the required notice of intent not to collect an assessment for the
BID for FY 2023 in the May timeframe. This will be followed by the required public
hearing on the BID in June.
Resource Impact
With the resumption of the full BRC fee an estimated $100,000 is expected to be
collected through business registration for the FY 2023 cycle, which cover the costs of
administering the program including the contract with Avenu for operating the online
registration system, collection process and customer support. With the BID on pause an
estimated $80,000 will not be collected and no BID business activities will be provided.
With the expectation that the BID will resume in FY 2024 a new cycle of assessments
will bring in revenue that can then be used to support activies via the management
agreement.
Stakeholder Engagement
Staff has met and coordinated with members of PADBA and the Chamber of Commerce
in preparation of these recommendations. In FY 2023 staff will work with these entities
to develop a potential new management agreement for the BID.
Environmental Review
The proposed action is not a project for the purposes of the California Environmental
Quality Act.
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