HomeMy WebLinkAboutStaff Report 14234
City of Palo Alto (ID # 14234)
City Council Staff Report
Meeting Date: 5/23/2022 Report Type: Consent Calendar
City of Palo Alto Page 1
Title: Adoption of a Resolution of Intent to Not Levy Assessments for the
Business Improvement District (BID) in FY2023, and Setting Public Hearing for
June 6, 2022
From: City Manager
Lead Department: Administrative Services
Recommendation
Staff recommends that Council adopt a resolution of intention to decline to levy assessments in
the Palo Alto Downtown Business Improvement District (BID) for Fiscal Year 2023 (Attachment
A), setting a date and time for the public hearing on the proposal to decline to levy assessments
for June 6, 2022, at 5:00 PM or thereafter.
Background
The Palo Alto City Council established the BID in 2004 pursuant to the California Parking and
Business Improvement Area Law to maintain economic vitality and physical maintenance of the
Palo Alto Downtown business district. The Council appointed the Palo Alto Downtown Business
and Professional Association (PADBPA), a non-profit corporation, as the advisory board and
administrator of the BID. PADBPA, acting through its independent Board of Directors, has
advised the Council on the method and basis for levy of assessments in the BID and has
managed the expenditure of revenues derived from the assessments.
In light of organizational changes at PADBPA and changes resulting from the Covid-19
pandemic, and with the concurrence of the City Council, the City allowed the contract with
PADBPA to expire on June 30, 2020. Council directed staff to work with the Palo Alto Chamber
of Commerce and PADBPA to develop options for the transition of the management of the BID.
The Chamber and PADBPA identified a need to 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.
Discussion
On March 1, 2022 the Finance Committee discussed options for the FY 2023 Business Registry
Certificate (BRC) and BID processes (CMR 13902; Minutes). The Committee reviewed three
options for the BRC and BID and forwarded their recommendation to the City Council on April
City of Palo Alto Page 2
4, 2022, CMR 13901, to restore the BRC in the 2022-2023 collection timeframe, using the
established structure used in pre-pandemic years, while continuing the pause of BID
assessments again in FY2023. The Palo Alto City Council directed Staff to proceed with this
recommendation.
Staff recommends that the Council adopt the attached resolution for FY 2023 with the intention
to not collect BID assessments for one additional year. During the upcoming year Council
directed staff to work with the PADBPA and the Chamber to provide options on the future
management of the BID.
If Council adopts the recommendation, the Council should provide notice of its intention to not
levy a collection of the BID assessments for FY 2023 only, and set a public hearing for June 6. At
the public hearing, Council will hear and consider any objections to non-collection of
assessments due in 2022 and take final action. The decision to not levy assessments payable in
2022 is consistent with Council’s rescinding and waiving of assessments due in 2020 (CMR
11219) and in 2021 (CMR 12255) in response to the pandemic, and would implement the
Finance Committee’s recommendation to not levy assessments for FY23 (CMR 13901).
Resource Impact
The BID is set up as a separate fund within the City’s accounting system. In recent years, the BID
has required a General Fund subsidy as collected assessments fell short of the costs of
operating the BID. Historically, the City acts as the collection agent for BID revenues and
reimburses PADBPA’s expenses after receipt and verification of invoices. With the BID on pause
an estimated $80,000 will not be collected and no BID business activities will be provided.
Additional staff resources include time from the City Manager’s Office and Administrative
Services Department to provide oversight to the BID, administer the contract with Avenu, liaise
with stakeholders, and prepare the annual reauthorization.
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
options for a new management agreement for the BID.
Environmental Review
The proposed action is not a project for the purposes of the California Environmental Quality
Act.
Attachments:
• Attachment A: Business Improvement District Resolutoin for FY 2023
ATTACHMENT A
NOT YET APPROVED
Resolution No. _____
Resolution of the Council of the City of Palo Alto Declaring Its Intention to Not
Levy Assessments Against Businesses Within the Downtown Palo Alto Business
Improvement District for Fiscal Year 2023; and Setting a Time and Place for a
Public Hearing on the Proposed Decision Not to Levy Assessments on June 6,
2022 at 5:00 PM or Thereafter, in the Council Chambers
R E C I T A L S
A. 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.
B. Pursuant to the Law, in 2004 the City Council adopted Ordinance No. 4819
establishing the Downtown Palo Alto Business Improvement District (the "District") in the City
of Palo Alto.
C. The City Council, by Resolution No. 8416, appointed the Board of Directors of the Palo
Alto Downtown Business & Professional Association (“PADBPA”), a California nonprofit mutual
benefit corporation, to serve as the Advisory Board for the District (the "Advisory Board").
D. Beginning in March of 2020 and continuing through the present, Downtown
businesses have substantially impacted by the COVID-19 pandemic, the public health measures
taken to reduce the spread of the virus, and the resulting statewide economic contraction. In
recognition of these impacts, the City Council refunded fiscal year 2020 BID assessments and
declined to levy assessments in fiscal years 2021 and 2022.
E. As California emerges from the pandemic, local businesses are experiencing
additional impacts from changes in on-site and remote work patterns and other developments
in the local economy. In addition, PADBPA is experiencing organizational changes.
F. In recognition of the challenges continuing to effect downtown businesses and
understanding the need for a new direction on BID management, the City Council has
determined not to levy BID assessments for fiscal year 2023 (July 1, 2022 through June 30,
2023).
NOW THEREFORE THE CITY COUNCIL OF THE CITY OF PALO ALTO RESOLVES AS FOLLOWS:
SECTION 1. The Council hereby adopts the above Recitals as findings of the Council.
SECTION 2. Based on the findings herein, the Council intends not to levy or collect
assessments for the District for fiscal year 2023 (July 1, 2022 through June 30, 2023). The
District shall remain in effect and the Council will consider the levy of assessments for following
fiscal years.
ATTACHMENT A
NOT YET APPROVED
SECTION 3. The City Council hereby fixes the time and place for a public hearing on the
proposed determination not to levy assessments against any businesses within the District for
fiscal year 2023 as follows:
DATE: June 6, 2022
PLACE: Conducted simultaneously in person at City Hall and via Zoom
TIME: 5:00 p.m. or soon thereafter
At the public hearing, the testimony of all interested persons regarding the determination not
to levy assessments against any businesses within the District for fiscal year 2023 shall be
heard.
SECTION 4. The City Clerk is hereby authorized and directed to provide notice of the
public hearing in accordance with law.
SECTION 5. 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 Mayor
APPROVED AS TO FORM:
City Attorney City Manager or Designee
Director of Administrative
Services