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HomeMy WebLinkAboutStaff Report 14235 City of Palo Alto (ID # 14235) City Council Staff Report Meeting Date: 6/6/2022 Report Type: Action Items City of Palo Alto Page 1 Title: PUBLIC HEARING: Adoption of a Resolution Providing that the City will Not Levy Assessments for the Downtown Business Improvement District for FY2023 From: City Manager Lead Department: Administrative Services Recommendation Staff recommends that Council hold a public hearing and adopt a resolution declining to levy assessments for Fiscal Year 2023 for the Downtown Business Improvement District (BID). Background The Palo Alto City Council established the BID in 2004 pursuant to the California Parking and Business Improvement Area Law to promote the economic revitalization and physical maintenance of the Downtown business district. The Council appointed the Board of Directors of the Palo Alto Downtown Business and Professional Association (PADBPA), a non-profit corporation, as the Advisory Board and administrator of the BID. From 2004 to 2020, PADBA advised the Council on the method and basis for levy of assessments and managed the expenditure of revenues derived from the assessments. In March of 2020, public health measures in response to the COVID-19 pandemic resulted in a sharp contraction of business activity. In May of 2020, Council refunded FY 2020 assessments considering the pandemic-related challenges that Downtown businesses were facing. At approximately the same time, organizational changes were occurring at PADBPA. As a result of these developments, on June 30, 2020, the City allowed the contract with PADBPA to expire. With the economic impacts of COVID-19 continuing to effect local businesses through fiscal years 2021 and 2022, the Council also declined to levy assessments on downtown businesses for those years. No BID-funded activities have occurred in these years. The Finance Committee and Council considered the situation again in the spring of 2022. On April 4, 2022 the Council directed staff to again refrain from levying assessments for the BID for FY2023 (CMR 13901). Council directed staff to work with the Palo Alto Chamber of Commerce and representatives of 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 BID assessments within the Downtown business community before collecting a new assessment City of Palo Alto Page 2 and establishing a new management agreement. This work is expected to occur in FY2023 with the potential for BID assessments to resume in FY2024. Discussion The attached proposed resolution will result in no collection of BID assessments for FY 2023. No BID-funded activities will occur in FY2023. This public hearing is held to afford interested parties to provide input on the proposal to decline to levy BID assessments in FY2023. As directed by the Council previously, staff in collaboration with the Chamber and PADBPA, will work on resumption of the BID assessment and establishing a new management agreement. Resource Impact No additional funding is requested as part of this report. The BID is set up as a separate fund within the City. 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 FY2024 a new cycle of assessments will bring in revenue that can then be used to support activities undertaken pursuant to a new management agreement. Future funding needs will be brought forward for City Council approval at that time. Stakeholder Engagement Staff has met and coordinated with members of PADBA and the Chamber of Commerce in preparation of these recommendations. In FY2023 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. Attachments: • Attachment A: Resolution Declining to Levy Assessments for Downtown Business Improvement District Fiscal Year 2023 *Yet to be Passed* Resolution No. Resolution of the Council of the City of Palo Alto Providing that No Levy of Assessments be Made Against Businesses Within the Downtown Palo Alto Business Improvement District for Fiscal Year 2023 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, 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 been 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). As a result of not making assessments, no BID- funded activities will occur in fiscal year 2023. *Yet to be Passed* G. On May 23, 2022 the City Council by Resolution No. 10041, declared its intention not to levy assessments against Downtown businesses for Fiscal Year 2023 and scheduled a public hearing for June 6, 2022 on the proposed decision to refrain from making assessments. H. On June 6, 2022 the City Council held a duly noticed public hearing at which all interested persons were afforded the opportunity to hear and be heard. 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. The City Council does hereby determine not to levy assessments against businesses within the Downtown Palo Alto Business Improvement District for Fiscal Year 2023. SECTION 3. 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: APPROVED: Assistant City Attorney City Manager Director of Administrative Services