HomeMy WebLinkAboutStaff Report 2303-1184CITY OF PALO ALTO
CITY COUNCIL
Special Meeting
Monday, May 15, 2023
Council Chambers & Hybrid
5:30 PM
Agenda Item
12.PUBLIC HEARING: Adoption of a Resolution Providing that the City will Not Levy
Assessments for the Downtown Business Improvement District for FY 2024.
City Council
Staff Report
From: City Manager
Report Type: PUBLIC HEARING
Lead Department: Administrative Services
Meeting Date: May 15, 2023
Report #:2303-1184
TITLE
PUBLIC HEARING: Adoption of a Resolution Providing that the City will Not Levy Assessments
for the Downtown Business Improvement District for FY 2024.
RECOMMENDATION
Staff recommends that Council hold a public hearing and adopt a resolution declining to levy
assessments for Fiscal Year 2024 for the Downtown Business Improvement District (BID).
BACKGROUND
The Palo Alto City Council established the Palo Alto Downtown Business Improvement District
(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 historically 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 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.
On March 1, 2022 the Finance Committee discussed options for the FY 2023 Business Registry
Certificate (BRC) and BID processes (CMR 139021). The Committee reviewed three options for
the BRC and BID and forwarded their recommendation to the City Council on April 4, 2022, CMR
139012, 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 FY 2023. The
Palo Alto City Council directed Staff to proceed with this recommendation, and the City Council
approved a resolution to not levy an assessment for FY 2023.
Due to ongoing discussions between PADBPA, the Chamber and the City, it is again requested
that the BID assessment be paused in FY 2024. On April 24, 2023, Council adopted a resolution
of intent to not levy assessments for the Palo Alto Downtown Business Improvement District in
FY 2024 and setting a public hearing for May 15, 2023 (CMR 11823).
ANALYSIS
The attached proposed resolution will result in no collection of BID assessments for FY 2024. No
BID-funded activities will occur in FY 2024. This public hearing is held to afford interested parties
to provide input on the proposal to decline to levy BID assessments in FY 2024. City staff are
currently working on developing alternatives for a new streetscape design on University Avenue,
in consultation with stakeholders and the community more broadly. This work is expected to
generate a plan that will require businesses in the vicinity to invest in capital and potentially
operating costs for implementation. Since it is not clear at this point what structure would be
most appropriate for such investment, the BID is a valuable framework but not necessarily
structured as will be needed. The entities therefore request another year to continue exploring
options for the BID including input from organizations within the BID.
During the FY 2024 period staff will work with representatives from PADBPA and the Chamber to
do outreach to businesses to help identify priority projects that the BID assessment can go
towards and look at different structures for management of the BID.
FISCAL/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
1 03/02/2022 Finance Committee, Review the Business Registry Certificate and Business Improvement District FY 2023 Processes and
recommendation to City Council on the Renewal Processes
https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas-minutes/finance-
committee/2022/20220301/20220301pfcs-linked.pdf
2 04/04/2022 City Council, 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
https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas-minutes/city-council-agendas-
minutes/2022/20220404/20220404pccsmamendedlinked1.pdf
3 4/24/2023 Adoption of a Resolution of Intent to Not Levy Assessments for the Palo Alto Downtown Business Improvement District
(BID) in FY 2024 and Setting a Public Hearing for May 15, 2023
https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=82349
the BID. The subsidy amounted to $70,000 in FY 2020. 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. In the past business activities have included the streetlight banner
program, Lytton Plaza enhancements, and summer concerts among others.
STAKEHOLDER ENGAGEMENT
ENVIRONMENTAL REVIEW
ATTACHMENTS
APPROVED BY:
*NOT YET APPROVED*
1
270_20230425_ts24
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 2024
R E C I T A L S
A. The Parking and Business Improvement Area Law of 1989 (the "Law"), codified at
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, 2022, and 2023.
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 2024 (July 1, 2023 through June 30, 2024). As a result
of not making assessments, no BID-funded activities will occur in fiscal year 2024.
G. On April 24, 2023 the City Council adopted Resolution No. 10104, which declared
its intention not to levy assessments against Downtown businesses for Fiscal Year 2024 and
scheduled a public hearing for May 15, 2023 on the proposed decision to refrain from making
assessments.
H. On May 15, 2023 the City Council held a duly noticed public hearing at which all
interested persons were afforded the opportunity to hear and be heard.
*NOT YET APPROVED*
2
270_20230425_ts24
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 2024.
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