HomeMy WebLinkAboutStaff Report 2503-4251CITY OF PALO ALTO
CITY COUNCIL
Special Meeting
Tuesday, May 27, 2025
Council Chambers & Hybrid
5:30 PM
Agenda Item
4.Adoption of Resolution Suspending the Levy of Assessments on the Downtown Palo Alto
Business Improvement District (BID) Assessment for Fiscal Year 2026; CEQA status – not a
project.
City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Administrative Services
Meeting Date: May 27, 2025
Report #:2503-4251
TITLE
Adoption of Resolution Suspending the Levy of Assessments on the Downtown Palo Alto
Business Improvement District (BID) Assessment for Fiscal Year 2026; CEQA status – not a
project.
RECOMMENDATION
Staff recommends that Council adopt the attached resolution suspending the levy of the Palo
Alto Downtown Business Improvement District assessment for Fiscal Year (FY) 2026. (Attachment
A).
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 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.
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 supported the Finance Committee recommendation and approved a
resolution to not levy an assessment for FY 2023. The BID was subsequently paused again in FY
20243 and FY 20254. Staff continues this recommendation for FY 2026.
ANALYSIS
1 03/01/2022 Finance Committee, Review the Business Registry Certificate and Business Improvement District FY 2023 Processes and
recommendation to City Council on the Renewal Processes
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
3 04/14/2023 City Council, PUBLIC HEARING: Adoption of a Resolution Providing that the City will Not Levy Assessments for the Downtown
Business Improvement District for FY 2024.
4 05/20/2024 Adoption of Resolution Suspending the Levy of Assessments on the Downtown Palo Alto Business Improvement District (BID)
Assessment for Fiscal Year 2025; CEQA status – not a project.
funding plan for capital improvements has been finalized, staff will evaluate the appropriate
ongoing funding framework to support the long-term vision for downtown including, but not
limited to, enhanced cleaning and maintenance, landscaping, branding, and events. Staff
anticipates bringing forward any recommended changes to the BID for Council consideration in
2026. Finally, given the uncertainty surrounding PADBPA, a new advisory board for the BID may
be necessary. The decision to not levy assessments in FY 2026 is consistent with Council’s prior
decisions5. In addition, based on further review of the Parking and Business Improvement Area
Law of 1989, staff has determined that no public hearing on the proposed resolution is required
if no assessment will be levied. If and when the Council determines to resume levy of the BID
assessment for future years, the Council will need to conduct a noticed public hearing prior to
doing so.
FISCAL/RESOURCE IMPACT
STAKEHOLDER ENGAGEMENT
ENVIRONMENTAL REVIEW
5 Prior Council Decisions: FY 2021 (CMR 11219) and in FY 2022 (CMR 12255) in response to the pandemic, along with the
Finance Committee’s recommendation to not levy assessments for FY 2023 (CMR 13901) and FY 2024 (CMR 2303-1184) and
Council in FY 2025 (CMR 2403-2822).
ATTACHMENTS
APPROVED BY:
Attachment A
1 133_20250514_ts24
NOT YET ADOPTED
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 2026
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 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, 2023, and 2024.
E. The Advisory Board for the District is currently defunct, and therefore the Council
has not had the opportunity to review or approve the annual report on the District’s
improvements and activities, as well as the proposed assessments.
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 2026 (July 1, 2025 through June 30, 2026).
G. Because no assessment is proposed for fiscal year 2026, a public hearing on the
assessment is not required under the Parking and Business Improvement Area Law of 1989.
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, no assessments shall be levied for the
District for fiscal year 2026 (July 1, 2025 through June 30, 2026). The District
Attachment A
2 133_20250514_ts24
NOT YET ADOPTED
shall remain in effect and the Council will consider the levy of assessments for following fiscal
years.
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 review is required.
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