REPORT TO THE CITY COUNCIL
April 30, 2015
FROM: JENNIFER CLARK, Director
Development and Resource Management Department
BY: LUPE PEREZ, Downtown Project Manager
Development and Resource Management Department
SUBJECT
Title
Approval of items related to the renewal of the Downtown Fresno Property and Business Improvement District (DFPBID) upon verification of sufficient number of valid petitions collected to support the renewal of the district (Property located in District 3)
1. RESOLUTION -Declaring its intention to renew the DFPBID and establishing a time and place for a public hearing thereon and giving notice thereof
2. Authorize the City Manager to execute the Assessment Ballot on behalf of the City of Fresno
Body
RECOMMENDATION
Staff recommends that the Council approve the attached Resolution of Intention to renew the DFPBID and set a public hearing thereon for June 18, 2015 at 1:30 P.M.
Authorize the City Manager to execute the attached Assessment Ballot on behalf of the City in support of the DFPBID renewal.
EXECUTIVE SUMMARY
The DFPBID was formed in 2010 for a five-year term ending on December 31, 2015. As the DFPBID reaches the end of its term, property owners have expressed a desire to renew the program. The DFPBID will continue to provide a steady funding source to the Downtown Fresno Partnership (DFP) through an assessment levied on property owners within the District. The Property and Business Improvement District (PBID) Law of 1994 that authorizes creation of the DFPBID requires that a municipal entity renew the DFPBID. The DFP will continue to serve as the DFPBID's Owner's Association. The Owner's Association is charged with managing funds and implementing programs in accordance with the attached PBID Management District Plan.
BACKGROUND
About PBIDs
The PBID is a common and important tool for downtown revitalization throughout the U.S. Through a PBID, property owners pool their resources, talents, and energy to address the unique needs of a defined area. PBID revenues generated through special assessments on property are expended in accordance with the proposed Management District Plan (MDP).
Approximately 200 PBIDs exist in California, many of them in downtown areas. PBIDs are found in all of the state's largest urban areas, including the downtowns of comparably sized cities such as Sacramento, San Jose, Stockton, and Long Beach. PBIDs have also been an important component of revitalization in downtowns as nearby as Visalia and Tulare. PBIDs provide two fundamental benefits to the downtowns they serve; the more tangible of these is the services which range from economic development to greater cleanliness to enhanced safety, or for physical improvements such as signage or façade improvement. The scope of services provided in any PBID is a function of the assessment level supported by the property owners, and the MDP the owners adopt to guide the use of funds. The less tangible, but equally important, benefit of a PBID is the effect of uniting property owners in a common purpose.
Under the provisions of Proposition 218 in the California Constitution, government agencies must pay assessments in PBIDs and other special benefit districts, just like private property owners, unless they receive no benefit. In the case of the DFPBID, the City and the County of Fresno are two of the 300 property owners included in the assessment, and they have dedicated board seats.
State law establishes an initial limit of five years on the existence of a new PBID. After five years, PBIDs can be renewed through a majority vote of the assessed property owners for a term of up to ten years. The PBID can only be renewed by a governing municipal agency. The law requires that a group of property owners who pay more than 50% of the assessment sign petitions indicating their desire to renew the PBID. Upon receipt of sufficient petitions, if the City Council chooses to proceed, it must pass a Resolution of Intent to Renew the District and initiate a Proposition 218 ballot process.
Downtown Fresno PBID
Since the creation of the DFPBID, it has provided visible and valuable benefits to Downtown properties. The DFPBID provides services above and beyond City services. The DFPBID funds have been used to host community meetings about the importance of revitalizing downtown, the future of Fulton Mall through the "I Believe Campaign," cell phone and cell service for the bicycle police, day and evening security patrol, artwork, landscaping, and fountain maintenance. In addition, the DFP manages and issues permits for all vendor carts, and events on the Fulton Mall on behalf of the City's Parks Department. Ambassadors have been hired to serve as the eyes on the street for the police and the graffiti removal team, and they help to navigate Downtown customers to their destination. By dividing Downtown into three distinct services zones, the DFPBID ensures that services are provided when and where needed. These services help make Downtown cleaner, safer, and more prosperous.
Earlier this year, a petition drive was launched to renew the DFPBID. These petitions stated precise assessment levels based on a PBID MDP which was prepared in cooperation with Civitas Advisors. During the petition drive each petition was mailed, emailed, and/or hand-delivered to the respective property owner, along with a map of the proposed district boundary, and a summary of the management plan showing how assessments were calculated and how the district budget would be composed.
The renewed DFPBID will include all real properties located within the boundaries as outlined in the map attached. The DFPBID is designed to provide specific benefits directly to payors through the following programs: Economic Enhancements, Clean and Safe Initiatives, Transportation Improvements, and Fulton Zone Activation. The goal of these programs will be to improve the economic vitality and physical maintenance of the district, attract new businesses, support existing businesses, and create jobs within the district boundary.
These services will be funded through the levy of a benefit assessment on real properties within the DFPBID boundary. The DFPBID assessment budget for the initial year of its seven (7) year operation is anticipated to be $720,896.41. The annual budget may be subject to an increase in assessment rates of no more than three percent (3%) per year. The assessment will be supplemented by non-assessment funding (grants, and program income) thereby increasing the total service budget for the initial year to at least $764,748.25.
As of today, the DFPBID petitions have been received from the private and public property owners in the district who pay more than 50% of the assessments to be levied indicating their desire to renew the DFPBID. The actions requested of City today is to pass a resolution of intention of the City to renew the DPFBID and to initiate the ballot process, and set a public hearing on June 18, 2015. The Council's approval of the Resolution on April 30, 2015 does not formally establish, or bind the Council to establish, the District. At the public hearing, the Council may adopt a resolution renewing the DFPBID so long as there is no majority protest among the ballots returned; ballots can be submitted until the time set for the public hearing.
Furthermore, the DFPBID steering committee respectfully requests that the Council consider authorizing the City Manager to execute the assessment ballot on behalf of the City in support of the renewal.
ENVIRONMENTAL FINDINGS
This is not a project for CEQA purposes.
LOCAL PREFERENCE
This action is not subject to local preference.
FISCAL IMPACT
There is no fiscal impact to proceed with the public hearing. All necessary actions to mail ballots to affected parties will be paid by the DFP. If the DFPBID is renewed, under state PBID Law, these funds must be directed to the DFP for administration under the MDP adopted by the property owners. Under the agreement the City will receive and disburse the PBID funds in trust to DFP, after deducting any reasonable and necessary administrative expenses.
The City's estimated annual PBID assessment would be $112,000 in the initial year. This amount may increase up to three percent (3%) per year thereafter. Due to minor changes in zone boundaries and the parking lot assessment rate, this amount is slightly lower than in previous years. The assessment payments would be appropriated during the annual budget cycles. By helping to revitalize the Downtown economy, the PBID funded activities performed under the Agreement have the potential to increase revenues to the City in the form of tax increment, tax receipts, and user fees that could be used to offset annual PBID assessment(s).
Attachments:
Resolution of Intention to Renew Downtown Fresno PBID and Boundary Map
Assessment Ballot for the City of Fresno
Management District Plan and Engineering Report
Ballot Notice
Ballot Instructions