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B. Annual Budget The total five (5) year improvement and service plan budget is projected at approximately $2,400,000 annually, or $12,000,000 through 2025. This amount may fluctuate as sales and revenue increase at assessed businesses, but is not expected to change significantly over the term. C. California Constitutional Compliance The SATMD assessment is not a property -based assessment subject to the requirements of Proposition 218. Courts have found Proposition 218 limited the term `assessments' to levies on real property.' Rather, the SATMD assessment is a business -based assessment, and is subject to Proposition 26. Pursuant to Proposition 26 all levies are a tax unless they fit one of seven exceptions. Two of these exceptions apply to the SATMD, a "specific benefit' and a "specific government service." Both require that the costs of benefits or services do not exceed the reasonable costs to the City of conferring the benefits or providing the services. 1. Specific Benefit Proposition 26 requires that assessment funds be expended on, "a specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of conferring the benefit or granting the privilege." z The services in this Plan are designed to provide targeted benefits directly to assessed businesses, and are intended only to provide benefits and services directly to those businesses paying the assessment. These services are tailored not to serve the general public, businesses in general, or parcels of land, but rather to serve the specific businesses within the SATMD. The activities described in this Plan are specifically targeted to increase room night sales for assessed lodging businesses within the boundaries of the SATMD, and are narrowly tailored. SATMD funds will be used exclusively to provide the specific benefit of increased room night sales directly to the assessees. Assessment funds shall not be used to feature non -assessed lodging businesses in SATMD programs, or to directly generate sales for non -assessed businesses. The activities paid for from assessment revenues are business services constituting and providing specific benefits to the assessed businesses. The assessment imposed by this SATMD is for a specific benefit conferred directly to the payors that is not provided to those not charged. The specific benefit conferred directly to the payors is an increase in room night sales. The specific benefit of an increase in room night sales for assessed lodging businesses will be provided only to lodging businesses paying the district assessment, with marketing and sales programs promoting lodging businesses paying the SATMD assessment. The marketing and sales programs will be designed to increase room night sales at each assessed lodging businesses. Because they are necessary to provide the marketing and sales programs that specifically benefit the assessed lodging businesses, the administration and contingency services also provide the specific benefit of increased room night sales to the assessed lodging businesses. Although the SATMD, in providing specific benefits to payors, may produce incidental benefits to non-paying businesses, the incidental benefit does not preclude the services from being considered a specific benefit. The legislature has found that, "A specific benefit is not excluded from classification as a `specific benefit merely because an indirect benefit to a nonpayor occurs incidentally and without cost to the payor as a consequence of providing the specific benefit to the payor."' 'Jarvis v. the City of San Diego 72 Cal App. 4' 230 z Cal. Const. art7GIII C § 1(e)(1) 'Government Code § 53758(a) SATMD Management District Plan 8 March 19, 2020 12A-17