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ORDINANCE TO REPEAL ARTICLE XX DIESTABLISHING THE DOWNTOWN COMMUNITY MANAGEMENT DISTRICT January 22, 2013 Page 2 If this occurs, staff recommends that the City Council proceed with the two actions proposed in this agenda item. The two actions proposed, in combination with the Downtown, Inc. agreement, are a result of two years of discussion concerning the best way for all interests in the Downtown to move forward in their collective efforts to remain a unique and vibrant shopping, business and entertainment center. The actions are summarized below. Ordinance Disestablishing the Downtown CMD On August 18, 2008 the City Council approved Article XX of Chapter 13 of the Municipal Code which set rules and procedures for the establishment of community management districts (commonly referred to as PBIDs). As noted earlier, the City Council then established a PBID under these rules for the Downtown in December 2008. If the City Council desires to disestablish the existing Downtown PBID, it is recommended that the entire enabling authority be repealed. Repeal of Article XX would automatically dissolve any PBID established to date and would ensure that new rules and procedures would be enacted should the City and property owners wish to consider a PBID in the future. Direction Regarding Reactivation of the Downtown BID The Downtown Santa Ana Business Improvement District (BID) was established in February 1984 as a means of providing the Downtown business community with funding for promoting the Downtown, increasing security, enhancing maintenance and implementing improvements. The Community Redevelopment and Housing Commission (CRHC) is designated as the BID Advisory Board, responsible to prepare and administer the BID's annual budget and annual report. Unlike the property-based PBID, the BID is funded based upon business license tax surcharges and is therefore funded by businesses, not property owners. Based on a current analysis of business license tax accounts, there are now 720 active business license accounts within the BID boundary with 623 BID-eligible businesses (State law exempts certain businesses from local business license taxes, including banks and insurance companies. The Municipal Code further exempts non-profits such as schools and churches.) Since 2007, no BID assessment levies have been approved by the City Council. With the disestablishment of the PBID, both Downtown, Inc. and other involved property owners and businesses have endorsed a return to the BID as a means to generate funds for the promotion of Downtown. State law and the Santa Ana Municipal Code provide precise direction concerning levying assessments for the City's current Downtown BID. In general terms, the City would notice the affected businesses of the intent to consider levy of the assessments, ballots would be sent to the businesses for return prior to a public hearing, and a public hearing on the assessment would be held. If a majority of affected businesses protest the assessment, the proceeding would end. If 5OA-2