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HomeMy WebLinkAbout50B - ORD - ESTABLISING COMMUNITY MGMTREQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: JULY 7, 2008 TITLE: ORDINANCE ENABLING THE ESTABLISHMENT OF COMMUNITY MANAGEMENT DISTRICTS i ~~~-~.r.,-_ _, CITY MANAGER RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ^ As Recommended ^ As Amended ^ Ordinance on 1St Reading ^ Ordinance on 2"d Reading ^ Implementing Resolution ^ Set Public Hearing For CONTINUED TO FILE NUMBER Adopt an ordinance adding Article XX to Chapter 13 of the Santa Ana Municipal Code related to establishment of Community Management Districts. DISCUSSION Beginning in the Spring of 2007, the City initiated an analysis of the various assessment options available to adopt in the Downtown. The existing Business Improvement District (BID) cannot equitably generate sufficient resources to address the economic pressures in an evolving downtown. Therefore, new assessment options were evaluated. The analysis examined Property and Business Improvement Districts (PBIDs) which are established under California statute, Community Management Districts (CMDs) which are formed under a city's charter authority, and Parking and Business Improvement Districts (BIDs), also formed under state law. All three are benefit assessment districts. The first two levy a special assessment against real property within the defined district. The third type of district levies an assessment against business. This is the type of district Downtown Santa Ana has had in place since 1984. Both the Property and Business Improvement District and the Community Management District, as tentatively framed for Downtown, can generate nearly five times the revenue of the current BID. This enables stakeholders to exercise significantly greater self-determination in the development, implementation, and management of downtown economic enhancement programs. This Community Management District ordinance lays out the processes for the establishment of this unique benefit assessment district. It is 50B-1 Establishment of Community Management Districts July 7, 2008 Page 2 patterned after the PBID statute, but offers greater local authority and flexibility. The proposed ordinance varies from the PBID in two noteworthy ways: first, the pre-formation petitioning requirement is set at thirty percent of the district value while State law requires fifty percent; second, the maximum life span for a district permitted by this ordinance is ten years while the state law was a limit of five years when it is first formed, and then allows ten year terms for subsequent renewals. As with PBIDs, a district formed under the proposed ordinance begins with a petition that proposes a district boundary and draft management plan. If the petition is accepted by the City Council, the management plan, which sets forth the powers of the district, its programs and the annual maximum assessment, is submitted to the property owners at a public hearing. Unless a majority protest is filed, the district is created and the annual assessment levied. The ordinance permits the City to enter into a contract with a non-profit corporation made up of property owners in the district to manage the district. As with other property-based assessments, to be imposed, the establishment of the district must be supported by at least fifty percent of those property assessments returning ballots. In January 2008, a Management District Formation Committee was created to investigate and pursue the development of a Community Management District. This ten member committee is comprised of key downtown stakeholders and is working with the Interim Downtown Manager/Consultant to define a workable district and develop a comprehensive management plan. As property owners vital to the success of downtown, they unanimously agreed that the Community Management District ordinance is the preferred enabling mechanism. The committee anticipates the formation of the district by the end of this year. FISCAL IMPACT There is no fiscal impact associated with this action. GZ-C~..J Nancy T. dwards Acting E cutive Director Community Development Agency NTE/TE/mlr 060208 CMD Tom 50B-2 ORDINANCE NO. NS-XXX AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA ANA ADDING ARTICLE XX TO CHAPTER 13 OF THE SANTA ANA MUNICPAL CODE RELATED TO ESTABLISHMENT OF COMMUNITY MANAGEMENT DISTRICTS. THE CITY COUNCIL OF THE CITY OF SANTA ANA DOES ORDAIN AS FOLLOWS: Section 1. The City Council of the City of Santa Ana hereby finds, determines and declares as follows: A. Part 7 of Division 18 of the California Street and Highways Code contains the Property and Business Improvement District Law of 1994 (the "Act") authorizing the creation of property owner based business improvement assessment districts to promote economic revitalization and physical maintenance of business districts in California in order to create jobs, attract new businesses and prevent erosion of the business districts; and, B. Section 36603 of the Act states that the Act does not preempt the authority of charter cities to adopt similar or differing methods of levying assessments for similar purposes; and, B. The City of Santa Ana is a charter city and the establishment of benefit assessment districts similar to those authorized by the Act and the levying of assessments for such purposes is a municipal affair; and, C. The City Council of the City of Santa Ana desires to enact a local ordinance for the creation and implementation of Community Management Districts substantially similar to districts authorized by the Act to enable property owners in business districts within the City of Santa Ana to raise funds for the betterment of their communities. Section 2. Article XX, Sections 13-200 through 13-216 are added to Chapter 13 of the Santa Ana Municipal Code to read in full as follows (new language in bold for tracking purposes only): 50B-3 Article XX COMMUNITY MANAGEMENT DISTRICTS Sec. 13-200. General Provisions. Whenever the public interest or convenience may require, the Council of the City of Santa Ana, acting under the authority conferred upon it by the City Charter, shall have the power and authority to provide supplemental services, activities and improvements in specifically defined districts of the City. The City shall determine and declare the geographic area(s) to be specially benefited by said services, activities and improvements; and to assess the cost and expenses of said services, activities and improvements, including all expenses incurred incidentally thereto, upon the lots or parcels of real property in proportion to the estimated benefits to be received. The procedures established herein shall be additional or alternative to any other procedure established by ordinance or State law. The election to proceed under this Article shall be expressed in a Resolution of Intent to form a district which shall be referred to as a Community Management District ("CMD"). Sec. 13-201. Definitions. (a) "Improvement" means the acquisition, construction, installation, or maintenance of any tangible property with an estimated useful life of five years or more including, but not limited to, the following: (1) parking facilities and structures; (2) benches, booths, kiosks, display cases, pedestrian shelters and signs, trash receptacles and public restrooms; (3) public lighting and heating facilities; (4) closing, opening, widening or narrowing of existing streets; (5) security facilities or equipment or both; (6) ramps, sidewalks, plazas, town centers, pedestrian malls or similar open space; (7) rehabilitation or removal of existing structures; (8) installation or planting of landscaping, statuary, fountains, decorations and other ornamental structures and facilities; 50B-4 (9) the installation or construction or modification of any facilities which are appurtenant to any of the foregoing or which are necessary or convenient for the utility, maintenance or servicing thereof, including, but not limited to, grading, clearing, removal of debris, the installation or construction of curbs, gutters, walls, sidewalks or paving, or water, irrigation, drainage or electrical facilities; (b) "Services" means the furnishing of services and materials for the ordinary and usual maintenance, operation, and servicing of any Improvement, including: (1) repair, removal, or replacement of any part of the Improvement; (2) providing for the life, growth, health and beauty of landscaping including cultivation, irrigation, trimming, spraying, fertilizing, or treating for disease or injury; (3) the removal of trimmings, rubbish, debris and other solid waste; (4) the cleaning, sandblasting and painting of walls and other improvements to remove or cover graffiti; (5) providing security, sanitation, graffiti removal, street cleaning and other municipal services supplemental to those provided by the City. (c) "Activities" means, but is not limited to, all of the following: (1) promotion of public events which benefit businesses, tenants or real property in the district; (2) furnishing of music and/or entertainment in any public place within the district; (3) promotion of tourism within or benefiting the district; (4) marketing and economic development, including, but not limited to, business retention and recruitment; (c) "Owners Association" means a private nonprofit corporation registered and in good standing with the California Secretary of State that is under contract with the City to administer or implement services, activities and improvements specified in the management district plan. An Owners Association 50B-5 may be existing or newly formed. An Owners Association is a private entity and shall not be considered a public entity for any purpose, nor shall its board members or staff be considered to be public officials for any purpose. Notwithstanding the foregoing, an Owners Association when under contract with the City to manage the district shall comply with the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2 of Title 5 of the Government Code), whenever matters within the subject matter of the CMD are heard, discussed, or deliberated by the governing board of the Owners Association, and with the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code), for all documents relating to activities of the Owners Association of the district when under contract with the City to manage the district. (d) "Property owner" or "owner" means any person shown as the owner of land on the last equalized assessment roll or otherwise known to be the owner of land by the City. The City has no obligation to obtain other information as to the ownership of land, and its determination of ownership shall be final and conclusive for the purposes of this part. Wherever this subdivision requires the signature of the property owner, the signature of the authorized agent of the property owner shall be sufficient. Sec. 13-202. Establishment. (a) Upon submission of a written petition signed by the property owners in the proposed district who will pay more than 30% of the assessments proposed to be levied, the City Council may initiate proceedings to form a CMD by adopting a resolution of intent to form a district conforming to the provisions of Section 13-203, below. The amount of assessment attributable to property owned by the same property owner which is in excess of 20% of the amount of all assessments proposed to be levied shall not be included in determining whether the petition is signed by the requisite percentage of the property owners. (b) The petition shall include a summary of the Management District Plan. The summary shall include all of the following: (1) A map showing the boundaries of the district. (2) Information specifying where the complete management district plan can be obtained. (3) Information specifying that the complete management district plan shall be furnished upon request. Sec. 13-203 Resolution of Intent: Contents. 50B-6 (a) The resolution of intent described in Section 13-202, above, shall contain all of the following: (1) A brief description of the proposed services, improvements and activities; (2) The amount of the total proposed assessment; (3) A statement as to whether the assessment will be levied on property or businesses within the district; (4) A statement as to whether bonds will be issued; (5) The maximum period of time, which shall not exceed ten (10) years, for which the proposed services, improvements and activities will be carried out and for which assessments will be levied; (6) A description or depiction of the exterior boundaries of the proposed district; and, (7) The time and place for a public hearing on the establishment of the district and the levy of assessments, which shall be consistent with the requirements of Section 13-205, below. (b) The descriptions and statements do not need to be detailed and shall be sufficient if they enable an owner to generally identify the nature and extent of the services, improvements and activities and the location and extent of the proposed district. Sec. 13-204. Management District Plan Contents. The management district plan shall contain all of the following: (a) A map of the district in sufficient detail to locate each parcel of property and, if businesses are to be assessed, each business within the district; (b) The name of the proposed district; (c) A description of the boundaries of the district, including the boundaries of any benefit zones, proposed for establishment or extension in a manner sufficient to identify the affected lands and businesses included. Under no circumstances shall the boundaries of a proposed district overlap with the boundaries of another existing district created pursuant to this part. Nothing in 50B-7 this part prohibits the boundaries of a district created pursuant to this part to overlap with other assessment districts established pursuant to other provisions of law; (d) The services, improvements and activities proposed for each year of operation of the district and the maximum cost thereof; (e) The total annual amount proposed to be expended for services, improvements, maintenance and operations, and debt service in each year of operation of the district; (f) The proposed source or sources of financing including the proposed method and basis of levying the assessment in sufficient detail to allow each property or business owner to calculate the amount of the assessment to be levied against his or her property or business. The plan shall also state whether bonds will be issued to finance improvements; (g) The time and manner of collecting the assessments; (h) The specific number of years in which assessments will be levied, the maximum number of which shall be ten (10). Notwithstanding these limitations, a district created pursuant to this Article to finance capital improvements with bonds may levy assessments until the maximum maturity of the bonds. The management district plan may set forth specific increases in assessments for each year of operation of the district; (i) The proposed time for implementation and completion of the management district plan; Q) Any proposed rules and regulations to be applicable to the district; (k) A list of the properties or businesses to be assessed, including the assessor's parcel numbers for any properties to be assessed, and a statement of the method or methods by which the expenses of a district will be imposed upon benefited real property or businesses, in proportion to the benefit received by the property or business, to defray the cost thereof, including operation and maintenance. The plan may provide that all or any class or category of real property which is exempt by law from real property taxation may nevertheless be included within the boundaries of the district but shall not be subject to assessment on real property; (I) Any other item or matter required to be incorporated therein by the City Council; and, 50B-8 (m) A statement, placed in a conspicuous place on the Management District Plan, stating that assessments for the maintenance of improvements constructed by the district, if any, may continue to be levied on each parcel of land within the district for a period of time equal to the useful life of the improvement, as determined by the City Engineer, regardless of whether the district is disestablished or the term of the original levy has expired. Sec. 13-205. Procedures, Notice. If the City Council proposes to levy a new or increased property assessment, notice shall be provided and protest and hearing procedures shall be carried out in compliance with Section 53753 of the California Government Code. Sec. 13-206. Establishment of District and Levying of Assessment. (a) At the conclusion of the hearing, if there is no majority protest as determined in accordance with Sec. 13-205, the City Council may adopt a resolution of formation . (b) The City Council may adopt, revise, change, reduce, or modify the proposed assessment or the type or types of improvements and activities to be funded with the revenues from the assessments. (c) Notwithstanding the foregoing, proposed assessments may only be revised by reducing any or all of them and the City Council may only make changes in, to, or from the boundaries of the proposed property and business improvement district that will exclude territory that will not benefit from the proposed improvements or activities. Any modifications, revisions, reductions, or changes to the proposed assessment district shall be reflected in the notice and map recorded pursuant to Section 13-207. (d) The adoption of such resolution establishing the district and levying the assessment, or if the district has been previously established, levying the new assessment, and recordation of the notice and map pursuant to Sec.13-207, below, shall constitute the levy of an assessment in each of the fiscal years referred to in the Management District Plan. The resolution of formation shall contain all of the following: (1) A summary of the Management District Plan; (2) The number, date of adoption, and title of the Resolution of Intent; (3) The time and place where the public hearing was held concerning 50B-9 the establishment of the district or the levying of a new assessment; (4) A determination regarding any protests received; (5) A statement that a CMD has been established; (6) A statement that the services, improvements and activities to be provided in the district will be funded by the levy of assessments. The revenue from the levy of assessments within a district shall not be used to provide improvements or activities outside the district or for any purpose other than the purposes specified in the resolution of intent, as approved, or as modified and approved, by the City Council at the hearing concerning the establishment of the district; (7) A finding that the property within the CMD will be benefited by the improvements and activities funded by the assessment to be levied. The City Council may establish one or more separate benefit zones within the district based upon the degree of benefit derived from the improvements or activities to be provided within the benefit zone and may impose a different assessment within each benefit zone; and, (8) A statement, if applicable, that a continuing assessment in an amount sufficient to maintain any constructed improvement throughout its useful life, as determined by the City Engineer, may be levied on each parcel within the district regardless of whether the district is disestablished or the term of the original levy has expired. (e) Properties zoned solely for residential use may be subject to any assessment pursuant to this part, provided that the City Council finds that they benefit from the services improvements and activities funded through these assessments. Sec. 13-207. Record of Notice and Map of Assessment District. Following adoption of the Resolution establishing the district, the City shall record a notice and map describing the assessment district pursuant to California Streets and Highways Code Division 4.5, Section 3114. Sec. 13-208. Contesting the Validity of an Assessment. The validity of an assessment levied under the provisions of this Chapter shall not be contested in any action or proceeding unless the same is 50B-10 commenced within 30 days after the time said assessment is levied, and any appeal from a final judgment in such action or proceeding must be perfected within 30 days after entry of such judgment. Sec. 13-209. District Administration, Owners Association. The City may contract with an Owners Association to manage the district on a day-to-day basis. In the event more than one qualifying association seeks to contract with the City, that association with active membership representing the largest amount of annual assessment in the district shall be chosen. Only if that association fails to maintain its qualifications with the California Secretary of State shall the next largest association be selected. Nothing herein shall be construed to require the City to contract with an Owners Association. Sec. 13-210. Collection of Assessment: Time and Manner. The collection of assessments levied pursuant to this Chapter shall be made at the time and in the manner set forth by the City Council in the Management District Plan. The assessment may be collected at the same time and in the same manner as for the ad valorem property tax, and may provide for the same lien priority and penalties for delinquent payment. The City may also choose for any one year to directly bill for assessments. Non-payment of such an assessment shall be due and payable in any subsequent years when assessments are collected with ad valorem property taxes. Sec. 13-211. Annual Report: Contents. (a) For each fiscal year in which assessments are to be levied and collected to pay the costs of the improvements and activities report shall be prepared, except for the first fiscal year. (b) The report shall be filed with the Clerk of the Council and shall refer to the CMD by name, specify the fiscal year to which the report applies, and, with respect to that fiscal year, shall contain all of the following information: (1) Any changes, including, but not limited to, the boundaries of the CMD or any benefit zones within the district, the basis and method of levying the assessments, and any changes in the classification of property, if a classification is used. (2) The improvements and activities to be provided for that upcoming fiscal year. (3) An estimate of the cost of providing the improvements and the activities for that upcoming fiscal year. 50B-11 (4) The method and basis of levying the assessment in sufficient detail to allow each real property owner to estimate the amount of the assessment to be levied against his or her property for that fiscal year. (5) The amount of any surplus or deficit revenues to be carried over from a previous fiscal year. (6) The amount of any contributions to be made from sources other than assessments levied pursuant to this part. (c) The City Council may approve the report as filed or may modify any particular contained in the report and approve it as modified. Any modification shall be made pursuant to Section 13-212, below. The City Council shall not approve a change in the basis and method of levying assessments that would impair an authorized or executed contract to be paid from the revenues derived from the levy of assessments. (d) If an Owners Association is under contract with the City to manage the CMD, it shall cause the report to be prepared. Sec. 13-212. Modification of Boundaries, Assessments, Improvements or Activities. (a) Upon the written request of the Owners Association, the City Council may modify the management district plan after conducting one public hearing on the proposed modifications. (b) The City Council may modify the improvements and activities to be funded with the revenue derived from the levy of the assessments by adopting a resolution determining to make the modifications after holding a public hearing on the proposed modifications. (c) If the modification includes the levy of a new or increased assessment, the City Council shall comply with Section 13-205. (d) Notice of all other public meetings and public hearings pursuant to this section shall comply with both of the following: (1) The resolution of intent shall be published in a newspaper of general circulation in the city once at least seven days before the public meeting. (2) A complete copy of the resolution of intent shall be mailed by first 50B-12 class mail, at least 10 days before the public meeting, to each business owner or property owner affected by the proposed modification. (e) The City Council shall adopt a resolution of intent which states the proposed modification prior to the public hearing required by this section. The public hearing shall be held not more than 90 days after the adoption of the resolution of intent. (f) Any subsequent modification of the resolution shall be reflected in subsequent notices and maps recorded pursuant to California Streets and Highway Code Division 4.5 (commencing with Section 3100), in a manner consistent with the provisions of Section 13-207. Sec. 13-213. Renewal of District. (a) Any district previously established whose term has expired, may be renewed by following the procedures for establishment as provided in this article. (b) Upon renewal, any remaining revenues derived from the levy of assessments, or any revenues derived from the sale of assets acquired with the revenues, shall be transferred to the renewed district. If the renewed district includes additional parcels or businesses not included in the prior district, the remaining revenues shall be spent to benefit only the parcels or businesses in the prior district. If the renewed district does not include parcels or businesses included in the prior district, the remaining revenues attributable to these parcels shall be refunded to the owners of these parcels or businesses. (c) Upon renewal, a district shall have a term not to exceed 10 years, or, if the district is authorized to issue bonds, until the maximum maturity of those bonds. There is no requirement that the boundaries, assessments, improvements, or activities of a renewed district be the same as the original or prior district. Sec. 13-214. Dissolution of District. (a) Any district established or extended pursuant to the provisions of this part, where there is no indebtedness, outstanding and unpaid, incurred to accomplish any of the purposes of the district, may be disestablished by resolution. If the City Council finds there has been misappropriation of funds, malfeasance, or a violation of law in connection with the management of the district, it shall notice a hearing on disestablishment. (b) The City Council shall adopt a resolution of intent to disestablish the district prior to the public hearing required by this section. The resolution 50B-13 shall state the reason for the disestablishment, shall state the time and place of the public hearing, and shall contain a proposal to dispose of any assets acquired with the revenues of the assessments levied within the property and business improvement district. The notice of the hearing on disestablishment required by this section shall be given by mail to the property owner of each parcel or to the owner of each business subject to assessment in the district, as appropriate. The city shall conduct the public hearing not less than 30 days after mailing the notice to the property or business owners. The public hearing shall be held not more than 60 days after the adoption of the resolution of intent. (c) Upon the disestablishment of a district, any remaining revenues, after all outstanding debts are paid, derived from the levy of assessments, or derived from the sale of assets acquired with the revenues, or from bond reserve or construction funds, shall be refunded to the owners of the property or businesses then located and operating within the district in which assessments were levied by applying the same method and basis that was used to calculate the assessments levied in the fiscal year in which the district is disestablished. All outstanding assessment revenue collected after disestablishment shall be spent on improvements and activities specified in the management district plan. (d) If the disestablishment occurs before an assessment is levied for the fiscal year, the method and basis that was used to calculate the assessments levied in the immediate prior fiscal year shall be used to calculate the amount of any refund. Section 3. If any section, subsection, sentence, clause, phrase or portion of this ordinance is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this ordinance. The City Council of the City of Santa Ana hereby declares that it would have adopted this ordinance and each section, subsection, sentence, clause, phrase or portion thereof irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases, or portions be declared invalid or unconstitutional. ADOPTED this day of 2008 Miguel A. Pulido Mayor 50B-14 APPROVED AS TO FORM: Joseph W. Fletcher, City Attorney AYES: Councilmembers NOES: Councilmembers ABSTAIN: Councilmembers NOT PRESENT: Councilmembers CERTIFICATE OF ATTESTATION AND ORIGINALITY I, PATRICIA E. HEALY, Clerk of the Council, do hereby attest to and certify that the attached Ordinance No. NS-XXX to be the original ordinance adopted by the City Council of the City of Santa Ana on ,and that said ordinance was published in accordance with the Charter of the City of Santa Ana. Date: Clerk of the Council City of Santa Ana 50B-15 50B-16