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HomeMy WebLinkAbout55B - RESO OF INTENT COMM MGMT DSTREQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: OCTOBER 6, 2008 TITLE: RESOLUTION OF INTENTION TO ESTABLISH A COMMUNITY MANAGEMENT DISTRICT IN THE DOWNTOWN CITY MANAGER RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ^ As Recommended ^ As Amended ^ Ordinance on 1s2 Reading ^ Ordinance on 2"d Reading ^ Implementing Resolution ^ Set Public Hearing For_ CONTINUED TO FILE NUMBER 1) Adopt a Resolution of Intention to form a Community Management District in the Downtown in accordance with the provisions of Article XX, Chapter 13 of the Santa Ana Municipal Code; 2 ) Set a public hearing and order the preparation and distribution of ballots in accordance with the provisions of Section 53753 of the Government Code and Article XIIID, Section 4 of the California Constitution. DISCUSSION In the spring of 2007, the City initiated an analysis of the various assessment district options available to the Downtown, as the existing Business Improvement District (BID) does not generate sufficient revenues to address the growing economic pressures in the area. The analysis examined (1) Property and Business Improvement Districts (PBIDs) which are established under California statute, (2) Community Management Districts (CMDs) which are formed under a city's charter authority, and (3) 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 individual businesses. This is the type of district Downtown Santa Ana has had in place since 1984. Both the PBID and CMD, as 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. 55B-1 Resolution of Intention to Establish Management District in the Downtown October 6, 2008 Page 2 The City of Santa Ana's recently adopted CMD ordinance lays out the processes for the establishment of this unique benefit assessment district. It is patterned after the PBID statute, but offers greater local authority and flexibility. The CMD ordinance varies from the PBID statute in two noteworthy ways: first, the pre-formation petitioning requirement is set at 30 percent of the district value while State law requires 50 percent; second, the maximum life span for a district permitted by this ordinance is ten years while the State law has a limit of five years when it is first formed, and then allows ten-year terms for subsequent renewals. In January 2008, a Management District Formation Committee was created to investigate and pursue the development of a CMD. This ten-member committee is comprised of key Downtown stakeholders and has worked with the Interim Downtown Manager/Consultant to define a workable district and develop a comprehensive management plan. The Committee has determined the District's boundaries, created the Management District Plan, and initiated outreach efforts with their fellow property owners. The procedural steps to form a CMD are: • Gather and submit to the City petitions signed by property owners who will contribute more than 30 percent of the total assessment. • The City Council adopts a Resolution of Intention to establish a CMD. • The City Council conducts a public hearing and a ballot procedure for all property owners within the CMD in accordance with the provisions of Section 53753 of the Government Code and Article XIIID, Section 4 of the California Constitution. In order for the district to be formed, of the CMD ballots returned, a weighted majority must be in favor of the district formation. CMD ballots are weighted based upon the dollars to be paid into the district. • At the conclusion of the public hearing, if there is no majority protest of the establishment of the district, as determined by a weighted majority of the ballots returned, the City Council may adopt a Resolution of Formation of the CMD and levy the assessment. 55B-2 Resolution of Intention to Establish Management District in the Downtown October 6, 2008 Page 3 District assessments are collected by the County as part of the regular property tax collections. The County returns the assessment funds to the City which then forwards the funds to the owners association for administration of the district programs and activities. Downtown Incorporated, a new nonprofit corporation, filed Articles of Incorporation with the Secretary of State on August 5, 2008 (endorsed and certified August 7, 2008). Downtown Incorporated is the owners association formed to manage the district. FISCAL IMPACT There is no fiscal impact associated with this action. There will be, however, a financial impact in the form of assessments levied on City and Agency properties at such time as the district is formed. The combined total of City and Agency assessments is projected at $114,000 annually. Cynthia J. Nel on Deputy City Manager for Development Services Community Development Agency CJN/TE/kg 55B-3 ROH/JWF (10/06/08) RESOLUTION NO. 2008-XXX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA STATING ITS INTENTION TO ESTABLISH THE DOWNTOWN SANTA ANA COMMUNITY MANAGEMENT DISTRICT AND TO LEVY AND COLLECT ASSESSMENTS WITHIN SUCH DISTRICT PURSUANT TO ARTICLE XX, CHAPTER 13 OF THE SANTA ANA MUNICIPAL CODE AND SETTING A TIME AND PLACE FOR HEARING OBJECTIONS THERETO. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS FOLLOWS: Section 1. The City Council of the City of Santa Ana hereby finds, determines and declares as follows: A. Article XX of Chapter 13 of the Santa Ana Municipal Code (the "Law") authorizes the City Council to establish Community Management Districts (CMD) to promote the economic revitalization and physical maintenance of business districts. B. The Law authorizes cities to levy and collect assessments on real property within such districts for the purpose of providing improvements and promoting activities that provides special benefit to real property within such districts. C. A written petition has been submitted by property owners within Downtown Santa Ana requesting the City Council to initiate proceedings pursuant to the Law to establish the Downtown Santa Ana Community Management District for a five year period. D. Such petition was signed by property owners in the proposed district who will pay more than thirty percent (30%) of the assessments proposed to be levied. E. A Management District Plan entitled the "Downtown Santa Ana Community Management District Plan" (the "Management District Plan") containing all of the information to establish the District required by Section 13-204 of the Law, including a description of the boundaries of the district, the improvements and activities proposed for the district, and the cost of such improvements and activities has been prepared and submitted to the Clerk of the Council. Included as part of the Management 55B-4 Resolution No. 2008-XXX Page 1 of 4 District Plan is a engineers report, prepared by a registered professional engineer, which complies with the requirements of Sections 4(a), (b) and (c) of Article XIIID of the California Constitution. As used herein, Management District Plan shall include the engineer's report. F. Articles XIIID of the California Constitution and Sections 54750 through 53756 of the California Government Code impose certain procedural and substantive requirements relating to the levy of new or increased assessments, including mailing of a notice to each affected property owner regarding the proposed assessment, conducting a ballot procedure, and holding a public hearing. Section 2. Pursuant to Sections 13-202 and 13-203 of the Law, the City Council declares its intention to establish "The Downtown Santa Ana Community Management District" (the "District") for five years, and to levy and collect assessments against lots and parcels of real property within the District, commencing with fiscal year 2008-09. Section 3. The City Council hereby approves the Management District Plan on file in the office of the Clerk of the Council. The City Clerk shall make the Management District Plan and other documents related to the District available to the public for review during normal business hours. Section 4. NOTICE IS HEREBY GIVEN that the City Council shall conduct a public hearing on the establishment of the District and the levy and collection of assessments for fiscal year 2008-09 on December 1, 2008 at 6:30 p.m., or as soon thereafter as the matter may be heard, in the City Council Chambers located at 22 Civic Center, Santa Ana, California 92702. Section 5. The City Manager is hereby authorized to exercise the City's voting rights regarding the District balloting. Section 6. At the public hearing, the City Council will consider all objections or protests, if any, to the proposed establishment of the District and the proposed assessment, and will tabulate property owner ballots. Any interested person may present written or oral testimony at the public hearing. Ballots must be submitted to the City Clerk by the end of the public comment portion of the public hearing. A. Ballots will remain sealed until tabulated following the close of the public hearing on the District. Proceedings to establish the District will be abandoned if a majority protest exists at the conclusion of the public hearing. A majority protest shall be deemed to exist if ballots submitted in opposition to the assessment exceed the ballots submitted in favor of the assessment. Ballots shall be weighted and tabulated according to the proposed assessment against the property. 55B-5 Resolution No. 2008-XXX Page 2 of 4 B. The proposed District includes much of Downtown Santa Ana generally bounded by Flower Street on the west, First Street from Flower Street to Birch Street and Walnut Street from Broadway to Orange Street on the south, Maple Street from Walnut Street to First Street, the easterly property line of the commercial center known as Downtown Plaza and Mortimer Street from Third Street to Santa And Boulevard on the east, and Santa Ana Boulevard from Mortimer Street to Bush Street and Civic Center Drive from Bush Street to Flower Street on the north. C. The proposed activities for the District include enhanced maintenance, supplemental public security, marketing and promotions, and beautification and physical enhancement improvements. D. The assessment proposed to be levied and collected for fiscal year 2008- 09 is approximately $920,000, based on the assessment rates described in the Management Plan, which assessment rates shall continue for each of the following four fiscal years. Parcel assessments may increase where new building construction occurs on parcels within the District which increases the current building area. E. No bonds shall be issued in conjunction with the establishment of the District. F. The Clerk of the Council is hereby authorized and directed to send a notice of the public hearing and a ballot to each property owner within the District as provided in Section 53753 of the Government Code and Article XIIID, Section 4 of the California Constitution. Section 7. This Resolution shall take effect immediately upon its adoption by the City Council, and the Clerk of the Council shall attest to and certify the vote adopting this Resolution. ADOPTED this 6th day of October, 2008. Miguel A. Pulido Mayor APPROVED AS TO FORM: By: Joseph W. Fletcher, City Attorney 55B-6 Resolution No. 2008-XXX Page 3 of 4 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 the attached Resolution No. 2008-XXX to be the original resolution adopted by the City Council of the City of Santa Ana on Date: Clerk of the Council City of Santa Ana 55B-7 Resolution No. 2008-XXX Page 4 of 4