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Home My WebLink About50A - ORDINANCE - DISESTABLISH PBID REACTIVATE BID REQUEST FOR , COUNCIL ACTION CITY COUNCIL MEETING DATE: CLERK OF COUNCIL USE ONLY: JANUARY 22, 2013 TITLE: APPROVED ? As Recommended ORDINANCE TO REPEAL ARTICLE XX ? As Amended DISESTABLISHING THE DOWNTOWN El Ordinance on Reading El Ordinance on 2 I d Reading COMMUNITY MANAGEMENT DISTRICT ? Implementing Resolution AND DIRECTION REGARDING ? Set Public Hearing For REACTIVATION OF DOWNTOWN BID CONTINUED TO r/ { FILE NUMBER CITY MANAGER RECOMMENDED ACTION 1. Adopt an ordinance repealing Article XX of Chapter 13 of the Santa Ana Municipal Code relating to community management districts; and 2. Direct staff to undertake activities to allow consideration of reactivation of the Downtown Santa Ana Business Improvement District (BID). DISCUSSION The City of Santa Ana established a Business Improvement District (BID) in 1984 at the request of Downtown merchants to provide funds from business license surcharges for the promotion of the Downtown. Funds were collected for this BID continuously through 2007. On December 15, 2008 the City Council adopted a resolution establishing the Downtown Santa Ana Community Management District (commonly known as the PBID) and levied assessments on property owners within the District to fund various programs benefiting the Downtown. On May 18, 2009, the City Council approved an agreement with Downtown, Inc. to manage the Downtown PBID and Downtown, Inc. proceeded to administer the Clean & Safe Programs and undertake marketing efforts outlined in their annual report. Concurrently, it became evident that while there were many Downtown stakeholders supportive of the PBID and its programs, there were also Downtown stakeholders - both property owners and business owners - that either did not agree with the initial formation of the PBID or did not agree with the program expenditures. Due to this disagreement and other factors the City Council did not levy the PBID assessment in 2012 and therefore, did not provide Downtown, Inc. the funds anticipated in the May 2009 agreement. On January 22, 2013, the City Council will consider in closed session a potential settlement agreement with Downtown, Inc. If the City Council agrees to the settlement terms presented, the City Attorney will then report the terms of the settlement agreement to the public in open session. 5OA-1 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 ORDINANCE TO REPEAL ARTICLE XX DIESTABLISHING THE DOWNTOWN COMMUNITY MANAGEMENT DISTRICT January 22, 2013 Page 3 a majority of businesses are in favor, the City Council may adopt a resolution approving the BID assessment. If directed by the City Council, staff will undertake the following actions related to reactivation of the BID: 1. Send each business within the Downtown BID boundary a letter providing background on the BID, information on the amount of the BID surcharge and information concerning the upcoming process for consideration of reactivation. Meet with business groups as requested to ensure full understanding of process and BID structure. 2. Brief the Community Redevelopment and Housing Commission concerning City Council direction and seek the CHRC recommendation of approval of an assessment report. 3. Agendize for City Council consideration of approval of the assessment report and a resolution of intent to levy and collect the BID assessments. If City Council approves the resolution of intent to levy, information and ballots will be mailed to each business within the BID boundary. 4. Hold City Council public hearing to hear and consider all protests. As noted earlier, if a majority of affected businesses protest the assessment, the proceeding would end. If a majority of businesses are in favor, the City Council may adopt a resolution approving the BID assessment. 5. Work with Downtown associations on administrative contracts to program the BID funds. FISCAL IMPACT There are no fiscal impacts associated with the recommended actions. Paul Walters City Manager 5OA-3 ORDINANCE NO. NS-XXX AN ORDINANCE OF THE CITY OF SANTA ANA REPEALING ARTICLE XX OF CHAPTER 13 OF THE SANTA ANA MUNICIPAL CODE RELATING TO COMMUNITY MANAGEMENT DISTRICTS THE CITY COUNCIL OF THE CITY OF SANTA ANA DOES ORDAIN AS FOLLOWS: Section 1. Ordinance No. NS-2771 of the Santa Ana Municipal Code relating to the establishment of Community Management Districts is hereby repealed. Section 2. The adoption of this ordinance is exempt from CEQA and a Notice of Exemption will be filed if this ordinance is adopted. Section 3. Chapter 13 of the Santa Ana Municipal Code is hereby amended to delete Article XX in its entirety. ADOPTED this day of , 2012. Miguel A. Pulido Mayor APPROVED AS TO FORM: Sonia R. Carvalho, City Attorney By: (name) City Attorney 5OA-5 Ordinance No. NS-XXX AYES: Councilmembers NOES: Councilmembers ABSTAIN: Councilmembers NOT PRESENT: Councilmembers CERTIFICATE OF ATTESTATION AND ORIGINALITY I, Maria D. Huizar, 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 Ordinance No. NS-XXX Page 2 50A-6