Item 6-M
City Council Meeting: 03-23-99 Santa Monica, California
TO: Mayor and City Council
FROM: City Staff
SUBJECT: Recommendation That the City Council Adopt a Resolution Declaring its Intention to Modify and Amend the Main Street Business Improvement Area Assessment District, Set a Public Hearing For April 13, 1999, and Repeal Resolution Number 9018 (CCS) Which Set an Earlier Public Hearing For This Purpose.
Introduction
This report recommends that the City Council adopt the attached resolution declaring its intention to modify and amend the Main Street Business Improvement Area, set a public hearing for first reading of the proposed ordinance on April 13, 1999, and repeal Resolution Number 9018(CCS), which set an earlier public hearing for this purpose on May 14, 1996.
Background
At the request of the businesses on Main Street a Business Improvement Area ("BIA") was created in 1984. Under its terms, retail business owners are assessed each May 15th the amount of one tenth of one percent of total taxable sales for the purposes of general promotion of business activities in the area. The boundaries of the Main Street BIA were defined as follows: "Businesses located on property bordering on either side of Main Street from Pico Boulevard on the north to the south city limits on the south and on either side of Ocean Park Boulevard, Hill Street, Ashland Avenue, Kinney Street, Pier Avenue, and Marine Street between Neilson Way on the west and Second Street on the east". The ordinance was amended on December 11, 1984, by Resolution No. 6954 (CCS) and again on February 12, 1985 to include non-retail businesses, except those operating under a home occupation permit. Non-retail businesses were required to pay a flat fee of $25.00 per year.
On April 9, 1996, in accordance with Ordinance Number 1606 (CCS) (as amended by Ordinance Number 1845 (CCS)), the City Council adopted Resolution No. 9018 (CCS) declaring its intention to adopt new fees for the Main Street Business Improvement Area, and set a public hearing on its establishment for May 14, 1996.
The public hearing did not occur on May 14, 1996 as scheduled, due to its inclusion with other Main Street issues, and the Main Street BIA has remained unchanged since 1985. It generates approximately $46,000.00 per year, billed annually by the Business License Office on or about April 15 in a cycle separate from the annual Business License renewal cycle. The funds received, less 5% retention by the City for collection expenses, are administered by a contract with the Santa Monica Chamber of Commerce.
Discussion
The Main Street Merchants Association, the subcommittee of the Chamber which oversees expenditure of the funds collected under the Main Street BIA, has determined that the amount of funds received and the methods of collection separate from the business license cycle are inadequate to properly promote business in the area and provide supplemental services necessary to attract customers and businesses to Main Street.
Accordingly, on January 27, 1999, at a General Meeting of Main Street Merchants Association, the Board of Directors introduced a ballot asking Main Street businesses to indicate whether they would be in favor of increasing the BIA fee and billing cycle. The new BIA fee for retailers would increase to the equivalent of one time the business license tax ($75.00 plus $1.25 per each $1,000.00 of total gross receipts in excess of $60,000.00 instead of 1/10 of 1% of total taxable sales which equals $1.00 per each $1,000.00). The maximum BIA fee for retail businesses would be increased to $2,000.00 from $1,000.00 per year. The maximum BIA flat fee for non-retail businesses would be increased from $25.00 per year to $100.00 per year. The boundaries of the Main Street BIA would remain the same.
Under the amended BIA, the Main Street BIA fee would be billed and collectible with the Business License Tax paid by each business license holder, rather than a separate billing at a different time of year.
The Main Street Merchants Association advised City Staff on March 10, 1999 that a majority of Main Street businesses responding support the new rate and method of collection. On March 10, 1999, the Main Street Merchants Association requested that the City proceed with amending the Main Street Business Improvement Area based on the formulas and method of collection outlined above.
Staff evaluated the issue of whether a BIA with fees paid by business owners is subject to Prop 218, and determined that it was not. The issue of whether Prop 218 applies to BIA's is being litigated in San Diego. The lower court has held that Business Improvement Areas are not subject to Prop 218, but this decision has been appealed. While the appeal presents some risk, staff's assessment is that this risk is minimal.
Budget/Financial Impact
The proposed business improvement area fees from Main Street merchants are projected to be approximately $91,500.00 per year annually. The 5% retention by the City would be approximately $4,575.00 which staff calculates would be sufficient to cover administrative costs associated with printing, postage, and billing, as this would be done concurrently with the Business License renewal. There would be no other financial/budgetary impacts.
Recommendation
City staff recommends that the City Council adopt the attached resolution declaring its intention to modify and amend the Main Street Business Improvement Area, set a public hearing for first reading of the proposed ordinance on April 13, 1999, and repeal Resolution Number 9018(CCS), which set an earlier public hearing for this purpose.
Prepared by: Jeff Mathieu, Director, Resource Management Department
Gwen Pentecost, Sr. Admin. Analyst, Economic Development Div.
Attachment: Resolution of Intention
Resolution Number 9018 (CCS)
RESOLUTION NUMBER__________(CCS)
(CITY COUNCIL SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA DECLARING ITS INTENTION TO MODIFY AND AMEND THE MAIN STREET BUSINESS IMPROVEMENT AREA ASSESSMENT DISTRICT AND REPEAL RESOLUTION NUMBER 9018 (CCS)
WHEREAS, on April 10, 1984, the City Council adopted Ordinance No. 1303 (CCS) which established a Main Street Business Improvement Area and authorized the City Council to levy an assessment on business located within the boundaries of such Main Street Business Improvement Area; and
WHEREAS, the City Council of the City of Santa Monica proposes to modify and amend the Business Improvement Area for the Main Street commercial area as more particularly described herein; and
WHEREAS, Ordinance Number 1606 (CCS) of the City of Santa Monica, adopted November 26, 1991, as amended by Ordinance Number 1845 (CCS), adopted March 19, 1996, (hereinafter collectively "Ordinance No. 1606") sets forth the procedures governing Business Improvement Areas within the City; and
WHEREAS, it has been determined by the City Council that proceedings be commenced in accordance with Ordinance No. 1606 for the modification and amendment of the Main Street Business Improvement Area and the levying of assessments pursuant to Ordinance 1606: and
WHEREAS, on April 9, 1996 the City Council adopted Resolution Number 9018 declaring its intention to modify and amend the Main Street Business Improvement Area; and
WHEREAS, no further proceedings were taken under Resolution Number 9018 (CCS) to modify and amend the Main Street Business Improvement Area; and
WHEREAS, the City Council of the City of Santa Monica now proposes to take steps necessary to modify and amend the Main Street Business Improvement Area;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA
DOES HEREBY RESOLVE AS FOLLOWS:
SECTION 1. Resolution Number 9018 (CCS) is repealed in its entirety.
SECTION 2. The City Council hereby declares its intention to modify and amend the Main Street Business Improvement Area ("Main Street BIA") which comprises businesses located on property bordering on either side of Main Street from Pico Boulevard on the north to the south city limits on the south and on either side of Ocean Park Boulevard, Hill Street, Ashland Avenue, Kinney Street, Pier Avenue, and Marine Street between Neilson Way on the west and Second Street on the east.
SECTION 3. The assessments levied within this proposed Main Street BIA shall be used for any of the following purposes:
1) Operation and maintenance of the capital improvements to be constructed
pursuant to the Main Street Streetscape Improvement Plan, and supplemental operation and maintenance activities within the Main Street
BIA as required.
2) General promotion and marketing of commercial trade activities within the Main Street BIA, promotion of public events and decoration of any public place in the area.
3) Any other purposes allowable under Ordinance 1606.
SECTION 4. This modification and amendment of the Main Street BIA shall become effective upon adoption of an ordinance pursuant to Ordinance 1606. All assessments due under this Main Street BIA shall be payable concurrently and at the same time as the general business license tax. For failure to pay said assessments on the due date thereof, penalties shall be exacted as set forth in Section 6.04.160 of the Santa Monica Municipal Code.
SECTION 5. That an assessment will be levied against all persons or entities operating a business establishment within such proposed Main Street BIA. . For fees due July 1, 1999 and thereafter, unless amended by the City Council, the Main Street Business Improvement Area assessment will be a fee equivalent to the following:
Business Assessment Annual
Classification Fee Amount Maximum
Retail 1 x Business License Tax* $ 2,000.00
Recreation and $100.00 Flat Fee $ 100.00
Entertainment
Agent/Broker $100.00 Flat Fee $ 100.00
Auto Dealer $100.00 Flat Fee $ 100.00
Contractor/Subcontractor $100.00 Flat Fee $ 100.00
Corporate/Administrative
Headquarters $100.00 Flat Fee $ 100.00
Professions $100.00 Flat Fee $ 100.00
Manufacturers $100.00 Flat Fee $ 100.00
Services $100.00 Flat Fee $ 100.00
Wholesalers $100.00 Flat Fee $ 100.00
Utilities $100.00 Flat Fee $ 100.00
*Business License Tax rates are set forth in Article 6 of the Santa Monica
Municipal Code.
SECTION 6. The assessment shall not apply to any person operating a business from his or her principal place of residence within the Main Street BIA and for which a home occupation permit has been issued in accordance with the provisions of Article IX of the Santa Monica Municipal Code.
SECTION 7. The improvements and activities to be provided in the area will be funded by the levy of assessments described in Section 5 above. The revenues from such assessments shall be used exclusively within the Main Street BIA described herein, and shall not be used to provide improvements or activities outside such BIA.
SECTION 8. A public hearing on the proposed Main Street BIA will be held at 7:00 p.m. on Tuesday April 13, 1999 , or as soon thereafter as the matter may be heard, in the temporary City Council Chambers located at the Main Library Auditorium at 1343 6th Street, Santa Monica, California. At such public hearing, the City Council will hear public testimony on the proposed Main Street BIA, including any protests and objections to the BIA.
SECTION 9. That notice of such public hearing shall be published and mailed in accordance with Section 8 of City Ordinance 1606 (CCS). A copy of Ordinance 1606 is on file in the office of the City Clerk.
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SECTION 10. The City Clerk shall certify to the adoption of this Resolution, and thenceforth and thereafter the same shall be in full force and effect.
APPROVED AS TO FORM:
_______________________
CITY ATTORNEY
City Council Meeting: 4-9-96 Santa Monica, California
RESOLUTION NUMBER__________(CCS)
(CITY COUNCIL SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF SANTA MONICA DECLARING ITS INTENTION TO
ESTABLISH A MAIN STREET BUSINESS IMPROVEMENT
AREA ASSESSMENT DISTRICT
WHEREAS, the City Council of the City of Santa Monica proposes
to establish a new business improvement area assessment district
for the Main Street commercial area as more particularly described
herein; and
WHEREAS, the proposed business improvement area assessment
district is that area bounded on the north by Pico Boulevard, the
west by Nielson Way, the south by the southerly City limit, and the
east by Second Street and an imaginary line extending Second Street
north to Pico Boulevard and including all commercially zoned
parcels within such area; and
WHEREAS, it has been determined by the City Council that
proceedings be commenced for the formation of such business
improvement area assessment district and the levying of assessments
pursuant to City Ordinance Number 1606 (CCS);
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA
DOES HEREBY RESOLVE AS FOLLOWS:
SECTION 1. That this City Council hereby declares its intention
to establish a business improvement area ("BIA Assessment
District") for commercially zoned parcels along Main Street
as described above and with boundaries as reflected on the map
attached hereto as Exhibit "A" and incorporated herein by
reference.
SECTION 2. That the assessments levied within such proposed BIA
Assessment District shall be used for any of the following
purposes:
(a) The acquisition, installation, construction
or maintenance of parking facilities, benches, information kiosks,
trash receptacles, street lighting, parks, fountains, landscaping
and related improvements, including, without limitation,
irrigation, lighting, signage, fencing, walkways and similar
improvements for the benefit of the area.
(b) Decoration of any public place in the area.
(c) Promotion of public events which are to take place
on or in public places in the area, including the provision
of security for such public events.
(d) Furnishing music in any public place in the area.
(e) The general promotion of commercial trade activities in the area.
(f) Activities to manage traffic generated by employees
and customers of businesses within the area.
(g) Security operations within the area.
SECTION 3. That an assessment will be levied against all persons
or entities operating a business establishment within such proposed
Main Street BIA Assessment District based upon the following
formulas and subject to the minimum and maximum levels stated
below:
FISCAL YEAR 1996-97
BUSINESS CATEGORY ASSESSMENT FEE AMOUNT ANNUAL MIN/MAX
Retail ____ of Gross Receipts* $___/$___
All Others _____ of Gross Receipts* $___/___
FISCAL YEARS 1997-98 AND AFTER
BUSINESS CATEGORY ASSESSMENT FEE AMOUNT ANNUAL MIN/MAX
Retail 0.2% of Gross Receipts* $200/$3,000
All Others 0.1% of Gross Receipts* $200/$1,000
*Gross Receipts is defined in Santa Monica Municipal Code,
Article 6, Section 6.04.010(d).
SECTION 4. That commencing on July 1, 1997. the assessments shall
be payable concurrently and at the same time as the general
business license tax. For failure to pay said assessments on the
due date thereof, penalties shall be exacted as set forth
in Section 6.04.160 of the Santa Monica Municipal Code.
SECTION 5. That the improvements and activities to be provided
in the area will be funded by the levy of assessments described
in Section 3 above. The revenues from such assessments shall be
used exclusively within the BIA Assessment District described
herein, and shall not be used to provide improvements or activities
outside such BIA Assessment District.
SECTION 6. That the City Council hereby finds and declares that
the businesses and the property within the proposed BIA Assessment
District will be benefited by the improvements and activities
funded by the assessments proposed to be levied.
SECTION 7. That a public hearing on the establishment of the
proposed Main Street BIA Assessment District will be held on
Tuesday, May 14, 1996 at 6:30 p.m. in the City Council Chambers,
1685 Main Street, Santa Monica, California. At such public hearing,
the City Council will hear public testimony on the proposed BIA
Assessment District, including any protests and objections to the
establishment of such BIA Assessment District.
SECTION 8. That notice of such public hearing shall be published
and mailed in accordance with Section 8 of City Ordinance Number
1606 (CCS). A copy of Ordinance Number 1606 (CCS) is on file in the
office of the City Clerk of Santa Monica.
SECTION 9. The City Clerk shall certify to the adoption of this
Resolution, and thenceforth and thereafter the same shall be in
full force and effect.
APPROVED AS TO FORM:
______________________
MARSHA JONES MOUTRIE
City Attorney