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SR-6-M (48)R~o ~ 938~ ccS ~ M ~~~1,P~ ~9~~ MAR 2 3 1999 F \RESOURCEISHARE\GWENSH\STAFREPNv1SNEW815 WPD Councd Meeting March 23, 1999 Santa Monica. California TO Mayor and City Counal FROM City 5taff SUBJECT Recommendation That the City Councd Adopt a Resolution Declaring iis Inte~tion to Modify and Amend the Mam Street Business Improvement Area Assessment Distnct, Set a Public Heanng For Apnl 13. 1999, and Repeal Resolution Num6er 9018 (CCS) Which Set an Earlier Public Hearing For This Purpose IntroductioIl This report recommends that the City Council adopt the attached resolution deciaring its intenUon to modrfy and amend the Ma~n Street Business Improvement Area, set a pubhc hearing for first reading of the proposed ordinance on Apnl 13, 1999, and repeal Resolution Number 9018(CCS), which set an earlier public heanng for this purpose on May 14. 1996 Backaround At the request of the businesses on Mam Street a Business Improvement Area ("BIA") was created in 1984 Under its terms, retad busmess 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 busmess activities in the area The boundaries of the Main Street BIA were defined as follows 'Busmesses 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 ' ~M MAR 2 3 199,g side of Ocean Park Boulevard, Hdl Street, Ashland Avenue, Kinney Street, P~er Avenue. and Manne Street between Nedson Way on the west and Second Street on the easY' The ordinance was amended on December 11, 1984, by Resolution No 6954 (CCS) and again on February 12, 1985 to mciude non-retail businesses, except those operating under a home occupation permit Non-retad businesses were reqwred to pay a flat fee of $25 00 per year On Apnl 9, 1996, in accordance with Ordinance Number 1606 (CCS) (as amended by Ordinance Number 1845 (CCS)), the City Council adopted Resolution No 9018 (CCS} declanng its mtention 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 heanng did not occur on May 14, 1996 as scheduied, due to its inclusion with other Main 5treet issues, and the Main Street BIA has remained unchanged since 1985 it generates approximately $46,000 00 per year, billed annuaily by the Business License Office on or about April 15 m a cycle separate from the annual Business License renewal cycle The funds recewed, less 5% retention by the City for collection expenses, are administered by a contract with the Santa Monica Chamber of Commerce Discussion The Mam Street Merchants Assoaation, 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 ~n the area and provide supplementai services necessary to attract customers and businesses to Main Street Accordingly. on January 27, 1999, at a General Meeting of Main Street Merchants AssoaaUon, the Board of Directors mtroduced a ballot asking Main Street busmesses to mdicate whether they would be in favor of increasmg the BIA fee and billing cycle The new BIA fee for retaders wouid increase to the equivalent of one time the busmess 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 bus~ness license holder. rather than a separate billing at a different time of year The Mam Street Merchants Association advised City Staff on March 10. 1999 that a ma~ority of Main Street busmesses respondmg support the new rate and method of collection On March 10, 1999, the Mam Street Merchants Assoaation requested that the City proceed with amendmg the Mam Street Bus~ness Improvement Area based on the formulas and method of collection outlined above Staff evaluated the issue of whether a BIA with fees paid by busmess owners is sub~ect to Prop 218, and determined that it was not The issue of whether Prop 218 applies to BIA's is being Id~gated in San Diego The lower court has held that Business Improvement Areas are not sub~ect to Prop 218, but this decision has been appealed While the appeal presents some nsk. staff's assessment is that this nsk is minimal Budaet/Finanaal impact The proposed business improvement area fees from Main Street merchants are pro~ected to be approximately $91,500 00 per year annually The 5°/a retention by the City would be approximatefy $4,575 00 which staff calculates would be suffic~ent to cover administrative costs assoaated with pnntmg, postage, and bdling, as this would be done concurrently with the Bus~ness License renewal There would be no other finanaallbudgetary impacts Recommendation City staff recommends that the City Councd adopt the attached resotution declanng its mtention to modify and amend the Mam Street Busmess Improvement Area, set a public heanng for first reading of the proposed ordinance on Apnl 13, 1999, and repeal Resolution Number 9018(CCS), which set an eariier public heanng for this purpose 4 Prepared by Jeff Mathieu. Director. Resource Management Department Gwen Pentecost. Sr Admin Analyst. Economic Development D~v Attachment Resolution of Intention Resolution Number 9018 (CCS) f lattylmunillawslmox\mainst bia City Counal Meeting 03-23-99 Santa Monica, California RESOLUTION NUMBER 9381 (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 Apnl 10, 1984, the City Council adopted Ordmance No 1303 (CCS) which established a Main Street Busmess 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 Counal of the C~ty of Santa Monica proposes to modify and amend the Business Improvement Area for the Main Street commeraal 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 governmg Business Improvement Areas within the City, and WHEREAS, it has been determined by the City Councd that proceedmgs be commenced in accordance with Ordinance No 1606 for the modification and amendment of the Main Street Business improvement Area and the levymg of assessments pursuant to Ordmance 1606 and WHEREAS, on April 9, 1996 the City Council adopted Resolution Number 9018 deciarmg its intention to modify and amend the Main Street Busmess Improvement Area, and WHEREAS, no further proceedings were taken under Resolution Number 9018 (CCS) to modify and amend the Mam 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 Mam 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 Counal hereby declares its intention to modify and amend the Main Street Busmess Improvement Area ("Main Street BIA") which comprises businesses located on property bordering on either side of Mam Street from Pico Boulevard z 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 behveen Nedson 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 ihe 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 pubiic events and decoration of any public place in the area 3) Any other purposes allowable under Ordinance 16o6 SECTION 4 This modification and amendment of the Main Street BIA shall become effective upon adoption of an ordinance pursuant to Ordinance 1606 Ali assessments due under this Main Street BIA shall be payabie concurrently and at the same time as the general business license tax For failure to pay said assessments on the due date thereof, penalties shali be exacted as set forth in Section 6 04 160 of the Santa 3 1 Monica Municipal Code SECTION 5 That an assessment wdl 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 Councd, the Main Street Busmess Improvement Area assessment will be a fee equivalent to the following Business Assessment Annual Classification Eee Amount Maximum Retail 1 x Business License Tax' $ 2,000 00 Recreation and $100 00 Flat Fee $ 100 00 Entertainment AgenUBroker $100 00 Flat Fee $ 100 00 Auto Dealer $100.00 Flat Fee $ 100 00 Contractor/Subcontractor $100 00 Flat Fee $ 100 0~ Co rpo ra te/Ad m m istrative Headquarters $100.00 Flat Fee ~ 100 00 Professions $100 00 Flat Fee $ 100 00 Manufacturers $100 00 Flat Fee S 100 00 Services $100 00 Flat Fee $ 100 00 Whofesalers $100 00 Flat Fee $ ~00 00 Utilities $100 00 Flat Fee $ 100 00 *Business License Tax rates are set forth in Article 6 of the Santa Monica Municipal Code 4 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 m accordance with the provisions of Article IX of the Santa Monica Muniapal Code SECTION 7 The improvements and actroities to be provided in the area will be funded by the levy of assessments descnbed m Section 5 above The revenues from such assessments shall be used exclusively within the Main Street BIA descnbed 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 Apnl 13, 1999 , or as soon ihereafter as the matter may be heard, m the temporary City Counal Chambers located at the Main Library Auditorium at 1343 6th Street, Santa Monica, Califorrna At such public hearing, the City Council will hear public testimony on the proposed Main Street BIA, mcluding any protests and ob~ections 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 // /! // 5 SECTION 10 The City Clerk shall certify to the adoption of this Resolut+on, and thenceforth and thereafter the same shall be in full force and effect APPROVED AS TO FORM I ,~/ `-'~-~`""- ~~ I; , `. ~ ITY ATTORNEY Adopted and approved this 23rd of March, 1999 t ~~'b1 ~=~~~- - P m O'Connor, Mayor I, Mana M Stewart, City Clerk of the City of Santa Monica, do hereby certify that the foregoing Resolution 9381 (CCS) was duly adopted at a meeting of the Santa Monica City Councd held on the 23rd of March, 1999 by the following vote Ayes Councdmembers Feinstein, Genser, Holbrook, McKeown, O'Connor, Rosenstein Noes Councilmembers None Abstain Councdmembers None Absent Councilmembers None ATTEST ~_ ` C ~ \.l..~a W . ~Qs.,.~ \ Mana M Stewart, City Clerk f:\atty\muni\laws\mox\assessmt.2 City Councll Meetlnq: Apr~l 9, 1996 Santa Monica, Callfornia RESOLUTION NUMBER `~G'(?~ (CCS) (CITY COUNCZL SERIES) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA DECLARZNG ITS INTENTION TO ESTABLISH A MAIN STREET BUSINESS IMPROVEMENT AREA w~HEREAS, the City Council of the City of Santa Monica proposes to establish a new Business Improvement Area for the Main Street commercial area as more particularly described herein; and WHEREAS, the Ci:y Council, on November 14, 1995, directed staff to prepare a Resolution of Intention to establish a Main Street Business Improvement Area, and WHEREAS, in preparation for the proceedings relating to such Resolution, staff caused to be prepared a financial consultant's report (hereinafter "Report") to provide analysis of the proposed Business Improvement Area; and WHEREAS, Ordinance 1606 of the City of Santa Monica, adopted November 26, 1991, as amended by Ordinance 1845, adopted March 19, 1996,(hereinafter "Ordinance 1606") sets forth the procedures by which new Business Iaprovement Areas may be farmed wlthin the C1ty; and WHEREAS, i~ has been dete`-mined by the C~ty Council that proceedings be commenced for the formation of such Business Improvement Area and the levying of assessaents pursuant to City Ordinance 1606 (as amended by Ordinance 1845); NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES HEREBY RESOLVE AS FOLIAWS: SECmION 1. That thls C1ty Council hereby declares its intention to establish a Business Improvement Area ("BIA") which shall be comprised of all commercially zoned parcels within that area bounded on the north by Pico Boulevard, the west by Neilson 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, a map of which is included as Exhibit D to the Report and inccrporated herein by reference. SEC:ION 2. That the assessments levied within such proposed BIA shall be used for any of the followinq purposes: 1) Operation and maintenance of the capital improvements i to be constructed pursuant to the Main St:eet Streetscape Improvement Plan, and supplemental operation and maintenance activities within the Main Street BIA as requlred. 2) General promotion and aarket~nq of coaaercial t:ade activities within the BIA, promotion oP oublic events and decoration of any public place in the area. 3) Any other purposes allowable under Ordinance 1606. SECTION 3. That this BIA shall become effective on January 1, 1997. All assessments due under such BIA shall be payable concurrently and at the same time as the general buslness license tax. For failure to pay said assessments on the due date thereof, genalties shall be exacted as set forth in Section 6.04.160 oP the Santa Monica Municipal Code. SECTION 4. That an assessment will be levied against all person or entities operating a business establishment within such proposed Main Street BIA. For fees due July 1, 1997, the Main Street BI~ assessment will be a fee equivalent to the following (all fees calculated on calendar 1996 gross receipts): Business Cl ifi ti Assessment A t F Annual t~ri ~ Annual y ass ca Retail ee moun on o.l~ of Gross Receipts m~ n $25.00 ~ ~ym $1,000.00 All Others $25 flat fee $25.00 $25.00 t , For fees due July 1, 1998, and thereafter unless amended by City Council, the Main Street BIA assessaent wi~l be a fee equivalent to the following (all fees calculated on gross recei~ts for the preceding calendar year): Business Assessment Annual Annual Classification Fee ?~mount Minimum Mav,.~„m Retail 0.2~ of Gross Receipts* $200.00 $3,000.00 All Others 0.1$ of Gross Receipts* $200.00 51,000.00 *Gross Receipts is defined in Santa Monica Municipal Code, Article 6, Sectlon 6.Q4,~10 (d). SECTION 5. That the improvements and activities to be provided in the area will be funded by the levy of assessments described in Section 4 above. The revenues from such assessments shall be used exclusively within the BIA described herein, and shall not be used to provide improvements or activities outside such BIA. SECTION 6. That the City Council hereby finds and deelares that the businesses and the property within the proposed BIA will be benefitted by the improvements and activities funded by the assessments proposed to be levled. SECTION 7. That a public hearing on the e5tablishment of the proposed Main Street BIA will be held on Tuesday, May 14, 1996 at 6:30 p.m. in the City Councll Chambers, 1685 Main Street, Santa ?Sonica, California. At such public hearing, the City Council will hear public testimony on the proposed BIA, including any protests and objections to the establishment of such BIA. SECTION 8. That notice of such public hearing shall be published and mailed in accordance wlth Section 8 of City Ordlnance 1606. A copy of Ordinance 1606 is on file in the office of the City Clerk of Santa Monica. SECTION 9. The City Clerk shall certify to the adoption o£ this Resolution, and thenceforth and thereafter the same shall be in full force and effect. APPROVED AS TO FORM: J ^~ I - ~'~-~4/~ '"~°"~{ ~ MARSHA JONES MOUTRIE City Attorney