SR-213-007
Santa Monica, California
RMD:F/SHARE/GWENSH/STAFRPT/MontanaSetPH.doc
City Council Meeting: March 28, 2000
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 Montana Avenue
Business Improvement District beginning July 1, 2000, and Set a
Public Hearing for April 25, 2000, for the Purpose of Hearing
Testimony.
INTRODUCTION
This report recommends that the City Council adopt the attached resolution
declaring its intention to modify and amend the Montana Avenue Business
Improvement District beginning July 1, 2000, and to set a public hearing for April
25, 2000, for the purpose of hearing testimony.
BACKGROUND
The Montana Avenue Business Improvement District (Montana BID) was first
established on July 9, 1974, with the adoption of Ordinance Number 960 (CCS)
by the City Council, which provided for the levy of an assessment on Montana
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businesses between 6 Court and 17 Street on Montana Boulevard. The fee
thus levied was last increased in 1995 to $200 for retail, recreation, and
entertainment businesses, and $80 for all non-retail businesses. It creates a
fund of approximately $48,600 per year in total.
The City retains 5% to cover the costs of administration, before forwarding to the
Santa Monica Chamber of Commerce, which administers the funds derived from
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the Montana BID pursuant to Contract No 2134 (CCS) with the City. The
Chamber retains an additional 10% to cover the costs of administration, support,
and liability insurance, etc., leaving approximately $40,000 per year for use by
the Montana Merchants Association.
DISCUSSION
During the past two years, the Montana Merchants Association has investigated
means of increasing advertising, promotions, and publicity for Montana Avenue,
and has determined that the present level of funding is inadequate for meeting
the needs of the district. Additionally, they have expressed interest in a change
in formula from the present flat fee to a sliding scale based on gross receipts. A
similar sliding scale formula is presently in place on Main Street and the Bayside
District, and is currently being contemplated by Pico Boulevard.
Accordingly, on January 20, 2000, the Montana Avenue Merchants Association
voted to change the assessment formula as follows: for retail, recreation, and
entertainment business license holders, a sliding scale equivalent to the business
license fee up to an annual maximum of $1,000. For other business categories,
the fee would remain unchanged at $80 per year if that business grossed
$20,000 or more during the year for which the business license renewal fee was
based. In a manner similar to that proposed for the smallest businesses on Pico,
City staff is recommending that the fee for those new businesses or businesses
grossing less than $20,000 per year would be half the minimum, or $40.00. The
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proposed rate changes would increase the annual fund to approximately $69,000
for promotion of business activities in the area.
This action was followed by a petition from the Merchants Association, mailed to
approximately Montana Avenue 300 businesses on Montana Avenue, requesting
that the City raise the annual BID fees accordingly, and set a public hearing for
that purpose. As of March 21, 2000, 48 businesses have responded to the
Chamber of Commerce, 43 favorably. Members of the Merchants Association
Board of Directors and Block Captains have been actively soliciting additional
petition responses.
Questions have been raised regarding how to best assist those businesses
which are new or grossing less than $20,000 income. Staff has considered this
issue and researched the impact of changing the fees for these small and low
revenue-producing business license holders, and recommends the following:
that business license holders pay half the proposed minimum, or $40.00 per year
if they are new or grossed less than $20,000 during the year for which their
business license renewal fee is calculated.
Budget/Financial Impact
The proposed business improvement district fees from Montana Avenue
merchants and property owners are projected to be approximately $81,000 per
year. This will be included in the FY 2000/01 budget. The 5% retention by the
City would be approximately $4,050. Staff calculates this amount would be
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sufficient to cover administrative costs associated with printing, postage, and
billing. 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 Montana Avenue Business
Improvement District beginning July 1, 2000, and to set a public hearing for April
25, 2000, for the purpose of hearing testimony.
Prepared by: Jeff Mathieu, Director, Resource Management Department
Mark Richter, Economic Development Division Manager
Gwen Pentecost, Sr. Admin. Analyst, Economic Development
Attachment: Resolution of Intention
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