SR-213-007 (3)
F:\RESOURCE\SHARE\GWENSH\STAFREPT\MontanaBID.WPD
Council Meeting: April 18, 2000 Santa Monica, California
TO: Mayor and City Council
FROM: City Staff
SUBJECT: Recommendation to Hold a Public Hearing and Introduce for First Reading an
Ordinance to Amend the Montana Avenue Business Improvement District
Levy Beginning July 1, 2000.
Introduction
This report recommends that the City Council hold a public hearing and introduce for first
reading the attached ordinance to modify and amend fees levied in the Montana Avenue
Business Improvement District beginning July 1, 2000.
Background and Discussion
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,
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which provided for the levy of an assessment on Montana businesses between 6 Court
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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.
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
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to a sliding scale based on gross receipts similar to those used for the Main Street and
Pico BIDs.
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, to be collected at the same time as the business license
tax. 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 recommends that the fee for those new businesses or
businesses grossing less than $20,000 per year be half the minimum, or $40.00. The
proposed rate changes would increase the annual fund to approximately $69,000 for
promotion of business activities in the area.
The penalty for late payment of BID assessments is the same as the penalty for late
payment for the Business License Tax, which is 20% of the amount due on Sept. 1, and
an additional 10% each month thereafter, up to a maximum of 100%.
On March 28, 2000, the City Council approved Resolution No. 9495, which declared its
intention to amend the fees levied for the Montana Avenue Business Improvement District
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(BID), and set a public hearing for first reading of the proposed ordinance on April 18,
2000. Staff has prepared and mailed notices regarding this public hearing to affected
Business License Holders within the area of the proposed Montana Avenue BID and
published the Resolution of Intent No. 9495 (CCS) more than ten days in advance as
required by the provisions of Part 5 of Division 18 in Section 36000 of the Street &
Highways Code under which the Montana BID was formed.
As of April 9, 2000, 46 petitions in favor of and 5 protests against the proposed BID have
been received by the Santa Monica Chamber of Commerce.
The 1974 contract with the Santa Monica Chamber of Commerce provides that the
revenues from the BID be forwarded to the Chamber less the 5% retention by the City to
cover the costs of collection. The funds are to be used for the general promotion of retail
trade activities within the boundaries of the area, and the administration thereof. No set
amount or percentage for administration is defined in the contract. The Chamber is
required to provide the City with a full and complete accounting of its expenditures on
behalf of the Montana BID on an annual basis, which it has done. The City may terminate
the agreement upon violation by the Chamber of its terms. There is no other method of
termination or fixed expiration date mentioned in the contract.
BUDGET/FINANCIAL IMPACT
The proposed business improvement district fees from Montana Avenue merchants and
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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 sufficient to cover administrative costs associated
with printing, postage, and billing. There would be no other financial/budgetary impacts
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RECOMMENDATION
City staff recommends that the City Council hold a public hearing and introduce for first
reading the attached ordinance to modify and amend fees levied in the Montana Avenue
Business Improvement District beginning July 1, 2000.
Prepared by: Jeff Mathieu, Director, Resource Management Department
Mark Richter, Economic Development Division Manager
Gwen Pentecost, Sr. Admin. Analyst, Economic Development Div.
Attachment: Ordinance
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