SR-02-10-2015-8DCity Council Meeting: February 10, 2015
Agenda Item:
To: Mayor and City Council
From: Andy Agle, Director of Housing and Economic Development
Subject: Potential Modification and Expansion of Downtown Assessment District
Recommended Action
Staff recommends that the City Council:
1. Review and comment on the Draft Colorado Avenue Overlay Management Plan and
Engineer's Report and the Draft Lincoln Boulevard Property -Based Assessment
District Management Plan and Engineer's Report; and
2. Approve the proposed plans including City funding for the payment of general benefits
associated with the assessment areas; and
3. Authorize the City Manager to sign petitions relating to the City -owned parcels located
within the proposed Colorado Overlay.
Executive Summary
Downtown stakeholders on Colorado Avenue have been exploring the modification of the
existing Downtown Property -Based Assessment District (PBAD) to incorporate an overlay
benefit zone on Colorado to provide additional services above those services already
provided, in anticipation of the opening of the Expo terminus station and the Colorado
Esplanade. Concurrently, Downtown stakeholders on Lincoln Boulevard have also been
exploring the establishment of a PBAD on Lincoln to provide a level of services similar to
what is currently provided in the Downtown PBAD.
Downtown Santa Monica Inc. (DTSM) has proposed draft management plans and
engineer's reports for each area. If Council supports the recommendations described in
the management plans, DTSM would initiate the Proposition 218 process to seek support
from the affected property owners through a petition drive and subsequent ballot vote to
obtain no less than 50 percent of the ballots received, weighted by assessment, to be in
support of the assessment areas to be formed. Staff recommends that the City support
the modification to the PBAD and that the City Manager sign petitions of support on
behalf of the City -owned properties located within the Colorado Overlay, which
represents an estimated assessment of $62,800 for the first year.
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In addition, staff recommends that the City pay the cost of the `general benefits'
associated with both assessment areas, if adopted. General benefits are calculated as a
percentage of each PBAD activity that may benefit the public at large related to an
enhance level of customer service provided by ambassadors. General benefits are
estimated to total $48,814 for the first year ($35,200 for the first year of the Colorado
zone and $13,614 for the first year of the Lincoln zone).
Background
On April 8 2014, Council authorized staff to collaborate with Downtown Santa Monica
Inc. (DTSM) to explore the modification of the existing Downtown Property -Based
Assessment District (PBAD) along Colorado Avenue (Colorado Overlay), as well as the
establishment of a new property -based improvement district along Lincoln Boulevard
(Lincoln PBAD) to provide expanded and enhanced services in each of the
respective areas. (See Attachment 1: Proposed Boundary Map.) Council authorization
included the allocation of funding for 50 percent of DTSM's costs associated with the
development of a work plan, assessment methodology, and public outreach. The City
also engaged a consultant to prepare an engineer's report for each proposed
assessment area that would analyze the potential special and general benefits and
assessment amounts associated with each proposal.
Special benefits are defined as activities directly benefiting each individual assessed
parcel in the PBAD. Activities such as maintenance and beautification activities are
tailored to benefit the physical characteristics of each parcel in the district and are
classified as special benefits. General benefits are attributed to PBAD activity that
benefits the general public, in particular the heightened level of safety and customer
service provided by ambassadors that benefit the general public within the boundaries of
the PBAD. Thus a portion of the budget is quantified in the engineer's report as general
benefits and must be funded by sources other than assessment revenue.
Discussion
For over a year, DTSM has facilitated meetings with property owners within the proposed
zones, as well as other stakeholders, to seek feedback and direction on the formulation
of benefit areas and in the preparation of a management plan for each area. Endorsed by
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the DTSM Board on January 22, 2015, both management plans are now presented to
Council for consideration and approval. (See Attachment 2: Draft Colorado Overlay
Management Plan and Engineer's Report and Attachment 3: Draft Lincoln Management
Plan and Engineer's Report.) A summary of each management plan follows.
Colorado Overlay Benefit Zone
The draft Colorado Overlay Management Plan recommends the modification of the
existing Downtown PBAD to create an overlay benefit zone along Colorado.
The additional pedestrian traffic and the installation of new streetscape and amenities
associated with the Expo light rail terminus and Colorado Esplanade is anticipated to
necessitate more services than are currently apportioned through the existing
Downtown PBAD. The proposed Colorado Overlay would pay for ambassador services
and enhanced maintenance benefitting property owners along Colorado between
7th Court and Ocean Avenue. The proposed enhanced maintenance would be in addition
to the City's base level of maintenance services dedicated to the Colorado Esplanade.
(See Attachment 4: Proposed Base Level of City Maintenance - Colorado Esplanade).
The base level of maintenance services provided by the City would be documented in a
service agreement between the City and DTSM. The proposed level of service included
in Attachment 4 is subject to Council consideration as part of the FY15/17 budget.
In accordance with Proposition 218 and recent case law, the 'special benefits' and
`general benefits' conferred on real property within an assessment area must be
separately identified and quantified. The costs of the services or improvements must be
apportioned so that the property owners are assessed only for the portion of the cost
representing special benefits. Special benefits represent the benefits of services or
improvements directed toward the assessed property owners, and which are over and
above any benefits that may be conferred on properties that are not assessed or enjoyed
by the general public. The law requires that determinations as to the extent of benefits
and distinctions between general and special benefits must be based on an
engineer's report. The draft Management Plan for the Colorado Overlay reflects the
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engineer's determination that a portion of ambassador services would benefit the public
at large and thereby should be classified as general benefit. The general benefit is valued
at $35,200, which represents eight percent of the total Colorado benefit zone budget.
Costs associated with the general benefits must come from sources other than
assessment revenue. Staff recommends that the general benefits portion be funded by
the City as the general benefits provide by the ambassadors constitutes a benefit to the
public at large. The total budget for the Colorado Overlay is currently proposed to be
$440,000 for the first year based on property assessment revenues of $404,800 and
general benefit funding of $35,200. As the budget for the benefit zone is adjusted
annually, the costs for general benefits would remain fixed at eight percent of the total
budget.
The assessment methodology is currently proposed to be based on each parcel's linear
frontage along Colorado Avenue. Parcels east of 5th Court would be assessed $80.51
per linear foot of frontage per year. Parcels west of 5th Court would be assessed $107.35
per linear foot of frontage per year. DTSM staff is continuing to work with the property
owners on the assessment methodology and will finalize prior to the commencement of
the petition process. The differentiated rates reflect the differences in benefits and
frequency of services to the respective areas. As with the existing Downtown PBAD,
assessment rates would be subject to annual increases of up to five percent.
The duration of the Colorado Avenue overlay benefit zone would coincide with the
existing Downtown PBAD's term limit, which ends in 2028. Governance of the overlay
zone would remain part of the existing Downtown PBAD, which is currently managed
by DTSM.
Lincoln Boulevard PBAD
The draft Lincoln Boulevard PBAD Management Plan proposes a new property -based
assessment district along Lincoln between the 1 -10 Freeway and Wilshire Boulevard.
The management plan recommends providing services and assessments similar to that
of the current Downtown PBAD, including enhanced maintenance, ambassador services,
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additional marketing, and beautification projects such as signage, seating, holiday decor,
and planters.
As explained above, the special benefits and general benefits conferred on real property
and the public at large within an assessment district must be separately identified and
quantified. The draft Lincoln PBAD Management Plan reflects the engineer's
determination that a proportion of the customer services provided by the PBAD
ambassadors would benefit the public at large and thereby should be classified as
general benefit. The general benefit is valued at $13,614, which represents
approximately three percent of the total Lincoln PBAD budget. Staff recommends that the
general benefits portion be funded by the City as it constitutes a benefit to the
general public.
The total budget for the Lincoln PBAD is currently proposed to be $456,500 for the first
year based on property assessment revenues of $442,886 and general benefit funding of
$13,614. As the budget for the benefit zone is adjusted annually, the general benefit
share would remain fixed at approximately three percent of the total budget.
The current assessment methodology for the Lincoln PBAD is proposed to be based
upon the greater of the lot or building square footage for each parcel and adjusted by
parcel type. Commercial parcels would be assessed 39.7 cents per square foot per year,
residential parcels would be assessed 34.5 cents per square foot per year, and parcels
owned by non - profit organizations would be assessed 17.3 cents per square foot
per year. As with the existing Downtown PBAD, assessment rates would be subject to
annual increases of up to five percent. DTSM staff is continuing to work with the property
owners on the assessment methodology and will finalize prior to the commencement of
the petition process. The duration of the Lincoln PBAD would coincide with the existing
Downtown PBAD's term limit, which ends in 2028. Governance of the Lincoln PBAD
would be managed by DTSM. DTSM would add a Lincoln PBAD property owner seat to
the existing composition of property -owner members of the Board of Directors.
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Petition Process
With Council support of the management plans, DTSM would initiate the petition process
among the respective property owners to determine if there is at least majority support
(weighted by proposed assessment amount) for placing the questions of establishing an
overlay benefit zone and of establishing a new district on ballots for a vote. The petition
process is a prerequisite for a ballot vote.
Council is asked to authorize the City Manager to sign petitions on behalf of two
City -owned parcels located within the proposed Colorado Overlay: 215 Colorado Avenue
(Parking Structure No. 8) and 402 Colorado Avenue (Expo terminus site.) The proposed
total assessment amount is $62,800 ($33,815 for 215 Colorado and $28,985 for 402
Colorado) for the first year, representing 15.4 percent of the total Colorado Overlay
proposed assessments. It is expected that within the first year of the assessment period,
Metro would take ownership of 402 Colorado Avenue and the assessment would be
Metro's obligation thereafter. The City.does not own any properties within the proposed
Lincoln PBAD.
In addition to the two
City -owned properties within the
proposed Colorado
Overlay,
the City owns property
at 612 Colorado that is part of
the Big Blue Bus
campus.
The BBB campus is not
included in the Downtown PBAD
nor is it within the
proposed
Colorado Overlay. However, recognizing that the BBB campus would receive benefits
from the Colorado Overlay, City and DTSM staff has discussed the possibility of the City
voluntarily contracting for overlay services for the 320 linear feet of the BBB campus that
runs along Colorado between 6th and 71t' streets equivalent to the assessed rate of
$80.51 per linear foot of frontage per year, totaling $25,763. If the Colorado Overlay is
successfully enacted, staff will seek Council authorization to enter into a contractual
service agreement with DTSM.
Future Council Action
If the petition threshold is met for each of the areas, Council would be asked to hold
public hearings and adopt a resolution of intention for each assessment area. The City
would prepare and mail out ballots to all property owners within the boundaries of each
proposed assessment area. Council would be asked to authorize the City Manager to
vote the City's ballots for its properties on Colorado Avenue.
Proposition 218 requires a property owner ballot vote with no less than 50 percent of the
ballots received, weighted by assessment, to be in support of the assessment areas to
be formed. If each area is approved by the majority of property owners, Council would
consider resolutions approving the formation of the Colorado Overlay and the
Lincoln PBAD. Assessments would be recorded and sent to the Los Angeles County Tax
Assessor's Office by its August 2015 deadline. If the process is not completed by then,
assessments would be levied on the following year's tax rolls.
Existing baseline services and enhanced maintenance in Downtown is governed by
service and maintenance agreements between the City and DTSM. The agreements
also include an administration fee to recover City costs for collecting assessments and
transferring funds to DTSM. If one or both of the proposed assessments are adopted,
the agreements would be amended to reflect the enhanced services. The City's
Administration fee formula would remain unchanged for PBAD. Currently it's
approximately $74 per parcel per year and is adjusted by CIP each year. The Colorado
Overlay would generate $1,705 in revenue in the first year and the Lincoln PBAD would
generate $6,303.
Commission Action
The Management Plans were endorsed by the DTSM Board of Directors at its
January 22, 2015 meeting.
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Financial Impacts & Budget Actions
There is no immediate financial impact or budget action necessary as a result of the
recommended action. If the petition threshold is met for one or both of the areas, staff
would return to Council for specific budget actions and would propose to fund the general
benefits as part of the FY15 -17 biennial budget.
Prepared by: Elana Buegoff, Sr. Development Analyst
Approved:
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Andy Agle, Diro4tjo
Housing and Economic Development
Attachments:
Forwarded to Council:
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Elaine M. Polachek
Interim City Manager
Attachment 1. Proposed Boundary Map
Attachment 2. Draft Colorado Overlay Management Plan & Engineer's Report
Attachment 3. Draft Lincoln Management Plan & Engineer's Report
Attachment 4. City Base Level of Services Colorado Esplanade
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Attachment 2
COLORADO AVENUE
PROPERTY -BASED BUSINESS ASSESSMENT DISTRICT (PBAD) OVERLAY
MANAGEMENTPLAN
January 29, 2oa5 — DRAFT
CONTENTS
Management Plan Summary
I. What is a PBAD?
II. PBAD Overlay Boundaries
III. Improvements and Activities
a. Environment
b. Administration
IV. Plan Budgets
V. Assessments
a. Assessment Methodology
b. Calculation of Assessments
c. Assessment Adjustments
VI. Governance
Exhibits:
• Engineer's Report
• List of properties
• Map with parcel detail
• Base level of service letterfrom City of Santa Monica
Prepared for the Colorado Avenue PBAD Overlay Steering Committee
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Progressive Urban Management Associates, Inc.
Kristin Lowell, Inc.
1
Attachment 2
COLORADO AVENUE
PROPERTY -BASED BUSINESS ASSESSMENT DISTRICT (PBAD) OVERLAY
MANAGEMENTPLAN
SUMMARY
January 29, 2o9.5- DRAFT PLAN
The Colorado Avenue Property -Based Business Assessment District (PBAD) Overlay is a special benefit
assessment district that provides special benefits to each individual assessment parcel located within
the district overlay boundaries. As described in this plan, it is proposed that the PBAD Overlay will
provide funding for enhanced maintenance and safety, above and beyond those provided by both the
City of Santa Monica and the underlying Downtown Santa Monica PBAD.
Location
The district overlay will include properties along Colorado Avenue between Ocean
Avenue and 7th Court and coincide with the new Esplanade and Metro Expo Line
Station improvements. A map of the proposed Overlay district boundary is
provided on page 4.
Improvements &
The PBAD Overlay will finance improvements and activities that will improve the
Activities
Colorado Avenue corridor's environment and experience of property owners,
residents, workers and visitors, including:
• Maintenance Teams that sweep, scrub and pressure wash sidewalks,
remove litter and graffiti, increase the frequency of trash removal and
maintain landscaping along Colorado Avenue.
• Safety & Hospitality Ambassadors that provide information on activities
and attractions, work with local police, and business and property owners
to prevent crime and reduce homelessness and quality of life issues.
Method of
Levy of assessments upon real property that benefit from improvements and
Financing
activities.
Budget
Total district budget for its first year of operations is $440,000
Clean $264,000
Safe $176,000
Total $440,000
General Benefit Allowance: An allowance is made for general benefits that the
district overlay may provide outside of the overlay boundaries. Any PBAD services
that are found to provide general benefit cannot be paid for with assessment
revenue. A certified engineer has estimated that the general benefit from services
accounts for $35,200 of the estimated budget, resulting in a total assessment
budget of $404,800. See Full budget detail for the breakdown in Section 1V of this
Management Plan.
Attachment 2
Cost
Annual assessments are based upon each properties special benefit received from the
activities provided. The assessment rate is apportioned to the linear front footage of
all parcels along the Colorado PBAD Overlay corridor.
Properties west of S`h Court will pay a full assessment amount for services since these
properties will be fronting the planned Esplanade improvements and will be impacted
by the anticipated majority of new pedestrian traffic created by the Expo Line Station.
Properties east of 5ch Court will pay three - quarters of the assessment amount since
they will not be fronting Esplanade improvements and will be impacted by less
pedestrian traffic created by the Expo Line Station. The estimated assessment rates
are as follows:
Estimated Rates of Assessment
Per Linear Foot of Frontage
East of S` Court Pays
$80.Si
West of 5` Court Pays
$10735
Cap
Annual assessments may increase no more than 5% per year consistent with the
increase in consumer price index (CPI) and increases in program costs. The
determination of annual adjustments in assessment rates will be subject to the review
and approval of the board of Downtown Santa Monica Inc.
City Services
The City of Santa Monica provided an accounting of baseline services that are currently
provided within the District and will continue through the duration of the planned
renewal. The City base level service agreement is included as an Exhibit.
Collection
PBAD Overlay assessments appear as a separate line item on the annual Los Angeles
County property tax bills.
District
The PBAD Overlay will be governed as part of the existing PBAD which is currently
Governance
managed bythe Downtown Santa Monica, Inc. Board of Directors.
District
California law for PBAD district formation requires the submission of petitions signed
Formation
by property owners in the proposed district who will pay more than 50% of the total
assessments (i.e. petitions must represent more than So %of the $404,800 to be
assessed). Petitions are submitted to the Santa Monica's City Council and the City will
mail ballots to all affected property owners. The majority of ballots returned, as
weighted by assessments to be paid, must be in favor of the PBAD in order for the City
Council to consider approval.
Duration
Collection of the first year's assessments will be included in Los Angeles County's 2015-
2016 tax bill. Services will begin January 1, 2016 and continue through December 31,
2028, with a 13 year term that will coincide with the existing PBAD, allowing forthe
Overlay Zone and Downtown PBAD to explore formal consolidation of services in
2028.
3
Attachment 2
I. WHAT IS A PBAD?
A PBAD provides enhancement improvements and activities, such as safety, maintenance and image
enhancement, above and beyond those provided by local government. PBADs provide services that
improve the overall viability of downtown districts — resulting in higher property values, sales and tax
revenues and an improved quality of life.
Since the creation of California's Property and Business Improvement District Law in 1994, more than
loo new PBADs have been established in California downtowns, including downtown Santa Monica.
Since the legislation was enacted, there have been changes in both the character of Downtowns and
the laws that govern the application of special assessments. Downtowns, including Santa Monica have
emerged as vibrant mixed -use communities, becoming population centers in addition to their
traditional roles as business centers. Amendments to the State constitution have changed the
application of assessment laws, including PBADs, to allocate costs to all parcels that receive a benefit
from PBAD services, regardless of the parcel's use.
Process to Develop the PBAD Overlay Management Plan
To develop the Management Plan for Colorado Avenue, property and business owners have been
involved in a participatory process that was initiated in the fall of 2013. The consulting firms of
Progressive Urban Management Associates (PBAD consultant) and Kristin Lowell Inc. (certified
engineer) were retained by DTSM and the Colorado Avenue PBAD Overlay steering to develop the
Management Plan or the PBAD. Key steps included:
1. One -On -One and Roundtable Meetings with Property Owners: The DTSM staff and
consultants conducted a series of one -on -one and roundtable meetings with property owners
located along the Colorado Avenue corridor. Top improvement priorities and guiding principles
that emerged from the meetings with property owners included:
® Provide additional maintenance teams that will increase the frequency of sweeping,
scrubbing and power washing sidewalks, removing litter and graffiti and increase the
frequency of trash removal.
® Provide landscape maintenance for the new Esplanade improvements, beyond what
the City of Santa Monica provides.
• Additional man -hours for Ambassador services which will provide information on
downtown activities and establishments, improve public safety, homeless outreach and
enhance the visitor experience. And, assign an Ambassador outside the Metro station.
• Make sure that PBAD Overlay services are supplemental to and do not replace existing
City services.
2. City Participation & Base Level of Services: Concurrent with the property and business owner
outreach process to develop the PBAD Management Plan, meetings were held with City staff to
develop an accounting of current city services and a policy commitment to continue these
services with the creation of the Colorado Avenue PBAD Overlay Zone,
3. Meetings with the City of Santa Monica to review and understand the Esplanade streetscape
improvements and maintenance requirements.
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4. Plan Review and Final Plan: The draft PBAD Overlay Management Plan and budget was
reviewed by the PBAD Overlay steering committee and individual property owners. Affected
property owners were invited to a series of meetings to review the plan.
II. PBAD BOUNDARIES
The boundaries for the Overlay Zone to the PBAD will include properties along Colorado Avenue from
Ocean Avenue to 7th Court. The boundaries would coincide with the new Esplanade improvements and
additional pedestrian activity along Colorado Avenue.
A map of the proposed district boundary is below.
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Attachment 2
III. IMPROVEMENTS AND ACTIVITIES
Maintenance and Safety& Hospitality Ambassadors
Colorado Avenue's Maintenance and Safety & Hospitality Ambassador program was developed based
upon services currently being provided by DTSM's existing PBAD and contractor. It provides for a level
of service that is comparable to the existing Zone 1 maintenance and safety coverage, plus
enhancements given the higher pedestrian frequencies expected along the corridor. The Colorado
Avenue Overlay Zone's maintenance and safety Ambassadors deployment will be:
Maintenance Team
Hours of Deployment per Week
172
Average Weekly Coverage
12 hours per day /7 days per week
Litter Removal /Pan & Broom
Daily
Pressure Washing
Asneeded
Graffiti Removal
Daily as needed
Light Landscape/Weeds
Daily as needed
Emergency Spot Cleaning
As needed
Safety & Hospitality Team
Hours of Deployment per Week
112
1 -2 Ambassadors Monday thru Thursday Too a.m. to 1:0o a.m.
1 to 3 Ambassadors Friday, Saturday Too a.m. to 3:00 a.m.
2 -3 Ambassadors 10:0o a.m. to 1:0o a.m.
Foot Patrol
Daily
Visitor services, safety escorts,
motorist assist, homeless
outreach
Daily
Administration
An Administrative cost of 10% has been included within the PBAD Overlay budget. Examples of these
costs include:
• Accounting and annual financial reports,
• Program support costs including supplies, equipment and rent,
• Communications to keep all Colorado Avenue stakeholders informed of policies, issues,
challenges and opportunities,
• City of Santa Monica collection fee for PBAD assessments,
• Other administration costs associated with the overhead and administrative support of
programs.
To reduce administrative costs, increase leveraging of funds and to avoid duplication of enhanced
services, the PBAD Overlay will be managed by DTSM to deliver day -to -day services. DTSM can
leverage PBAD Overlay assessments with additional revenues, including sponsorship revenues,
contracts, grants and earned income.
0
Attachment 2
IV. PLAN BUDGETS
The total improvement and activity plan budget for the first year of the district is projected at $440,000
with the following components:
(a) Non - assessment funding will be required to cover the cost associated with general benefits
from services.
Thirteen Year Operating Budget
A projected thirteen year operating budget for the Colorado Avenue PBAD Overlay is below.
Projections forthe budget are based upon the following assumptions:
o Total program revenue increases no more than 5% per year, the maximum allowed under the
proposed annual budget adjustment to respond to increases in the consumer price index and
other program costs. Actual budgets may not increase 5% as determined by DTSM board of
directors.
® Revenues for specific activities within the general activity categories (i.e. Clean & Safety) may
be reallocated among specific activities from yearto year based upon district needs and
budgets developed by the DTSM board of directors.
Year
SERVICES
DTSM Admin (10 %)
TOTAL BUDGET
Maintenance
$240,000
$24,000
$264,000
Safety & Hospitality
$16o,000
$16,000
$176,000
Less Allowance for General Benefit (a)
$542,471
Year
($35,200)
TOTAL
$598,074
Year 10
$404,800
(a) Non - assessment funding will be required to cover the cost associated with general benefits
from services.
Thirteen Year Operating Budget
A projected thirteen year operating budget for the Colorado Avenue PBAD Overlay is below.
Projections forthe budget are based upon the following assumptions:
o Total program revenue increases no more than 5% per year, the maximum allowed under the
proposed annual budget adjustment to respond to increases in the consumer price index and
other program costs. Actual budgets may not increase 5% as determined by DTSM board of
directors.
® Revenues for specific activities within the general activity categories (i.e. Clean & Safety) may
be reallocated among specific activities from yearto year based upon district needs and
budgets developed by the DTSM board of directors.
Year
$404,800
Year
$425,040
Year
$446,292
Year
$468,607
Year
$492,037
Year
$516,639
Year
$542,471
Year
$569,594
Year
$598,074
Year 10
$627,978
Year 11
$659,377
Year 12
$692,345
Year 13
$726,963
Attachment 2
Maximum Annual Assessment Rates: the foot of linear frontage
V. ASSESSMENTS
A. Assessment Methodology
To develop the PBAD Overlay assessment methodology, the consulting team included participation
from Kristin Lowell Inc., a certified engineer. Lowell evaluated several methods of assessment for
conveying special benefits to each individual assessed parcel from the type of improvements and
activities described within the Colorado Avenue PBAD Overlay Management Plan.
Additional information and justification for the proposed assessment methods and adjustments is provided
in the Engineer's Report, prepared by Kristin Lowell Inc. and is provided as an attachment to the Final
Management Plan.
Benefit Allocation Approach: The proposed assessment methodologies are based upon an analysis of
the special benefit provided to each property and the cost associated to each property to provide the
PBAD activities equal to the special benefit it receives.
Assessment Variables: The assessment methodology for the Colorado Avenue PBAD Overlay is based
upon per linear foot of frontage for each parcel of real property.
Property Use Considerations: Commercial and Residential properties will receive full benefit from
clean and safe and hospitality and will be assessed fully for them.
East of Sth Court
West of 5th Court
Year 1
$80.51
$107.35
Year 2
$84.54
$112.72
Year 3
$88.76
$118.35
Year 4
$93.20
$124.27
Years
$97.86
$130.48
Year 6
$102.75
$137.01
Year 7
$107.89
$143.86
Year 8
$113.29
$151.05
Year 9
$118.95
$158.60
Year 10
$124.90
$166.54
Year 11
$131.14
$174.86
Year 12
$137.70
$183.60
Year 13
$144.58
$192.79
V. ASSESSMENTS
A. Assessment Methodology
To develop the PBAD Overlay assessment methodology, the consulting team included participation
from Kristin Lowell Inc., a certified engineer. Lowell evaluated several methods of assessment for
conveying special benefits to each individual assessed parcel from the type of improvements and
activities described within the Colorado Avenue PBAD Overlay Management Plan.
Additional information and justification for the proposed assessment methods and adjustments is provided
in the Engineer's Report, prepared by Kristin Lowell Inc. and is provided as an attachment to the Final
Management Plan.
Benefit Allocation Approach: The proposed assessment methodologies are based upon an analysis of
the special benefit provided to each property and the cost associated to each property to provide the
PBAD activities equal to the special benefit it receives.
Assessment Variables: The assessment methodology for the Colorado Avenue PBAD Overlay is based
upon per linear foot of frontage for each parcel of real property.
Property Use Considerations: Commercial and Residential properties will receive full benefit from
clean and safe and hospitality and will be assessed fully for them.
Attachment 2
B. Calculation of Assessments
The preceding methodology is applied to a database that has been constructed by DTSM with primary
data provided by the City of Santa Monica. A list of all properties to be included in the PBAD Overlay is
provided as an Exhibit.
The assessments are based on anticipated service frequencies.
Estimated Rates of Assessment
Per Linear Foot of Frontage
East of 5t Court
s80.52
West of 5` Court
$107.35
Assessments will not exceed the above amounts during the first year of the PBAD Overlay.
Calculation Rates: The following examples illustrate how the preceding rates are applied to parcels
along the Colorado Avenue corridor.
Property Characteristic
Frontage
Rate
Annual Assessment
East of 5` Court
150
$80.51
$12,076.50
West of 5i Court
150
$107.35
$16,1.02.50
C. Assessment Adjustments
Annual Adjustment: Annual assessment rates may be adjusted for annual changes in the Consumer
Price Index (CPI) for all urban consumers and/or other changes in programs costs, not to exceed 5 %.
Actual annual adjustments range from 0% to 5 %. Assessment adjustments will be contingent upon
recommendation from the DTSM board of directors.
Board Adjustment: Any annual budget surplus or deficit will be rolled into the following year's PBAD
Overlay Zone budget. Assessments will be set accordingly, within the constraints of the CPI
adjustment, to adjust for surpluses or deficits that are carried forward.
General Benefit Adjustment: The PBAD Overlay Zone's Engineer's Report has found thatthe PBAD
Overlay may provide general benefit (i.e. benefits to the general public or surrounding community) that
is intangible and unquantifiable. To account for any general benefit a 20% general benefit adjustment
has been established. Accordingly 20% of the total PBAD budget ($35,200) will be funded annually by
non - assessment revenue.
Time and Manner for Colleting Assessments: As provide by State law, the City of Santa Monica PBAD
Overlay assessment appears as a separate line item on annual property tax bills prepared by the County
of Los Angeles. Property tax bills are distributed in the fall and payment is expected by lump sum or
installment. Existing laws for enforcement and appeal of property taxes apply to PBAD Overlay
assessments.
Disestablishment: State law provides for the disestablishment of a PBAD Overlay pursuant to an
annual review process. Each year that the PBAD Overlay is inexistence, there will be a 30-day period
during which the property owners will have the opportunity to request disestablishment of the district.
9
Attachment 2
This 30-day period begins each year on the anniversary day that the district was first established by the
City Council. Within that 3o -day period, if a written petition is submitted by the owners of real property
who pay 5o percent ( %) or more of the assessments levied, the PBAD Overlay may be disestablished.
The City Council will hold a public hearing on disestablishing the PBAD Overlay prior to actually doing
SO.
UIiSeIH9Zi t7\r-A\[N4
The Colorado Avenue PBAD Overlay, will be governed as part of the existing PBAD which is currently
managed by the Downtown Santa Monica, Inc. (DTSM) Board of Directors. DTSM is an existing 503. (c)
6 California non - profit corporation serving as the PBAD Owner's Association. As part of the
Management Plan, DTSM will manage the delivery of day -to -day PBAD Overlay services in order to:
• Reduce overall administrative costs of the PBAD Overlay,
• Leverage PBAD funds with other resources and capabilities provided by DTSM,
• Eliminate the potential for duplication of enhanced services and activities, and
• Ensure that Downtown is represented by a unified voice, thereby maximizing Downtown's
influence in policies and civic affairs.
Pursuant to the State of California PBAD legislation the DTSM Board of Directors is subject to
disclosure and notification guidelines set by the Ralph M. Brown Act and California Public Records Act.
m
Santa Monica, California
January 2015
Prepared by:
Kristin Lowell Inc.
Prepared pursuant to:
Prepared pursuant to the State of California
Property and Business Improvement District Law of 1994
And Article XIIID of the California Constitution
to create a property based assessment district
ENGINEER'S STATEMENT ................................................. ..............................1
SECTION A: Legislative and Judicial Review ................. ..............................2
SECTION B: Improvements and Activities ...................... ..............................4
SECTION C: Benefitting Parcels ..................................... ............................... 6
SECTION D: Proportional Benefits ................................. ............................... 8
SECTION E: Special and General Benefits .................... ............................... 9
SECTION F: Cost Estimate .............................................. .............................13
SECTION G: Apportionment Method .............................. .............................14
SECTION H: Assessment Roll ......................................... .............................16
c
This Report is prepared pursuant to Article XIIID of the California State Constitution (Proposition
218) and the State of California Property and Business Improvement District Law of 1994 as
amended.
The Colorado Avenue Property -based Business Assessment District ( "PBAD ") Overlay will
provide funding for enhanced maintenance and safety, above and beyond those provided by
both the City of Santa Monica and the underlying Downtown Santa Monica PBAD. Every
individual assessed parcel within the PBAD receives special benefit from the activities identified
under Section B of this Report. Only those individual assessed parcels within the PBAD receive
the special benefit of the proposed activities; parcels contiguous to and outside the PBAD and
the public at large may receive a general benefit, as outlined in Section E. The cost to provide
general benefits, if any, will be funded from sources other than special assessments.
The duration of the proposed PBAD Overlay is thirteen (13) years, commencing January 1,
2016 and continue through December 31, 2028. This term will coincide with the existing PBAD
allowing for the Overlay zone and the Downtown PBAD to explore formal consolidation of
services in 2028.
An estimated budget for the PBAD improvements and activities is set forth in Section D. The
annual budget may increase no more than 5% per year consistent with the increase in
consumer price index (CPI) and increases in program costs. The determination of annual
budget adjustments and assessment rates will be subject to the review and approval of the
board of Downtown Santa Monica Inc. Funding for the PBAD improvements and activities shall
be derived from a property -based assessment of each specially benefitted parcel in the PBAD.
A detailed description of the methodology for determining the proportional special benefit each
individual assessable parcel receives from the activities and the assessment for each parcel is
set forth in Section F.
I hereby certify to the best of my professional knowledge that each of the identified assessable
parcels located within the PBAD will receive a special benefit over and above the benefits
conferred to those parcels outside of the PBAD boundary and to the public at large and that the
amount of the proposed special assessment is proportional to, and no greater than the special
benefits received.
Respectfully submitted,
Terrance E. Lowell, P.E.
The State Law is the legislation that authorizes the City to levy assessments upon real property
for the purposes of providing improvements and activities that specially benefit each individual
assessed parcel in the PBAD. The purpose of the PBAD is to encourage commerce,
investment, and business activities. In order to meet these goals PBADs typically fund activities
and improvements, such as, enhanced safety and cleaning. Unlike other assessment districts
which fund the construction of public capital improvements or maintenance thereof, PBADs
provide activities and improvements "to promote the economic revitalization and physical
maintenance of the business districts of its cities in order to create jobs, attract new businesses,
and prevent the erosion of the business districts." (Streets and Highways Code Section
36601(b)). The improvements and activities funded through the PBAD are over and above those
already provided by the City within the PBAD's boundaries. Each of the PBAD activities or
improvements is intended to increase building occupancy and lease rates, to encourage new
business development, attract businesses that serve the community, and improve the quality of
life.
Specifically, the State Law defines "Improvements" and "Activities' as follows:
"Improvement" means the acquisition, construction, installation, or maintenance of any
tangible property with an estimated useful life of five years..."'
"Activities" means, but is not limited to, all of the following:
(a) Promotion of public events which benefit businesses or real property in the district.
(b) Furnishing of music in any public place within the district.
(c) Promotion of tourism within the district.
(d) Marketing and economic development, including retail retention and recruitment.
(e) Providing safety, sanitation, graffiti removal, street and sidewalk cleaning, and
other municipal services supplemental to those normally provided by the municipality.
(f) Activities which benefit businesses and real property located in the district 2
Article XIIID of the State Constitution
In 1996, California voters approved Proposition 218, codified in part as Article XIIID of the State
Constitution. Among other requirements, Article XIIID changes the way local agencies enact
local taxes and levy assessments on real property. It states, in relevant part, that:
(a) An agency which proposes to levy an assessment shall identify all parcels which will
have a special benefit conferred upon them and upon which an assessment will be
imposed. The proportionate special benefit derived by each identified parcel shall be
determined in relationship to the entirety of the capital cost of a public improvement, the
maintenance and operation expenses of a public improvement, or the cost of the
property related service being provided. No assessment shall be imposed on any parcel
which exceeds the reasonable cost of the proportional special benefit conferred on that
parcel. Only special benefits are assessable, and an agency shall separate the general
California Streets and Highways Code, Section 36610.
2 California Streets and Highways Code, Section 36613.
benefits from the special benefits conferred on a parcel. Parcels within a district that are
owned or used by any agency, the State of California or the United States shall not be
exempt from assessment unless the agency can demonstrate by clear and convincing
evidence that those publicly owned parcels in fact receive no special benefit.
(b) All assessments shall be supported by a detailed engineer's report prepared by a
registered professional engineer certified by the State of California 3.
"Special benefit" means a particular and distinct benefit over and above general benefits
conferred on real property located in the district or to the public at large. General
enhancement of property value does not constitute "special benefit. r4
Judicial Guidance
Since the enactment of Article XIIID, the courts have rendered opinions regarding various
aspects of Article XIIID. The notable portions of cases that apply to assessment districts in
general and this PBAD in particular are noted below.
"The engineer's report describes the services to be provided by the PBAD; (1) security,
(2) streetscape maintenance (e.g., street sweeping, gutter cleaning, graffiti removal), and
(3) marketing, promotion, and special events. They are all services over and above those
already provided by the City within the boundaries of the PBAD. And they are particular
and distinct benefits to be provided only to the properties with the PBAD, not to the public
at large they 'affect the assessed property in a way that is particular and distinct from
(their) effect on other parcels and that real property in general and the public at large do
not share'. s5
"...separating the general from the special benefits of a public improvement project and
estimating the quantity of each in relation to the other is essential if an assessment is to
be limited to the special benefits. i6
"...the agency must determine or approximate the percentage of the total benefit
conferred by the service or improvement that will be enjoyed by the general public and
deduct that percentage of the total cost of the service or improvement from the special
assessment levied against the specially benefitted property owners. i7
"...even minimal general benefits must be separated from special benefits and quantified
so that the percentage of the cost of services and improvements representing general
benefits, however slight, can be deducted from the amount of the cost assessed against
specially benefitting properties. i8
The contents of this Engineer's Report are prepared in compliance with the above noted
authorizing legislation, the State Constitution and the judicial opinions.
3 Section 4, Article XIIID of the State Constitution.
4 Section 2 (1), Article XIIID of the State Constitution.
5 Dahms v. Downtown Pomona Property and Business Improvement District, (2009) 174 Cal. App. 4'^ 708, 722
6 Beutz v. County of Riverside, (2010) 184 Cal. App. 41h 1516, 1532.
7 Golden Hill Neighborhood Association, Inc. v. City of San Diego, (2011) 199 Cal. App. 4t^ 416, 438
8 Golden Hill Neighborhood Association, Inc. v. City of San Diego, (2011) 199 Cal. App. 41' 416, 439
_�. ,°
The Colorado Avenue PBAD Overlay Steering Committee collectively determined the priority for
improvements and activities to be delivered by the business improvement district. The primary
needs as determined by the property owners are:
® Maintenance, and
0 Public Safety
Maintenance, Safety & Hospitality Ambassadors
Colorado Avenue's Maintenance and Safety & Hospitality Ambassador program was developed
based upon services currently being provided by DTSM's existing PBAD and contractor. It
provides for a level of service that is comparable to the existing Zone 1 maintenance and safety
coverage, plus enhancements given the higher pedestrian frequencies expected along the
corridor. The Colorado Avenue Overlay Zone's maintenance and safety Ambassadors
deployment will be:
Maintenance Team `i
Deployment
Hours of Deployment per Week
172
Average Weekly Coverage
12 hours per day/7 days per week
Litter Removal /Pan & Broom
Dail
Pressure Washing
As needed
Graffiti Removal
Daily as needed
Light Landscape/Weeds
Daily as needed
Emergency Sot Cleaning
As needed
Safety & Hospitality Team
Deployment
Hours of Deployment per Week
112
1 -2 Ambassadors Monday thru Thursday 7:00 a.m. to
1:00 a.m.
1 to 3 Ambassadors Friday, Saturday 7:00 a.m. to 3:00
a.m.
2 -3 Ambassadors 10:00 a.m. to 1:00 a.m.
Foot Patrol
Dail
Visitor services, safety escorts,
motorist assist, homeless
outreach
Daily
Administration
An Administrative cost of 10% has been included within the PBAD Overlay budget. Examples of
these costs include:
• Accounting and annual financial reports,
• Program support costs including supplies, equipment and rent,
• Communications to keep all Colorado Avenue stakeholders informed of policies, issues,
challenges and opportunities,
® City of Santa Monica collection fee for PBAD assessments,
® Other administration costs associated with the overhead and administrative support of
programs.
To reduce administrative costs, increase leveraging of funds and to avoid duplication of
enhanced services, the PBAD Overlay will be managed by DTSM to deliver day -to -day services.
DTSM can leverage PBAD Overlay assessments with additional revenues, including
sponsorship revenues, contracts, grants and earned income.
MKS
PBAD Boundary Description
The boundaries for the Overlay Zone to the PBAD will include properties with frontage along
Colorado Avenue from Ocean Avenue to 7th Court. The boundaries will coincide with the new
Esplanade improvements and additional pedestrian activity along Colorado Avenue.
Benefit Zones
The activities that the PBAD will provide will be in accordance with the needs of different areas of
the District. To ensure that assessment levels are proportional to benefits received two benefit
zones are proposed to account for the different levels of service. They are those parcels that are
west the 5th Street/Colorado Avenue intersection and those that are east of the intersection.
West of a Street: The first benefit zone is the three block area from 5h Street to Ocean Avenue
that experiences the most pedestrian traffic and has the highest intensity of land use. This area will
have the highest demand of PBAD services especially upon completion of the Esplanade
improvements and the metro line. The Hospitality Ambassadors and clean team will have a higher
concentration of services in this area compared to the area east of 5th Street.
East of a Street: The second benefit zone is the two and half block area from 5th Street to 7h
Court. This area has less pedestrian traffic and land use density, thus these parcels will receive
less frequency of services than the parcels west of 5th Street. Therefore, the assessments for
parcels in this benefit zone will be 75% that of the Promenade Zone. The assessment revenues
generated from the Bayside /Ocean Zone will be spent solely within that zone.
20 y a 0 ti
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r
lolailZVO41Z' /_1N =1II=1;1I1f:'
Methodology
Article XIIID Section 4(a) of the State Constitution states that "The proportionate special benefit
derived by each identified parcel shall be determined in relationship to the entirety of the capital
cost of the public improvement, the maintenance and operation expenses of a public
improvement, or the cost of the property related service being provided ".
Determining the proportionate special benefit among the parcels of real property within the
proposed assessment district which benefit from the proposed improvements, services, and
activities is the result of a four -step process:
1. Defining the proposed activities,
2. Determining which parcels specially benefit from the proposed activities,
3. Determining the amount of special benefit each parcel receives,
4. Determining the proportional special benefit a parcel receives in relation to the amount of
special benefit all other parcels in the PBAD receive.
Each identified parcel within the PBAD will be assessed based upon each parcel's unique
characteristics in relationship to all other specially benefitted parcels' characteristics. Due to the
proportionate special benefits received by each parcel from the PBAD services, each parcel will
be assessed a rate which is commensurate with the amount of special benefits received.
Special Benefit Factor
The amount of special benefit a parcel receives is a function of each parcel's linear street
frontage. The proportional special benefit for an individual parcel is determined by calculating
the ratio of each parcel's linear street frontage in relation to the total linear street frontage of all
parcels in the PBAD boundary.
Linear Street frontage is relevant to the amount of benefit each assessed parcel receives from
the PBAD activities that are delivered at the street level. This reflects the fact that services on
the street will have the greatest benefit to properties in relationship to their exposure on the
streets. That is to say that the more linear frontage a parcel has the more benefit it will receive
from the services. Linear street frontage is defined as the number of linear feet of each parcel
that directly fronts on a street that will receive the PBAD activities.
' ' i
State Law, Proposition 218, and judicial opinions require that assessments be levied according
to the estimated special benefit each assessed parcel receives from the activities and
improvements. Article MID Section 4(a) of the California Constitution in part states 'only
special benefits are assessable' which requires that we separate the general benefits, if any,
from the special benefits provided by the proposed activities and improvements.
As of January 1, 2015, the State Legislature amended the Property and Business Improvement
District Law to clarify and define both special benefit and general benefit as they relate to the
improvements and activities these districts provide. Specifically, the amendment (Section
36615.5 of the Streets and Highways Code) defines special benefit as "Special Benefit means,
for purposes of a property -based district, a particular and distinct benefit over and above
general benefits conferred on real property located in a district or to the public at large. Special
benefit includes incidental or collateral effects that arise from the improvements, maintenance,
or activities of property -based districts even if those incidental or collateral effects benefit
property or persons not assessed ".
In addition, the amendment (Section 36609.5 of the Streets and Highways Code) defines
general benefit as "General benefit means, for purposes of a property -based district, any benefit
that is not a "special benefit' as defined in Section 36615.5 ".
Furthermore, the amendment (Section 36601(h)(2) states "Activities undertaken for the purpose
of conferring special benefits upon property to be assessed inherently produce incidental or
collateral effects that benefit property or persons not assessed. Therefore, for special benefits
to exist as a separate and distinct category from general benefits, the incidental or collateral
effects of those special benefits are inherently part of those special benefits. The mere fact that
special benefits produce incidental or collateral effects that benefit property or persons not
assessed does not convert any portion of those special benefits or their incidental or collateral
effects into general benefits ".
Special Benefit Analysis
All special benefits derived from the assessments outlined in this Report are for property related
activities directly benefiting each individual assessed parcel in the Colorado Overlay. The
special benefit must affect the individual assessable parcel in a way that is particular and
distinct from its effect on other parcels and that real property in general and the public at large
do not share. No parcels assessment shall be greater than the special benefits received.
Streets and Highways Code Section 36601(e) states that `Property and business improvement
districts formed throughout this state have conferred special benefits upon properties and
businesses within their districts and have made those properties and businesses more useful by
providing the following benefits: (1) Crime reduction. A study by the Rand Corporation has
confirmed a 12- percent reduction in the incidence of robbery and an 8- percent reduction in the
total incidence of violent crimes within the 30 districts studied. (2) Job creation. (3) Business
attraction. (4) Business retention. (5) Economic growth. (6) New investments.
The Colorado Overlay's goal is to fund activities and improvements to provide a higher level of
clean and safe activities than what is currently provided in the existing Colorado Overlay to
parcels on Colorado Avenue between Ocean Avenue and 7th Street. The enhanced level of
clean and safe activities are necessary with the expected additional pedestrian traffic on
Colorado Avenue once the metro line is extended to Santa Monica with a station at Colorado
and 5th. The increased pedestrian traffic will require additional Ambassador service as well as
enhanced maintenance services to keep the public rights -of -way and sidewalks clear of debris
and trash. In addition, the new Esplanade improvements along Colorado and west of the 5th will
require additional maintenance services than what is currently being provided. Each assessed
parcel within the Colorado Overlay will specially benefit from the enhanced activities by keeping
each parcel cleaner and safer.
Each parcel will benefit from:
• Cleaner sidewalks, streets and common areas
• Real and perceived public safety improvements
• Greater pedestrian traffic
• Enhanced rental incomes
• Improved business climate
• New business and investment
• Well managed programs and services
Specifically each parcel benefits from each of the PBAD activity as defined below.
Safety
The enhanced safety activities makes the area more attractive for businesses, customers, and
residents, and ultimately private investment. When business location decisions are made "lower
levels of public safety lead to increased uncertainty in decision making and can be perceived as
a signal of a socio - institutional environment unfavorable for investment ". Uncertainty affects the
investment environment in general. But in particular, it increases the fear of physical damage to
investment assets (or to people) or their returns... Almost universally, places with lower crime
rates are perceived as more desirable".' Once economic investment occurs within the district,
pedestrian traffic and commercial activity will increase. The special benefit to assessed parcels
from these services is the likelihood of increased lease rates and tenant occupancy due to the
increase of commercial activity and an increase in customers that follow from having a safer
environment.
Maintenance
The enhanced maintenance activities benefit each assessed parcel within the Overlay by
providing a cleaner environment. This is achieved through sidewalk sweeping and power
washing, removing litter and graffiti, and trash removal. These activities are provided to the
public rights -of -way adjacent to each assessed parcel, thus protecting the capital investment of
each assessed parcel in addition to maintaining the new Esplanade improvements west of 5th.
9 "Accelerating economic growth and vitality through smarter public safety management" IBM Global Business
Services Executive Report, September 2012, pg. 2
Special Benefit Conclusion
Based on the special benefits each assessed parcel receives from the Colorado Overlay
activities we concluded that each of the proposed activities provides special benefits to the real
property within the Overlay district and that each parcel's assessment is in direct relationship to
and no greater than the special benefits received.
The special benefit to parcels from the proposed Colorado Overlay activities and improvements
described in this Report are equal to or exceeds the total amount of the proposed assessment.
Each individual assessed parcel's assessment is no greater than the special benefit it receives
from the Colorado Overlay activities.
General Benefit Analysis
As required by the State Constitution Article MID Section 4(a), the general benefits of an
assessment district must be quantified and separated out so that the cost of the activities that
are attributed to general benefit are deducted from the cost assessed against each specially
benefitted parcel. General benefits are benefits from the Colorado Overlay activities and
improvements that are not special in nature, are not "particular and distinct" and are not over
and above the benefits that other parcels receive. This analysis will evaluate and determine the
level of general benefits that (1) parcels outside of the Colorado Overlay, and (2) the public at
large may receive.
General Benefit to Parcels Outside of the Colorado Overlay
All the Colorado Overlay activities and improvements are provided solely to each of the
individual assessed parcels in the Colorado Overlay boundary. Each of the enhanced activities
is provided to the public rights -of -way (streets, sidewalks) adjacent to all specially benefitted
parcels or tenants in the Colorado Overlay. In the case of the Colorado Overlay the surrounding
parcels currently receive the base level of activities from the existing PBAD. However, due to
the location of the Esplanade and train station the parcels fronting Colorado Avenue require an
enhanced level of activities above and beyond what they are currently receiving from the
existing PBAD. None of the parcels, except for one (see discussion below) outside of the
Overlay district will receive the enhanced activities. Any benefits these parcels may receive are
incidental to providing special benefits to the assessed parcels, and thus any cost associated to
the incidental benefits are not reduced from the cost of providing special benefit.
There is one parcel on Colorado Avenue the blue bus maintenance center that is not included in
the Overlay District. This parcel is primarily used as a public bus maintenance center and bus
parking. It is only for bus vehicles and employees and not intended for public access. Its use is
not commerce driven and is not consistent with other uses in the Overlay District. The City
however, will contract with the District to receive these enhanced activities and shall pay this
parcel's equivalent assessment had this parcel been included within the District. Each parcel
east of 5th Street within the District is being assessed $42.667 per linear foot along Colorado
Avenue. The Blue Bus parcel has 320 linear feet along Colorado so shall by contract pay the
District $13,653 ($42.667 x 320) to receive the enhanced activities.
General Benefit to the Public At Large
In addition to the general benefit analysis to the parcels outside of the Colorado Overlay
boundary, we also quantify the general benefits to the public at large; those people that are
either in the Colorado Overlay boundary and not specially benefitted from the activities or
people outside of the Colorado Overlay boundary that may benefit from the Colorado Overlay
activities. In the case of the Colorado Overlay the public at large are those people that are
within the Colorado Overlay boundary that do not pay an assessment and do not specially
benefit from the Colorado Overlay activities.
To calculate the general benefit the public at large may receive we determine the percentage of
each Colorado Overlay activity budget that may benefit the general public. In this case, the
Safe activities may generally benefit the public as the general public may appreciate the
enhanced level of security and ambassador activities as it passes through the Overlay District.
The Maintenance activities are tailored to benefit the physical characteristics of the parcels,
buildings and sidewalks of each parcel and are not intended to benefit the general public. If
there are any public benefits, they are incidental and collateral to providing special benefits to
the assessed parcels.
The table below shows the budget for the Safety program and its respective percentage of the
total Colorado Overlay budget. We then apply a Relative Benefit factor to this activity. The
relative benefit factor is a basic unit of measure that compares the benefit the general public
receives compared to the public that specially benefits (employees, tenants, customers) from
each activity. Since the specially benefitted public receives 100% of the activities it is assigned
a relative benefit factor of 1.0 for each Colorado Overlay activity, and the general public is
assigned a relative benefit factor less than 1.0. Due to the increased pedestrian traffic from the
transit center, the Safe activity receives a relative benefit factor of 0.50 which we believe to be a
reasonable factor for the general public that is not specially benefitted. There is no scientific
method to determine the relative benefit factors. However, in our 50 years of professional
experience as a Registered Civil Engineer determining relative benefit of land uses to capital
infrastructure and the maintenance and/or service thereof, the relative benefit factors are
reasonable to conclude.
The relative benefit factor is then multiplied by the Colorado Overlay activity's budget
percentage to determine the overall benefit factor. The following table illustrates this
calculation.
A
B
C
D
E
Colorado Budget
% of
General Benefit
General Benefit
General Benefit
Overlay Activity Amount
Budget
Factor
Percent (B x C)
Allocation (A x D)
Safe $176,000
40.00%
0.50
20.00%
$35,200
This analysis indicates that 20.00% of Safe activities may be attributed to general benefit to the
public at large equaling a total of $35,200 that must be raised from sources other than special
assessments.
General Benefit Conclusion
Using the sum of the two measures of general benefit quantified above (0.0% + 20.00% for
Safety activities) we find that approximately $35,200 may be general in nature and will be
funded from sources other than special assessments.
2016 Operating Budget
The Colorado Avenue PBAD's operating budget takes into consideration:
The improvements and activities needed to provide special benefits to each individual
parcel within the PBAD boundary (Section B),
The parcels that specially benefit from said improvements and activities (Section C), and
The costs associated with the special and general benefits conferred (Section E).
EXPENDITURES
Budget
Administration
10%
TOTAL
BUDGET
%of'
Budget '
Maintenance
$240,000
$24,000
$264,000
60.00%
Safety & Hospitality
$160,000
$16,000
$176,000
40.00%
Total Expenditures
$400,000
$440,000
100.00%
REVENUES
Assessment Revenues
$404,800
92.00%
Other Revenues 1
$35,200
8.00%
Total Revenues
$440,000
100.00%
(1) Other non - assessment funding to cover the cost associated with general benefit.
Budget Notations
The annual budget may increase no more than 5% per year consistent with the
increase in consumer price index (CPI) and increases in program costs. The
determination of annual budget adjustments and assessment rates will be subject to
the review and approval of the board of Downtown Santa Monica Inc.
i -• III I .;
As previously discussed in Section B, the PBAD is segregated and into two benefit zones based
upon each zone's demand for services and improvements and the benefits received. The table
below summarizes the assessable linear frontage within each benefit zone:
Variable
West of 5
Court !
East of 5
Court
Linear Footage
2925
2925
Calculation of Assessments
Based on the special benefit factors, assessable linear frontage and the proposed budget, all of
which are discussed above, the first year's maximum annual assessment rate for each parcel
follows:
Benefit Zone
Assmt Rate per
Linear Foot
East of 5` Street
$80.51
West of 5 Street
$107.35
The following example illustrates how the preceding rates are applied to parcels in both benefit
zones.
Benefit Zone
Frontage
Rate
Annual Assessment
East of 5 Court
150
$80.51
$12,076.50
West of 5 Court
150
$107.35
$16,102.50
The assessment calculation is the same for every parcel in the PBAD.
Government Assessments
The PBAD will provide all the improvements and activities to the City of Santa Monica or any
other government -owned parcels within the PBAD boundary. All publicly -owned parcels will pay
their proportional share of costs based on the special benefits conferred to those individual
parcels. The special benefit to government assessed parcels from these services is an
increased likelihood of attracting and retaining employees that follow from having a cleaner and
safer area. Public owned parcels will receive special benefit in the form of increased use of the
public facilities, increased attraction and retention of employees, which directly relates to
fulfilling their public service mission. Article XIII D of the California Constitution was added in
November of 1996 to provide for these assessments. It specifically states in Section 4(a) that
"Parcels within a district that are owned or used by any agency... shall not be exempt from
assessment unless the agency can demonstrate by clear and convincing evidence that those
publicly owned parcels in fact receive no special benefit."
Maximum Annual Assessment Adjustments
The annual budget may increase no more than 5% per year consistent with the increase in
consumer price index (CPI) and increases in program costs. The maximum assessment for
each year of the District, based on a maximum 5% annual increase of the budget over the prior
year, is shown in the following table.
Budget Adjustment
Any annual budget surplus or deficit will be rolled into the following year's PBAD budget. The
budget will be set accordingly, within the constraints of the management plan to adjust for
surpluses or deficits that are carried forward.
Future Development
Based on new development in the PBAD, the amount of assessable square footage in the
PBAD may change over time. These changes could modify the total square footage assessed
for affected parcels. Therefore, in future years, the assessments levied against PBAD parcels
may change in accordance with the assessment methodology formula and rates in the
Management District Plan and Engineer's Report. Changes to the assessment formula would
require the approval of an amendment to the Management Plan
East of 6th Street
West of 5th Street
Year 1
$80.51
$107.35
Year 2
$84.54
$112.72
Year 3
$88.76
$118.35
Year 4
$93.20
$124.27
Year 5
$97.86
$130.48
Year 6
$102.75
$137.01
Year 7
$107.89
$143.86
Year 8
$113.29
$151.05
Year 9
$118.95
$158.60
Year 10
$124.90
$166.54
Year 11
$131.14
$174.86
Year 12
$137.70
$183.60
Year 13
$144.58
$192.79
Budget Adjustment
Any annual budget surplus or deficit will be rolled into the following year's PBAD budget. The
budget will be set accordingly, within the constraints of the management plan to adjust for
surpluses or deficits that are carried forward.
Future Development
Based on new development in the PBAD, the amount of assessable square footage in the
PBAD may change over time. These changes could modify the total square footage assessed
for affected parcels. Therefore, in future years, the assessments levied against PBAD parcels
may change in accordance with the assessment methodology formula and rates in the
Management District Plan and Engineer's Report. Changes to the assessment formula would
require the approval of an amendment to the Management Plan
The total assessment amount for FY 2015 -16 is $404,800 apportioned to each individual
assessed parcel, as follows.
Attachment 3
LINCOLN BOULEVARD
TIETMAIRWITUNEX MM
January 8, 2caa.S — DRAFT
CONTENTS
Management Plan Summary
I. What is a PBAD?
11. PBAD Boundaries
III. Improvements and Activities
a. Environment
b. Marketing
c. Administration
IV. Plan Budgets
V. Assessments
a. Assessment Methodology
b. Calculation of Assessments
c. Assessment Adjustments
VI. Governance
Exhibits:
• Engineer's Report
• List of properties
• Map with parcel detail
Prepared forthe Lincoln Boulevard PBAD Steering Committee
0
Progressive Urban Management Associates, Inc.
Kristin Lowell, Inc.
1
Attachment 3
LINCOLN BOULEVARD
PROPERTY -BASED BUSINESS ASSESSMENT DISTRICT (PBAD)
MANAGEMENTPLAN
SUMMARY
January 8, 201-5- DRAFT PLAN
The Lincoln Boulevard Property -Based Business Assessment District (PBAD) is proposed to be a special
benefit assessment districtthat will provide special benefits to each individual parcel located within the
district boundaries. As described in this plan, it is proposed that the PBAD will provide funding for
enhanced maintenance, safety, and beautification and marketing programs, above and beyond those
provided by the City of Santa Monica.
Location
The district will be adjacent to the downtown PBAD and the boundaries will include
properties along Lincoln Boulevard between Wilshire Boulevard and Interstate 1-o
Freeway. A map of the proposed district boundary is provided on page 5.
Improvements &
The PBAD will finance improvements and activities that will improve the Lincoln
Activities
Boulevard corridor's environment for property owners, residents, workers and
visitors, including:
Environment:
• Maintenance Teams that sweep, scrub and pressure wash sidewalks,
remove litter and graffiti, increase the frequency of trash removal and
maintain landscaping along Lincoln Boulevard.
• Safety & Hospitality Ambassadors that provide information on activities
and attractions, work with local police, and business and property owners
to prevent crime and reduce homelessness and quality of life issues.
• Beautification improvements that make Lincoln Boulevard more visually
attractive, which might include: wayfinding signage, trash cans, holiday
decor, enhanced streetscape, planters, etc.
Marketing:
® Marketing to promote a positive image for Lincoln Boulevard and projects
that integrate the Lincoln Boulevard corridor into the overall marketing and
promotion of downtown Santa Monica.
Method of
Levy of assessments upon real property that benefit from improvements and
Financing
activities.
Budget
Total district budget for its first year of operations is $456,5oo
Environment
Clean $133,833
Safe $144053
Beautification $ 1-1-0,000
Marketing $ 55,000
Total $465,500
2
Attachment 3
3
The first year of the Beautification budget would include funding for an intensified
effort to clean the district quickly. It will also include the costs incurred in
establishing the Lincoln Boulevard PBAD.
General Benefit Allowance: An allowance is made for general benefits that the
district may provide outside of the Lincoln Boulevard PBAD boundaries. Any PBAD
services that are found to provide general benefit cannot be paid for with
assessment revenue. A certified engineer has estimated that the general benefit
from services accounts for si3,614 of the estimated budget, resulting in a total
assessment budget of $44z,886. See Full budget detail forthe breakdown in Section
W of this Management Plan.
Cost
Annual assessments are based upon a calculation of benefits provided, an
allocation of costs for providing those special benefits, and a calculation of lot and
gross building square footage for each parcel. The greater of lot or building square
footage for each parcel of real property are the assessment variables used for each
property.
Properties owned and used for non - profit purposes pay an adjusted and reduced
rate. Commercial and residential properties pay full share for clean, safe and
beautification services. Only commercial properties will benefit from and pay for
marketing services. Estimated annual maximum assessment rates for the first year
of the district are:
Estimated Rates of Assessment
Lot or Building Sq. Ft.
Commercial properties
0.397
Residential properties
0.345
Non - profit properties
0.273
Cap
Annual assessments may increase no more than 5% per year consistent with the
increase in consumer price index (CPI) and increases in program costs. The
determination of annual adjustments in assessment rates will be subject to the
review and approval of the board of Downtown Santa Monica Inc.
City Services
The City of Santa Monica will provide an accounting of baseline services that are
currently provided within the District and will continue through the duration of the
planned renewal.
Collection
PBAD assessments appear as a separate line item on the annual Los Angeles
County property tax bills.
District
The PBAD will be managed by Downtown Santa Monica Inc. (DTSM). DTSM will
Governance
add a Lincoln Boulevard property owner seat to the existing composition of
property owner members of the board of directors to represent Lincoln Boulevard
property owners. The Lincoln Boulevard board member will be elected by Lincoln
Boulevard property owners, with each parcel representing one vote in the election.
A committee made up of Lincoln Boulevard property owners will help determine
the uses and budget of the Lincoln PBAD beautification funds each year.
District
California law for PBAD district formation requires the submission of petitions
Formation
signed by property owners in the proposed district who will pay more than so% of
the total assessments (i.e. petitions must represent more than 5o% of the $442,886
to be assessed). Petitions are submitted to the Santa Monica's City Council and the
3
Attachment 3
a]
City will mail ballots to all affected property owners. The majority of ballots
returned, as weighted by assessments to be paid, must be in favor of the PBAD in
order for the City Council to consider approval.
Duration
Collection of the first year's assessments will be included in Los Angeles County's
2015 -2o16 tax bill. Services will begin January 1, 2o16 and continue through
December 31, 2o28, with a 13 year term that will coincide with the existing PBAD,
allowing forthe Lincoln PBAD and Downtown PBAD to explore formal
consolidation of services beginning in 2o28.
a]
- iD
Attachment 3
I. WHAT IS A PBAD?
A PBAD provides enhancement improvements and activities, such as safety, maintenance and image
enhancement, above and beyond those provided by local government. PBADs provide services that
improve the overall viability of downtown districts — resulting in higher property values, sales and tax
revenues and an improved quality of life.
Since the creation of California's Property and Business Improvement District Law in 1994, more than
loo new PBADs have been established in California downtowns, including downtown Santa Monica.
Since the legislation was enacted, there have been changes in both the character of downtowns and
the laws that govern the application of special assessments. Downtowns, including Santa Monica have
emerged as vibrant mixed -use communities, becoming population centers in addition to their
traditional roles as business centers. Amendments to the State constitution have changed the
application of assessment laws, including PBADs, to allocate costs to all parcels that receive a benefit
from PBAD services, regardless of the parcel's use.
Process to Develop the PBAD Management Plan
To develop the Management Plan for Lincoln Boulevard, property and business owners have been
involved in a participatory process thatwas initiated in the fall of 2014. The consulting firms of
Progressive Urban Management Associates (PBAD consultant) and Kristin Lowell Inc. (certified
engineer) were retained bythe DTSM and the Lincoln Boulevard PBAD steering committee to help
develop the Management Plan for the PBAD. Key steps included:
1. Meetings with Property Owners: The DTSM staff and consultants conducted a series of one -
on -one and roundtable meetings with property owners located along the Lincoln Boulevard
corridor. Top improvement priorities and guiding principles that emerged from the meetings
with property owners included:
• Provide consistency and connection to downtown Santa Monica, particularly the basics
of clean and safe, which is critical to Lincoln Boulevard's overall vitality.
• Create a stronger downtown identityfor the Lincoln Boulevard corridorthrough
beautification improvements.
• Make sure that PBAD services are supplemental to and do not replace existing City
services.
2. Plan Review and Final Plan: The draft PBAD Management Plan and budget was reviewed by
the PBAD steering committee and individual property owners. Affected property owners were
invited to a series of meetings to review the plan.
Attachment 3
II. PBAD BOUNDARIES
The PBAD will encompass approximately 5 blocks of the core of the Lincoln Boulevard corridor which
includes properties along Lincoln Boulevard from Wilshire Boulevard to the 1.o Interstate Freeway.
A map of the proposed district boundary is below.
BID ASSESSED PROPERTIES DOWNTOWN SANTA MONICA, INC.
0
Attachment 3
III. IMPROVEMENTS AND ACTIVITIES
ENVIRONMENT — Clean, Safe & Attractive
PBAD "Environment" activities and improvements are intended to provide a clean, safe and attractive
Lincoln Boulevard. Environment activities, which include maintenance, safe and beautification, benefit
each individual assessed parcel, including commercial, non - profits and residential.
Maintenance and Safety & Hospitality Ambassadors
Lincoln Boulevard's Maintenance and Safety & Hospitality Ambassador program was developed based
upon services currently being provided by DTSM's existing downtown PBAD and contractor. It provides
for a level of service that is comparable to the existing Zone 3 maintenance and safety coverage, plus
enhancements given the highervehicular and pedestrian frequencies along the Lincoln corridor.
The Lincoln PBAD's s maintenance and safety budget is based upon the following deployment:
Maintenance Team
Hours of Deployment per Week
56
Average Weekly Coverage
8 hours per day /7 days per week
Litter Removal /Pan & Broom
Daily
Pressure Washing
As needed
Graffiti Removal
Daily as needed
Light Landscape/Weeds
Daily as needed
Emergency Spot Cleaning
As needed
Maintenance of PBAD funded
beautification elements
As needed
Safety & Hospitality Team
Hours of De fo ment per Week
zzz
Coverage
stoz Ambassadors Monday thru Friday Too a.m. to 9:30 p.m.
I to 3 Ambassadors Saturday and Sunda 20:0o a.m. to 9:30 p.m.
Foot Patrol
Dail
Visitor services, safety escorts,
motorist assist, homeless
outreach
Daily
Beautification
Beautification funds support enhancements that improve the visual appearance of Lincoln Boulevard
and may include:
o Wayfinding signage
® Seasonal decorations
® Flower planters
Street furniture and amenities
Attachment 3
® Feasibility analyses and plans for design, streetscape and other physical improvements
® Other activities and improvements that visibly enhance the Lincoln Boulevard environment
Annual recommendations regarding the allocation of beautification will be developed by a Lincoln
Boulevard PBAD committee and then forwarded to the DTSM Board of Directors.
The ENVIRONMENT portion of the PBAD accounts for 88 %ofthe proposed budget.
IITIFAIWW%91il [h
Activities aimed at working with property owners to improve Lincoln Boulevard's overall image,
increase sales and building occupancies are part of the PBAD Management Plan. Marketing programs
and activities will aim to improve the overall image of Lincoln Boulevard with the goal of integrating
Lincoln Boulevard into the overall marketing and promotion of Downtown Santa Monica, which will
ultimately attract consumers, visitors and businesses to the Lincoln corridor. Examples of marketing
activities include adding Lincoln Boulevard to downtown kiosks and directories and including Lincoln
Boulevard businesses in applicable downtown promotions and events.
MARKETING activities account for 12% of the proposed PBAD budget.
ADMINISTRATION & GENERAL BENEFIT
An Administrative cost of 2o% has been included within the PBAD budget. Examples of these costs
include:
• Accounting and annual financial reports,
• Program support costs including supplies, equipment and rent,
• Communications to keep all Lincoln Boulevard stakeholders informed of policies, issues,
challenges and opportunities,
• The City of Santa Monica's PBAD administration fee,
• Other administration costs associated with the overhead and administrative support of
programs.
To reduce administrative costs, increase leveraging of funds and to avoid duplication of enhanced
services, the PBAD will be managed by DTSM to deliver day -to -day services. DTSM can leverage PBAD
assessments with additional revenues, including sponsorship revenues, contracts, grants and earned
income.
Attachment 3
IV. PLAN BUDGETS
The total improvement and activity plan budget for the first year of the district is projected at $456,5oo
with the following components:
(a) Non - assessment funding will need to be raised to to cover the cost associated with general
benefits from services.
Thirteen Year Operating Budget
A projected thirteen year operating budget for the Lincoln Boulevard PBAD is provided below.
Projections forthe budget are based upon the following assumptions:
® Total program revenue increases no more than 5% per year, the maximum allowed under the
proposed annual budget adjustment to respond to increases in the consumer price index and
other program costs. Actual budgets may not increase 5% as determined by the DTSM board
of directors, which is the PBAD Owner's Association.
® Revenues for specific activities within the general activity categories (i.e. Environment and
Marketing) may be reallocated among specific activities from year to year based upon district
needs and budgets developed by the DTSM board of directors. Revenues may not be moved
between the Environment and Marketing categories.
SERVICES
DTSM
TOTAL
LESS GENERAL
TOTAL
Admin
BUDGET
BENEFIT(a)
ASSESSMENTS
(].0 %)
ENVIRONMENT
Maintenance
$121,667
$12,167
$133,833
$133,833
Safety &
Hospitality
$143,333
$14,333
$157,667
($13,614)
$144,053
Beautification
$100,000
$10,000
$110,000
$110,000
Total
Environment
$365,000
$36,500
$401,500
($13,614)
$387,886
MARKETING
$50,000
$5000
$55,000
$55,000
TOTAL
$415,000
$41,500
$456,500
($13,614)
$442,886
(a) Non - assessment funding will need to be raised to to cover the cost associated with general
benefits from services.
Thirteen Year Operating Budget
A projected thirteen year operating budget for the Lincoln Boulevard PBAD is provided below.
Projections forthe budget are based upon the following assumptions:
® Total program revenue increases no more than 5% per year, the maximum allowed under the
proposed annual budget adjustment to respond to increases in the consumer price index and
other program costs. Actual budgets may not increase 5% as determined by the DTSM board
of directors, which is the PBAD Owner's Association.
® Revenues for specific activities within the general activity categories (i.e. Environment and
Marketing) may be reallocated among specific activities from year to year based upon district
needs and budgets developed by the DTSM board of directors. Revenues may not be moved
between the Environment and Marketing categories.
Attachment 3
Lincoln Boulevard PBAD
Thirteen Year Operating Budget & Maximum Assessments
ESTIMATED THIRTEEN YEAR OPERATING BUDGET
*Includes 10% DTSM Administrative
MAXIMUM ANNUAL ASSESSMENT RATES: the greater of lot or building square foot
Environmental Enhancements *
Marketing Enhancements*
General Benefit
Total
Year
$387,886
$55,000
$13,614
$456,500
Year
$407,280
$57,750
$14,295
$479,325
Year
$427,644
$60,638
$15,009
$503,291
Year
$449,027
$63,669
$15,760
$528,456
Year
$471,478
$66,853
$16,548
$554,879
Year 6
$495,052
$70,195
$17,375
$582,623
Year
$519,804
$73,705
$18,244
$611,754
Year
$545,795
$77,391
$19,156
$642,341
Year
$573,084
$81,260
$20,114
$674,458
Year 10
$601,738
$85,323
$21,120
$708,181
Year 11
$631,825
$89,589
$22,176
$743,590
Year 12
$663,417
$94,069
$23,285
$780,770
Year 13
$696,588
$98,772
$24,449
$819,808
*Includes 10% DTSM Administrative
MAXIMUM ANNUAL ASSESSMENT RATES: the greater of lot or building square foot
10
Commercial
Residential
Non - profit
Year
0.397
0.345
0.173
Year
0.417
0.362
0.182
Year
0.438
0.380
0.191
Year
0.460
0.399
0.200
Year
0.483
0.419
0.210
Year
0.507
0.440
0.221
Year
0.532
0.462
0.232
Year
0.559
0.485
0.243
Year
0.587
0.510
0.256
Year 10
0.616
0.535
0.268
Year 11
0.647
0.562
0.282
Year 12
0.679
0.590
0.296
Year 13
0.713
0.620
0.311
10
Attachment 3
V. ASSESSMENTS
A. Assessment Methodolo
To develop the PBAD assessment methodology, the consulting team included participation from
Kristin Lowell Inc., a certified engineer. Lowell evaluated several methods of assessment for conveying
special benefits to each individual assessed parcel from the type of improvements and activities
described within the Lincoln Boulevard PBAD Management Plan.
Additional infonnation and justification for the proposed assessment methods and adjustments is provided
in the Engineer's- Report, prepared by Kristin Lowell Inc. and is provided as an attachment to the final
Management Plan.
Benefit Allocation Approach: The proposed assessment methodologies are based upon an analysis of
the special benefit provided to each property and the cost associated to each property to provide the
PBAD activities equal to the special benefit it receives.
Assessment Variables: The assessment methodology forthe Lincoln Boulevard PBAD is based upon
the greater of lot or building square footage for each parcel of real property.
Property Use Considerations: The assessment methodology provides the following:
• Commercial and Residential properties will receive full benefit form Environment Services
(i.e. maintenance, safety and hospitality and beautification) and will be assessed fully for
them;
• However, residential and non - profits parcels will not receive the same benefit as
commercial parcels from Marketing services because those uses are not engaged in
commercial or customer attraction activities, thus their assessment will not include that
portion of the assessment.
• All commercial and mixed -use parcels with residential uses will be subject to an adjusted
assessment rate forthe residential square footage of that parcel. The commercial square
footage for thattype of parcel will be assessed the assessment rate applied to all
commercial parcels.
• Non - profit properties owned and used by 5os (c) 3 non - profit organizations will not benefit
the same way as commercial and residential properties because those uses are not engaged
in commercial, customer attraction or value appreciation activities and will only pay half-
share of Environmental services
B. Calculation of Assessments
The preceding methodology is applied to a database that has been constructed by DTSM with primary
data provided by the City of Santa Monica. A list of all properties to be included in the PBAD is
provided as an Exhibit.
The assessments are based on anticipated service frequencies. Residential and 503 (c) 3 non - profit
parcels do not receive benefit from the Marketing services and therefore will not be assessed that
portion of the assessment. 5oi. (c) 3 non - profit properties will also not benefit from Environment
11
Attachment 3
services (i.e. maintenance, safety and hospitality and beautification) the same way as commercial and
residential properties and will pay half (3./2) share for those services. The resulting assessment
calculation by service follows:
Estimated Rates of Assessment
Lot or Building S . Ft.
Maintenance
0.119
Safety & Hospitality
0.128
Beautification
0.098
Marketing
0.052
0.397
$3970
Total Commercial
0.397
Total Residential
0.345
Total Non-profit
0.173
Assessments will not exceed the above amounts during the first year of the PBAD.
Calculation Rates: The following examples illustrate how the preceding rates are applied to parcels
along the Lincoln Boulevard corridor.
Property Characteristic
Building Sq. Ft.
Lot Sq. Ft.
Greater of
Rate
Annual Assessment
3.o,000 sq. ft. office building
3.0,000
5000
3.0,000
0.397
$3970
Residential
2500
3.5oo
2500
0.345
$86.25
Non - profit
3.500
3000
3000
0.3.73
$53..90
C. Assessment Adiustments
Annual Adjustment: Annual assessment rates may be adjusted for annual changes in the Consumer
Price Index (CPI) for all urban consumers and /or other changes in programs costs, not to exceed 5 %.
Actual annual adjustments range from 0% to 5 %. Assessment adjustments will be contingent upon
recommendation from the Lincoln Boulevard PBAD committee and approval by the DTSM board of
directors.
Board Adjustment: Any annual budget surplus or deficit will be rolled into the following year's PBAD
budget. Assessments will be set accordingly, within the constraints of the CPI adjustment, to adjust for
surpluses or deficits that are carried forward.
General Benefit Adjustment: The PBAD's Engineer's Report has found that the PBAD may provide
general benefit (i.e. benefits to the general public or surrounding community) that is intangible and
unquantifiable. To accountfor any general benefit an adjustment has been established. Accordingly,
$3.3,63.4 must be funded by non - assessment revenue in the first year of the PBAD, and a proportional
amount in subsequent years.
Time and Mannerfor Colleting Assessments: As provide by State law, the City of Santa Monica PBAD
assessment appears as a separate line item on annual property tax bills prepared by the County of Los
Angeles. Property tax bills are distributed in the fall and payment is expected by lump sum or
installment. Existing laws for enforcement and appeal of property taxes apply to PBAD assessments.
12
Attachment 3
Disestablishment: State law provides for the disestablishment of a PBAD pursuant to an annual review
process. Each year that the PBAD is inexistence, there will be a 3o -day period during which the
property owners will have the opportunity to request disestablishmentof the district. This 3o -day
period begins each year on the anniversary day that the district was first established by the City
Council. Within that 30-day period, if a written petition is submitted by the owners of real property who
pay 5o percent ( %) or more of the assessments levied, the PBAD may be disestablished. The City
Council will hold a public hearing on disestablishing the PBAD prior to actually doing so.
VI. GOVERNANCE
For the Lincoln Boulevard PBAD, Downtown Santa Monica Inc. (DTSM), an existing 5oi (c) 6 California
non - profit corporation, shall serve as the PBAD Owner's Association. DTSM currently serves this
governance role for the existing Downtown Santa Monica PBAD. DTSM will add a Lincoln Boulevard
property owner seat to the existing composition of property owner members of the board of directors
to represent Lincoln Boulevard interests. The Lincoln Boulevard board member will be nominated to
the board by a committee of the Lincoln Boulevard property owners. A committee made up of Lincoln
Boulevard property owners will advise DTSM on the uses and budget of the Lincoln PBAD
beautification fund each year. As part of the Management Plan, DTSM will manage the delivery of day -
to -day PBAD services in order to:
• Reduce overall administrative costs of the PBAD,
• Leverage PBAD funds with other resources and capabilities provided by DTSM,
• Eliminate the potential for duplication of enhanced services and activities, and
• Ensure that Downtown is represented by a unified voice, thereby maximizing Downtown's
influence in policies and civic affairs.
Pursuantto the State of California PBAD legislation the DTSM Board of Directors is subject to
disclosure and notification guidelines set by the Ralph M. Brown Act and California Public Records Act.
13
Property 3 a kd Business
Assessment District
Draft S
Engineer's
Prepared by.
Kristin Lowell Inc.
Prepared pursuant to:
Prepared pursuant to the State of California
Property and Business Improvement District Law of 1994
And Article XIIID of the California Constitution
to create a property based assessment district
ENGINEER'S
SECTION A:
Legislative and Judicial Review ................. ..............................2
SECTION B:
Improvements and Activities ...................... ..............................4
SECTION C:
Benefitting Parcels ..................................... ...............................
6
SECTION ®:
Proportional Benefits ................................. ...............................
7
SECTION E:
Special and General Benefits .................... ...............................
9
SECTION F:
Cost Estimate .............................................. .............................13
SECTION G:
Apportionment Method .............................. .............................14
SECTION H:
Assessment Roll ......................................... .............................16
This Report is prepared pursuant to Article XIIID of the California State Constitution (Proposition
218) and the State of California Property and Business Improvement District Law of 1994 as
amended.
The Lincoln Boulevard Property -based Business Assessment District ( "PBAD ") will provide
funding for enhanced maintenance, safety, and marketing activities, above and beyond those
provided by the City of Santa Monica. Every individual assessed parcel within the PBAD
receives special benefit from the activities identified under Section B of this Report. Only those
individual assessed parcels within the PBAD receive the special benefit of the proposed
activities; parcels contiguous to and outside the PBAD and the public at large may receive a
general benefit, as outlined in Section E. The cost to provide general benefits, if any, will be
funded from sources other than special assessments.
The duration of the proposed PBAD is thirteen (13) years, commencing January 1, 2016 and
continue through December 31, 2028. This term will coincide with the existing PBAD allowing
for the zone and the Downtown PBAD to explore formal consolidation of services in 2028.
An estimated budget for the PBAD improvements and activities is set forth in Section D. The
annual budget may increase no more than 5% per year consistent with the increase in
consumer price index (CPI) and increases in program costs. The determination of annual
budget adjustments and assessment rates will be subject to the review and approval of the
board of Downtown Santa Monica Inc. Funding for the PBAD improvements and activities shall
be derived from a property -based assessment of each specially benefitted parcel in the PBAD.
A detailed description of the methodology for determining the proportional special benefit each
individual assessable parcel receives from the activities and the assessment for each parcel is
set forth in Section F.
I hereby certify to the best of my professional knowledge that each of the identified assessable
parcels located within the PBAD will receive a special benefit over and above the benefits
conferred to those parcels outside of the PBAD boundary and to the public at large and that the
amount of the proposed special assessment is proportional to, and no greater than the special
benefits received.
Respectfully submitted,
Terrance E. Lowell, P.E.
'17111 11111
Property and Business Improvement District Lawn of 1994
The State Law is the legislation that authorizes the City to levy assessments upon real property
for the purposes of providing improvements and activities that specially benefit each individual
assessed parcel in the PBAD. The purpose of the PBAD is to encourage commerce,
investment, and business activities. In order to meet these goals PBADs typically fund activities
and improvements, such as, enhanced safety and cleaning. Unlike other assessment districts
which fund the construction of public capital improvements or maintenance thereof, PBADs
provide activities and improvements "to promote the economic revitalization and physical
maintenance of the business districts of its cities in order to create jobs, attract new businesses,
and prevent the erosion of the business districts." (Streets and Highways Code Section
36601(b)). The improvements and activities funded through the PBAD are over and above those
already provided by the City within the PBAD's boundaries. Each of the PBAD activities or
improvements is intended to increase building occupancy and lease rates, to encourage new
business development, attract businesses that serve the community, and improve the quality of
life.
Specifically, the State Law defines "Improvements" and "Activities" as follows:
"Improvement" means the acquisition, construction, installation, or maintenance of any
tangible property with an estimated useful life of five years..."'
'Activities" means, but is not limited to, all of the following:
(a) Promotion of public events which benefit businesses or real property in the district.
(b) Furnishing of music in any public place within the district.
(c) Promotion of tourism within the district.
(d) Marketing and economic development, including retail retention and recruitment.
(e) Providing safety, sanitation, graffiti removal, street and sidewalk cleaning, and
other municipal services supplemental to those normally provided by the municipality.
(f) Activities which benefit businesses and real property located in the district'
Article MID of the State Constitution
In 1996, California voters approved Proposition 218, codified in part as Article XII ID of the State
Constitution. Among other requirements, Article MID changes the way local agencies enact
local taxes and levy assessments on real property. It states, in relevant part, that:
(a) An agency which proposes to levy an assessment shall identify all parcels which will
have a special benefit conferred upon them and upon which an assessment will be
imposed. The proportionate special benefit derived by each identified parcel shall be
determined in relationship to the entirety of the capital cost of a public improvement, the
maintenance and operation expenses of a public improvement, or the cost of the
property related service being provided. No assessment shall be imposed on any parcel
which exceeds the reasonable cost of the proportional special benefit conferred on that
parcel. Only special benefits are assessable, and an agency shall separate the general
California Streets and Highways Code, Section 36610.
2 California Streets and Highways Code, Section 36613.
benefits from the special benefits conferred on a parcel. Parcels within a district that are
owned or used by any agency, the State of California or the United States shall not be
exempt from assessment unless the agency can demonstrate by clear and convincing
evidence that those publicly owned parcels in fact receive no special benefit.
(b) All assessments shall be supported by a detailed engineer's report prepared by a
registered professional engineer certified by the State of California 3.
"Special benefit" means a particular and distinct benefit over and above general benefits
conferred on real property located in the district or to the public at large. General
enhancement of property value does not constitute "special benefit. i4
Judicial Guidance
Since the enactment of Article XIIID, the courts have rendered opinions regarding various
aspects of Article XIIID. The notable portions of cases that apply to assessment districts in
general and this PBAD in particular are noted below.
'The engineer's report describes the services to be provided by the PBAD; (1) security,
(2) streetscape maintenance (e.g., street sweeping, gutter cleaning, graffiti removal), and
(3) marketing, promotion, and special events. They are all services over and above those
already provided by the City within the boundaries of the PBAD. And they are particular
and distinct benefits to be provided only to the properties with the PBAD, not to the public
at large they 'affect the assessed property in a way that is particular and distinct from
{their} effect on other parcels and that real property in general and the public at large do
not share'.'
"...separating the general from the special benefits of a public improvement project and
estimating the quantity of each in relation to the other is essential if an assessment is to
be limited to the special benefits."'
"...the agency must determine or approximate the percentage of the total benefit
conferred by the service or improvement that will be enjoyed by the general public and
deduct that percentage of the total cost of the service or improvement from the special
assessment levied against the specially benefitted property owners. "'
"...even minimal general benefits must be separated from special benefits and quantified
so that the percentage of the cost of services and improvements representing general
benefits, however slight, can be deducted from the amount of the cost assessed against
specially benefitting properties."'
The contents of this Engineer's Report are prepared in compliance with the above noted
authorizing legislation, the State Constitution and the judicial opinions.
3 Section 4, Article XIIID of the State Constitution.
4 Section 2 (1), Article XIIID of the State Constitution.
5 Dahms v. Downtown Pomona Property and Business Improvement District, (2009) 174 Cal. App. 4t^ 708, 722
6 Beutz v. County of Riverside, (2010) 184 Cal. App. 4th 1516, 1532.
7 Golden Hill Neighborhood Association, Inc. v. City of San Diego, (201 1) 199 Cal. App. 0" 416, 438
8 Golden Hill Neighborhood Association, Inc. v. City of San Diego, (2011) 199 Cal. App. 4s, 416, 439
The Lincoln Boulevard PBAD Steering Committee collectively determined the priority for
improvements and activities to be delivered by the business improvement district. The primary
needs as determined by the property owners are both Environmental Enhancements as well as
Marketing activities. The Environmental Enhancements include activities, such as;
Maintenance, Public Safety and Beautification. Specifically the PBAD shall provide the
following activities.
Environmental Enhancements
Maintenance. Safety & Hospitality Ambassadors
Lincoln Boulevard's Maintenance and Safety & Hospitality Ambassador program was developed
based upon services currently being provided by DTSM's existing downtown PBAD and
contractor. It provides for a level of service that is comparable to the existing Zone 3
maintenance and safety coverage, plus enhancements given the higher vehicular and
pedestrian frequencies along the Lincoln corridor.
The Lincoln PBAD's s maintenance and safety budget is based upon the following deployment:
Maintenance Team
Frequent
Hours of Deployment per Week
56
Weekly Coverage
8 hours per day/7 days per week
-Average
Litter Removal /Pan & Broom
Dail
Pressure Washing
As needed
Graffiti Removal
Daily as needed
Landscape/Weeds
Daily as needed
-Light
Sot Cleaning
As needed
-Emergency
Maintenance of PBAD funded
beautification elements
As needed
& Hospitality Team
-Safety
Hours of Deployment per Week
112
Coverage
1to2 Ambassadors Monday thru Friday 7:00 a.m.
to 9:30 p.m.
1 to 3 Ambassadors Saturday and Sunday 10:00
a.m. to 9:30 p.m.
Foot Patrol
Dail
Visitor services, safety escorts, motorist
assist, homeless outreach
Daily
Beautification
Beautification funds support enhancements that improve the visual appearance of Lincoln
Boulevard and may include:
Wayfinding signage
Seasonal decorations
• Flower planters
• Street furniture and amenities
Feasibility analyses and plans for design, streetscape and other physical improvements
Other activities and improvements that visibly enhance the Lincoln Boulevard
environment
Annual recommendations regarding the allocation of beautification will be developed by a
Lincoln Boulevard PBAD committee and then forwarded to the DTSM Board of Directors.
The ENVIRONMENT activities account for 88% of the proposed PBAD budget.
Economic Enhancements
Marketing
Activities aimed at working with property owners to improve Lincoln Boulevard's overall image,
increase sales and building occupancies are part of the PBAD Management Plan. Marketing
programs and activities will aim to improve the overall image of Lincoln Boulevard with the goal
of integrating Lincoln Boulevard into the overall marketing and promotion of Downtown Santa
Monica, which will ultimately attract consumers, visitors and businesses to the Lincoln corridor.
Examples of marketing activities include adding Lincoln Boulevard to downtown kiosks and
directories and including Lincoln Boulevard businesses in applicable downtown promotions and
events.
The ECONOMIC activities account for 12% of the proposed PBAD budget.
Administration
An Administrative cost of 10% has been included within the PBAD budget. Examples of these
costs include:
• Accounting and annual financial reports,
• Program support costs including supplies, equipment and rent,
• Communications to keep all Lincoln Boulevard stakeholders informed of policies, issues,
challenges and opportunities,
• The City of Santa Monica's PBAD administration fee,
• Other administration costs associated with the overhead and administrative support of
programs.
To reduce administrative costs, increase leveraging of funds and to avoid duplication of
enhanced services, the PBAD will be managed by DTSM to deliver day -to -day services. DTSM
can leverage PBAD assessments with additional revenues, including sponsorship revenues,
contracts, grants and earned income.
4 y,
Fli
PBAD Boundary Description
The PBAD will encompass approximately 5 blocks of the core of the Lincoln Boulevard corridor
which includes properties along Lincoln Boulevard from Wilshire Boulevard to the 10 Interstate
Freeway.
A map of the proposed district boundary is below.
O e BID ASSESSED PROPERTIES DOWNTOWN SANTA MONICA, INC.
Methodology
Article XIIID Section 4(a) of the State Constitution states that "The proportionate special benefit
derived by each identified parcel shall be determined in relationship to the entirety of the capital
cost of the public improvement, the maintenance and operation expenses of a public
improvement, or the cost of the property related service being provided ".
Determining the proportionate special benefit among the parcels of real property within the
proposed assessment district which benefit from the proposed improvements, services, and
activities is the result of a four -step process:
1. Defining the proposed activities,
2. Determining which parcels specially benefit from the proposed activities,
3. Determining the amount of special benefit each parcel receives,
4. Determining the proportional special benefit a parcel receives in relation to the amount of
special benefit all other parcels in the PBAD receive.
Each identified parcel within the PBAD will be assessed based upon each parcel's unique
characteristics in relationship to all other specially benefitted parcels' characteristics. Due to the
proportionate special benefits received by each parcel from the PBAD services, each parcel will
be assessed a rate which is commensurate with the amount of special benefits received.
Special Benefit Factor
The method used to determine proportional special benefits are measured by each parcel's lot
square footage or building square footage compared to the total assessable footages of all
parcels in the District boundary.
Building or Lot Square Footage: The greater of lot or building square footage for each parcel of
real property are the primary assessment variables for all properties within the PBAD. Benefits from
all PBAD activities are designed to improve cleanliness, public safety, image, occupancy and
sales, benefits that are distributed for all real property within the district. Developed parcels receive
the greatest benefit from the proposed improvements and activities for the tenants, employees and
pedestrians. For undeveloped parcels and parking lots, lot square footage acknowledges the
benefits of these services to the ground level of property.
Property Use Considerations
All parcels in the PBAD benefit from the Environmental activities. However, not all parcels specially
benefit from the Marketing activities. In order to ensure proportionality, these parcels, such as
residential and non - profit will be assessed based on the following methodology:
Treatment of Residential and Non - Profit Property: All residential and non - profit parcels
receive the same level of service and special benefit from Environmental activities (i.e. clean
and safe) as all other parcels in the PBAD by making each of these parcels cleaner and safer.
Specifically, these parcels specially benefit from PBAD activities, such as; removing graffiti from
their buildings, patrolling their sidewalks, cleaning up any debris and powerwashing their
sidewalks. Thus, each of these parcels is assessed for the special benefits received from the
Environmental activities services. However, these parcels will not receive special benefit from
Marketing activities because those uses are not engaged in commercial or customer attraction
activities, and will not specially benefit from the increased economic activities. Therefore, they
will not be assessed for the Marketing activities.
New assessments for a Change in Land Use: If any parcel within the PBAD changes land use
during the life of the PBAD, it will be subject to the assessment rate consistent with the assessment
methodology for the new land use.
State Law, Proposition 218, and judicial opinions require that assessments be levied according
to the estimated special benefit each assessed parcel receives from the activities and
improvements. Article MID Section 4(a) of the California Constitution in part states "only
special benefits are assessable" which requires that we separate the general benefits, if any,
from the special benefits provided by the proposed activities and improvements.
As of January 1, 2015, the State Legislature amended the Property and Business Improvement
District Law to clarify and define both special benefit and general benefit as they relate to the
improvements and activities these districts provide. Specifically, the amendment (Section
36615.5 of the Streets and Highways Code) defines special benefit as "Special Benefit means,
for purposes of a property -based district, a particular and distinct benefit over and above
general benefits conferred on real property located in a district or to the public at large. Special
benefit includes incidental or collateral effects that arise from the improvements, maintenance,
or activities of property -based districts even if those incidental or collateral effects benefit
property or persons not assessed ".
In addition, the amendment (Section 36609.5 of the Streets and Highways Code) defines
general benefit as "General benefit means, for purposes of a property -based district, any benefit
that is not a "special benefit' as defined in Section 36615.5 ".
Furthermore, the amendment (Section 36601(h)(2) states "Activities undertaken for the purpose
of conferring special benefits upon property to be assessed inherently produce incidental or
collateral effects that benefit property or persons not assessed. Therefore, for special benefits
to exist as a separate and distinct category from general benefits, the incidental or collateral
effects of those special benefits are inherently part of those special benefits. The mere fact that
special benefits produce incidental or collateral effects that benefit property or persons not
assessed does not convert any portion of those special benefits or their incidental or collateral
effects into general benefits ".
Special Benefit Analysis
All special benefits derived from the assessments outlined in this Report are for property related
activities directly benefiting each individual assessed parcel in the PBAD. The special benefit
must affect the individual assessable parcel in a way that is particular and distinct from its effect
on other parcels and that real property in general and the public at large do not share. No
parcels assessment shall be greater than the special benefits received.
Streets and Highways Code Section 36601(e) states that "Property and business improvement
districts formed throughout this state have conferred special benefits upon properties and
businesses within their districts and have made those properties and businesses more useful by
providing the following benefits: (1) Crime reduction. A study by the Rand Corporation has
confirmed a 12- percent reduction in the incidence of robbery and an 8- percent reduction in the
total incidence of violent crimes within the 30 districts studied. (2) Job creation. (3) Business
attraction. (4) Business retention. (5) Economic growth. (6) New investments.
The PBAD's goal is to fund activities and improvements to provide a cleaner, safer and more
attractive and economically vibrant environment as outlined in Section B. The goal of improving
the economic vitality is to improve the safety, cleanliness, marketing and appearance of each
specially benefitted parcel in an effort to increase commerce, to increase building occupancy
and lease rates and to attract more customers, employees, tenants and investors.
Each parcel will specially benefit from:
• Cleaner sidewalks, streets and common areas
• Real and perceived public safety improvements
• Greater pedestrian traffic
• Enhanced rental incomes
• Improved business climate
• New business and investment
• Well managed programs and services
Specifically each parcel benefits from each of the PBAD activity as defined below
Safetv
The enhanced safety activities makes the area more attractive for businesses, customers, and
residents, and ultimately private investment. When business location decisions are made "lower
levels of public safety lead to increased uncertainty in decision making and can be perceived as
a signal of a socio - institutional environment unfavorable for investment ". Uncertainty affects the
investment environment in general. But in particular, it increases the fear of physical damage to
investment assets (or to people) or their returns... Almost universally, places with lower crime
rates are perceived as more desirable ".9 Once economic investment occurs within the district,
pedestrian traffic and commercial activity will increase. The special benefit to assessed parcels
from these services is the likelihood of increased lease rates and tenant occupancy due to the
increase of commercial activity and an increase in customers that follow from having a safer
environment.
In addition, each specially benefitted parcel benefits from: increased security patrol, removing
graffiti from their buildings, connecting the homeless to available resources, reducing the
number of trips and falls by repairing the grout in the sidewalks in front of their parcel, picking up
trash that pedestrians leave behind, and powerwashing their sidewalks.
Maintenance and Beautification
The maintenance and beautification activities benefit each assessed parcel within the PBAD by
providing a clean and aesthetically appealing environment. This is achieved through sidewalk
sweeping and power washing, removing litter and graffiti, and trash removal. In addition, the
beautification activities benefit each assessed parcel by providing an aesthetically appealing
environment through wayfinding signage, sidewalk benches, holiday decor, planters, etc. These
activities create the environment needed to achieve the PBAD goals.
s "Accelerating economic growth and vitality through smarter public safety management" IBM Global Business
Services Executive Report, September 2012, pg. 2
Marketing
The Marketing activities will specially benefit each commercial parcel by encouraging business
development and investment which generates customer traffic which directly relates to
increases in commercial activity, filling of vacant storefronts and offices and ultimately,
increased lease rates for retail and office space. Residential parcels will not receive special
benefit from the Marketing activities as they are not engaged in commercial or customer
attraction activities. Therefore, they will not be assessed for the Marketing portion of the PBAD
budget.
Special Benefit Conclusion
Based on the special benefits each assessed parcel receives from the PBAD activities we
concluded that each of the proposed activities provides special benefits to the real property
within the district and that each parcel's assessment is in direct relationship to and no greater
than the special benefits received.
The special benefit to parcels from the proposed PBAD activities and improvements described
in this Report are equal to or exceeds the total amount of the proposed assessment. Each
individual assessed parcel's assessment is no greater than the special benefit it receives from
the PBAD activities.
General Benefit Analysis
As required by the State Constitution Article XIIID Section 4(a), the general benefits of an
assessment district must be quantified and separated out so that the cost of the activities that
are attributed to general benefit are deducted from the cost assessed against each specially
benefitted parcel. General benefits are benefits from the PBAD activities and improvements
that are not special in nature, are not "particular and distinct" and are not over and above the
benefits that other parcels receive. This analysis will evaluate and determine the level of
general benefits that (1) parcels outside of the PBAD, and (2) the public at large may receive.
General Benefit to Parcels Outside of the PBAD
All the PBAD activities and improvements are provided solely to each of the individual assessed
parcels in the PBAD boundary. Each of the PBAD activities is provided to the public rights -of-
way (streets, sidewalks) adjacent to all specially benefitted parcels or tenants in the PBAD. In
the case of the Lincoln Boulevard PBAD the surrounding parcels are either primarily residential
or are parcels that are currently in the existing Downtown PBAD that already receives services.
In either case, none of the surrounding parcels will directly receive any of the PBAD activities.
Any benefits these parcels may receive are incidental to providing special benefits to the
assessed parcels, and thus any cost associated to the incidental benefits are not reduced from
the cost of providing special benefit.
General Benefit to the Public At Large
In addition to the general benefit analysis to the parcels outside of the PBAD boundary, we also
quantify the general benefits to the public at large; those people that are either in the PBAD
boundary and not specially benefitted from the activities or people outside of the PBAD
boundary that may benefit from the PBAD activities. In the case of the PBAD the public at large
are those people that are within the PBAD boundary that do not pay an assessment and do not
specially benefit from the PBAD activities.
Attachment
To calculate the general benefit the public at large may receive we determine the percentage of
each PBAD activity budget that may benefit the general public. In this case, the Safe activities
may generally benefit the public as the general public may appreciate the enhanced level of
security as it passes through the PBAD. The Maintenance, Beautification and Marketing
activities are tailored to benefit the physical characteristics of the parcels, buildings and
sidewalks or the tenants of each parcel and are not intended to benefit the general public.
The table below shows the budget for the Safety program and its respective percentage of the
total PBAD budget. We then apply a Relative Benefit factor to this activity. The relative benefit
factor is a basic unit of measure that compares the benefit the general public receives
compared to the public that specially benefits (employees, tenants, customers) from each
activity. Since the specially benefitted public receives 100% of the activities it is assigned a
relative benefit factor of 1.0 for each PBAD activity, and the general public is assigned a relative
benefit factor less than 1.0. The Safe activity receives a relative benefit factor of 0.25 which we
believe to be a reasonable factor for the general public that is not specially benefitted. There is
no scientific method to determine the relative benefit factors, however in our professional
experience of over 50 years as a Registered Civil Engineer the relative benefit factors are
reasonable to conclude.
The relative benefit factor is then multiplied by the PBAD activity's budget percentage to
determine the overall benefit factor. The following table illustrates this calculation.
A B C D E
Budget % of General Benefit General Benefit General Benefit
PBAD Activity Amount Budget Factor Percent (B x C) Allocation (A x D)
Safe $157,667 34.54% 0.25 8.63% $13,614
This analysis indicates that 8.63% for Safe activities may be attributed to general benefit to the
public at large equaling a total of $13,614 that must be raised from sources other than special
assessments.
General Benefit Conclusion
Using the sum of the two measures of general benefit quantified above (0.0% + 8.63% for
Safety activities) we find that approximately $13,614 may be general in nature and will be
funded from sources other than special assessments.
AM
S ll,
2016 Operating Budget
The Lincoln Boulevard PBAD's operating budget takes into consideration:
1. The improvements and activities needed to provide special benefits to each individua
parcel within the PBAD boundary (Section B),
2. The parcels that specially benefit from said improvements and activities (Section C), and
3. The costs associated with the special and general benefits conferred (Section E).
EXPENDITURES
Budget
Administration
10%
TOTAL
BUDGET
% of
Budget
Maintenance
$121,667
$12,167
$133,833
29.32%
Safety & Hospitality
$143,333
$14,333
$157,667
34.54%
Beautification
$100,000
$10,000
$110,000
24.10%
Marketing
$50,000
$5,000
$55,000
12.05%
Total Expenditures
$415,000
$41,500
$456,500
100.00%
REVENUES
Assessment Revenues
$442,886
97.02%
Other Revenues 1
$13,614
2.98%
Total Revenues
$456,500
100.00%
(1) Other non - assessment funding to cover the cost associated with general benefit.
Budget Notations
The annual budget may increase no more than 5% per year consistent with the
increase in consumer price index (CPI) and increases in program costs. The
determination of annual budget adjustments and assessment rates will be subject to
the review and approval of the board of Downtown Santa Monica Inc.
R1 1 1 1 ii i..
As previously discussed in Section D, the PBAD is segregated and into three land use types
that benefit differently from the PBAD activities. The table below summarizes the assessable lot
or building square footage for each land use type.
Land Use
Lot or
S
Building
.Ft.
Commercial
1,060,000
Residential
40,000
Non - Profit
46,000
Calculation of Assessments
Based on the land use type, assessable lot or building square footage and the proposed budget,
all of which are discussed above, the first year's maximum annual assessment rate for each
parcel follows:
Estimated Rates of Assessment
Lot or Building Sq. Ft.
Maintenance
0.119
Safety & Hospitality
0.128
Beautification
0.098
Marketing
0.052
0.397
$3,970.00
Total Commercial
0.397
Total Residential
0.345
Total Non - profit
0.173
The following example illustrates how the preceding rates are applied to parcels within the
PBAD.
Property
Characteristic
Building Sq.
Ft.
Lot Sq.
Ft.
Greater
of
Rate
Annual
Assessment
Commercial
10,000
5000
10,000
0.397
$3,970.00
Residential
2500
1500
2500
0.345
$86.25
Non - profit
1500
3000
3000
0.173
$51.90
The assessment calculation is the same for every parcel in the PBAD.
(Maximum Annual Assessment Adjustments
The annual budget may increase no more than 5% per year consistent with the increase in
consumer price index (CPI) and increases in program costs. The maximum assessment for
each year of the District, based on a maximum 5% annual increase of the budget over the prior
year, is shown in the following table.
Budget Adjustment
Any annual budget surplus or deficit will be rolled into the following year's PBAD budget. The
budget will be set accordingly, within the constraints of the management plan to adjust for
surpluses or deficits that are carried forward.
Future Development
Based on new development in the PBAD, the amount of assessable square footage in the
PBAD may change over time. These changes could modify the total square footage assessed
for affected parcels. Therefore, in future years, the assessments levied against PBAD parcels
may change in accordance with the assessment methodology formula and rates in the
Management District Plan and Engineer's Report. Changes to the assessment formula would
require the approval of an amendment to the Management Plan
Commercial
Residential
Non- profit
Year 1
0.397
0.345
0.173
Year 2
0.417
0.362
0.182
Year 3
0.438
0.380
0.191
Year 4
0.460
0.399
0.200
Year 5
0.483
0.419
0.210
Year 6
0.507
0.440
0.221
Year 7
0.532
0.462
0.232
Year 8
0.559
0.485
0.243
Year 9
0.587
0.510
0.256
Year 10
0.616
0.535
0.268
Year 11
0.647
0.562
0.282
Year 12
0.679
0.590
0.296
Year 13
0.713
0.620
0.311
Budget Adjustment
Any annual budget surplus or deficit will be rolled into the following year's PBAD budget. The
budget will be set accordingly, within the constraints of the management plan to adjust for
surpluses or deficits that are carried forward.
Future Development
Based on new development in the PBAD, the amount of assessable square footage in the
PBAD may change over time. These changes could modify the total square footage assessed
for affected parcels. Therefore, in future years, the assessments levied against PBAD parcels
may change in accordance with the assessment methodology formula and rates in the
Management District Plan and Engineer's Report. Changes to the assessment formula would
require the approval of an amendment to the Management Plan
The total assessment amount for FY 2015 -16 is $442,886 apportioned to each individual
assessed parcel, as follows.
Attachment 4: City Base Level of Services Colorado Esplanade
8ervicea ggglki.iiyj
escrtttgn
Ftgtteney
MAN
Pedestrian Walkways:
Picks up large debris
® Once daily, 7 days a week
Sweeper
Sweeper — scrubber
Picks up small debris, applies
degreaser, scrubs pavement &
® Once daily, days a week
y, y
recovers excess water
Pressure Washer
Steam cleans in places
® Once daily, 5 days a
scrubbers can't reach
week (Mon, Tues,Thurs,
Friday, Sat)
Pre -treat stains and spot
Degreaser applied with hand -
pressure wash
sprayer
® As needed
Policing
Walk site, sweep & remove
® Daily and as needed
debris
Benches
Spray & wipe
o Daily and as needed
Drinking Fountains
Spray & wipe
• Daily and as needed
Trash Containers
Wipe top, remove trash,
• Four times daily, Mon. — Thu.
replace bag
• Five times daily, Fri. — Sun. &
Holidays
Trash Container Liners
Steam clean/ wiped down from
• weekly as needed
the inside & deodorize
Stainless Steel Bollards
Spray & wipe, steam clean
. Once daily, as needed
Directories
Spray & wipe
o Once daily, as needed
Sculptures
Spray & wipe
. Once daily, as needed
Graffiti
Remove
o Daily and as needed
Attachment 4: City Base Level of Services Colorado Esplanade
1) Tree care cost (work performed byWCA)
Annual Cost (first 5 years) after 5 years the cost to prune the sycamores will increase due to size
%\ Landscape Maintenance (work performed bvTruXreen)
Turf/
Mow, trim, general
1
Platanus mexicana
80
Full/Structural
$50
$4,000
$20,000
maintenance (using
Prune
City standards)
2
Washingtonia
14
Maintenance
$75
$1,050
($5,250)
AnnualCost
settings
%\ Landscape Maintenance (work performed bvTruXreen)
Turf/
Mow, trim, general
0 Weekly
$30,000.00
Shrub Maintenance
landscape
maintenance (using
City standards)
Irrigation Inspection
Check system and
0 Weekly
lncluded in
controller for proper
AnnualCost
settings