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SR-03-17-2015-7ACity Council Report City of .Samita Monied City Council Meeting: March 17, 2015 Agenda Item: 7 A To: Mayor and City Council From: Andy Agle, Director of Housing and Economic Development Subject: Petition Threshold for Assessment District Consideration Recommended Action Staff recommends that the City Council introduce for first reading the attached ordinance adopting local modifications to the requirements of the Property and Business Improvement District Law of 1994 to reinstate a 40- percent- minimum petition threshold for consideration of establishing a property or business improvement district. Executive Summary The proposed ordinance would reinstate the 40- percent- minimum petition threshold necessary to call for elections regarding the establishment of a property or business improvement district. Approval of a proposed district would continue to require affirmative votes from more than 50 percent of the voting property owners, weighted by proposed assessments. Background The Property and Business Improvement District Law of 1994 sets forth the process for establishing property and business improvement districts and levying assessments. Streets and Highways Code Section 36621(a) states that "Upon the submission of a written petition, signed by the property or business owners in the proposed district who will pay more than 50 percent of the assessments proposed to be levied, the city council may initiate proceedings to form a district by the adoption of a resolution expressing its intention to form a district." Charter cities are permitted to adopt local modifications to the method of levying assessments pursuant to the Property and Business Improvement District Law of 1994. When the existing Downtown Property -Based Assessment District was originally formed in 2008, staff from Downtown Santa Monica Inc. (DTSM -- known as the Bayside District Corporation at the time), DTSM board members, and interested community members spent nearly two years outreaching to property owners regarding the proposed PBAD. However, as a result of many out -of -state and absentee property owners, DTSM was challenged in reaching property owners. To help ensure that property owners would have an opportunity to vote on the proposed district, Council adopted Ordinance No. 2258 (CCS) on April 8, 2008, which added Santa Monica Municipal Code Section 2.38.030, providing for a petition threshold of 40 percent. The section had a sunset date of December 31, 2008. Discussion On February 10, 2015, Council reviewed the draft Colorado Avenue Overlay Management Plan and the draft Lincoln Boulevard PBAD Management Plan. The Council discussion included DTSM's difficulty in reaching out -of -state and absentee property owners, in spite of nearly one year of outreach efforts. As a result, Council directed staff to prepare an ordinance reinstating the 40- percent- minimum petition threshold required to initiate proceedings to establish property and business districts. The attached ordinance would reinstate the threshold by removing the sunset date. Next Steps If the 40- percent- minimum petition threshold is reached for the Colorado Avenue Overlay and /or the Lincoln Boulevard PBAD, Council would be asked to hold public hearings to adopt a resolution of intention for each assessment area. The City would then prepare and mail out ballots to all property owners within the boundaries of each proposed assessment area. Proposition 218 requires a ballot vote with no less than 50 percent of the ballots received, weighted by assessment, to be in support of the assessment in order for the assessment areas to be formed. If the assessment overlay or district is approved by the majority of property owners, Council would adopt resolutions approving the formation of the Colorado Overlay and the Lincoln Boulevard PBAD. 2 Financial Impacts and Budget Actions There is no immediate financial impact or budget action necessary as a result of the recommended action. Prepared By: Elana Buegoff, Senior Development Analyst Approved: Forwarded to Council: 1 —1 Andy Agle, Director Elaine M. Polachek Housing and Econom' evelopment Interim City Manager Attachments: Attachment A: Ordinance 3 City Council Meeting: March 17, 2015 Santa Monica, California ORDINANCE NUMBER (CCS) (City Council Series) AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA ADOPTING LOCAL MODIFICATIONS TO THE METHOD OF LEVYING ASSESSMENTS PURSUANT TO THE PROPERTY AND BUSINESS IMPROVEMENT DISTRICT LAW OF 1994 WHEREAS, property and business owners have expressed their desire to obtain the benefits of enhanced services and improvements through the mechanism of assessment financing; and WHEREAS, the Property and the Business Improvement District Law of 1994 (the "State Law ") authorizes the establishment of assessment districts for the purpose of providing the special benefits of enhanced services and improvements to property owners and business owners; and WHEREAS, the State Law expressly authorizes charter cities to modify the method of establishing a district pursuant to the State Law; and WHEREAS, authorizing modifications to the provisions of the State Law governing the petition threshold will promote the welfare of the City by increasing the flexibility and utility of the State Law so that petitions may be more readily initiated, thereby facilitating the initiation of the district establishment process and enhancing 1 opportunities for property and business owners to receive additional services and improvements benefitting their area. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES HEREBY ORDAIN AS FOLLOWS: SECTION 1. Santa Monica Municipal Code Section 2.38.030 is hereby amended to read as follows: 2.38.030 Petition threshold. Notwithstanding Streets and Highways Code Section 36621(a) or any other provision of state law, the City Council may initiate proceedings to establish a property and business improvement district upon receipt of a petition signed by property owners, business owners, or a combination of property owners and business owners in the proposed district who will pay at least forty percent of the assessments proposed to be levied. This seGtien sha4 SECTION 2. Any provision of the Santa Monica Municipal Code or appendices thereto inconsistent with the provisions of this Ordinance, to the extent of such inconsistencies and no further, is hereby repealed or modified to that extent necessary to effect the provisions of this Ordinance. SECTION 3. If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by a decision of any 2 court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have passed this Ordinance and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of the ordinance would be subsequently declared invalid or unconstitutional. SECTION 4. The Mayor shall sign and the City Clerk shall attest to the passage of this Ordinance. The City Clerk shall cause the same to be published once in the official newspaper within 15 days after its adoption. This Ordinance shall become effective 30 days from its adoption. _•-:• 51_ • •:u MAF SHA JONES MOLJRIE Cityc-Attorney J 3