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HomeMy WebLinkAbout05 - CdM Business Improvement District RenewalCITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT Agenda Item No. 5 August 9, 2005 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Community & Economic Development, Planning Department George A. Berger, AICP; C &ED Program Manager; 949/644 -3207; gaberger(cilcity. newport- beach.ca. us SUBJECT: Corona del Mar Business Improvement District Renewal: Annual Report for Fiscal Year 2004 - 2005 and Adoption of Resolution of Intention to Levy for Shortened Fiscal Year 2005 -2006. ISSUE: Should the City Council renew the Corona del Mar Business Improvement District for its 10th year of operation, for the BID's fiscal year of September 1st, 2005 to June 30tH 2006? RECOMMENDATION: 1. Approve the Corona del Mar Business Improvement District 2004 -2005 Annual Report; and 2. Adopt the Resolution of Intention to Levy Assessments and set the public hearing for August 23, 2005. DISCUSSION: Background The Corona del Mar Business Improvement District (BID) is nearing the end of its ninth year of operation and requests renewal of the District for the shortened fiscal year September 1, 2005 to June 30, 2006. This report summarizes the District's accomplishments during FY 2004 -2005, its ninth year of operation, and the proposed activities and budget for the coming year. It also discusses renewing the BID for a shortened period, ten months, to bring the BID renewal period into the City's Fiscal Year, and discusses proposed activities and budget for this shortened fiscal period. The BID's Board of Directors, which serves as the District Advisory Board, requests City Council approval of the annual report and scheduling of the public hearing for August CdM BID '04 -05 Annual Report & Resolution of Intention to Levy August 09, 2005 Page 2 23, 2005. The District includes the area generally located on East Coast Highway from Hazel Drive to Avocado Avenue as set forth with greater specificity in the map attached as Exhibit A. California law requires that an annual report be prepared and a public hearing be held each year prior to renewal of the District. A summary of accomplishments during 2004 and 2005 and proposed activities for 2005 -2006 are provided below. Ninth Year District Accomplishments The Corona del Mar BID sponsored the following promotions and activities during the past year: • In close cooperation with the City, new Coast Highway medians were engineered, installed and landscaped throughout the entire length of the District. The BID made an initial cash contribution of $145,000 to the City to ensure the success of this project, and committed $40,000 per year for four additional years from future City matching funds to this project ($160,000 additional). • The BID continued its working relationship with the Corona del Mar Chamber of Commerce for marketing and promotional efforts. As part of this joint effort, the BID contracted with the Chamber for maintenance of the Corona del Mar BID website, www.edmvillage.com, in order to educate the public about the CdM Vision plan and distribute information on current events and BID administration. The Chamber also included the BID newsletter in its bi- monthly newsletter sent to all BID members and Chamber members. The BID also worked with the Chamber in recognizing merchants who renovate their stores or buildings, as well as continuing the successful Holiday Storefront Lighting program in all participating merchant windows. In addition, the BID paid for a presence for all of its members in the 2005 Corona del Mar Business Directory. • The BID paid for quarterly maintenance of decorative landscape bedding at the Marguerite / Coast Highway intersection, with replanting as needed. • The BID maintained the contract with the City's landscape services provider to ensure the health of the 200 Palm and Hong Kong Orchid trees along the Coast Highway right -of -way throughout the business district. The BID also continued to contract with the contractor for maintenance of the planters and irrigation systems. • The BID supported and participated in the Annual Christmas Walk, sponsored by the Corona del Mar Chamber of Commerce. CdM BID '04 -05 Annual Report & Resolution of Intention to Levy August 09, 2005 Page 3 • The BID contracted with Dekra -Lite, Inc. to have holiday season decorations installed in the medians at Marguerite and Coast Highway, and garland and bows placed on a number of utility poles throughout the District. Fiscal Year District Revenues During 2004 -2005 the district collected approximately $68,858 in member assessments with $15,000 in additional funds yet to be collected. Its account balance at the beginning of the year was $128,073.00. The BID received $48,707.00 in matching funds from the City. The BID has spent approximately $223,949.00 for approved activities, and anticipates spending an additional $10,000.00 by fiscal year end. It is anticipated that a remaining balance of approximately $9,000 will be carried over into the shortened 2005 -2006 fiscal year budget. At the end of the shortened FY 2005 -2006 (September – June), the District anticipates spending approximately $108,100 for approved activities. As noted below in more detail, the Corona del Mar BID has committed $40,000 of the City's matching funds -- otherwise anticipated to be approximately $48,000 —back to the City in repayment for the median construction project. Proposed Improvements, Activities and Budget As Council members will recall from the Balboa Village renewal earlier this year, staff —in cooperation with the BID contract administrator —has begun synchronizing the BID renewals with the fiscal year of the City, in order to obtain additional administrative efficiencies. Therefore, staff recommends that the Corona del Mar Business Improvement District be renewed for a shortened (ten month) fiscal year lasting through June 30, 2006; and then be renewed again by the City Council for a 12 -month fiscal year beginning in July of 2006. The FY2005 -2006 Priorities and Budget Outline, including specific goals for each category, is submitted by the BID Advisory Board as part of the attached Annual Report. The highest priorities for the upcoming fiscal year are: 1. Marketing, advertising, and promotion of Corona del Mar; 2. Physical Improvements within Corona del Mar; 3. Corona del Mar BID Member and Community Outreach; 4. Corona del Mar BID CdM Vision Plan and associated administration. The estimated cost of providing the proposed improvements and activities to be undertaken by the BID in the shortened FY 05 -06 period is approximately $108,100. The implementation of these actions is more fully described in the attached CdM BID Priorities and Budget Outline for the 2005 -2006. CdM BID '04 -05 Annual Report & Resolution of Intention to Levy August 09, 2005 Page 4 Additionally, the City Attorney's office has noted that the BID has been operating under Bylaws which were not authorized by the City Council. The Advisory Board requests that the City Council grant the authority to the Advisory Board to adopt Bylaws to govern its general operations. Any Bylaws adopted by the Advisory Board will be consistent with State law and resolutions adopted by the City Council, and this request will be brought before the Council at the Renewal Hearing, currently scheduled for August 23r0 Assessment Collection The current and proposed BID benefit assessment per business is equal to 150% of the City's annual business license fee, pursuant to Chapter 5.08 of the Newport Beach Municipal Code. In most cases the business license tax is comprised of $120 plus an additional amount for each employee. Banks and financial institutions exempt from City business license regulations are assessed $500 per year. Insurance agencies exempt from City license regulations are assessed $250 per year. Persons operating one of the following businesses as an independent contractor in an establishment owned by another person are exempt from this assessment: 1. Hair stylists 2. Nail technicians 3. Real estate agents The penalty for delinquent payments is twenty -five percent per month, provided that the penalty amount added shall in no event exceed one hundred percent of the assessment amount due. Assessments are collected in a single installment at the beginning of the fiscal year, and are prorated for new businesses opening during the year. The Advisory Board of the Corona del Mar Business Improvement District does not expect to raise funds in addition to the assessments levied for the upcoming year. It is anticipated that overall BID matching funds will be approved by the City Council for fiscal year 2005- 2006, with those additional funds normally being added to the amount designated for marketing activities and physical improvements. However, the CdM BID has committed $40,000 of the matching funds — anticipated to be approximately $48,000 this year —back to the City in repayment for the median construction project. The attached Annual Report further describes the budget and activities for the upcoming year, and has been filed with the City Clerk's office as required by Califomia law. Environmental Review: Not subject to CEQA, as the activity is not a project, as defined in Section 15378(b)(4). CdM BID '04 -05 Annual Report & Resolution of Intention to Levy August 09, 2005 Page 5 Public Notice: None required for this action. Notice will be provided for the public hearing on August 23, 2005. Funding Availability: Business Improvement District matching funds are included in City Budget Account No. 2720 -8250. Submitted by: SHARON Z. WOOD Assistant City Manager Prepared by: GEORGE A. BERGER, AICP C &ED Program Manager W � assistance from: CLINTON SCOTT PALMER Cathimarie's Inc., BID Administration Attachments: Exhibit A: CdM BID Boundary Map Exhibit B: FY 04 -05 Annual Report (by BID Advisory Board) Exhibit C: (Shortened) FY 05 -06 Priorities & Budget (by BID Advisory Board) Exhibit D: Resolution of Intention 05 EXHIBIT B REPORT TO THE MAYOR AND CITY COUNCIL CORONA DEL MAR BUSINESS IMPROVEMENT DISTRICT ANNUAL REPORT FOR 2004 -2005 FISCAL YEAR Overview This is the annual report for the Corona del Mar Business Improvement District, as required by Section 36533 of the California Streets and Highways Code, for fiscal year September 1, 2004 to August 31, 2005. Boundaries The boundaries of the benefit zone remain unchanged: generally located on East Coast Highway from Hazel Drive to Avocado Avenue as set forth with greater specificity in the map attached as Exhibit A. Revision to Fiscal Year City Staff has reviewed the renewal periods for all four business improvement districts. Three of the Districts have renewal periods that are not synchronized with the City's fiscal year. Staff has determined that efficiencies in administration of the Districts would be realized if all four Business Improvement Districts were renewed in synch with the City's Fiscal Year. Therefore, Staff recommends and the CdM BID Advisory Board agrees that the Corona del Mar Business Improvement District be renewed for nine months, and then be renewed again in July of 2006 in order to match the City's Fiscal Year (July 1 —June 30). Proposed Activities The improvements and activities to be provided for the fiscal year include: 1. Marketing, advertising, and promotion of Corona del Mar 2. Physical Improvements within Corona del Mar 3. Corona del Mar BID Member and Community Outreach 4. Corona del Mar BID CdM Vision Plan and associated administration. Proposed Budget The estimated cost of providing the proposed improvements and activities in this report is approximately $108,100.00. The implementation of these actions is more fully described in the attached Priorities and Budget Outline for the 2005 -2006 Short Fiscal Year. Assessments Assessments shall be collected in one annual installment at the ki Account Status Prior Year Accomplishments beginning of the fiscal year, and shall be pro -rated for new businesses that open during the fiscal year. The benefit assessment shall be equal to 150% of the City's usual annual business license tax as established pursuant to Chapter 5.08 of the Municipal Code. The penalty for delinquent payments will be twenty -five percent per month, providing that the penalty amount added shall in no event exceed one hundred percent of the assessment amount due. Banks and financial institutions that are exempt from City business license regulations shall be assessed $500 per year. Insurance agencies that are exempt from City business license regulations shall be assessed $250 per year. Persons operating in one of the following types of businesses, as an independent contractor in an establishment owned by another person shall be exempt from this assessment: 1. Hair stylists 2. Nail technicians 3. Real estate agents During the 2004 -2005 fiscal year the District collected approximately $68,858.00 in assessments from members, with an additional $15,000.00 in accounts receivable to be collected by the end of the fiscal year. Its account balance of the beginning of the year was $128,073.00. The BID received $48,707.00 in matching funds from the City. The BID has spent approximately $223,949.00 for approved activities, and anticipates spending an additional $10,000.00 by fiscal year end. The District's current account balance is approximately $26,250 at the end of the first ten months of the fiscal year. It is anticipated the balance will be approximately $16,000 or less at the fiscal year end, August 31, 2005. Revenue from members is projected to be $58,000 and City Matching revenues to be $48,000. Of that $48,000, $40,000 has been previously committed to the City for payment on the new medians. $108,100 has been allocated for projected expenses, with an anticipated $5,000 left over at the end of the Short Fiscal Year. The merchants of Corona del Mar have found their ninth year as a Business Improvement District to be very successful and have achieved several accomplishments including: * In cooperation with the City, new medians have been engineered, landscaped and installed throughout the entire length of the District. This was achieved by a cash payment of $145,000 to the City, as well as committing $40,000 a year for three years from future matching funds from the City. * Continued with the working relationship with the Corona del Mar Chamber of Commerce in marketing efforts. As part of this joint effort, the BID contracted with the Chamber to maintain and update the Corona del Mar BID website, www.cdmvillage.com, to educate the public about the CdM Vision plan and distribute information on current events and administration of the BID. The Chamber also includes the BID newsletter in its bi- monthly newsletter sent to all BID members and Chamber members. The BID also worked with the Chamber in recognizing merchants who renovate their stores or buildings, as well as continuing the successful Holiday Lighting program in all participating merchant windows. In addition, the BID paid for a presence for all of its members in the 2005 Corona del Mar Directory. * The BID paid for quarterly maintenance of decorative bedding at the Marguerite / Coast Highway intersection with replanting as needed. * Maintained the health of the 200 palm and Hong Kong Orchids along the Coast Highway right -of -way. The BID also paid to maintain the planters and irrigation. * Supported the Corona del Mar Chamber of Commerce with the Annual Christmas Walk. * Installed Holiday Season Decorations in the medians at Marguerite and Coast Highway. The merchants of Corona del Mar have worked hard to promote and improve their village and wish to express their appreciation for the City Council's continued support of the Corona del Mar Business Improvement District. N � r • Corona del Mar Business Improvement District Priorities and Budget Outline September 1, 2005- June 30, 2006 Abbreviated Fiscal Year Funds Available FY End 2005 16,000 Funds to be Collected September 2005 69,000 Matching Funds (Net) from City 6,000 Total Available Funds 91,000 Priorities Budget Amount Total 1. BID Administration / Vision 2004 2% $ 600 * Administrative Mailings for Renewals 2. Action Committee 48% $42,5000 • Develop plans and costing strategies for replacing streetlights and traffic signals • Contribute funds to the Corona del Mar Chamber for the Christmas Walk • Install holiday decorations throughout the BID during the holiday season. Marketing 36% $32,500 *Contribute to the Newport Beach Centennial Celebration • Maintain Membership with Sherman Gardens • Develop new annual special events in conjunction with the Corona del Mar Chamber * Contract with CdM Chamber to maintain website and publish newsletter 4. Maintenance 14% $12,500 • Maintain lighting and seasonal color for Marguerite /Coast Highway intersection • Maintain backflow devices as needed for tree irrigation • Maintain sidewalks and benches as needed • Maintain all tree wells and tree health for 200 palm and orchid trees within the District 16 EXHIBIT D RESOLUTION NO. 2005- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH STATING ITS INTENTION TO LEVY ASSESSMENTS FOR THE CORONA DEL MAR BUSINESS IMPROVEMENT DISTRICT FOR THE FISCAL YEAR OF SEPTEMBER 1, 2005 TO JUNE 30, 2006. WHEREAS, the Corona del Mar Business Improvement District was established in 1996 pursuant to the Parking and Business Improvement Area Law of 1989, California Streets and Highways Code, Section 36500 et seq., (hereinafter the "Act'), which requires an annual report to be filed and approved by the City Council for each fiscal year; and WHEREAS, the Advisory Board has prepared an Annual Report for the 2004- 2005 fiscal year which is on file in the Office of the City Clerk, and WHEREAS, the Annual Report for the 2004 -2005 fiscal year was approved by the City Council, NOW, THEREFORE, the City Council of the City of Newport Beach resolves as follows: Section 1: The City Council hereby declares the intention to levy assessments for the Corona del Mar Business Improvement District for an abbreviated fiscal Resolution No. 2005 - Corona del Mar Business Improvement District Page 1 I\ year September 1, 2005 to June 30, 2006 pursuant to the Act. Such benefit assessment shall be as follows: A. Banks and financial institutions that are exempt from City business license regulations shall be assessed $500 per year; B. Insurance agencies that are exempt from City business license regulations shall be assessed $250 per year; C. Persons operating one of the following types of businesses as an independent contractor in an establishment owned by another person shall be exempt from this assessment: 1. Hairstylists 2. Nail technicians 3. Real estate agents D. The assessment for all other businesses within the District shall be 150 percent of the annual business license tax as established pursuant to Chapter 5.08 of the Municipal Code. Section 2: The penalty for delinquent payments shall be twenty -five percent (25 %) per month, providing that the penalty to be added shall in no event exceed one hundred percent of the assessment amount due. Section 3: The City shall collect benefit assessments in one annual installment, with collections for new businesses in the District on the day of the issuance of a business license by the City. The assessment for new businesses shall be pro- rated according to the number of full months remaining in the District's fiscal year. Resolution No. 2005 - Corona del Mar Business Improvement District Page 2 la Section 4: The improvements and activities to be funded by the benefit assessments shall include only the following: 1. Marketing and advertising 2. Physical Improvements 3. Maintenance Programs 4. Administration Section 5: The location of the District will remain the same: generally located on East Coast Highway from Hazel Drive to Avocado Avenue as set forth with greater specificity in the map attached as Exhibit A. Section 6. The City Council hereby declares the intention to discuss the granting of proper authority for the Corona del Mar Business Improvement District to adopt Bylaws for the purposes of general operations, consistent with State law and resolutions adopted by the City Council. BE IT FURTHER RESOLVED, that the City Council of the City of Newport Beach shall conduct a public hearing on August 23, 2005 at 7:00 p.m., or as soon thereafter as this matter may be heard, in the Council Chambers located at 3300 Newport Boulevard, Newport Beach, California at which time the Council will hear all interested persons for or against the renewal of the District, the extent of the District and the specific types of improvements or activities to be funded by the benefit assessment. Protests may be made orally or in writing; but if written, protests shall be filed with the City Clerk at or before the time fixed for the Hearing and contain sufficient documentation to verify business ownership and validate the particular protest. If written protests are received by the owners of Resolution No. 2005 - Corona del Mar Business Improvement District Page 3 0 businesses within the District that pay fifty percent or more of the total assessments to be levied, no further proceedings to renew the District shall be taken for a period of one year from the date of the finding of a majority protest by the City Council. If the majority protest is only against the furnishing of a specific type or types of improvements or activity or benefit within the District, those types of improvements or activities or benefit zones shall be eliminated. Further information regarding the proposed Business Improvement District renewal may be obtained at the Newport Beach City Hall, 3300 Newport Boulevard, Newport Beach, California, 92658. Telephone (949) 644 -3225. The City Clerk shall cause this resolution of intention to be published once in a newspaper of general circulation in the City at least seven days before the public hearing. This resolution shall take effect immediately upon adoption. Passed and adopted by the City Council of the City of Newport Beach at a regular meeting held on the day of 2005. ATTEST: 70 TV MO: CITY CLERK ATTACHMENT: Exhibit A (Boundary Map) Resolution No. 2005 - Corona del Mar Business Improvement District Page 4 ) 1