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Home My WebLink About20 - Confirm the Levying of Assessments, and Appointment of the Advisory Board of Directors for the NBRBID Fiscal Year 2019-20TO: FROM CITY OF NEWPORT BEACH City Council Staff Report June 25, 2019 Agenda Item No. 20 HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL Grace K. Leung, City Manager - 949-644-3001, gleung@newportbeachca.gov PREPARED BY: Mary Locey, Management Analyst mlocey(c)-newportbeachca.gov and Melanie Franceschini, Administrative Analyst mfranceschini(a)-newportbeachca.gov PHONE: 949-644-3031 1 949-644-3028 TITLE: Public Hearing, Adopt a Resolution to Confirm the Levying of Assessments, and Appointment of the Advisory Board of Directors for the Newport Beach Restaurant Association Business Improvement District's Fiscal Year 2019-20 ABSTRACT: The annual renewal of the Newport Beach Restaurant Association Business Improvement District (NBRA BID) requires a public hearing to determine if there is a majority protest by the members against the levied assessments or a specific improvement, activity or benefit proposed by the BID for FY 2019-20. In addition, the City Council appoints an advisory board of directors to the NBRA BID during the annual renewal process. RECOMMENDATIONS: a) Hold a public hearing regarding the renewal of the Newport Beach Restaurant Association Business Improvement District for Fiscal Year 2019-20; b-1) If the protests received are less than 50 percent of the total assessment amount, adopt Resolution No. 2019-61, A Resolution of the City Council of the City of Newport Beach, California, Confirming the Levying of Assessment for the Fiscal Year of July 1, 2019 to June 30, 2020 for the Newport Beach Restaurant Association Business Improvement District, L oll b-2) If the protests received are 50 percent or more of the total assessment amount, abandon the proceedings to renew the Newport Beach Restaurant Association Business Improvement District; 20-1 Public Hearing, Adopt a Resolution to Confirm the Levying of Assessments, and Appointment of the Advisory Board of Directors for the Newport Beach Restaurant Association Business Improvement District's Fiscal Year 2019-20 June 25, 2019 Page 2 c) Determine this action is exempt from the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because this action will not result in a physical change to the environment, directly or indirectly; and d) Appoint the following Newport Beach Restaurant Association Business Improvement District members to serve as the Newport Beach Restaurant Association Business Improvement District's Advisory Board of Directors for Fiscal Year 2019-20: BID Member Representing BID Business Phil Crowley Modo Mio Thaddeus Foret The Winery Restaurant and Bar Juan Carlos Godinez On the Rocks Bar & Grill Matthew Meddock Sessions West Coast Deli Jordan Otterbein A Restaurant and A Market Kenyon Parr Five Crowns Eun'oo Pluenneke Balboa Lily's Christopher Roman Fork, Knife + Spoon Talia Samuels Representing Moulin Ron Schwartz Muldoon's Irish Pub Jim Walker The Bungalow Restaurant FUNDING REQUIREMENTS: The City of Newport Beach (City) contracts with a vendor (the NBRA BID pays for these services) to collect the member assessments on behalf of the NBRA BID and remits the monies directly to the NBRA BID's bank account. The monies are used for funding the activities described in the annual report, which was originally filed with the City Council on June 11, 2019. DISCUSSION: The Newport Beach Restaurant Association Business Improvement District (NBRA BID) was formed in 1995 (Ordinance 95-55) pursuant to the Parking and Business Improvement Area Law of 1989 (1989 Law), codified in Streets and Highways Code Sections 36500 et seq., for the purpose of financing activities and programs to benefit businesses located and operating in the area. The NBRA BID encompasses any food service business within the city boundaries, such as restaurants, markets with dine -in or take-out service, bars serving food, dessert shops, coffee shops, juice bars, catering companies, or similar food -related businesses. In accordance with the 1989 Law, a public hearing must be held prior to the City Council adopting a resolution to confirm the BID's renewal. Owners of member businesses may submit written or oral protest against the assessment levy and / or against the furnishing of a specific type of improvement, activity, or benefit proposed for the BID's upcoming fiscal year. 20-2 Public Hearing, Adopt a Resolution to Confirm the Levying of Assessments, and Appointment of the Advisory Board of Directors for the Newport Beach Restaurant Association Business Improvement District's Fiscal Year 2019-20 June 25, 2019 Page 3 • If the majority protest are from member business owners, which pay 50 percent or more of the total assessment to be levied, the City Council should abandon the renewal. If abandoned, no further proceeding to renew the BID 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, activity, or benefit within the BID, those types of improvements, activities, or benefit zones shall be eliminated. • If protests represent less than 50 percent of the total assessment, the City Council may renew the BID. The NBRA BID is nearing the ends of its FY 2018-19 operating period and the Advisory Board of Directors (Board) has requested renewal of the BID for FY 2019-20. In addition to holding a public hearing prior to the BID's renewal, and pursuant to the 1989 Law, an annual report must be prepared and filed with the City Council. During its June 11, 2019 regular meeting, the City Council approved the NBRA BID's FY 2018-19 Revised Annual Report and FY 2019-20 Budget, adopted a Resolution of Intention (Resolution 2019-47) to levy and collect assessments in FY 2019-20, and set a public hearing for June 25, 2019. See Attachment A for the June 11 staff report (without attachments). A public notice of Resolution No. 2019-47 declaring the City Council's intent to levy and collect assessments for the renewal of the NBRA BID and the time and place of the public hearing was published in the Daily Pilot newspaper (print) on Saturday, June 15, 2019. In addition, it was posted on the City's website (newportbeachca.gov/publicnotices) and, per the 1989 Law, a copy was mailed to each member of the NBRA BID. At the time this report was published by the City Clerk, no letters of opposition have been received to the NBRA BID's renewal, the levying of assessments, or to a specific improvement, activity, or benefit proposed. Any subsequent correspondence, with a tabulation of protests, will be provided to the City Council at its June 25, 2019 meeting. Advisory Board Appointments The City Council has the authority to appoint an advisory board of directors to the NBRA BID. The City may limit membership on the board to persons' subject to the BID assessment, or a designated representative of a stakeholder business. The board that serves the NBRA BID is different and distinct from other City advisory bodies and is not appointed in the same manner. The City relies upon the Streets and Highways Code for BID advisory board appointments rather than Council Policy A-2. The NBRA BID's bylaws allow for the appointment of up to 11 board members. 20-3 Public Hearing, Adopt a Resolution to Confirm the Levying of Assessments, and Appointment of the Advisory Board of Directors for the Newport Beach Restaurant Association Business Improvement District's Fiscal Year 2019-20 June 25, 2019 Page 4 The City Clerk posted a vacancy announcement for the 11 available NBRA BID advisory board seats (board members serve a one-year term). To be eligible to serve on the NBRA BID Board, the applicant must be the member business owner or their designated representative. In addition, the business must be in good standing (no debt owed to the City or the NBRA BID). By the May 15 deadline, 11 applications were received. The NBRA BID Board met on May 29, 2019 to review the applications and recommended the nomination of the 11 applicants for City Council appointment to the FY 2019-20 NBRA BID Advisory Board of Directors: BID Member Representing BID Business Phil Crowley Modo Mio Thaddeus Foret The Winery Restaurant and Bar Juan Carlos Godinez On the Rocks Bar & Grill Matthew Meddock Sessions West Coast Deli Jordan Otterbein A Restaurant and A Market Kenyon Parr Five Crowns Eunjoo Pluenneke Balboa Lily's Christopher Roman Fork, Knife + Spoon Talia Samuels Representing Moulin Ron Schwartz Muldoon's Irish Pub Jim Walker The Bungalow Restaurant ENVIRONMENTAL REVIEW: Staff recommends the City Council find this action is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. NOTICING: The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item). ATTACHMENTS: Attachment A — June 11 Staff Report (without attachments) Attachment B — Resolution Confirming the Levying of Assessments 20-4 Q �EwPpRT O c — '9 TO: FROM: ATTACHMENT A CITY OF NEWPORT BEACH City Council Staff Report June 11, 2019 Agenda Item No. 10 HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL Grace K. Leung, City Manager - 949-644-3001, gleung@newportbeachca.gov PREPARED BY: Mary Locey, Administrative Analyst mlocey@newportbeachca.gov PHONE: 949-644-3031 TITLE: Resolution No. 2019-47: Resolution of Intention to Renew the Newport Beach Restaurant Association Business Improvement District, Levy Assessments in FY 2019-20, and Fix the Time and Place of a Public Hearing ABSTRACT: On May 28, 2019, the City Council considered staff's recommendation to renew the Newport Beach Restaurant Association Business Improvement District (NBRA BID). The City Council, after discussion and public comment, approved a motion to withhold City funding support to the BID and continued the item to provide the BID Board time to meet and revise its annual report and budget, which is attached for City Council approval. RECOMMENDATION: a) Determine this action is exempt from the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because this action will not result in a physical change to the environment, directly or indirectly-, b) Approve the Newport Beach Restaurant Association Business Improvement District's Fiscal Year 2018-19 Annual Report and its Proposed Fiscal Year 2019-20 Budget-, c) Adopt Resolution No. 2019-47, A Resolution of the City Council of the City of Newport Beach, California, Declaring its Intention to Renew the Newport Beach Restaurant Association Business Improvement District and Levy Assessments for the Fiscal Year of July 1, 2019 to June 30, 2020, and Fix the Time and Place of a Public Hearing for June 25, 2019. FUNDING REQUIREMENTS: The City of Newport Beach (City) contracts with a vendor (the NBRA BID pays for these services) to collect the stakeholder assessments on behalf of the City and remits the money directly to the NBRA BID's bank account. The monies are used for funding the BID's activities as described in the attached annual report. 20-5 Resolution No. 2019-47: Resolution of Intention to Renew the Newport Beach Restaurant Association Business Improvement District, Levy Assessments in FY 2019-20, and Fix the Time and Place of a Public Hearing June 11, 2019 Page 2 DISCUSSION: The Newport Beach Restaurant Association Business Improvement District (NBRA BID) was formed in 1995 (Ordinance 95-55) pursuant to the Parking and Business Improvement Area Law of 1989 (1989 Law), codified in the Streets and Highway Code Sections 36500 et seq. The NBRA BID was established for the purpose of financing activities and programs to benefit the businesses located and operating in the area. The NBRA BID encompasses any food -service business within the city boundaries, such as restaurants, markets with dine -in or take-out food service, bars serving food, dessert shops, coffee shops, juice bars, catering companies, or similar food -related business (A boundary map is attached to the Resolution). The NBRA BID Board, which serves in an advisory capacity to the City Council, has requested renewal of the BID for FY 2019-20. Pursuant to the 1989 Law, an annual report must be prepared and filed with the City Council and a public hearing (scheduled for June 25) must be held prior to the BID's renewal. It is important to note that during the 2018 renewal process members of the City Council requested staff review the potential to reform the City's two 1989 Law BIDs (the NBRA BID and the Corona del Mar BID) under the 1994 Law. (See the separate staff report for more on the CdM BID.) For quick reference, the below table highlights a few of the major differences between the two types of BIDs. Operating as a 1994 Law BID provides autonomy from the City's oversight in BID management and operations and, since a majority membership vote is required, validation that the members perceive a benefit of belonging to the organization. 20-6 .;. BID W 1994 BID Existing Structure Reviewed StructureA Establishment . City Council may establish on • Members submit written its own. petition to form. • Based on a majority member • Based on a majority member protest. vote. Management . Compliance with the Ralph M. • Compliance with the Ralph M. Brown Act. Brown Act. • Annual renewal by the City • Renewed every five or up to Council. 10 years by the City Council. • Compliance with all City • Compliance with the City policies and procedures. Council approved Management District Plan. Governing Body . City Council appointment of an • City Council approves a advisory board. contract with a designated nonprofit to serve as an owners association. Other . More City oversight and staff • More independence to time to operate and manage. operate and manage. Operating as a 1994 Law BID provides autonomy from the City's oversight in BID management and operations and, since a majority membership vote is required, validation that the members perceive a benefit of belonging to the organization. 20-6 Resolution No. 2019-47: Resolution of Intention to Renew the Newport Beach Restaurant Association Business Improvement District, Levy Assessments in FY 2019-20, and Fix the Time and Place of a Public Hearing June 11, 2019 Page 3 At its May 28 meeting, the City Council considered the NBRA BID Board's request to renew as a 1989 Law BID and receive $40,000 in annual funding support from the City. The City Council discussed the BID's request and its current formation as a 1989 Law BID. The Council reaffirmed its desire for confirmation that the BID members are receiving a benefit by re-forming as a 1994 Law BID. A motion was approved to withhold the City's $40,000 in funding support and continue the item to allow the BID Board an opportunity to revise its budget. In addition, the creation of a Council Ad Hoc Committee to review how the BID aligns with City Council priorities was recommended. (See the separate staff report for the creation of the committee.) Per direction from the City Council, the NBRA BID Board held a special meeting on May 30 to revise its FY 2018-19 Annual Report and FY 2019-20 Budget. The Board revised its budget to eliminate the anticipated funding support from the City, reducing its proposed expenditures by $49,000 ($40,000 annual funding support and $9,000 Special Event Grant support) from its meeting expenses, consumer advertising and event operating budget line items. The revised annual report and budget are included for the Council's consideration and approval (Attachment A). Fiscal Year 2018-19 Operating Results The estimated year-end operating budget for the NBRA BID's FY 2018-19 is reflected in the table on the following page. Income (City Funding, Assessments and Special Event Income) $252,000 Fund Balance (Retained Earnings) $20,000 Total Income and Fund Balance $272,000 Total Expenditures $252,000 Fund Balance (Retained Earnings for FY 2019-2020) $20,000 Proposed Budget for Fiscal Year 2019-20 The proposed operating budget for FY 2019-20 is attached to the NBRA BID's annual report for the City Council's approval. A summary is reflected in the table on the following page. Proposed FY 2019-20 Operating Budget Income Special Event Income Member Assessment $33,000 $170,000 Carry Over Retained Earnings) $20,000 Total Income $223,000 Expenses Operational Expenses $9,250 Event Expenses $24,000 Administration(Board/Admin/Bookkeeping Services $36,500 Vendor/Contractor Services $110,000 Outreach $43,250 Total Expenses $223,000 20-7 Resolution No. 2019-47: Resolution of Intention to Renew the Newport Beach Restaurant Association Business Improvement District, Levy Assessments in FY 2019-20, and Fix the Time and Place of a Public Hearing June 11, 2019 Page 4 Resolution of Intention The Resolution of Intention (Attachment B) for the NBRA BID provides for the following: The intention to renew the NBRA BID assessments for fiscal year 2019-20. The assessment levies shall be: o $600 for full -serve restaurants o $500 for fast -casual restaurants o $500 for grocery or markets o $150 for coffee, tea or specialty shops, dessert, bakery or treat shops, juice bar or smoothie shop, and catering companies. The improvements and activities to be funded shall be: o Marketing, advertising, and public relations; o Brochure development and distribution; o Promotion of public events; o General promotion of restaurant trade activities; o Educational and training classes for members; and o Membership in various organizations. The public hearing shall be heard on June 25, 2019 at 7 p.m. in the City Council Chambers. Per the 1989 Law, the City Council may revise, change, reduce or modify the assessment or the type or types of improvements and activities proposed to be funded by the NBRA BID Board. ENVIRONMENTAL REVIEW: Staff recommends the City Council find this action is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. NOTICING: The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item). ATTACHMENTS: Attachment A — NBRA BID Revised Annual Report and Budget Attachment B — Resolution No. 2019-47 K: ATTACHMENT B RESOLUTION NO. 2019-.61 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH, CALIFORNIA, CONFIRMING THE LEVYING OF ASSESSMENTS FOR THE FISCAL YEAR OF JULY 1, 2019 TO JUNE 30, 2020 FOR THE NEWPORT BEACH RESTAURANT ASSOCIATION BUSINESS IMPROVEMENT DISTRICT WHEREAS, on June 11, 2019 the Newport Beach Restaurant Association Business Improvement District ("NBRA BID") annual report and budget was filed and approved by the City Council; WHEREAS, on June 11, 2019 the City Council adopted a Resolution of Intention (No. 2019-47) declaring the intention to levy assessments for the NBRA BID for fiscal year July 1, 2019 to June 30, 2020; and WHEREAS, on June 15, 2019 the City Clerk published Resolution No. 2019-47 declaring the City Council's intention to levy assessments for the NBRA BID for fiscal year July 1, 2019 to June 30, 2020; and WHEREAS, a public hearing regarding the renewal of the NBRA BID was held on June 25, 2019 without a majority protest. NOW, THEREFORE, the City Council of the City of Newport Beach resolves as follows: Section 1: The City Council hereby confirms the levying of assessments as described in the Resolution of Intention, dated June 11, 2019, for the NBRA BID for the fiscal year July 1, 2019 to June 30, 2020. Section 2: The recitals provided in this resolution are true and correct and are incorporated into the operative part of this resolution. Section 3: If any section, subsection, sentence, clause or phrase of this resolution is, for any reason, held to be invalid or unconstitutional, such decision shall not affect the validity or constitutionality of the remaining portions of this resolution. The City Council hereby declares that it would have passed this resolution, and each section, subsection, sentence, clause or phrase hereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases be declared invalid or unconstitutional. 20-9 Resolution No. 2019 - Page 2 of 2 Section 4: The City Council finds the adoption of this resolution is not subject to the California Environmental Quality Act (°CEQA") pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Division 6, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. Section 5: This resolution shall take effect immediately upon its adoption by the City Council, and the City Clerk shall certify the vote adopting the resolution. ADOPTED this 25th day of June, 2019. Diane B. Dixon Mayor Leilani I. Brown City Clerk APPROVED AS TO FORM: CITY ATTORNEY'S OFFICE A c, Aaron C. Harp City Attorney 20-10