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HomeMy WebLinkAbout21 - Levying of Assessments and Appointing the Advisory Board of Directors for the CDMBID's Fiscal Year 2020-21Q �EwPpRT CITY OF O � z NEWPORT BEACH <,FORN'P City Council Staff Report June 23, 2020 Agenda Item No. 21 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Grace K. Leung, City Manager - 949-644-3001, gleung@newportbeachca.gov PREPARED BY: Melanie Franceschini, Administrative Analyst mfranceschini@newportbeachca.gov PHONE: 949-644-3028 TITLE: Resolution No. 2020-64: Confirming the Levying of Assessments and Appointing the Advisory Board of Directors for the Corona del Mar Business Improvement District's Fiscal Year 2020-21 ABSTRACT: Pursuant to the Parking and Business Improvement Area Law of 1989 (1989 Law), codified in Streets and Highways Code Sections 36500 et seq., the annual renewal of a 1989 Law Business Improvement District requires a public hearing to determine if a majority of the members protest the assessments or a specific improvement, activity or benefit proposed by the Corona del Mar Business Improvement District (CdM BID) for fiscal year 2020-21 (FY 2020-21). If a majority protest is not received, the City Council may confirm the levying of assessments for FY 2020-21 and appoint the advisory board of directors for the CdM BID. RECOMMENDATIONS: a) Hold a public hearing regarding the renewal of the Corona del Mar Business Improvement District for Fiscal Year 2020-21; b-1) If the protests received are less than 50 percent of the total assessment amount, adopt Resolution No. 2020-64, 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, 2020 to June 30, 2021 for the Corona del Mar Business Improvement District; or b-2) If the protests received are more than 50 percent of the total assessment amount, abandon the renewal proceedings for the Corona del Mar Business Improvement District; 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 21-1 Resolution No. 2020-64: Confirming the Levying of Assessments and Appointing the Advisory Board of Directors for the Corona del Mar Business Improvement District's Fiscal Year 2020-21 June 23, 2020 Page 2 d) Appoint the following Corona del Mar Business Improvement District members to serve as the Corona del Mar Business Improvement District's Advisory Board of Directors for Fiscal Year 2020-21: BID Member Representing Business Ernie Caponera Harcourts Newport Properties Keith Dawson Dawson & Dawson Edward Hanley Hanley Investment Group Hamid Kianipur 76 Gas Station Scott LaFleur Representing Cafe Jardin Scott Laidlaw Laidlaw Schultz Architects Jasmin Mortazavi Mathnasium of Newport Beach Andrea Sotoma or Reborn Coffee CdM Bernie Svalstad Upland Stor King FUNDING REQUIREMENTS: The City of Newport Beach (City) contracts with a vendor (the CdM BID pays for these services) to collect the stakeholder assessments on behalf of the City and remits the money directly to the CdM BID's bank account. The monies are used for funding the BID's activities as described in the annual report, which was filed with the City Council on June 9, 2020. DISCUSSION: The Corona del Mar Business Improvement District (CdM BID) was formed in 1997 (Ordinance 97-24) 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 the member businesses located and operating in the area. The CdM BID territory encompasses the commercial area generally located along East Coast Highway from Hazel Drive to Avocado Avenue in Corona del Mar. 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 a 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. • If the majority protest is 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 proceedings 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. 21-2 Resolution No. 2020-64: Confirming the Levying of Assessments and Appointing the Advisory Board of Directors for the Corona del Mar Business Improvement District's Fiscal Year 2020-21 June 23, 2020 Page 3 • If the majority protest is only against the furnishing of a specific type of improvement, activity or benefit within the BID, those types of improvements, activities or benefits shall be eliminated from the BID's proposed plan. • If protests represent less than 50 percent of the total assessment, the City Council may renew the BID. During the June 9, 2020 regular meeting, the City Council approved the CdM BID'S FY 2019-20 Annual Report and FY 2020-21 Budget, adopted a Resolution of Intention (Resolution No. 2020-58) to levy and collect assessments in FY 2020-21, and set a public hearing for June 23, 2020. See Attachment A for the June 9, 2020 staff report (without attachments). A public notice of Resolution No. 2020-58, declaring the City Council's intention to levy and collect assessments for the CdM BID and setting the time and place of the public hearing, was published in the Daily Pilot newspaper (print edition) on Saturday, June 13, 2020. In addition, it was posted on the City's website (newportbeachca.gov/publicnotices) and, per the 1989 Law, a full copy of the resolution was mailed to each member of the CdM BID. At the time this report was published by the City Clerk, no letters of opposition have been received to the CdM BID's assessment renewal, the levying of assessments, or to a specific improvement, activity or benefit proposed. Any subsequent correspondence, with a tabulation of the protests, will be provided to the City Council at its June 23, 2020 meeting. Advisory Board Appointments The City Council has the authority to appoint an advisory board of directors to the CdM BID. The City may limit membership on the board to persons subject to the BID assessment or a designated representative of a member business in good standing. The advisory board that serves the CdM 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 CdM BID's bylaws allow for the appointment of up to nine (9) board members. The City Clerk posted a vacancy announcement for the nine (9) available CdM BID advisory board seats (board members serve a one-year term). To be eligible to serve on the CdM BID Board, the applicant must be the member business owner or their designated representative. In addition, the business represented must be in good standing (no debt owed to the City or the CdM BID). Nine (9) eligible applications were received in response to the vacancy announcement published on April 14, 2020. The CdM BID Board met on May 28, 2020 and recommended the nomination of the nine (9) applicants for City Council appointment to the FY 2020-21 CdM BID Advisory Board of Directors as shown in the recommendation. 21-3 Resolution No. 2020-64: Confirming the Levying of Assessments and Appointing the Advisory Board of Directors for the Corona del Mar Business Improvement District's Fiscal Year 2020-21 June 23, 2020 Page 4 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 9, 2020 Staff Report (without attachments) Attachment B — Resolution No. 2020-64 21-4 ATTACHMENT A Q �EwPpRT CITY OF O � z NEWPORT BEACH <,FORN'P City Council Staff Report June 9, 2020 Agenda Item No. 14 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Grace K. Leung, City Manager - 949-644-3001, gleung@newportbeachca.gov PREPARED BY: Melanie Franceschini, Administrative Analyst mfranceschini@newportbeachca.gov PHONE: 949-644-3028 TITLE: Resolution No. 2020-58: Resolution of Intention to Renew the Corona del Mar Business Improvement District, Levy Assessments in FY 2020-21 and Fix Time and Place of Public Hearing ABSTRACT: The Corona del Mar Business Improvement District (CdM BID) Advisory Board of Directors (Board) has submitted the BID's annual report and budget for the City Council's review and approval. The Board also submitted a letter requesting the renewal of the CdM BID for fiscal year 2020-21 and thanking the City Council for considering $40,000 in funding support to the BID due to the economic impact of the COVID-19 pandemic on local businesses. RECOMMENDATIONS: 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 and/or modify the Corona del Mar Business Improvement District's Fiscal Year 2019-20 Annual Report and its Proposed Fiscal Year 2020-21 Budget; c) Direct staff to return to the City Council with the CdM BID's detailed plan and budget for how $40,000 in COVID-19 economic relief funds will be utilized before the City of Newport Beach releases the funds; and d) Adopt Resolution No. 2020-58, A Resolution of the City Council of the City of Newport Beach, California, Declaring its Intention to Renew the Corona del Mar Business Improvement District and Levy Assessments for the Fiscal Year of July 1, 2020 to June 30, 2021, and Fix the Time and Place of a Public Hearing for June 23, 2020. 21-5 Resolution No. 2020-58: Resolution of Intention to Renew the Corona del Mar Business Improvement District, Levy Assessments in FY 2020-21 and Fix Time and Place of Public Hearing June 9, 2020 Page 2 FUNDING REQUIREMENTS: The City of Newport Beach (City) contracts with a vendor (the CdM BID pays for these services) to collect the stakeholder assessments and remits the money directly to the CdM BID's bank account. The monies are used for funding the BID's activities as described in the annual report (Attachment A). At the May 26, 2020 City Council meeting, the Ad Hoc Committee on Local Business Advancement recommended providing the CdM BID with $40,000 for COVID-19 economic relief support. Once the City Council determines the CdM BID's COVID-19 relief spending plan is satisfactory, the allocation will be distributed to the CdM BID. DISCUSSION: The Corona del Mar Business Improvement District (CdM BID) was formed in 1997 (Ordinance 97-24) pursuant to the Parking and Business Improvement Area Law of 1989 (1989 Law), codified in the Streets and Highways Code Sections 36500 et seq. The CdM BID was established for the purpose of financing activities and programs that benefit the member businesses located and operating in the area. The CdM BID territory encompasses the area generally located along East Coast Highway from Hazel Drive to Avocado Avenue in Corona del Mar. A boundary map is attached to the Resolution of Intention (Attachment C). The CdM BID is nearing the end of its FY 2019-20 operating period and the Board, which serves in an advisory capacity to the City Council, has requested renewal of the BID for FY 2020-21. Pursuant to the 1989 Law, an annual report must be prepared and filed with the City Council and a public hearing must be held prior to the BID's renewal. If the City Council adopts the Resolution of Intention, the public hearing will be held on June 23. The CdM BID Board has prepared and submitted the attached annual report for the City Council's review and approval. The report includes a summary of the CdM BID's FY 2019- 20 accomplishments and revenues, as well as its proposed activities and budget for the upcoming fiscal year. In addition, the CdM BID Board met on May 28 and recommended that its chair submit a letter to the City Council requesting the BID's renewal and thanking the City Council for considering $40,000 in COVID-19 Economic Relief Funding for the BID (Attachment B). To meet the requirements for the City Council's offer for COVID-19 economic relief funding, the BID will be focusing its efforts on the Shop & Dine Local media campaign and developing new strategic components to promote economic growth during the "reopening" of the business district. New marketing ideas include forums regarding safe business re -opening and surveying the needs of the business members to see if the BID should provide protective equipment, guidance compliance posters or social distancing floor decals to the stakeholders, and district -wide promotional campaigns to further drive business to the district. 21-6 Resolution No. 2020-58: Resolution of Intention to Renew the Corona del Mar Business Improvement District, Levy Assessments in FY 2020-21 and Fix Time and Place of Public Hearing June 9, 2020 Page 3 The Board will continue to enhance its digital and media relations to maintain and develop new marketing collateral to attract customers to the business district. Due to the financial challenges small businesses currently face, at its May 28 meeting, the BID Board voted to reduce certain member assessments for FY 2020-21. The current assessment rate for most members is 150 percent of the business license fee and the proposed assessment for FY 2020-21 is 70 percent of the business license fee. The assessment rates are summarized on page 5 of this report. Staff believes these proposed activities support the Council's desire to have COVID-19 relief funds provided by the City utilized to facilitate the reopening and recovery of BID member businesses and/or used to offset revenue losses resulting from a temporary decrease in assessments. However, it is staff's understanding that the Council wants to see a plan and budget that details the specific activities the CdM BID will accomplish with $40,000 in COVID-19 relief funds. Therefore, staff is recommending that the City Council direct staff to return with the CdM BID's detailed plan for Council review and approval before the monies are distributed to the CdM BID. Fiscal Year 2019-20 Accomplishments The CdM BID Board continued making progress on the priorities identified in its Vision 2020 plan. Specific focus areas include its ongoing marketing, outreach and communication efforts, and regular community support programs and improvement projects. Board members have been working on several projects, which are consistent with the BID's efforts to revitalize the business district and support the economic growth of its member businesses. Highlights of projects from FY 2019-20 are listed below. 1. Parking and Transportation Improvements. A parking study to address potential solutions to improve parking within the Corona del Mar Business District and adjacent residential areas was completed. The Board worked with the City for the successful implementation of increased parking time limits on East Coast Highway. The Board continues to work toward the implementation of the study's remaining two recommendations: a. Incorporate the underutilized private parking supply for public use; and b. Lower the City's parking requirements in the business district. 2. East Coast Highway Improvements. The CdM BID Board continued to work on the appearance of the business district through various physical improvement projects including ordering new light pole banners promoting the district, coordinating the replacement of the aging dolphin topiaries, maintaining the tree -wells landscaping, and brainstorming enhancements for the business district entryways. 3. "Shop Local" Marketing Campaign. The BID's "Shop Local" marketing campaign is an on-going, coordinated effort with the Corona del Mar Chamber of Commerce. The campaign's branded design theme has been used strategically throughout the year to promote the business district. It will continue to be used in the immediate future to encourage more local business during these tough economic times. 21-7 Resolution No. 2020-58: Resolution of Intention to Renew the Corona del Mar Business Improvement District, Levy Assessments in FY 2020-21 and Fix Time and Place of Public Hearing June 9, 2020 Page 4 The remainder of the FY 2019-20 activities listed in the annual report include the ongoing and regular efforts of the CdM BID for general maintenance of the East Coast Highway, coordinating and maintaining the annual holiday decor, recognizing businesses through the Business Beautification Award Program, and the marketing outreach efforts for events and activities that occurred within the CdM BID boundaries. FY 2019-20 Operating Results The estimated year-end operating budget for the CdM BID's FY 2019-20 is summarized in the table below. Estimated FY 2019-20 Year -End Operating Budget (Updated Figures) $40,000 $2,000 Income (City Funding, Assessments and Late Fees $91,937 Fund Balance Retained Earnings from FY 2018-19 $99,629 Total Income and Fund Balance $191,566 Total Expenditures $132,343 Fund Balance Retained Earnings) $59,223 Proposed Budget for FY 2020-21 The proposed operating budget for FY 2020-21 is attached to the CdM BID's annual report for the City Council's approval. The Board has identified several project goals for the year and allocated its funding accordingly, as summarized in the table below. Income _ Proposed COVID-19 Relief Funding (City's Contribution)* Late Fees $40,000 $2,000 Member Assessment $55,000 Retained Earnings from FY 2019-20 $59,223 Total Income $156,223 Expenses Highway Decor and Banner Program $30,792 Marketing and Administration Services $102,550 Accounting and Bookkeeping Service $21,408 Improvements & Parking $1,473 Total Expenses $156,223 *This income is proposed as it has not yet been approved for distribution by the City Council. Should the City Council not approve the relief funding, the budget would be adjusted accordingly. BID Member Benefits The CdM BID has a unique and long-standing partnership with the Corona del Mar Chamber of Commerce (Chamber), a voluntary membership organization located within the business district. Through a City agreement, the Chamber has provided the CdM BID with administration and marketing services, coordination of programs and member communications, and assists with agenda preparation and reporting. BID funds are used to pay for these services. 21-8 Resolution No. 2020-58: Resolution of Intention to Renew the Corona del Mar Business Improvement District, Levy Assessments in FY 2020-21 and Fix Time and Place of Public Hearing June 9, 2020 Page 5 The marketing campaigns for the business district and the production of the CdM Business Directory are a joint effort between the BID and the CdM Chamber. The BID also financially supports various Chamber programs and events, and finances the decorative banners that promote Chamber events in the business district. The coordinated marketing efforts support the CdM BID members by attracting local and regional visitors to the area to shop in the retail establishments, dine from a large selection of restaurants and cafes, and obtain a variety of professional services. Resolution of Intention The Resolution of Intention (Attachment C) for the CdM BID provides for the following: Renews the CdM BID for fiscal year 2020-21 with assessment levies as follows: o $500 per year for banks and financial institutions that are exempt from City business license regulations; o $250 per year for insurance agencies that are exempt from City business license regulations; o $0 per year for independent contractors (hair stylists, nail technicians and real estate agents) operating in an establishment owned by another person; and 0 70 percent of the annual business license tax for all other businesses. Explains the improvements and activities to be funded are: o Marketing, advertising, and public relations; o Public area improvements and maintenance programs; o Promotion of public events in the area; o Promotion of retail trade activities; and o Administration. Sets the public hearing for June 23, 2020 at 7 p.m. 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. 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. 21-9 Resolution No. 2020-58: Resolution of Intention to Renew the Corona del Mar Business Improvement District, Levy Assessments in FY 2020-21 and Fix Time and Place of Public Hearing June 9, 2020 Page 6 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 — CdM BID Annual Report and Budget Attachment B — Letter from the CdM BID Board Chair Attachment C — Resolution No. 2020-58 21-10 ATTACHMENT B RESOLUTION NO. 2020-64 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, 2020 TO JUNE 30, 2021, FOR THE CORONA DEL MAR BUSINESS IMPROVEMENT DISTRICT WHEREAS, on June 9, 2020, the Corona del Mar Business Improvement District annual report and budget was filed and approved by the City Council; WHEREAS, on June 9, 2020, the City Council adopted Resolution 2020-58 declaring City Council's intention to levy assessments for the Corona del Mar Business Improvement District for fiscal year July 1, 2020 to June 30,2021; WHEREAS, on June 13, 2020, the City Clerk published Resolution No. 2020-58 declaring the City Council's intention to levy assessments for the Corona del Mar Business Improvement District for fiscal year July 1, 2020 to June 30, 2021; and WHEREAS, a public hearing regarding the renewal of the Corona del Mar Business Improvement District was held on June 23, 2020 without a majority protest. NOW, THEREFORE, the City Council of the City of Newport Beach resolves as follows: Section 1: The City Council does hereby confirm the levying of assessments as described in Resolution 2020-58 dated June 9, 2020, for the Corona del Mar Business Improvement District for the fiscal year July 1, 2020 to June 30, 2021. 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. 21-11 Resolution No. 2020 - 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 23rd day of June, 2020. Will O'Neill ATTEST: Leilani I. Brown City Clerk APPROVED AS TO FORM: CITY ATTORNEY'S OFFICE Aaron C. Harp City Attorney 21-12