Business Item 5e
STAFF REPORT
City Council Business Item
DATE: April 7, 2025
TO: Honorable Mayor and Council Members
FROM: Ryan Plotz, City Attorney
THROUGH: Amy Nilsen, City Manager
SUBJECT: Proposed Ordinance Amending Fortuna Business Improvement District Regulations
STAFF RECOMMENDATION:
Staff recommends that the Council discuss and consider conducting a first reading, by title only, of Ordinance 2025-774, which amends the Fortuna Business Improvement District (“FBID”) regulations.
DISCUSSION
The proposed Ordinance is intended to modify the existing FBID regulations contained in the Fortuna Municipal Code (“FMC”) to be consistent with the structural changes to FBID proposed by Resolution 2025-07.
In particular, the proposed Ordinance would make the following amendments to Chapter 5.40 of the FMC:
1. Dissolves the three existing benefit core areas (i.e., the Downtown Care Area, the Redwood Village Shopping Center Core Area, and the Strongs Creek Plaza Core Area) and specifies that those areas shall, instead, become part of the district generally and pay the same assessment as those businesses located outside of the core areas.
2. Revises the section imposing the benefit assessment to allow the Council to set the method and basis for calculating the annual assessment through the annual re-authorization process required by the Street and Highways Code.
3. Deletes certain definitional provisions that are no longer applicable to an annual assessment based upon a flat rate (as opposed to the prior rate which was based upon a percentage of gross receipts).
4. Revises the composition of the Advisory Committee to remove requirements for representation from the three core areas.
5. Further revises the composition of the Advisory Committee to reduce the number of Advisory Committee members from seven (7) to five (5) and specifies that (i) four (4) Business Item 5e
members shall be from among the following industries: retail, professional and service, hospitality, manufacturing, and/or wholesale; and (ii) one City Council liaison.
6. Removes the requirement that certain funds be allocated to the three core areas and, instead, provides that all funds raised within the District shall be used to promote the entire community.
7. Maintains the principal purpose for which the District was formed.
Staff recommends these changes to ensure consistency between the proposed changes to FBID as recommended by the Advisory Committee in its Annual Report, which was approved by Council, and Resolution 2025-07, which the Council will consider adopting at its April 7, 2025, meeting.
Reference is made to the Staff Report for Resolution 2025-07 for further particulars as to the recommended changes to the FBID structure and assessment amount.
As part of Resolution 2025-07, the Council will set a public hearing for April 21, at which time the Council will determine whether a sufficient protest exists against the proposed rates for the upcoming fiscal year. In the event of a successful protest, a second reading and adoption of this ordinance will be tabled.
FINANCIAL IMPACT:
If an assessment is approved at a $25 flat fee and the core areas are removed, approximately $16,500 would be generated annually.
The total expenditures for Fiscal Year 2024-2025 year-to-date are $16,523.65. The FBID fund has a current balance of $39,750 with $6,350 reserved for funding in the Redwood Village Core Area and $3,150 reserved for funding in the Strongs Creek Core Area. This leaves $30,250 that can be spent with no Core Area restrictions.
For reference, below is the amount previously collected from a tiered benefit assessment in Fiscal Year 2023-24.
Core Area Assessment Distribution to Core
Area (62%)
Citywide Share
(38%)
Citywide $37,500 $0 $37,500
Downtown $12,500 $7,750 $4,750
Redwood Village $10,000 $6,200 $3,800
Strongs Creek $5,000 $3,100 $1,900
Total $65,000 $17,050 $47,950
RECOMMENDED COUNCIL ACTION:
1. Receive staff presentation and review Council questions with staff
2. Open Public Comment
3. Close Public Comment
4. Motion to introduce and conduct first reading, by title only, of Ordinance 2025-774.
Roll Call Vote.
Business Item 5e
ATTACHMENTS:
• Ordinance 2025-774, An Ordinance Of The City Council Of The City Of Fortuna, California Amending Chapter 5.40 – Fortuna Business Improvement District – Of The Fortuna Municipal Code And Determining The Ordinance To Be Exempt From CEQA