Resolution 2023-53 — City Council/Public Finance and Economic Development Authority/Parking Authority, June 20, 2023

ATTACHMENT 1

City of Merced, California
June 2023

Prepared by:

Kristin Lowell, Inc.

Prepared pursuant to the State of California
Property and Business Assessment District Law of 1994
and Article XIIID of the California Constitution.

Downtown Merced
Property-Based Business Improvement District

Management District Plan

EXHIBIT A

DOWNTOWN MERCED
Property-Based Business Improvement District
Management District Plan

Table of Contents

Section Number Page Number

1. Executive Summary ........................................................................... 1

2. PBID Boundary ................................................................................... 5

3. PBID Activity and Improvement Plan ................................................ 7

4. PBID Assessment Budget................................................................ 11

5. Assessment Methodology ............................................................... 13

6. PBID Governance ............................................................................. 17

7. Implementation Timeline.................................................................. 18

8. Assessment Roll ............................................................................... 19

ATTACHMENTS

A. Engineer’s Report

Downtown Merced PBID June 2023
Management District Plan Page 1 of 25

SECTION 1: EXECUTIVE SUMMARY

The Downtown Merced Property-Based Business Improvement District (“ PBID”) is being established, pursuant to the California Constitution and the Property and Business Improvement District Law of 1994, as amended. Developed by the formal steering committee, the PBID Management District Plan responds to today’s market opportunities, district challenges, and the City of Merced’s efforts in vitalizing the downtown. The PBID Management District Plan describes how the PBID will improve and convey special benefits to assessed parcels located within the downtown area.

Summary Management District Plan
Pursuant to the Property and Business Improvement District Law of 1994 (California Streets and Highways Code § 36600 et seq. ) (the “PBID Law”), the PBID is proposed to be formed for a 5- year term. Upon receipt of petitions signed by property owners representing greater than 50% of the PBID assessable budget, the City will initiate a ballot procedure to officially form the PBID.

Governed by an Owners’ Association, the PBID will deliver en hanced services to improve and convey special benefits to properties located within the PBID boundary, above and beyond those provided by the City.

The PBID
will provide enhanced improvements and activities, such as, cleaning the downtown, improving safety, beautifying the downtown, as well as economic vitality , marketing and special events. Each of the activities is designed to meet the goals of the District; to improve the appearance and safety of the PBID, to increase building occupancy and lease rates, to encourage new business development and attract ancillary businesses and services.

Location The PBID is approximately 25 square blocks of the downtown area. It is roughly bounded by 16th Street to the South, R Street to the west, 18th and 19th Streets to the north, and G Street to the east. The PBID is allocated into three benefit zones to reflect the level of service and special benefits each parcel will receive. (See Section 3 for boundary description and map.)

Services &
Activities
The PBID will finance services that will enhance the experience within the downtown for property owners, businesses, residents, employees, and visitors, including:

Clean, Safe, and Beautiful:
• Community Engagement Team that support s law enforcement, property owners and businesses in overall crime prevention efforts above what the City provides while providing concierge service to customers, residents, and employees.
• Maintenance Services that will sweep, scrub and pressure wash sidewalks and public spaces, remove litter, trash and graffiti, and provide/maintain landscaping throughout the District.
• Lighting that increases the level of safety, which may include lighting the alleyways, decorative street lighting, and tree lighting.

• Beautification such as installing and operating streetscape furniture, bike Downtown Merced PBID June 2023
Management District Plan Page 2 of 25

racks, information kiosks, holiday décor, and wayfinding signage.

Economic Vitality:
• Marketing and Communication activities to market the downtown and that pro-actively promotes a positive image of the downtown

• Special Events that draw visitors to the downtown.

Management:
• Administration activities that manage the PBID programs, communicates with stakeholders and advocates on behalf of the district.

The table below itemizes the services and frequency each benefit zone shall receive, e.g., the Downtown Core will receive 2x the level of service than the Base Level.

PBID Activity
Base
Level
x 1.0
Enhanced
Zone
x 1.5
Downtown
Core
x 2.0
Community Engagement Team X X X
Clean Team X X X
Lighting X
Beautification X X
Economic Vitality X X X
Management X X X

Method of
Financing
Levy of assessments upon real property that receive a special benefit from enhanced services.

Budget Total PBID budget for its first year of operations is $426,000, as follows:

EXPENDITURES
TOTAL
BUDGET
% of
Budget
Clean, Safe, Beautiful $305,000 71.60%
Economic Vitality $35,000 8.22%
Management $86,000 20.19%
Total Expenditures $426,000 100.00%

REVENUES
Assessment Revenues $417,480 98.00%
Other Revenues (1) $8,520 2.00%
Total Revenues $426,000 100.00%

(1) An allowance is made for general benefits that the PBID may provide. Any PBID services that are found to provide general benefit cannot be paid for with assessment revenue. A certified engineer has estimated that the general benefit from the PBID services accounts for $8,520 of the estimated budget, resulting in a total assessable budget of $417,480.

Downtown Merced PBID June 2023
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Assessments Annual assessments are based upon an allocation of program costs and a calculation of lot square footage plus building square footage plus linear s treet frontage. For example, the Clean/Safe/Beautiful budget is allocated 50% each to building square footage plus linear street frontage. Economic Vitality budget is allocated 50% each to lot square footage and building square footage.

Management budget is allocated 1/3 to each of lot square footage, building square footage and linear street frontage.

Estimated annual maximum assessment rates for each benefit zone for the first year of the PBID are as follows:

Benefit Zone Lot SF Bldg SF Linear
Base Level $0.0113 $0.0997 $3.2074
Enhanced Zone $0.0113 $0.1178 $6.3273
Downtown Core $0.0113 $0.1178 $7.9310

CPI Increase Assessments will be subject to an annual increase of up to 5% per year to address changes in the cost of providing services. The determination of annual adjustments in assessment rates will be subject to review and approval by the PBID Owners’ Association and City Council and will be subject to the requirements of the PBID Law. The Owners’ Association will develop annual budgets and service programs each year which will be presented to the City Council for approval.

City
Services
The City has established and documented the base level of pre -existing City services. The PBID will not replace any pre-existing general City services.

Existing City
Districts
Upon City Council approval of the Downtown Merced PBID, the City Council shall simultaneously eliminate both the downtown maintenance district and the part of the business license tax that funds marketing and special events, as both these districts’ services will now be provided in the newly formed PBID.

Collection PBID assessments appear as a separate line item on the annual Merced County property tax bills.

District
Governance
The PBID will be managed by a nonprofit organization that will act as the PBID Owners’ Association. The Owners’ Association will be governed by a B oard of Directors comprised of a majority of PBID property owners. The Board will determine PBID annual services and budgets.

District
Formation
The PBID Law requires the submission of petitions signed by property owners in the proposed district who will pay more than 50% of the total assessments ( i.e., petitions must represent more than 50% of the $417,280 to be assessed).

Petitions are submitted to the City Clerk, who then mails ballots to all assessed property owners. The majority of ballots returned, as weighted by assessments to be paid, must be in favor of the PBID for the City Council to approve the formation.

Downtown Merced PBID June 2023
Management District Plan Page 4 of 25

Duration The PBID’s initial 5-year term will run from January 1, 2024, through December 31, 2028. Any subsequent renewal of the PBID will require a new Management District Plan, petition, and ballot process, any may be renewed up to 10 years.

Downtown Merced PBID June 2023
Management District Plan Page 5 of 25

SECTION 2: PBID BOUNDARY

PBID Boundary
The PBID is approximately 25 square blocks of the downtown area. It is roughly bounded by 16th Street to the South, R Street to the west, 18th and 19th Streets to the north, and G Street to the east.

Benefit Zones
There are three benefit zones within the PBID to reflect the varying needs and frequency of services within the PBID boundary. The Base Level includes every parcel in the district. The Enhanced Zone includes every parcel with frontage along 18 th Street between I Street and R Street, as well as parcels with frontage along W Main Street between G Street and V Street. The Downtown Core includes every parcel with frontage along W Main Street or 18th Street between Martin Luther King and O Street.

Base Level
Every parcel within the PBID will receive the Base Level of services for the Clean and Community Engagement Teams as well as the Economic Vitality and Management. Parcels that are within the Base Level and not included in either the Enhanced Zone or Downtown Core, have significantly less pedestrian traffic and commercial uses. In light of that, these parcels will receive the base level of services from the Clean and Community Engagement teams as well as the Economic Vitality and Management. However, parcels that are strictly in the Base Level zone will not receive any of the Beautification activities, and thus, will not be assessed for those services.

The Base Level parcels will pay an assessment rate equal to 100% of the special benefits received.

Enhanced Zone
The parcels in the Enhanced Zone have a higher level of commercial use and pedestrian traffic than the parcels strictly in the Base Level. The Enhanced Zone parcels will receive all the PBID services from the Base Level plus the Beautification activities. In addition, it is anticipated that the Clean and Community Engagement Teams within the Enhanced Zone will provide 1.5 times the frequency of service than they provide in the Base Level. The Enhanced Zone parcels will pay an assessment rate equal to 100% of the special benefits received.

Downtown Core
The parcels in the Downtown Core have the highest concentration of commercial use and pedestrian traffic, and thus will receive the highest level and frequency of the PBID services. The Downtown Core parcels will receive all the services that the parcels in both the Base Level and the Enhanced Zone receive, but it is anticipated that the Clean and Community Engagement Teams within the Downtown Core will provide 2.0 times the frequency of service than they provide in the Base Level. In addition, the Beautification services will be more concentrated than even in the Enhanced Zone. The Downtown Core parcels will pay an assessment rate equal to 100% of the special benefits received.

A map of the proposed district boundary and benefit zones is on the following page .

Downtown Merced PBID June 2023
Management District Plan Page 6 of 25

Downtown Merced PBID June 2023
Management District Plan Page 7 of 25

SECTION 3: PBID ACTIVITY AND IMPROVEMENT PLAN

Background and Feasibility
As determined by downtown property and business owners, the top priorit ies for services and activities within the Downtown Merced PBID boundary include:

 Clean, Safe and Beautiful
 Economic Vitality
 Management

Based upon these findings, these activities will be funded by the PBID. The following narrative provides recommendations for the PBID’s first year of operation. PBID activities may be amended in subsequent years within the following general categories. Final activities and budgets will be subject to the review and approval of the PBID Owners’ Association prior to City Council approval.

Clean, Safe and Beautiful
To respond to stakeholder priorities and guiding principles to make Downtown Merced more welcoming, clean and beautiful , the PBID will fund a safety program as well increased maintenance and beautification efforts. The PBID Clean, Safe and Beautiful activities are intended to improve commerce and quality of life by making each individually assessed parcel safer, cleaner and more attractive, which will encourage investment dollars and generate additional pedestrian traffic.

The following is a multi-dimensional approach for providing a safer, cleaner , and more aesthetically appealing downtown.

Community Engagement Team:

The Community Engagement Team will provide safety services for the individual parcels located within the PBID in the form of walking, bike or vehicle patrols. The purpose of the Community Engagement Team is to prevent, deter and report illegal activities taking place on the streets, sidewalks, storefronts, parking lots, and public alleys. The presence of the Community Engagement Team is intended to deter such illegal activities as vandalism, graffiti, nar cotic use or sales, public urination, trespassing, drinking in public, illegal panhandling, and illegal dumping.

The safety activities will supplement, not replace, other ongoing City police, security, and patrol efforts within the PBID.

In addition, the Community Engagement Team may engage people who are engaging in aggressive panhandling, to suggest and coordinate services, and will d ocument each incident and activity to track the frequency of illegal and threatening behaviors to mobilize enforcement eff orts of those people resisting services.

The Community Engagement Team will continually circulate through the district to identify the population that is engaged in illegal or threatening behaviors , engage homeless people to build relationships and encour age assistance from social service providers to coordinate service delivery, triage the needs of homeless people to encourage appropriate services from provider

Downtown Merced PBID June 2023
Management District Plan Page 8 of 25

agencies, and will document all interactions so that these individuals can be prioritized based on need.

Maintenance Services:

The Clean Team consistently deals with maintenance issues within the PBID by providing the following cleaning and maintenance services:

Sidewalk Maintenance: Uniformed, radio-equipped personnel sweep litter, debris, and refuse from sidewalks, and gutters, as well as public spaces of the PBID , and clean all sidewalk hardscape such as trash receptacles, benches, and parking meters.

Trash Collection: Collector truck personnel collect trash from sidewalk trash receptacles as needed. They are also dispatched to collect stolen shopping carts and large bulky items illegally dumped in the PBID.

Graffiti Removal: The Clean Team can remove graffiti using solvent and pressure washing. The PBID will maintain a zero- tolerance graffiti policy. All tags will aim to be removed within 48 hours of notification.

Sidewalk Pressure Washing: Pressure wash all sidewalks and public spaces on an as needed basis with areas of high
pedestrian traffic receiving the highest concentration.

However, during drought years pressure washing may not be permitted.

Landscape Maintenance: Public landscape areas including tree wells and planters will be maintained and kept free of litter and weeds.

Lighting:

Special lighting in the Downtown Core will be added as an additional level of safety as well as beautification. The lighting activities may include lighting the alleyways, decorative street lighting, and tree lighting.

Note: As part of the PBID formation, the existing downtown maintenance district will be eliminated. Those services will now be funded through the PBID.

Downtown Merced PBID June 2023
Management District Plan Page 9 of 25

Beautification & Placemaking:

In addition to clean and safe services, the PBID budget includes funds for beautification and placemaking improvements that are defined as cosmetic enhancements that improve the appearance and walkability within the PBID, in turn encouraging customer traffic and improved quality of life for residents. Examples of beautification improvements might include:

• Street furniture and amenities, such as benches, kiosks and lighting
• Design and installation of flowering planters and baskets • Design and installation of art and decorative elements • Holiday décor
• Bicycle racks and other hardware
• Urban design and/or planning services to advance beautification efforts • Other cosmetic enhancements that improve the PBID’s appearance

Economic Vitality
In addition to the Clean, Safe and Beautiful activities, a comprehensive economic vitality program has been included as a key component to the PBID. As the Downtown comes out of the COVID- 19 pandemic and there is a more favorable economic climate, the activities for economic enhancements may include:

Marketing and Communication:

It is important to not only provide the services needed in the PBID, but to tell the story of improvement in the PBID. Some of the marketing programs being considered are:

• Image and Marketing materials
• Media Advertising
• Website
• Meetings & Workshops
• Newsletter
• Maintain Social Media Outlets
• Restaurant/Retail Listing & Map

Special Events:

Promote and host special events downtown that draw residents and visitors that encourage them to eat at the local restaurants, shop downtown, engage in any type of commercial activity. Events may include culinary events, arts festivals, holiday parades, music events or any other special event that draws people to the downtown area.

Special Projects/Project Collaboration:

Special projects will be initiated to tackle issues that are overlooked or items that can leave a lasting impression on stakeholders in the PBID. Special project opportunities include painting of street fixtures to include utility boxes, benches, light poles, etc ., thorough cleaning of tree wells, power washing and repair of waste cans, and thorough scrubbing and cleaning of street fixtures.

The PBID may also use funds to collaborate with the City or any other organization on projects that benefit the downtown area.

Downtown Merced PBID June 2023
Management District Plan Page 10 of 25

As discussed above, the parcels in the PBID boundary are allocated into three benefit zones based on the types and frequency of PBID service deployment. The table below itemizes the services and frequency each benefit zone shall receive, e.g., the Downtown Core will receive 2x the level of service than that of the Base Level.

PBID Activity
Base
Level
x 1.0
Enhanced
Zone
x 1.5
Downtown
Core
x 2.0
Community Engagement Team X X X
Clean Team X X X
Lighting X
Beautification X X
Economic Vitality X X X
Management X X X

Management
Like any business, the PBID will require a professional staff to properly manage programs, communicate with stakeholders and provide leadership. The PBID supports a professional staff that delivers the PBID services and advocates on behalf of the parcels in downtown Merced. The PBID advocacy services will provide direction on policies and issues that affect the business district.

Management services may include compensation for an Executive Director, an administrative assistant or any other staff member, or subcontractor the Owner’s Association deems necessary to manage the PBID services. The management team is responsible for providing the day-to-day operations. PBID funds may be used to leverage additional monies from sponsorships, contracts, grants and earned income. Additional administrative costs may include accounting and annual financial reviews, insurance, program support costs including supplies, equipment and rent, utilities County assessment collection fee, estimated at 1% of assessments, and other administration costs associated with the overhead and administrative support of programs.

Note: As part of the PBID formation, the existing portion of the business license double tax that was assessed against businesses for the purposes of funding marketing and special events will be eliminated. Those services will now be funded through the PBID.

Downtown Merced PBID June 2023
Management District Plan Page 11 of 25

SECTION 4: PBID ASSESSMENT BUDGET

2024 PBID Assessment Budget
The following table outlines the PBID maximum assessment budget for 2024.

EXPENDITURES
TOTAL
BUDGET
% of
Budget
Clean, Safe, Beautiful $305,000 71.60%
Economic Vitality $35,000 8.22%
Management $86,000 20.19%
Total Expenditures $426,000 100.00%

REVENUES
Assessment Revenues $417,480 98.00%
Other Revenues (1) $8,520 2.00%
Total Revenues $426,000 100.00%
(1) Other non-assessment funding to cover the cost associated with general benefit.

Budget Adjustments
The services proposed for year one of the term are the same services that are proposed for subsequent years. Assessments will be subject to an annual increase of up to 5% per year to address changes in the cost of providing services. The determination of annual adjustments in assessment rates will be subject to review and approval by the PBID Owners’ Association and City Council and will be subject to the requirements of the PBID Law.

5-Year Maximum Budget
The following table illustrates the PBID ’s maximum annual budget for the 5-year term based on Year 1 of inventory of development, adjusting it by the maximum 5% increase.

Clean/Safe Economic Management Total
Year 1 $305,000 $35,000 $86,000 $426,000
Year 2 $320,250 $36,750 $90,300 $447,300
Year 3 $336,263 $38,588 $94,815 $469,665
Year 4 $353,076 $40,517 $99,556 $493,148
Year 5 $370,729 $42,543 $104,534 $517,806

The cost of PBID improvements and activities may vary in any given year depending on market conditions and the cost of providing those services. Expenditures for each of the line items may be adjusted up or down 10% between them to continue the same level of service. The Owners’ Association Board of Directors shall make such determination. In addition, any annual budget surplus, including those created through cost saving measures, unexpected reductions in expenses or unanticipated increases to income, will be rolled into the following year’s budget. The carryover funds will be applied to the same budget line item as the line item that was the source of the carryover funds. The budget will be adjusted accordingly consistent with the Management District Plan to adjust for surpluses that are carried forward to ensure that the PBI D is spending these funds in a timely manner and is complying with applicable State laws. Any change in line- Downtown Merced PBID June 2023
Management District Plan Page 12 of 25

item expenditures and/or budget surplus will be approved by the Owners’ Association Board of Directors and submitted in the annual report, pursuant to Section 36650 of the State Law.

PBID Renewal
PBID funds, which may consist of rollover funds may be used for renewing the district.

Bond Issuance
No bonds will be issued to finance improvements.

Downtown Merced PBID June 2023
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SECTION 5: ASSESSMENT METHODOLOGY

General
This Management District Plan provides for the levy of assessments for the purpose of providing services and activities that specially benefit real property in the PBID . These assessments are not taxes for the general benefit of the City but are assessments for the services and activities which confer special benefits upon the real property for which the services and activities are provided.

Assessment Factors
Each parcel’s proportional special benefit from the PBID activities is determined by analyzing three parcel characteristics: Building Square Footage, Lot Square Footage, and Linear Street Frontage. These parcel characteristics are an equitable way to identify the proportional special benefit that each of the assessed parcels receive. Building square footage is relevant to the current use of a property and is also closely correlated to the potential pedestrian traffic from each parcel and the demand for PBID activities. The lot square footage reflects the long-term value implications of the improvement district. A parcel’s linear street frontage is relevant to the street level usage of a parcel and the demand for PBID activities. Together, these parcel characteristics serve as the basic unit of measure to calculate how much special benefit each parcel receives in relationship to the district as a whole, which is then is the basis to proportionately allocate the cost of the special benefits.

Building square footage is defined as the total building square footage as determ ined by the outside measurements of a building. The gross building square footage is taken from the County Assessor’s records. Building square footage is used as the characteristic to assess ½ the cost of Clean, Safe and Beautiful activities, ½ the cost of Economic Vitality activities, and 1/3 the cost of the Management activities.

Lot square footage is defined as the total amount of area within the boundaries of the parcel.

The boundaries of a parcel are defined on the County Assessor parcel maps. Lot square footage is used as the characteristic to assess ½ the cost of Economic Vitality activities, and 1/3 the cost of the Management activities.

Linear street frontage is defined as the number of linear feet of each parcel that directly fronts a street that will receive the PBID activities. Corner lots or whole block parcels will be assessed for each side of the parcels’ street frontage. Linear street frontage is used as the characteristic to assess ½ the cost of Clean, Safe and Beautiful activities, and 1/3 the cost of the Management activities. Linear street frontage is then weighted based on each side the parcel ’s frontage is in each of the three benefit zones. That is , a parcel with frontage in the Base Level benefit zone receives a weighted factor of 1.0 for that frontage. A parcel with frontage in the Enhanced Zone benefit zone receives a weighted factor of 1.5 for that frontage. A parcel with frontage in the Downtown Core benefit zone receives as weighted factor of 2.0 for that frontage.

Each one of these characteristics represents the benefit units allocated to each specially benefitted parcel. The total number of assessable benefit units in the PBID are as follows:

Downtown Merced PBID June 2023
Management District Plan Page 14 of 25

Benefit Zone
Benefit Units
Lot SF Bldg SF Linear Frontage
Base Level 1,245,058 368,205 20,317
Enhanced Zone 816,813 358,771 5,660
Downtown Core 1,268,420 994,202 10,403
TOTAL Benefit Units 3,330,291 1,721,178 36,407

Assessment Methodology
The proportionate special benefit each assessed parcel receives shall be determined in relationship to the entirety of the capital cost of the PBID improvements and activities. Due to the proportionate special benefits received by these individual parcels from the PBID services, these parcels will be assessed at a rate which is proportionate to the amount of special benefits received. Only special benefits are assessable, and these benefits must be separated from any general benefits. As required by the State Constitution Article XIIID Section 4(a), the general benefits of an assessment district must be quantified and separated out so that the cost of the activities that are attributed to general benefit are deducted from the cost assessed against each specially benefitted parcel. General benefits are benefits from the PBID activities and improvements that are not special in nature, are not “particular and distinct” and are not over and above the benefits that other parcels receive. The attached Engineer’s Report has calculated that

2.0% of the PBID activities may be general in nature and will be funded from sources other than special assessments, see Section E of the Engineer’s Report for discussion of special and general benefits.

Calculation of Assessments
The PBID services and activities will be deployed throughout the district at various levels depending on the benefit zone. The cost of the special benefits received from these services is apportioned in direct relationship to each parcel’s benefit units, i.e., building square footage, lot square frontage, and linear street frontage as discussed above. The sum of the total assessable benefit units in the PBID is then divided into the assessment budget to determine the assessment rate for each benefit unit.

Specifically, the PBID budget is allocated as follows:

Clean, Safe and Beautiful and is assessed 50% each to building square feet and linear street frontage.

Economic Vitality and is assessed 50% each to building square feet and lot square feet.

Management is assessed 1/3 each to building square feet, lot square feet and linear street frontage.

Downtown Merced PBID June 2023
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Assessment Rates
Based on the assessment factors, benefit zones and assessment calculation discussed above, the following table illustrates the PBID’s maximum annual assessment rates each benefit unit and benefit zone for the 5-year life term, adjusting it by the maximum 5% increase for PBID activities.

Benefit Zone Year 1 Year 2 Year 3 Year 4 Year 5
Base Level
Lot SF $0.0113 $0.0118 $0.0124 $0.0130 $0.0137
Bldg SF $0.0997 $0.1046 $0.1099 $0.1154 $0.1211
Linear $3.2074 $3.3678 $3.5362 $3.7130 $3.8987
Enhanced Zone
Lot SF $0.0113 $0.0118 $0.0124 $0.0130 $0.0137
Bldg SF $0.1178 $0.1237 $0.1299 $0.1364 $0.1432
Linear $6.3273 $6.6436 $6.9758 $7.3246 $7.6908
Downtown Core
Lot SF $0.0113 $0.0118 $0.0124 $0.0130 $0.0137
Bldg SF $0.1178 $0.1237 $0.1299 $0.1364 $0.1432
Linear $7.9310 $8.3276 $8.7439 $9.1811 $9.6402

Sample Parcel Assessments
The initial annual parcel assessment for a parcel with 5,000 building square feet, 5,000 lot square feet, and 50 linear feet in the Base Level Zone is calculated as follows:

Bldg square footage x the assessment rate (5,000 x $0.0997) = $498.50 Lot square footage x the assessment rate (5,000 x $0.0113) = $ 56.50 Linear street frontage x the assessment rate (50 x $3.2074) = $160.37 Initial annual parcel assessment $715.37

The initial annual parcel assessment for a parcel with 5,000 building square feet, 5,000 lot square feet, and 50 linear feet in the Enhanced Zone is calculated as follows:

Bldg square footage x the assessment rate (5,000 x $0.1178) = $589.00 Lot square footage x the assessment rate (5,000 x $0.0113) = $ 56.50 Linear street frontage x the assessment rate (50 x $6.3273) = $316.37 Initial annual parcel assessment $961.87

The initial annual parcel assessment for a parcel with 5,000 building square feet, 5,000 lot square feet, and 50 linear feet in the Downtown Core is calculated as follows:

Bldg square footage x the assessment rate (5,000 x $0.1178) = $589.00 Lot square footage x the assessment rate (5,000 x $0.0113) = $ 56.50 Linear street frontage x the assessment rate (50 x $7.9310) = $396.55 Initial annual parcel assessment $1,042.05

Annual Assessment Adjustments
Budget Adjustment
Assessments will be subject to an annual increase of up to 5% per year to address changes in the cost of providing the PBID services identified above. In addition, assessments may be Downtown Merced PBID June 2023
Management District Plan Page 16 of 25

increased up to an additional 5% with those revenues being specifically allocated to a capital reserve account to fund/augment the Beautification and Street Life services, including matching funds or lever aging capital improvement projects . The determination of annual adjustments in assessment rates will be subject to review and approval by the PBID Owners’ Association and City Council and will be subject to the requirements of the PBID Law.

PBID Guidelines
Time and Manner for Collecting Assessments
As provided by State Law, the PBID assessment will appear as a separate line item on annual property tax bills prepared by the County of Merced. The Merced City Clerk’s office may directly bill any property owners whose special assessment does not appear on the tax rolls for each year of the BID term. The assessments shall be collected at the same time and in the same manner as for the ad valorem property tax paid to the County of Merced. These assessments shall provide for the same lien priority and penalties for delinquent payment as is provided for the ad valorem property tax.

Disestablishment
State law provides for the disestablishment of a PBID pursuant to an annual process. The 30-day period begins each year on the anniversary day that the City Council first established the PBID.

Within this annual 30- day period, if the owners of real property who pay more than 40% of the assessments levied submit a written petition for disestablishment, the PBID may be dissolved by the City Council. The City Council must hold a public hearing on the proposed disestablishment before voting on whether to disestablish the PBID.

Duration
The PBID will have a five-year term commencing January 1, 2024 through December 31, 2028.

Any major modifications or new or increased assessments during the term of the PBID that are not consistent with the provisions of this MDP will require a new mail ballot process.

To build in flexibility and adapt to new developments and economic conditions this PBID renewal will incorporate opportunities to further consider boundary adjustments and shifting resources within PBID service areas midstream, rather than waiting another ten years. A five -year “check in” will require an assessment of Downtown development, market influences, and place management needs. Anticipated changes to Downtown Merced over the next decade are simply too great to lock into a restrictive, ten-year plan and budget.

Future Development
As a result of continued development, the PBID may experience the addition or subtraction of assessable footage for parcels included and assessed within the PBID boundaries. The modification of parcel improvements assessed within the PBID may then change upwards or downwards the amount of total footage assessment for these parcels, pursuant to Government Code 53750(h)(3), will be prorated to the date the parcel receives the temporary and/or permanent certificate of occupancy.

In future years, the assessmen ts for the special benefits bestowed upon the included PBID parcels may change in accordance with the assessment methodology formula identified in the MDP and Engineer’s Report provided the assessment rate does not change. The assessment formula can only be changed in accordance with the provisions of the PBID Law and any other applicable laws.

Downtown Merced PBID June 2023
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SECTION 6: PBID GOVERNANCE

City Council
Following the submission of petitions from property owners representing more than 50% of the assessments to be paid, the City Council, upon holding a public hearing on the proposed PBID , may form the PBID. The PBID is formed by a City Council resolution, including the levy of an assessment on property, if the assessment is first approved by parcel owners in a balloting process.

PBID Governance
The PBID Law “establishes a governance framework that allows property owners who pay assessments the ability to determine how the assessm ents are used. This Management District Plan may be subject to changes if California state law or the Sacramento City Code changes.

Downtown Merced PBID
The PBID will contract with a nonprofit organization that will act as the Owners’ Association and governing board for the PBID. The role of the Owners’ Association is consistent with similar PBIDs and management organizations throughout California and the nation. The Owners ’ Association determines budgets, proposes any assessment adjustments and monitors service delivery. As part of the Management District Plan, the nonprofit organization oversees the delivery of day-to- day PBID activities.

Pursuant to the PBID Law , the Owners’ Association Board of Directors is subject to disclosure and notification guidelines set by the Ralph M. Brown Act and California Public Records Act when conducting PBID business.

The PBID Owners’ Association Board of Directors will represent a cross section of property owners found throughout the district. The goal and spirit of the board’s composition is to have a majority of property owners, but also include representatives from businesses, government, and residents that pay PBID assessments.

Downtown Merced PBID June 2023
Management District Plan Page 18 of 25

SECTION 7: IMPLEMENTATION TIMELINE

The Downtown Merced PBID is expected to be formed and begin implementation of the Management District Plan on January 1, 2024. The Jack London Business Improvement District will have a ten-year life through December 31, 2028.

Downtown Merced PBID June 2023
Management District Plan Page 19 of 25

SECTION 8: ASSESSMENT ROLL

The total assessment amount for FY 2023 /24 is $417,480 apportioned to each individual assessed parcel, as follows.

PARCEL

APN OWNER NAME SITE ADDRESS ASSMTS
031-134-007 1635 M St Merced L L C 1635 M St $2,676.74 031-122-019 4 Life International Center 912 Main St W $3,234.01 031-131-010 719 West Main Llc 719 Main St W $721.50
031-042-014 A M D Asset Holdings Llc 945 18Th St W $642.09 031-141-004 Abtahi Hamid Trustee & Kakkar Priyanka 1733 Canal St $1,468.76 031-123-014 Albertoni Susan L & Burk John E 820 18Th St W $697.84 031-144-001 Allen Sonia & Gonzalez Ramon Salvador Trustees 460 Main St W $1,362.70 031-144-037 Allen Sonia Trustees 510 Main St W $716.85 031-154-003 Allen Sonia Trustees & Gonzalez Ramon Salvador Tru 230 Main St W $846.73
031-154-015 Allen Sonia Trustees & Gonzalez Ramon Salvador Tru
1626 Martin Luther King Jr
Way $577.47
031-113-012 Alonzo Fernando Aguilera & Acosta Aurora N 1033 Main St W $1,199.96 031-113-019 Alonzo Fernando Aguilera & Acosta Aurora N 1041 Main St W $200.13 031-153-011 Ambriz Aristeo Pedraza & Ana 221 Main St W $496.14 031-051-006 American Agcredit Flca 1905 N St $1,559.14 031-051-007 American Agcredit Flca 725 19Th St W $195.86 031-072-018 Amro Abdulghani Trustee 301 18Th St W $1,842.34 031-122-013 Any Merced Inc 963 16Th St W $932.44
031-132-011 Arc Dbpprop001 Llc 710 Main St W $7,734.40 031-152-017 Arroyo Melissa 1624 K St $714.98
031-064-015 Athoula Group Llc 443 18Th St W $1,953.76
031-122-014 Atwareeth Ibrahim A & Mohamed Ayida S 961 16Th St W $1,007.23 031-072-005 Aue Dennis R & Patricia M Trustees 328 19Th St W $403.29 031-053-014 Ayers Yvonne K Trustee 635 19Th St W $1,284.05 031-064-012 Bandoni Ruby J Trustee 428 19Th St W $626.66 031-072-006 Bartholomew Robin S 314 19Th St W $455.21
031-121-001 Bellamy Tashandra 960 18Th St W $985.39
031-144-003 Beltran Edwardo 442 Main St W $1,364.71
031-151-006 Beltran Edwardo 325 Main St W $2,727.88
031-151-009 Benson Capital Inc 355 Main St W $1,061.58 031-161-016 Bette C Gaestel Childrens L L C 159 Main St W $1,509.11 031-134-004 Bette C Gaestel Childrens Llc 628 Main St W $1,364.71 031-064-003 Blank Richard M 426 19Th St W $370.77
031-144-032 Blauert Donald E & Blithe P Trustees 534 Main St W $1,364.71 031-144-033 Blauert Donald E & Blithe P Trustees 524 Main St W $1,364.71 031-064-005 Brandon Shirley L Trustee 412 19Th St W $522.48 031-064-006 Brandon Shirley L Trustee 406 19Th St W $1,111.63 031-144-034 Brawley Mason Trustee 520 Main St W $1,364.23 031-123-017 Brenda Group Lp 1755 O St $1,711.35
031-152-008 Bressler Richard & Rose Ann 320 Main St W $1,364.71 Downtown Merced PBID June 2023
Management District Plan Page 20 of 25

PARCEL
031-042-016 Brewer Randy V & Lori A Trustee 1820 Q St $788.95 031-064-009 Brownstone Capital Partners Llc 437 18Th St W $608.54 031-123-011 Brownstone Capital Partners Llc 843 Main St W $244.82 031-123-012 Brownstone Capital Partners Llc 847 Main St W $699.78 031-034-016 C & H Development Co A Corporation 1810 R St $1,542.44 031-124-007 C C M W Inc A Corporation 831 16Th St W $667.35 031-152-006 Catholic Charities Of Diocese Of Fresno 336 Main St W $1,364.71 031-072-012 Caton Clifford J 333 18Th St W $1,239.24
031-122-006 Caton Clifford J Trustee 906 17Th St W $1,140.88 031-122-017 Caton Clifford J Trustee 942 Main St W $812.68 031-122-018 Caton Clifford J Trustee 950 Main St W $523.93 031-151-010 Caton Clifford J Trustee 359 Main St W $2,555.53 031-163-011 Caton Clifford J Trustee 35 Main St W $1,919.78 031-164-004 Caton Clifford J Trustee 32 Main St W $630.81 031-124-010 Cen Cal Land & Cattle Company L L C 842 Main St W $4,411.86 031-063-012 Central Presbyterian Church Inc $3,360.56 031-064-001 Central Presbyterian Church Inc 1850 Canal St $1,019.73 031-152-001 Chan King & Li 360 Main St W $1,434.70
031-161-014 Chavez Chrispin O & Yolanda S 137 Main St W $355.92 031-162-004 Chavez Chrispin Ortiz & Yolanda Sarabia Trustees 134 Main St W $443.69 031-072-004 Cifuentes Mauricio 336 19Th St W $457.00
031-072-008 Cisneros Jesus 1835 Martin Luther King Jr
Way $725.94
031-163-014 Cisneros Juan Manuel Rosas 61 Main St W $1,682.72 031-164-001 Cisneros Juan Manuel Rosas & Martinez Consuela Mar 60 Main St W $1,053.93
031-161-021 Cisneros Juan Manuel Rosas & Martinez Consuelo Mar 101 Main St W $801.63
031-162-007 Cisneros Juan Manuel Rosas & Martinez Consuelo Mar 100 Main St W $3,050.04
031-164-002 Cisneros Juan Manuel Rosas & Martinez Consuelo Mar 52 Main St W $300.53
031-164-003 Cisneros Juan Manuel Rosas & Martinez Consuelo Mar 50 Main St W $244.82
031-153-014 Citrus Beginnings Lp 259 Main St W $1,104.85 031-052-006 City Of Merced $122.41
031-052-007 City Of Merced $854.83
031-052-008 City Of Merced $1,683.62
031-052-010 City Of Merced $890.04
031-064-007 City Of Merced 415 18Th St W $3,378.27
031-072-011 City Of Merced $721.50
031-114-016 City Of Merced $305.77
031-133-012 City Of Merced 645 Main St W $2,047.00
031-133-014 City Of Merced $85.92
031-133-018 City Of Merced 678 18Th St W $12,202.34
031-134-008 City Of Merced 1621 M St $101.30
031-134-009 City Of Merced 1617 M St $101.30
031-134-010 City Of Merced 1615 M St $101.30
Downtown Merced PBID June 2023
Management District Plan Page 21 of 25

PARCEL
031-134-013 City Of Merced $612.06
031-134-014 City Of Merced 639 16Th St W $244.82
031-134-020 City Of Merced 645 16Th St W $244.82
031-134-022 City Of Merced 1613 M St $544.46
031-141-018 City Of Merced $1,655.49
031-144-027 City Of Merced $2,439.71
031-144-040 City Of Merced $1,224.12
031-151-001 City Of Merced $3,354.16
031-151-002 City Of Merced $721.50
031-151-003 City Of Merced 314 18Th St W $481.00
031-151-004 City Of Merced 1739 Martin Luther King Jr
Way $962.12
031-151-005 City Of Merced 301 Main St W $4,637.20
031-151-008 City Of Merced $481.00
031-152-005 City Of Merced $481.00
031-153-013 City Of Merced $512.27
031-161-001 City Of Merced 1744 I St $377.05
031-153-017 Clarkson Thomas Brooks 235 Main St W $900.97 031-164-014 Clift Muril N & Vicki L Trustee 2 Main St W $2,464.58 031-143-002 Copper Rhino Llc 1730 Canal St $1,057.52
031-144-038 County Of Merced 550 Main St W $3,360.97
031-144-039 County Of Merced $3,183.20
031-042-012 Cruz Jose Rodriguez & Antonia 929 18Th St W $726.51 031-052-015 Curry Thomas M 728 19Th St W $511.82
031-052-013 Db Shewey Lp 754 19Th St W $970.54
031-152-003 Deangelo Vincent F Trustee 356 Main St W $676.44 031-152-004 Deangelo Vincent F Trustee 350 Main St W $682.29 031-141-014 Delcap Llc 531 Main St W $1,018.06
031-063-007 Drj Investments A Partnership 405 19Th St W $982.37 031-164-015 Dugan Valerie R Trustee 28 Main St W $952.77 031-162-003 Duong Hai 140 Main St W $426.25
031-133-008 El Capitan Hotel Merced Llc 609 Main St W $8,714.36 031-143-027 Encina Investment Group Mainplace Merced Llc 403 Main St W $10,889.79 031-143-028 Encina Investment Group Mainplace Merced Llc 425 Main St W $3,767.32 031-114-015 Ewing Paul 1020 Main St W $2,058.65
031-042-010 Faith Mission Ministries Inc 909 18Th St W $2,192.50 031-144-008 Feedam-Gomez Nicola K 422 Main St $527.61 031-121-004 Figueroa-Ocampo Pearl 944 18Th St W $609.47 031-044-011 Fletcher J Keith & Angela Terese 833 18Th St W $643.74 031-052-009 Fluetsch & Busby Rentals 2 0 Lp 725 18Th St W $1,637.02 031-161-022 Fong J Real Estate Inc 141 Main St W $1,534.47 031-072-003 Forsman Dan A & Tina J 344 19Th St W $636.49 031-141-005 Gaestel Bette C Trustee 1717 Canal $838.16 031-134-002 Gaestel Dekker John 642 Main St W $1,364.71 031-134-021 Gaestel Richard J & Lopez Cindee L Gaestel Trustee 661 16Th St W $1,054.83 031-153-016 Gaeta Miguel A & Rosario 227 Main St W 100 $1,083.89 031-053-013 Garcia John A & Kathy Renee 655 19Th St W $1,044.76 Downtown Merced PBID June 2023
Management District Plan Page 22 of 25

PARCEL
031-153-008 Garcia Patricia 1711 I St $1,074.06
031-143-001 Glass Craig & Seebode Julia Trustees 1742 Canal St $1,475.04 031-121-014 Glass Craig A Trustee 928 18Th St W $626.61 031-052-012 Glaze Grant & Janna 759 18Th St W $1,415.64 031-163-010 Glaze Grant M & Janna 21 Main St W $589.31 031-112-015 Glendale 3 Props Llc 1635 R St $1,073.29
031-114-020 Golden State Realty Association 1001 16Th St W $953.62 031-154-004 Golden State Realty Association 210 Main St W $1,356.63 031-154-005 Golden State Realty Association 206 Main St W $881.93 031-121-012 Golden State Realty Association Inc 959 Main St W $1,486.10 031-122-001 Golden State Realty Association Inc 962 Main St W $1,310.65 031-034-013 Gonzales Paul M & Socorro D Trustees 1045 18Th St W $541.21 031-051-012 Green Donald E 1910 O St $500.45
031-052-003 Green Donald E 748 19Th St W $500.16
031-131-004 Hoekstra Properties Llc $481.00
031-131-012 Hoekstra Properties Llc 745 Main St W $1,364.35 031-154-002 Hoekstra Properties Llc 240 Main St W $1,926.72 031-063-008 Hopeton Properties Llc 419 19Th St W $566.23 031-152-014 Hopeton Properties Llc 333 16Th St W $122.41 031-152-015 Hopeton Properties Llc 335 16Th St W $244.82 031-131-008 Hotel Tioga Investors L L C 715 Main St W $12,224.54 031-072-007 Huynh Linh C 310 19Th St W $406.67
031-152-007 Ingram Jeffery T & G Devon Trustee 328 Main St W $1,134.03 031-121-006 J & J Kaley Llc 920 18Th St W $638.22
031-144-006 Jabronski Limited Liability Company 432 Main St W $683.12 031-113-009 Jimenez Richard 1006 18Th St W $1,332.74
031-121-003 Jimenez Richard 954 18Th St W $651.16
031-072-001 K Street Properties A Partnership 1826 K St $1,348.03 031-072-002 K Street Properties A Partnership 352 19Th St W $244.82 031-044-010 Khan Zulqarnain Trustee 823 18Th St W $768.98 031-162-001 Kirby Phyllis Eva Trustee 160 Main St W $2,710.86 031-121-008 Koenig Steven A & Michelle L Trustee 902 18Th St W $1,056.30 031-113-004 La Estrella Enterprises L L C 1040 18Th St W $400.17 031-113-006 La Estrella Enterprises L L C 1032 18Th St W $625.92 031-113-007 La Estrella Enterprises L L C 1022 18Th St W $966.78 031-113-008 La Estrella Enterprises L L C 1014 18Th St W $606.24 031-131-007 La Estrella Enterprises Llc 1727 N St $3,918.94 031-064-004 Lagares Marta Ivelisse 420 19Th St W $499.16 031-163-012 Lam Thuy Le 43 Main St W $474.82
031-052-014 Landess Richard B 751 18Th St W $666.95
031-061-007 Larson Allen & Julia Family L P 501 19Th St W $642.10 031-061-008 Larson Allen & Julia Family L P 517 19Th St W $438.47 031-061-009 Larson Allen & Julia Family L P 529 19Th St W $622.04 031-123-001 Larson Allen & Julia Family L P 860 18Th St W $905.83 031-134-006 Larson Allen & Julia Family L P 616 Main St W $533.67 031-134-026 Larson Allen & Julia Family L P $167.15 031-144-002 Larson Allen & Julia Family L P 452 Main St W $1,364.71 Downtown Merced PBID June 2023
Management District Plan Page 23 of 25

PARCEL
031-123-002 Larson James Allen 850 18Th St W $433.88
031-062-017 Lee K & E Enterprise Inc 1840 M St $2,541.01 031-062-018 Lee K & E Enterprise Inc 1840 M St $293.79 031-114-018 Lee Samuel K G & Nori W Trustees 1048 Main St W $1,996.72 031-034-009 Leonardo Paul A Iii Trustee 1007 18Th St W $837.70 031-153-009 Lewis John L Trustee 211 Main St W $992.68 031-113-020 Lira Lp 1021 Main St W $3,490.93
031-114-002 Lira Lp 1050 Main St W $905.80
031-114-017 Lira Lp 1062 Main St W $693.92
031-061-010 Lodge Merced Lodge No 1240 Elks 541 19Th St W $765.61 031-061-011 Lodge Merced Lodge No 1240 Elks 1910 M St $2,682.19 031-141-021 Lofts On Main L L C The 521 Main St W $3,505.21 031-121-007 Lopez Arthur & Clara M Trustees 912 18Th St W $677.32 031-052-016 Lorenzi Land Investments Lp & Larson Julia Jordan 740 19Th St W $526.00 031-144-010 Lorenzi Robert J Weres Trustee 410 Main St W $1,364.71 031-131-011 Lorezni Land Investments Lp & Vogelsang Stewart Pr 739 Main St W $1,993.28 031-121-002 Luna Gilbert 1730 Q St $169.39
031-133-011 Madera Uniform & Accessories L L C 637 Main St W $579.68 031-133-013 Mainzer Theater Merced Llc 655 Main St W $3,835.60 031-062-012 Masonic Building Association 561 18Th St W $2,559.15 031-131-013 Mcauley Aron Patrick & Cathy Ann Trustee $1,602.52 031-132-001 Mcauley Aron Patrick & Cathy Ann Trustee 744 Main St W $4,397.43 031-123-007 Mcauley Ray Barry & Jeanne R Trustees 805 Main St W $725.94 031-123-008 Mcauley Ray Barry & Jeanne R Trustees 811 Main St W $992.38 031-123-009 Mcauley Ray Barry & Jeanne R Trustees 819 Main St W $244.82 031-123-010 Mcauley Ray Barry & Jeanne R Trustees $244.82 031-124-004 Mcauley Ray Barry & Jeanne R Trustees 820 Main St W $5,322.78 031-124-011 Mcauley Ray Barry & Jeanne R Trustees 813 16Th St W $2,018.19 031-153-010 Mccomb Donald & Karen D 219 Main St W $368.48 031-072-017 Mckim Dennis V & Sally Lou 345 18Th St W $3,047.08 031-062-013 Mcnamara Agnes H Trustee 519 18Th St W $240.50 031-141-015 Mcnamara Clarice J Trustee 1777 Canal St $2,861.02 031-114-019 Melehan Joseph P & Blackwell Larry Co-Trustees 1640 R St $3,230.93 031-154-013 Mendez Lourdes 224 Main St W $621.64
031-034-011 Mendoza John-Pierre Trustee 1027 18Th St W $543.22 031-034-012 Mendoza John-Pierre Trustee 1035 18Th St W $557.53 031-054-025 Merced Community College District $693.64 031-072-016 Merced County Association Of Governments 369 18Th St W $1,795.63 031-054-024 Merced County Employees Retirement Association 690 19Th St W $1,070.76 031-121-011 Merced County Legion Hall 933 Main St W $3,435.41 031-134-001 Merced County Office Of Education 658 Main St W $3,208.53 031-143-003 Merced County Office Of Education 450 18Th St W $1,238.77 031-141-006 Merced County Superintendent Of Schools 501 Main St W $2,249.99 031-152-020 Merced Family Dentistry Llc 375 16Th St W $873.04 031-152-021 Merced Family Dentistry Llc 345 16Th St W $1,043.61 031-051-008 Merced Irrigation District 729 19Th St W $204.30 031-051-009 Merced Irrigation District 737 19Th St W $227.93 Downtown Merced PBID June 2023
Management District Plan Page 24 of 25

PARCEL
031-051-010 Merced Irrigation District 745 19Th St W $244.82 031-051-011 Merced Irrigation District $244.82
031-122-007 Merced Rice Bowl Llc 1621 P St $1,567.59
031-122-008 Merced Tire Inc 927 16Th St W $302.63
031-122-009 Merced Tire Inc 937 16Th St W $751.20
031-161-023 Merced-Mariposa Dist Counc St Vincent De 131 Main St W $2,163.19 031-044-018 Merco Credit Union A Corporation 815 18Th St W $1,300.50 031-053-005 Merco Credit Union A Corporation 1911 M St $1,440.07 031-053-006 Merco Credit Union A Corporation 629 19Th St W $244.82 031-144-004 Mid Valley Finance Co 436 Main St W $682.29 031-144-007 Miller John J Trustee 426 Main St W $681.59 031-162-002 Mitchell Gene V & Catherine M Trustees 162 Main St W $866.88 031-163-016 Moreno Tony Trustee 1 Main St W $2,099.54
031-163-013 Morgan Calvin & Nellie Trustee 47 Main St W $442.01 031-143-004 Pacific Bell 440 18Th St W $2,027.26
031-123-003 Pacific Sunrise Associates Inc 834 18Th St W $915.10 031-054-026 Parking Authority Of The City Of Merced $1,516.74 031-054-027 Parking Authority Of The City Of Merced 605 18Th St W $16,252.79 031-113-002 Passovoy Carol D Trustee 1730 R St $438.64 031-113-021 Passovoy Carol D Trustee 1750 R St $1,123.16 031-144-009 Pazin Mark 420 Main St W $599.00
031-052-005 Perez Abelardo R & Rosita M 720 19Th St W $522.08 031-162-005 Perine & Dicken Professional Fiduciaries & Conserv 130 Main St W $200.41 031-162-006 Perine & Dicken Professional Fiduciaries & Conserv 122 Main St W $1,831.88 031-062-005 Quinta Properties A Partnership 510 19Th St W $852.06 031-062-019 Quinta Properties A Partnership 1827 Canal St $1,199.19 031-113-005 Ramirez Francisco & Rosa 1034 18Th St W $855.87 031-141-013 Razzari Timothy F & Billie K Co-Trustees 541 Main St W $4,792.51 031-141-020 Redevelopment Agency Of City Of Merced $78.35 031-144-036 Redevelopment Agency Of The City Of Merce $2,751.32 031-054-022 Regents Of The University Of California The $6,096.68 031-134-003 Reinero Philip 636 Main St W $981.82
031-042-013 Richard Neil Morse And Teresa M Saldivar-Mors 935 18Th St W $705.07 031-161-002 Ripsam Stefan & Han Sandra Y 1726 I St $355.95 031-143-017 Roberts Grey B 451 Main St W $2,968.28
031-121-009 Roberts Grey Trustee 901 Main St W $2,253.33 031-121-010 Roberts Grey Trustee $781.75
031-123-013 Roberts Grey Trustee 851 Main St W $970.76 031-064-008 Robinson Montgomery Venture No 2 $384.80 031-064-013 Robinson-Montgomery Venture No 1 442 19Th St W $279.94 031-064-011 Robinson-Montgomery Venture No 1 A Part 1804 Canal St $2,168.50 031-064-014 Robinson-Montgomery Venture No 2 A Part 451 18Th St W $452.85 031-144-005 Rosiemax L L C 434 Main St W $682.29
031-121-013 Roussos Stergios T & Pamela M 936 18Th St W $638.45 031-131-005 Rucker Sharon E Trustee 732 18Th St W $1,001.89 031-062-008 Salmeri Jeffery J & Michelle A 505 18Th St W $2,403.45 Downtown Merced PBID June 2023
Management District Plan Page 25 of 25

PARCEL
031-152-010 Sanchez Antonio V & Laura 1615 Martin Luther King Jr Way $956.80
031-152-011 Sanchez Antonio V & Laura $489.27
031-152-012 Sanchez Antonio V & Laura 315 16Th St W $400.23 031-154-014 Sao Vannak 260 Main St W $1,151.29
031-044-012 Sotelo Basilides Garcia & Rosales Elvia Patricia O 845 18Th 0 W $750.83 031-133-010 Stewart Donald J Jr Trustee 635 Main St W $820.79 031-114-008 Su Wayne Hao & Wu Emily Sulan Trustee 1002 Main St W $1,242.10 031-044-008 Teranishi Steve H & Valora A 1805 O St $1,341.02 031-152-009 Thomas David E & Carrie A 312 Main St W $2,359.10 031-042-011 Tinetti Stephen G & Joan 919 18Th St W $569.82 031-072-015 Transit Joint Powers Authority For Merced County 355 18Th St W $610.55 031-144-028 Trevinos Restaurant Bed & Breakfast Llc 408 Main St W $1,706.92 031-131-006 Trs Ops Llc 718 18Th St W $935.52
031-044-013 Varani Smiles Inc 849 18Th St W $1,976.19
031-152-013 Varni Corporation 323 16Th St W $515.27
031-042-015 Vierra Howard 953 18Th St W $400.83
031-141-019 Vogel Brauhaus Llc 560 18Th St W $3,923.05 031-124-009 Vogelsang Stewart Properties Ii L P 859 16Th St W $726.37 031-113-018 Vohra Vinay & Vohra Vikram 1061 Main St W $2,031.10 031-124-008 Waite Michael H 851 16Th St W $1,582.57
031-062-011 Wells Fargo Bank Na 545 18Th St W $2,548.78 031-133-015 Worthley David M & Norma Trustees 629 Main St W $907.31 031-034-010 Xavier Jose M Trustee 1017 18Th St W $1,132.52 031-131-002 Yosemite Land Bank Flca 1732 O St $243.12 031-131-014 Yosemite Land Bank Flca 760 18Th St W $2,339.29

TOTAL ASSESSMENT: $417,480.00

ATTACHMENT A

Downtown Merced
Property Based Business Improvement District
Engineer’s Report

Merced, California
June 2023

Prepared by:

Kristin Lowell Inc.

Prepared pursuant to the State of California
Property and Business Improvement District Law of 1994
And Article XIIID of the California Constitution
to create a property-based business improvement district

TABLE OF CONTENTS

ENGINEER’S STATEMENT ............................................................................... 1 ENGINEER’S REPORT:

SECTION A: Legislative and Judicial Review ............................................... 2 SECTION B: Improvements and Activities .................................................... 4 SECTION C: Benefitting Parcels .................................................................... 5 SECTION D: Proportional Benefits ................................................................ 7 SECTION E: Special and General Benefits ................................................. 10 SECTION F: Cost Estimate ........................................................................... 14 SECTION G: Apportionment Method ........................................................... 15

Attachment A:

Downtown Merced PBID Engineer’s Report Page 1 of 17

This Engineer’s Report is prepared pursuant to Article XIIID of the California State Constitution and the State of California Property and Business Improvement District Law of 1994 ( California Streets and Highways Code § 36600 et seq.) (the “Ordinance”).

The Downtown Me rced Property -Based Business Improvement District (“PBID ”) will provide activities either currently not provided or above and beyond what the City of Merced (“City”) provides. These activities will specially benefit each individual assessable parcel in the PBID.

Every individual assessed parcel within the PBID receives special benefit from the activities identified under Section B of this Engineer’s Report. Only those individual assessed parcels within the PBID receive the special benefit of these proposed activities; parcels contiguous to and outside the PBID and the public at large may receive a general benefit, as outlined in Section E.

The cost to provide general benefits, if any, will be funded from sources other than special assessments.

The duration of the PBID is five (5) years, commencing January 1, 2024 . An estimated budget for the PBID improvements and activities is set forth in Section D. Assessments will be subject to an annual increase of up to 5% per year as determined by the PBID Board of Directors.

Assessment increases must stay between 0% and 5% in any given year. Funding for the PBID services and activities shall be derived from a property -based assessment of each specially benefitted parcel in the PBID. A detailed description of the methodology for determining the proportional special benefit each individual assessable parcel receives from t he service and the assessment for each parcel is set forth in Section F.

I hereby certify to the best of my professional knowledge that each of the identified assessable parcels located within the PBID will receive a special benefit which is a particular and distinct benefit over and above general benefits conferred on real property located in a district or to the public at large and that the amount of the proposed special assessment is proportional to, and no greater than, the special benefits received.

Respectfully submitted,

Terrance E. Lowell, P.E.

ENGINEER’S STATEMENT

Attachment A:

Downtown Merced PBID Engineer’s Report Page 2 of 17

SECTION A: LEGISLATIVE AND JUDICIAL REVIEW

Property and Business Improvement District Law of 1994
The Property and Business Improvement District Law of 1994 (the “State Law”) is the legislation that authorizes the City to levy assessments upon real property for the purposes of providing improvements and activities that specially benefit each individual assessed parcel in the PBID .

The purpose of the PBID is to encourage commerce, investment, and business activities. In order to meet these goals PBIDs typically fund activities and improvements, such as, enhanced safety and cleaning. Unlike other assessment districts which fund the construction of public capital improvements or maintenance thereof, PBIDs provide activities and improvements “to promote the economic revitalization and physical maintenance of the business districts of its cities in order to create jobs, attract new businesses, and prevent the erosion of the business districts.” (Streets and Highways Code Section 36601(b)). The improvements and activities funded through the PBID are over and above those already provided by the City within the PBID’s boundaries. Each of the PBID activities or improvements is intended to increase building occupancy and lease rates, to encourage new business development, attract businesses that benefit the parcels, and improve the economic vitality of parcels.

Specifically, the State Law defines “Improvements” and “Activities” as follows:

"Improvement" means the acquisition, construction, installation, or maintenance of any tangible property with an estimated useful life of five years…” 1 "Activities" means, but is not limited to, all of the following:
(a) Promotion of public events which benefit businesses or real property in the district. (b) Furnishing of music in any public place within the district. (c) Promotion of tourism within the district.
(d) Marketing and economic development, including retail retention and recruitment. (e) Providing safety, sanitation, graffiti removal, street and sidewalk cleaning, and other municipal services supplemental to those normally provided by the municipality. (f) Activities which benefit businesses and real property located in the district. 2 The State Law also defines special benefit as “…for purposes of a property -based district, a particular and distinct benefit provided directly to each assessed parcel within the district. Merely because parcels throughout an assessment district share the same special bnefits does not make the benefits general.”
3 Article XIIID of the State Constitution
In 1996, California voters approved Proposition 218, codified in part as Article XIIID of the State Constitution. Among other requirements, Article XIIID changes the way local agencies enact local taxes and levy assessments on real property. It states, in relevant part, that:

(a) An agency which proposes to levy an assessment shall identify all parcels which will have a special benefit conferred upon them and upon which an assessment will be

1 California Streets and Highways Code, Section 36610.
2 California Streets and Highways Code, Section 36613.
3 California Streets and Highways Code, Section 36615.5(b) Attachment A:

Downtown Merced PBID Engineer’s Report Page 3 of 17

imposed. The proportionate special benefit derived by each identified parcel shall be determined in relationship to the entirety of the capital cost of a public improvement, the maintenance and operation expenses of a public improvement, or the cost of the property related service being provided. No assessment shall be imposed on any parcel which exceeds the reasonable cost of the proportional special benefit conferred on that parcel.

Only special benefits are assessable, and an agency shall separate the general benefits from the special benefits conferred on a parcel. Parcels within a district that are owned or used by any agency, the State of California or the United States shall not be exempt from assessment unless the agency can demonstrate by clear and convincing evidence that those publicly owned parcels in fact receive no special benefit. (b) All assessments shall be supported by a detailed engineer's report prepared by a registered professional engineer certified by the State of California.4

"Special benefit" means a particular and distinct benefit over and above general benefits conferred on real property located in the district or to the public at large. General enhancement of property value does not constitute "special benefit." 5 Judicial Guidance
Since the enactment of Article XIIID, the courts have rendered opinions regarding various aspects of Article XIIID. The notable portion of a case that applies to PBIDs in particular is noted below.

“The engineer’s report describes the servic es to be provided by the PBID [i.e. the PBID]; (1) security, (2) streetscape maintenance (e.g., street sweeping, gutter cleaning, graffiti removal), and (3) marketing, promotion, and special events. They are all services over and above those already provided by the City within the boundaries of the PBID. And they are particular and distinct benefits to be provided only to the properties within the PBID, not to the public at large—they ‘affect the assessed property in a way that is particular and distinct from [their] effect on other parcels and that real property in general and the public at large do not share.’”6

The contents of this Engineer’s Report are prepared in compliance with the above noted authorizing State Law, the State Constitution and the judicial opinion.

4 Section 4, Article XIIID of the State Constitution.
5 Section 2 (i), Article XIIID of the State Constitution. 6 Dahms v. Downtown Pomona Property and Business Improvement District (2009) 174 Cal.App. 4th 708, 722.

Attachment A:

Downtown Merced PBID Engineer’s Report Page 4 of 17

SECTION B: IMPROVEMENTS AND ACTIVITIES

The PBID Steering Committee collectively determined the priority for improvements and activities that the PBID will deliver. Accordingly, the PBID will provide the services described in greater detail in Section 3 of this Management District Plan: Clean, Safe, Beautiful; Economic and Vitality; and Management.

Attachment A:

Downtown Merced PBID Engineer’s Report Page 5 of 17

SECTION C: BENEFITTING PARCELS

PBID Boundary Description
The PBID is approximately 25 square blocks of the downtown area. It is roughly bounded by 16th Street to the South, R Street to the west, 18 th and 19th Streets to the north, and G Street to the east. The PBID is allocated into three benefit zones to reflect the level of service and special benefits each parcel will receive. All of which is discussed in detail in Section 2 of this Management District Plan

A map of the proposed district boundary is on the following page.

Attachment A:

Downtown Merced PBID Engineer’s Report Page 6 of 17

Attachment A:

Downtown Merced PBID Engineer’s Report Page 7 of 17

SECTION D: PROPORTIONAL BENEFITS

Methodology
Article XIIID Section 4(a) of the State Constitution states that “The proportionate special benefit derived by each identified parcel shall be determined in relationship to the entirety of the capital cost of the public improvement, the maintenance and operation expenses of a public improvement, or the cost of the property related service being provided.”

Determining the proportionate special benefit for the parcels of real property within the proposed assessment district which benefit from the proposed improvements, services, and activities is the result of a four-step process:

1. Defining the proposed activities,

2. Determining which parcels specially benefit from the proposed activities,

3. Determining the amount of special benefit each parcel receives,

4. Determining the proportional special benefit a parcel receives in relation to the amount of special benefit all other parcels in the PBID receive after subtracting any general benefit.

Each identified parcel wit hin the PBID will be assessed based upon each parcel’s unique characteristics in relationship to all other specially benefitted parcels’ characteristics. Due to the proportionate special benefits received by each parcel from the PBID services, each parcel will be assessed a rate which is commensurate with the amount of special benefits received.

Special Benefit Factor
Each parcel’s proportional special benefit from the PBID activities is determined by analyzing three parcel characteristics: Building Square Footage, Lot Square Footage, and Linear Street Frontage. These parcel characteristics are an equitable way to identify the proportional special benefit that each of the assessed parcels receive. Building square footage is relevant to the current use of a property and is also closely correlated to the potential pedestrian traffic from each parcel and the demand for PBID activities. The lot square footage reflects the long-term value implications of the improvement district. A parcel’s linear street frontage is relevant to the street level usage of a parcel and the demand for PBID activities. Together, these parcel characteristics serve as the basic unit of measure to calculate how much special benefit each parcel receives in relationship to the district as a whole, which is then is the basis to proportionately allocate the cost of the special benefits.

Building square footage is defined as the total building square footage as determined by the outside measurements of a building. The gross building square footage is taken from the County Assessor’s records. Building square footage is used as the characteristic to assess ½ the cost of Clean, Safe and Beautiful activities, ½ the cost of Economic Vitality activities, and 1/3 the cost of the Management activities.

Lot square footage is defined as the total amount of area within the boundaries of the parcel.

Attachment A:

Downtown Merced PBID Engineer’s Report Page 8 of 17

Each one of these characteristics represents the benefit units allocated to each specially benefitted parcel. The total number of assessable benefit units in the PBID are as follows:

Attachment A:

Downtown Merced PBID Engineer’s Report Page 9 of 17

SECTION E: SPECIAL and GENERAL BENEFITS

Special Benefit Defined
State Law, Proposition 218, and judicial opinions require that assessments be levied according to the estimated special benefit each assessed parcel receives from the activities and improvements. Article XIIID Section 4(a) of the California Constitution i n part states that “only special benefits are assessable”.

The State Law defines special benefit as “…for purposes of a property-based district, a particular and distinct benefit over and above general benefits conferred on real property located in a district or to the public at large. Special benefit includes incidental or collateral effects that arise from the improvements, maintenance, or activities of property -based districts even if those incidental or collateral effects benefit property or persons not assessed. Special benefit excludes general enhancement of property value.”7

As of July 19, 2022, the State Law , Section 36615.5 (b), was amended to further define special benefit as it relates to the improvements and activities these districts provide. Specifically, the amendment states: “‘Special benefit’ also includes, for purposes of a property -based district, a particular and distinct benefit provided directly to each assessed parcel within the district. Merely because parcels throughout an assessment district share the same special benefit does not make the benefits general.”

Furthermore, the amendment (Section 36622(k)(3)) states: “In a property -based district, properties throughout the district may share the same special benefits. In a distr ict with boundaries that define which parcels are to receive improvements, maintenance, or activities over and above those services provided by the city, the improvements, maintenance, or activities themselves may constitute a special benefit. The city may impose assessments that are less than the proportional special benefit conferred but shall not impose assessments that exceed the reasonable costs of the proportional special benefit conferred. Because one or more parcels pay less than the special benefit conferred does not necessarily mean that other parcels are assessed more than the reasonable cost of their special benefit.”

Special Benefit Analysis
All special benefits derived from the assessments outlined in this Report are for property-related activities that are specifically intended for and directly benefiting each individual assessed parcel in the BID . The special benefit must affect the individual assessable parcel in a way that is particular and distinct from its effect on other pa rcels and that real property in general and the public at large do not share. No parcel’s assessment shall be greater than the special benefits received.

Streets and Highways Code Section 36601€ states that “Property and business improvement districts f ormed throughout this state have conferred special benefits upon properties and businesses within their districts and have made those properties and businesses more useful by providing the following benefits: (1) Crime reduction. A study by the Rand Corpo ration has confirmed a 12-percent reduction in the incidence of robbery and an 8- percent reduction in the

7 California Streets and Highways Code, Section 36615.5(a) Attachment A:

Downtown Merced PBID Engineer’s Report Page 10 of 17

total incidence of violent crimes within the 30 districts studied. (2) Job creation. (3) Business attraction. (4) Business retention. (5) Economic growth. (6) New investments.”

The PBID’s goal is to fund activities and improvements to provide a cleaner , safer and more welcoming environment as outlined in Section B. The goal of improving the economic vitality is to improve the safety and cleanliness of each individual specially benefitted parcel in an effort to increase commerce, to increase building occupancy and lease rates and to attract more customers, employees, tenants and investors.

Each parcel will specially benefit from the proposed services, but may not to the same degree:

• Cleaner sidewalks, streets and common areas
• Real and perceived public safety improvements
• Greater pedestrian traffic
• Enhanced rental incomes
• Improved business climate
• New business and investment
• Well managed BID programs and services

Specifically, each parcel benefits from each of the PBID activities as defined below.

Clean, Safe, and Beautiful
The enhanced safety activities make the downtown area safer which attracts more businesses, customers, and residents, and ultimately private investment . When business location decisions are made, “lower levels of public safety lead to increased uncertainty in decision making and can be perceived as a signal of a socio- institutional environment unfavorable for investment.” Uncertainty affects the investment environment in general , but in particular it increases the fear of physical damage to investment assets (or to people) or their returns…Almost universally, places with lower crime rates are perceived as more desirable.”8

The cleaning and beautification activities specially benefit each assessed parcel within the PBID by providing a clean and aesthetically appealing environment. This is achieved through sidewalk sweeping, power washing, removing litter and graffiti, trash removal, and streetscape furniture .

These activities create the environment needed to achieve the PBID’s other goals. Sidewalks that are dirty and unclean, particularly from vagrant activities, deter pedestrians and commerc ial activity.

The Clean, Safe and Beautiful activities are expected to provide special benefits to the assessed parcels in a variety of ways. For example:

• Maintaining and cleaning sidewalks in front of each parcel creates a cohesive environment and allows pedestrians to move freely throughout the PBID. Sidewalks that are dirty and unkempt deter pedestrians and commercial activity . “Walkable communities offer many financial benefits, such as a reduction in healthcare costs. Homes with sidewalks tend to sell for more money and in less time than similar homes without sidewalks. Businesses also benefit as residents are more likely to shop locally when there is increased

8 “Accelerating economic growth and vitality through smarter public safety management” IBM Glo bal Business Services Executive Report, September 2012, pg. 2
Attachment A:

Downtown Merced PBID Engineer’s Report Page 11 of 17

connectivity between residential and business/commercial districts. The well -maintained sidewalks, accessibility, and inviting atmosphere of downtown helps to attract tourists.”9 • Removing graffiti from assessed buildings to keep the aesthetic appeal uniform throughout the PBID.
• The beautification activities specially benefit each assessed parcel by providing maintained landscaped corridors and streetscape furniture in public places. These activities create the welcoming environment needed to achieve the PBID’s other goals.

Economic Vitality
The Economic Vitality activities are tied to and will specially benefit each individual parcel by encouraging business development and investment that generates customer traffic, which directly relates to increases in commercial activity, filling of vacant storefronts and offices and ultimately, increased lease rates for retail and office space.

Management
The PBID requires a professional staff to properly manage programs, communicate with stakeholders, advocate with City departments, and provide leadership. Each parcel will specially benefit from the PBID executive staff that will ensure that the PBID activities are provided and deployed to assessed parcels and will provide leadership to represent the community with one clear voice.

Special Benefit Conclusion
The fact that each PBID improvement and activity defined above will be provided to each assessed parcel is above and beyond what the city currently provides constitutes a special benefit. In addition, the PBID activities are targeted to improve the safety, cleanliness, and economic vitality of only those parcels that are within the district boundary. Therefore, we conclude that each of the proposed activities provides solely special benefits to the assessed parcels within the district and that each parcel’s assessment is in direct relationship to and no greater than its proportional special benefits received.

9 “Benefits of Sidewalks”, Iowa Healthiest State Initiative, November 1, 2017 Attachment A:

Downtown Merced PBID Engineer’s Report Page 12 of 17

General Benefit Defined
As required by the State Constitution Article XIIID Section 4(a), the general benefits of an assessment district must be quantified and separated out so that the cost of the activities that are attributed to general benefit are deducted from the cost asses sed against each specially benefitted parcel. General benefits are benefits from the PBID activities and improvements that are not special in nature, are not particular and distinct and are not over and above the benefits that other parcels receive.

General Benefit Analysis
The PBID improvements and activities are designed to provide service only to those parcels that are within the district boundary. As discussed above, these activities are determined to provide solely special benefits to the assessed parcels. If there is any general benefit to property located in the district or to the public at large, it is incidental to providing special benefits to the assessed parcels. However, it is conceivable that there may be some general benefit that is not quantifiable, and it is judicious to allocate a portion of the budget to acknowledge this.

For the purposes of the PBID, we assigned 2%, or $8,520 of the budget to general benefit. This portion of the budget will need to be funded from sources other than the special assessments.

Attachment A:

Downtown Merced PBID Engineer’s Report Page 13 of 17

SECTION F: COST ESTIMATE

2024 PBID Assessment Budget
The PBID’s operating budget takes into consideration:

1. The improvements and activities needed to provide special benefits to each individual parcel within the PBID boundary (Section B),

2. The parcels that specially benefit from said improvements and activities (Section C), and

3. The costs associated with the special and general benefits conferred (Section E).

EXPENDITURES
TOTAL
BUDGET
% of
Budget
Clean, Safe, Beautiful $305,000 71.60%
Economic Vitality $35,000 8.22%
Management $86,000 20.19%
Total Expenditures $426,000 100.00%

REVENUES
Assessment Revenues $417,480 98.00%
Other Revenues (1) $8,520 2.00%
Total Revenues $426,000 100.00%
(1) Other non-assessment funding to cover the cost associated with general benefit.

Budget Notations
The cost of providing programs and services may vary depending on the market cost for those programs and services. Expenditures may require adjustment up or down to continue the intended level of programs and services. The Board of Directors of the Owner’s Association shall have the right to reallocate up to 10% by line item of the budget allocation within the budgeted categories.

Any change will be approved by the Owners’ Association Board of Directors and submitted within its annual planning report, pursuant to Section 36650 of the California Streets and Highways Code. The overall budget shall remain consistent with this Management District P lan. Each assessed parcel pays for 100% of the special benefit received based on the level of benefit received. Any annual budget surplus, including those created through cost saving measures, labor vacancies, unexpected reductions in expenses caused by one-time events or unanticipated increases to income, will be rolled into the following year’s budget. The carryover funds will be applied to the same budget line item as the line item that was the source of the carryover funds.

The budget will be set accor dingly, within the constraints of the Management District Plan, to adjust for surpluses that are carried forward to ensure that the District is spending these funds in a timely manner and is complying with applicable State laws and City policies. The estim ated budget surplus amount will be included in the Annual Planning Report each year. District funds may be used for renewal.

Bond Issuance
No bonds will be issued to finance improvements.

Attachment A:

Downtown Merced PBID Engineer’s Report Page 14 of 17

SECTION G: APPORTIONMENT METHOD

The proportionate special benefit derived by each identified parcel shall be determined in relationship to the entirety of the capital cost of an improvement or the cleaning and operation expenses of an improvement or the cost of the property service being provided. Due to the proportionate special benefits received by these individual parcels from the PBID services, these parcels will be assessed a rate which is proportionate to the amount of special benefits received.

Specifically, the assessment rates are calculated based on the following budget allocation as follows:

Clean, Safe and Beautiful and is assessed 50% each to building square feet and linear street frontage.

Economic Vitality and is assessed 50% each to building square feet and lot square feet.

Management is assessed 1/3 each to building square feet, lot square feet and linear street frontage.

The budget is then allocated to the assessment factors as follows:

Building square footage is defined as the total building square footage as determined by the outside measurements of a building. The gross building square footage is taken from the County Assessor’s records. Building square footage is used as the characteristic to assess ½ the cost of Clean, Safe and Beautiful activities, ½ the cost of Economic Vitality activities, and 1/3 the cost of the Management activities.

Lot square footage is defined as the total amount of area within the boundaries of the parcel.

Downtown Merced PBID Engineer’s Report Page 15 of 17

Downtown Core benefit zone receives as weighted factor of 2.0 for that frontage.

Each one of these characteristics represents the benefit units allocated to each specially benefitted parcel. The total number of assessable benefit units in the PBID are as follows:

Using the Benefit Units above and the budget allocation for each benefit zone, the first year’s maximum assessment rates are as follows:

Benefit Zone Lot SF Bldg SF Linear
Base Level $0.0113 $0.0997 $3.2074
Enhanced Zone $0.0113 $0.1178 $6.3273
Downtown Core $0.0113 $0.1178 $7.9310

Sample Parcel Assessments
The initial annual parcel assessment for a parcel with 5,000 building square feet, 5,000 lot square feet, and 50 linear feet in the Base Level Zone is calculated as follows:

The initial annual parcel assessment for a parcel with 5,000 building square feet, 5,000 lot square feet, and 50 linear feet in the Enhanced Zone is calculated as follows:

The initial annual parcel assessment for a parcel with 5,000 building square feet, 5,000 lot square feet, and 50 linear feet in the Downtown Core is calculated as follows:

Bldg square footage x the assessment rate (5,000 x $0.1178) = $589.00 Lot square footage x the assessment rate (5,000 x $0.0113) = $ 56.50 Linear street frontage x the assessment rate (50 x $7.9310) = $396.55 Initial annual parcel assessment $1,042.05

Attachment A:

Downtown Merced PBID Engineer’s Report Page 16 of 17

Maximum Annual Assessment Adjustments
The cost of providing programs and services may vary depending on the market cost for those programs and services. Expenditures may require adjustment up or down to continue the intended level of programs and services. Assessments maybe subject to annual increases not to exceed the assessment rates in the table below for any given year. Increases will be determined by the Board of Directors and will vary between 0% and 5% in any given year. Any change will be approved by the Board of Directors and submitt ed to the City within its annual planning report, pursuant to Section 36650 of the California Streets and Highways Code.

The projections below illustrate a maximum 5% annual increase for all assessment rates.

Budget Adjustment
Any annual budget surplus, including those created through cost saving measures, labor vacancies, unexpected reductions in expenses caused by one- time events or unanticipated increases to income, will be rolled into the following year’s budget. The budget will be set accordingly, within the constraints of the Management District Plan, to adjust for surpluses that are carried forward to ensure that the District is spending these funds in a timely manner and is complying with applicable State laws and City po licies. District funds may be used for renewal.

The estimated budget surplus amount will be included in the annual report each year. Funds from an expired District shall be rolled over into the new District if one is established or returned to the property owners if one is not established, in accordance with Streets and Highways Code section 36671.

If an error is discovered on a parcel’s assessed parcel square footages or building square footages, the District may investigate and correct the assessed footages after confirming the correction with the Merced County Assessor Data. The correction will be made in accordance with the assessment methodology and may result in an increase or decrease to the parcel’s assessment.

Attachment A:

Downtown Merced PBID Engineer’s Report Page 17 of 17

Future Development
As a result of continued development, the District may experience the addition or subtraction of assessable footage for parcels included and assessed within the District boundaries. The modification for parcel improvements within the District, which changes upw ards or downwards the amount of total footage assessed for these parcels will, pursuant to Government Code 53750, be prorated to the date they receive the temporary and/or permanent certificate of occupancy and will be billed directly by the City for the prorated year. Parcels that experience a loss of building square footage need to provide notice of the change to the District by April 1st of each year. Any delinquent assessments owed for the modification of assessable footage that was billed directly by the City will be added to the property tax roll for the following year as delinquent.

In future years of the PBID term, the assessments for the special benefits bestowed upon the included PBID parcels may change in accordance with the assessment methodol ogy formula listed in the Management District Plan and Engineer’s Report, provided the assessment rate does not change. If the assessment formula changes and increases the assessments, then a ballot as defined in Article 13 Section D of the State Constitution will be required for approval of the formula changes.

Assessment Appeal Procedure
Property owners may appeal assessments that they believe are inaccurate. Appeals must be in writing, stating the grounds for appeal and filed with the Owners Association prior to April 1 of each year. Appeals shall be limited to the current assessment year. Any appeal not filed by April 1 shall not be valid. In any case appeals will only be considered for the current year and will not be considered for prior years.

City Council/Public Finance and Economic Development Authority/Parking AuthorityJune 20, 2023

City Council/Public Finance and Economic Development Authority/Parking Authority
June 20, 2023