On behalf of City Manager Ed Shikada, please find below the staff responses to questions from Councilmember Burt and Reckdahl regarding the Monday, May 18th Council Meeting consent agenda item where they discussed re -establishing assessments to support business district needs, as well as the following questions:
Item #6: Adoption of Resolution Suspending the Levy of Assessments on the Downtown Palo Alto Business Improvement District (BID) Assessment for Fiscal Year 2027; CEQA status – not a project.
1. Request to refer the BID agenda item to the Economic Development Committee.
Suspending the BID during COVID was appropriate, but the downtown needs reinvigoration and the BID was a tool to support those efforts , how does continued suspension support use of this tool?
Staff response: The BID falls within the business retention, expansion, and attraction (BRE/A) strategy that is on the Economic Development Committee’s workplan as approved by the Council in their annual priority and objective setting (priority 3.1.1) . Business engagement is vital to the success of a BID, to determine assessments and overall benefits to the downtown business community (explained further below) . Monthly Downtown/University Ave Stakeholder meetings are underway, and the BID is scheduled for the May 27th meeting. In addition, work continues on the feasibility analysis of an Assessment District for University Avenue Streetscape. This project and reinvigorating the BID are closely aligned.
2. Must the City define the BID spending before we collect BID fees?
Staff response: Yes. The Parking and Business Improvement Area Law of 1989 (Streets & Hwy. Code, § 36500 et seq.) requires that the City Council appoint an advisory board, and that the board make a recommendation to the City Council on the expenditure of revenues derived from the levy of assessments, on the classification of businesses, and on the method and basis of levying the assessments. After receiving the report, the City Council must adopt a resolution imposing the assessment, which, among other things, must “[g]enerally describe the proposed improvements and activities . . . and any substantial changes proposed to be made to the improvements and activities. ” (Id., § 36534(a)(3).) The previous advisory board dissolved, and the City Council would need to take action to appoint a new one as an initial step in this process. The Council is responsible for reviewing and approving that report prior to collecting BID assessments.
3. If so, can we initiate BID fees during a fiscal year? Or must the fees begin at beginning of the Fiscal Year?
Staff response: The ordinance establishing the BID requires that the City provide business owners within the BID with a written invoice for the assessment by July 10 Collection for BID assessments coincide with renewal of the business registry certificate (BRC) program, which is due annually by March 31st. Given the outreach, consensus building, coordination with the City’s administrator of this fee , and ultimately notifications involved, staff anticipates that initiation of BID assessments during the year is unlikely.