City Council Memorandum
TO: HONORABLE MAYOR AND CITY COUNCIL DA TE: MARCH 19, 2024
FROM: FINANCE DEPARTMENT WARDS: ALL
SUBJECT: ANNUAL REPORTING REQUIR EMENTS FOR BUSIN ESS IMPROVEMENT
DISTRICTS
ISSUES:
Review and approve the resolutions detailing the reporting requirements for all Business Improvement Districts within the City of Riverside.
RECOMMENDATIONS:
That the City Council:
1. Review and approve the resolutions detai ling the reporting requir ements for the Auto Center Business Improvement District, Arli ngton Business Improvement District, and the Downtown Parking and Business Improvement District;
2. Direct staff to work with the Advisory Boards for each Business Improvement District, assisting the Business Improvement Distric ts with review and revision recommendations to the Annual Reports, to conform with th e updated reporting requirements established herein.
COMMITTEE RECOMMENDATION:
Economic Development, Placem aking and Branding/Marketing Committee met on January 18, 2024, with Vice Chair Edwards served as Chai r Pro Tem and Member Hemenway present with Chair Fierro was absent, to consider revising the Business Improvement Districts Reporting Requirements. After discussion the Committee unanimously voted to recommend that the City Council add the additional 7 reporting requirement s as well as supporting Council’s previous existing reporting requirements.
Business Improvement Districts Reporting Requirements ● Page 2 BACKGROUND:
Business Improvement Districts
The City of Riverside currently has three Business Improvement Districts which are geographically located in the Auto Center, Arlington, and Do wntown areas. A Busine ss Improvement District (BID) is formed when an advisory board approaches the City on behalf of the businesses within a specific area, who desire to have certain servic es and activities for t hat business area. These services and activities include but are not limit ed to: maintenance, landscaping, improvements, business promotions and advertising. The additional costs for these services are assessed to the business owners within that District.
Each Business Improvement District is formed under Section 36530 of t he Streets & Highways Code, which requires the City to hold a public hearing. If, at this meeting a majority of the Businesses (businesses who will pay 50% or more of the assessments proposed to be levied) protest against the formation, then the District may not be formed. If a majority protest is not received, City Council may then adopt an Ordinance to establish the District and the District is added to the Riverside Municipal Code. Under the provisions of the Streets & Highways Code, the City holds a public he aring each year before appr oving the assessments and services/activities proposed by the advisory board. Amendments to the District boundaries or assessment amounts can be in itiated after a public hearing is he ld and only if a majority protest has not been received. This action must also be approved by City Council and adopted through an ordinance to modify the Riverside Municipal Code.
At the time of formation, the following services and activities are established: a District boundary, assessment amount calculation methodology, a ssessment method and timi ng. At formation, an advisory board is approved by City Council and is empowered to manage the District. The advisory board is required to provide an annual r eport to City Council detailing the revenues, expenditures, services, and activities provided to businesses within that year.
During the annual levy process for Fiscal Year 2023-2024, City Council determined that in order to enhance transparency within these Business Improvement Districts additional detailed information was required to be provided from the advisory boards. City Council directed Finance staff to prepare a guide of proposed detailed reporting requirements for all business improvement districts moving forward. As a result, City C ouncil requested the Finance staff present this proposal to the Economic Development, Plac emaking and Branding/Ma rketing Committee for review and approval. Finance staff presented a lis t of recommended report ing requirements to the Committee on January 18, 2024 and the propos ed recommendations were approved by the Committee at that time.
Auto Center Business Improvement District
The Auto Center Business Improv ement District (Auto C enter BID) was established in July of 2011, and the Riverside New Car Dealers Associat ion (RNCDA) was appointed as the advisory board. The first assessments for the Auto Cent er BID were effectiv e September 1, 2011.
Assessments are presented to City Council annually for approva l and have been filed from the effective date and each year thereafter. The Auto Center currently has 17 businesses in the District. Each business owner is assessed an additional amount of $6,100 on their business tax renewal each year. The total assessment amount collected for FY2023-24 is expected to be $103,700. The City’s Business Tax Department collects the assessments each year and transfers the funds directly to the RNCDA.
Arlington Business Improvement District
Business Improvement Districts Reporting Requirements ● Page 3 The Arlington Business Improvement District (Arlington BID) was established in September of 2002 and the Arlington Business Partnership (ABP) was appointed as the advisory board. The first assessments for the Arlington BID were e ffective November 1, 2002. Assessments are presented to City Council annually for approval and have been filed from the effective date and each year thereafter. The Arlington BID currently has 1,011 businesses in the District. The annual assessment is currently set at an amount equal to ninety percent (90%) of the City business tax fee, capped at a maximum of $400. The total assessment amount collected for FY2023-24 in the Arlington BID is expected to be approximately $255,000. The City’s Business Tax Department collects the assessments each year and transfers the funds directly to the ABP.
Downtown Business Improvement District
The Downtown Business Improvement District (Downtown BID) was established in June of 1985, and the Riverside Downtown Part nership (RDP) was appointed as the advisory board. The first assessments for the Downtown BID were effective on J anuary 1, 1986. Assessments are presented to City Council annually for approval and have been filed from the effective date and each year thereafter. The Downtown BID curr ently has 1,201 businesses in the District. The annual assessment is currently set at an amount equal to 100% of the City’s business tax charge, with no maximum cap in place. The total a ssessment amount collected for FY2023-24 in the Downtown BID is expected to be approximately $470,000. The City’s Business Tax Department collects the assessments each year and transfers the funds directly to the RDP.
DISCUSSION:
Existing Reporting Requirements
The Streets & Highways Code mandates reporting r equirements that the Advisory Boards must follow. These reports are pres ented to City Council each year. Existing reporting requirements under Section 36533 of the Code are detailed below. The report shall refer to the business improvement area by name (i.e.: Auto Center BID), specify t he fiscal year to which the report applies, and with respect to that fiscal year, shall contain all the following information.
1) Any proposed changes in the boundaries or assessment amounts within the district. 2) The method and basis of levying the assessments in sufficient detail to allow each business owner to estimate the amount of assessment to be levied against his or her business. 3) An estimate of the cost of providing the improvements and activities for that fiscal year. 4) The improvements and activities to be provided for that fiscal year. 5) The amount of any surplus or deficit rev enues to be carried over from a previous fiscal year.
6) The amount of any contributions to be made from sources ot her than the levied assessments.
Additional Reporting Requirement Suggestions
At the direction of City Council, Finance has compiled the list below and recommends that these additional criteria be in cluded as part of the new standardiz ed reporting requirements for all Business Improvement Districts going forward. The suggestions below are a compilation of topics which were discussed with City Council during the FY 2023-2024 annual le vy process. Staff asserts that these criteria ar e an effective means to increas e transparency within the BIDs. The below guidance was approved by the Committ ee on January 18th, 2024, this guidance will be communicated to the advisory b oards with an effective date for all reporting from FY2024-2025 and all subsequent years thereafter.
1) Existing board policies and board members.
2) Mission statement
Business Improvement Districts Reporting Requirements ● Page 4 3) Strategic goals of the BID
4) Community Engagement Plan
Specific and tangible benefits the BID is providing to businesses. Description of how the advisory boar d determined the benefits are needed and related outcomes have been achieved.
Clarify how BID staff and activities respond to emerging needs and how those needs are identified.
Clarify how progress is tracked over time.
5) If a website is in place for the BID, prov ide a link to the website and a description of the resources, financials, and other information that is available to the public through the site. 6) List of sponsors in prior fiscal year and expected sponsors in upcoming fiscal year. 7) Detailed line-item budget for the prior fiscal year and upcoming fiscal year.
Staff recommends that the advisory boards in clude the information above, either embedded in the annual report, or as s eparate attachments, to be submitt ed with the annual report. If any of the listed information is not available for the Fiscal Year 2024-2025 an nual report, staff recommends that the advisory board address the gap and provide a timeline as to when said information might be available in the future.
STRATEGIC PLAN ALIGNMENT:
This action contributes to Strategic Priority 3 – Economic Opportunity and Goal 3.1 – Facilitate partnerships and programs to develop, attract and retain innovative business sectors.
This item aligns with each of the five Cross-Cutting Threads as follows:
1. Community Trust – The formation of Business Impr ovement Districts and subsequent Annual Reports provide a transparent and equitable way to finance, administer, and report maintenance and services within the business district area.
2. Equity – The Business Improvement Districts spread the cost of services to the business owners that receive the benefits.
3. Fiscal Responsibility – Each Business Improvement District supports marketing, promotion, and business and community partnerships within the district areas, with minimal use of public funds.
4. Innovation – Each Business Improvement District is an innovative and collaborative way to support the changing needs of businesses within each district, enabling business owners to guide their destiny.
5. Sustainability & Resiliency – The annual levy process provides a way to finance improvements and promotions for businesses within each district area.
FISCAL IMPACT:
There is no fiscal impact for this action. The standardized reporting requirements confirmed by the Economic Development, Pl acemaking and Branding/Market ing Committee on January 18 th,
2024, will be provided to the advisory board for each Business Improvement District and asked to be incorporated in the Fiscal Year 2024-2025 ann ual levy process, and in each fiscal year Business Improvement Districts Reporting Requirements ● Page 5 thereafter.
Prepared by: Meline Carranza, Debt and Treasury Manager Approved by: Kristie Thomas, Finance Dir ector/Assistant Chief Financial Officer Certified as to
availability of funds: Kristie Thomas, Financ e Director/Assistant Chief Financial Officer Approved by: Edward Enriquez, Assistant City Manager/Chief Financial Officer/City Treasurer
Approved as to form: Phaedra A. Norton, City Attorney
Concurs with:
_____________________________
Erin Edwards, Vice Chair
Economic Development Committee
Attachments:
1. Resolution-Arlington Busi ness Improvement District
a. Exhibit A
2. Resolution-Auto Center Business Improvement District a. Exhibit A
3. Resolution-Downtown Business Improvement District
a. Exhibit A