City Council Memorandum
TO: HONORABLE MAYOR AND CITY COUNCIL DATE: OCT 20, 2026 FROM: FINANCE DEPARTMENT WARDS: 4 & 5
SUBJECT: ANNUAL REPORT OF RIVERSIDE NEW CAR DEALERS ASSOCIATION AND RESOLUTION DECLARING INTENTION TO LEVY ANNUAL ASSESSMENT IN AUTO CENTER BUSINESS IMPROVEMENT DISTRICT FOR ONE YEAR BEGINNING ON SEPTEMBER 1, 2026 AND FIXING TIME AND PLACE FOR A PUBLIC HEARING ON LEVY OF PROPOSED ASSESSMENT ISSUE:
Approve the Annual Report of the Riverside New Car Dealers Association acting in its capacity as the advisory board to the Auto Center Business Improvement District, adopt a resolution declaring the City of Riverside’s intent to levy an annual assessment within the Auto Center Business Improvement District beginning September 1, 2026, and fix the time and place for a public hearing on the levy of the proposed assessment for November 10, 2026, at 3:00 p.m.
RECOMMENDATIONS:
That the City Council:
Receive and approve the Annual Report of the Riverside New Car Dealers Association acting in its capacity as the advisory board to the Auto Center Business Improvement District; Adopt a resolution declaring the City of Riverside’s intent to levy an annual assessment within the Auto Center Business Improvement District beginning September 1, 2026 and ending August 31, 2027; and Set a public hearing for November 10, 2026, at 3:00 p.m. on the levy of the proposed assessment.
BACKGROUND:
Business Tax Assessment
In early 2011, the City of Riverside (City) worked with the Riverside New Car Dealers Association (RNCDA) to develop a Business Improvement District (BID) in the Riverside Auto Center. An assessment is levied on each business located in the BID and is collected as an additional amount assessed through the City’s annual Business Tax collection process. The funds collected from the BID assessment are to be used by the BID for purposes including business promotion activities, advertising, the operation and maintenance of the electronic LED display sign located along the 91 Freeway, and maintenance and repair of the entryway monuments, pods, and landscaping located in the Auto Center. The City Council approved the formation of the Auto Center BID on July 26, 2011, with the assessments effective on September 1, 2011, and was codified in Riverside Municipal Code Chapter 3.49. It was determined that 13 businesses were part of the Auto Center BID, and each business was assessed $8,000 as an additional assessment on its Business Tax renewal. The Riverside New Car Dealers Association was appointed as the advisory board and is empowered to manage the Auto Center BID.
In 2021, RNCDA proposed a modification to the district boundaries to include four additional businesses and to adjust the assessment amount to $6,100 per business. On July 20, 2021, a public hearing was held to hear and rule on any protests against the proposed action. Following the public hearing, City Council approved the recommended modifications and adopted Ordinance No. 7558 to modify Section 3.49 of the City Charter.
The Auto Center BID was formed under Section 36500 of the Streets & Highway Code of the State of California. Section 36533 of the Streets & Highways Code requires that RNCDA prepare a report for each fiscal year for which assessments are to be levied and collected to pay the costs of the improvements and activities described in the report. The City Council may approve the report as filed by the advisory board or may modify any portion of the report and approve it as modified.
Business Improvement District Funding Agreement
On August 15, 2011, the City, the Redevelopment Agency of the City of Riverside (Agency), and the Riverside New Car Dealers Association entered into a Business Improvement District Funding Agreement whereby the Agency would pay RNCDA $1,000,000 at the rate of $100,000 per year for services set out in the BID.
On August 26, 2015, the City Council approved a new agreement with the RNCDA to continue the matching funds to help fund the maintenance and operating costs of the electronic sign in exchange for 15% of the daily advertising time on the electronic LED display sign for City advertising. On September 5, 2023, the City Council approved a subsequent agreement with the RNCDA for an additional five years. This Agreement is for an annual amount of $100,000, is funded from the General Fund, and expires on September 1, 2028.
During the annual levy process for FY 2023/2024, the City Council determined that in order to enhance transparency within all Business Improvement Districts, additional detailed information would need to be provided from the advisory boards. Resolution 24096, approved by City Council on March 19, 2024, outlines the scope of new reporting requirements for the Auto Center BID, effective for all reporting beginning in FY 2024/25.
DISCUSSION:
The Streets & Highways Code mandates reporting requirements that the Advisory Board must follow. These reports are presented to the City Council each year and include items such as: any proposed changes to the boundaries or assessment amounts in the district, the method and basis of assessments, and improvements and activities for the coming year.
Based on the 2026/2027 Auto Center BID Annual Report, there are no proposed changes to the boundaries of the Auto Center BID. The current activities and improvements for the upcoming year include advertising, maintenance of the Auto Center electronic sign, and property maintenance. The report details the method and basis of levying the assessment in sufficient detail to allow each business owner to estimate the amount of the assessment to be levied against his or her business. Each business within the Auto Center BID will be assessed $6,100 per year as an additional assessment on its business tax renewal.
To levy the Auto Center BID assessments for Fiscal Year 2026/2027, the City Council must adopt the Resolution of Intention and set a date for a public hearing. The Resolution of Intention will be published in a newspaper of general distribution seven (7) days prior to the public hearing. In addition, a notice of the public hearing will be mailed to each holder of a business license tax certificate within the Auto Center BID by mail, postage prepaid as required. The public hearing will be held on November 10, 2026, at 3:00 p.m. at which time any protests may be heard against the proposed action.
Business Improvement District Funding Agreement Amendments Proposed by RNCDA For approximately 15 years, the City’s contribution to the Auto Center has remained fixed at $100,000 per year. During this period, the Riverside Auto Center and its dealerships have made substantial private investments to maintain competitiveness within the regional automotive retail market. Individual dealerships typically invest between $1 million and $10 million annually in facility upgrades, equipment, and manufacturer image programs. In addition, the RNCDA recently invested more than $1 million in droughttolerant landscaping improvements covering more than 100,000 square feet. The Association also invested approximately $825,000 to modernize the electronic freeway sign, including an electrical upgrade. The freeway sign continues to serve as a shared marketing asset for the Auto Center and the City, generating an estimated 600,000 to 700,000 impressions per month. Under the current agreement, the City receives 15% of advertising time on the sign for public messaging.
As part of its 2026/2027 annual report, the RNCDA submitted a request for the City to extend and amend its longstanding funding contribution toward the electronic freeway sign to 1) increase City funding contributions, 2) modify the electronic freeway sign advertising allocation, and 3) extend the agreement to September 30, 2030. Staff are working on amendments to the current Auto Center Agreement to incorporate RNCDA’s request and will bring forward the proposed amended agreement and request for supplemental appropriation for City Council consideration at the November 10, 2026 public hearing.
Increased City Funding Contribution
The Riverside Auto Center, through the RNCDA, is requesting that the City consider increasing its annual contribution from $100,000 to $150,000, with the amount fixed through September 30, 2030. The Association notes that construction, technology, maintenance, and advertising costs have increased since the agreement was first established and that other Southern California cities, such as Ontario and Corona, have recently approved participation levels of approximately 50% toward new freeway signage in their automotive districts.
Modification of Electronic Freeway Sign Advertising Allocation The Auto Center is also requesting to modify the electronic freeway sign advertising allocation, changing the City’s allocation from the fixed allocation of 15% of total sign advertising time to an allocation equal to that provided to each participating Riverside Auto Center dealership. The proposed change is intended to ensure equal time allocation and treatment with individual dealer participants and continue the City’s partnership with the Auto Center, which generates a significant portion of the City’s General Fund sales tax.
FISCAL IMPACT:
The annual assessment of $6,100 per business is expected to produce $103,700 in revenue in FY 2026/2027 for the Auto Center BID. The City collects assessments through the annual business tax process and transfers all collected assessments directly to the RNCDA.
In addition to the assessment revenue, the City has a current funding agreement with the Auto Center BID, providing a $100,000 annual subsidy in exchange for 15% daily advertising time on its LED display sign. The FY 2026/2027 amount is budgeted in the General Fund, Non-Departmental/Finance, Development Agreement account number 7223000-446000. To the extent the City Council chooses to adopt amendments proposed by RNCDA, it would require a supplemental appropriation of $50,000 in FY 2026/27 and increases to the budget in future fiscal years.
Prepared by: Meline Carranza, Debt and Treasury Manager Approved by: Sergio Aguilar, Deputy Finance Director
Certified as to
availability of funds: Julie Nemes, Finance Director
Approved by: Edward Enriquez, Assistant City Manager/Chief Financial Officer/City Treasurer
Approved as to form: James Johnson, City Attorney
Attachments:
Annual Report of the Auto Center BID
Resolution of Intention to Levy Assessments in the Auto Center BID and Map of Auto Center BID Auto Center Business Improvement District ● Page 2