City of Sacramento
City Council - 5PM Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2023-00895 8/22/2023 Consent Item 3.
Fiscal Year (FY) 2023/24 Handle Business Improvement District Annual Proceedings File ID: 2023-00895
Location: District 4, Represented by Councilmember Valenzuela Recommendation: Adopt a Resolution approving the Handle Business Improvement District (District) Annual Report for FY2023/24.
Contact: Susanne Tam, Development Project Manager, (916) 808-7535, [email protected]; Sheri Smith, Special Districts Manager, (916) 808-7204, [email protected], Department of Finance
Presenter: None
Attachments:
1-Description/Analysis
2-Resolution
3-Exhibit A: District Map
4-Exhibit B: Annual Report for FY2023/24
Description/Analysis
Issue Detail: On July 19, 2011, the Council established the Handle District by Resolution No. 2011- 0425, under the Property and Business Improvement Law of 1994. On September 27, 2016, Council approved the renewal of the District for a 10-year term (Resolution No. 2016-0340) to provide marketing, maintenance, and other services to increase sales within the District. California Streets and Highways Code section 36650(c) requires that an Annual Report (Report) be filed with the City Clerk for Council approval.
The Handle District Advisory Board has prepared the Report for FY2023/24, attached as Exhibit B to the resolution. The Report addresses the estimated budget, assessment, and services to be provided for FY2023/24. The Report does not change the District boundaries, scope of services, the assessment rate, or any other aspect of the District’s legal structure as established in the Management District Plan approved in 2016 when the District was renewed.
Policy Considerations: The actions in the recommended resolution are required by the Property
File ID: 2023-00895 8/22/2023 Consent Item 3.
and Business Improvement Law of 1994 (California Streets and Highways Code section 36600 et seq.)
Economic Impacts: Not applicable.
Environmental Considerations: Administration of assessment districts does not constitute a project under the California Environmental Quality Act (CEQA) because it involves continuing administrative or maintenance activities and organizational or administrative activities that will not result in direct or indirect physical changes in the environment. [14 Cal. Code Regs. § 15378(b)(2) & (5))].
Sustainability: Not applicable.
Commission/Committee Action: None.
Rationale for Recommendation: Approval of the Report for the District authorizes the levy of assessments to fund services over and above those provided by the City, including security, maintenance, economic development, and image enhancement for FY2023/24.
Financial Considerations: Financing is provided by the levy of assessments upon restaurants and businesses selling prepared food within the District that benefit from the improvements and services. The District does not plan to issue bonds. The operating budget for the District fluctuates with market conditions and retail sales and is adjusted annually to reflect Council approved assessments and expenditure plans.
The total District assessment budget for FY2023/24 is estimated to be $225,000. There is a separate fund to track the revenues and expenditures for the District (Fund 2241). Budget details are provided in the Report. The District is self-supporting and has no impact on the General Fund.
Local Business Enterprise (LBE): Not applicable.
RESOLUTION NO. 2023-
Adopted by the Sacramento City Council
August 22, 2023
Resolution Approving the Annual Report for the Handle Business Improvement District for Fiscal Year 2023/24
BACKGROUND
A. The business owners within the boundaries of the Handle Business Improvement District No. 2016-04 (District) petitioned the City of Sacramento (City) to establish the District to provide services and improvements intended to increase restaurant and retail sales within the District. The District was established by the City Council on July 19, 2011 (Resolution No. 2011-0425).
B. On September 27, 2016, by Resolution No. 2016-0340, City Council approved the renewal of the District, depicted in Exhibit A, for a ten-year term commencing in October 2016. When the District was renewed, its applicability was narrowed to only include restaurants and businesses that sell prepared food.
C. The City Council established the District under the Property and Business Improvement District Law of 1994 (California Streets and Highway Code section 36600 et seq.) (PBID Law) and has previously levied assessments on businesses in the District to pay for improvements and services to be provided within the District, in accordance with the PBID Law.
D. Expenditures of assessment revenues provide for the following improvements and services within the District, all of which are intended to make the District safer, cleaner, and increase the commercial activity: (1) streetscape and safety projects; and (2) marketing, advertising, and special events services to promote a vibrant commercial center. All services are as defined within the Annual Report and by reference made a part of this resolution. The Annual Report is attached to this resolution as Exhibit B.
E. The Fiscal Year (FY) 2023/24 rate and methodology of assessment is not changed from the prior year.
F. Pursuant to California Streets and Highways Code section 36650(c), City staff is seeking City Council approval of the Annual Report.
BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE CITY COUNCIL RESOLVES AS FOLLOWS:
Section 1. The City Council finds and determines that the Background statements above are true and correct.
Section 2. The City Council finds and determines that businesses within the District specifically benefit from the improvements and services described in the Annual Report and funded by the proposed assessment.
Section 3. The City Manager or City Manager’s designee is authorized to make any necessary budgetary adjustments associated with the District budget for FY2023/24 as shown on Exhibit B.
Section 4. The annual budget and assessments as set forth in the FY2023/24 Annual Report (attached hereto as Exhibit B) are confirmed, and the Annual Report is hereby approved.
Section 5. Exhibits A and B are part of this resolution.
Table of Contents:
Exhibit A - District Map
Exhibit B - Annual Report for FY 2023/24
Exhibit A
District Map
1717 Capitol Avenue – Sacramento, CA 95811
2023/24 Annual Report INTRODUCTION The following review is the twelfth Handle District Annual Report since the creation of the district in 2011 (the 2011/12 the report covered nine months of operations and assessment collections), and the seventh report since the renewal of the district in 2016. It is a year-end summary of the HBIDs’ activities and finances, and a preview of planned expenditures for the upcoming fiscal year. In addition to the financial overview, this report highlights ongoing programs and projects. The pandemic recovery continues, with the first half of 2023 presenting new challenges for Handle businesses. The HBID has committed to a hands-on maintenance program, exploring even more improvement projects and to supporting an enhanced patio dining program. FINANCIAL OVERVIEW Management District Plan (MDP) - the MDP is the governing plan for the Handle District. It outlines the assessment methodology and collection details. Originally approved by Sacramento City Council in the Summer 2011, it was updated in 2012 to provide additional clarification. In 2016, the district was renewed as a “restaurant” only district, consisting of 18 food establishments. Assessment - The 17 food and beverage establishments in the Handle (at the time of this report four locations are transitioning to new businesses) collect 1.5% on each food purchase (excluding alcohol). The organization sends assessment information to each new business operator monthly, and periodic updates (reminders and overviews) to businesses each year. Accounting Practices - the HBID board contracts with a professional accountant for daily monitoring, oversight and collection of assessment funds, a process that also includes the preparation of an annual tax return for the organization. Accounting information, including budgets, expenditures and balances, are available for review by any Handle business or interested party. Financial decisions are made at noticed Board of Directors meetings held on the third Wednesday of every other month. 2023/24 Budget - the organization’s budget coincides with the calendar year. The budget is reviewed in draft form at two consecutive meetings and approved at the December Board of Director’s meeting. The original estimate of assessments to be collected, under the current Management District Plan, is $200,000/year. This total has fluctuated over the past six years, in particular during the pandemic years. For the upcoming budget year we estimate the collected and remitted assessments will be about $225,000 (based on 2022 and 2023 data).
1717 Capitol Avenue – Sacramento, CA 95811
(Page Two – 2023/24 Handle Annual Report) In 2022 the district was awarded a $100,000 County of Sacramento ARPA grant to support additional services during the pandemic. The grant funds were used to partially replenish reserves and project funds that supported the Al Fresco program in 2021 and 2022. A more detailed breakdown of the budget allocations is shown below. Note: the Handle’s Board-approved, annual budget shows additional program details (line items) not listed below. The annual budget exercise is a good opportunity to gather input, share information and review improvement programs. Reserves - The Handle has approximately $150,000 in reserve funds. These funds have accumulated over the past few budget cycles and have historically been used to pay for higher cost improvement projects (lighting, trash cans, etc.). Once again, the reserves were used heavily during the pandemic (2020-22) to support the AF Program.
PROGRAMS The organization continues to develop new programs to benefit HBID restaurants. With the adoption of the new district in 2016, marketing, events and promotion programs became a higher priority. Although many of the large events have not been scheduled since the pandemic, the Board continues to support events in the district (from St. Baldricks, Second Saturday and Sacramento Walk of Stars, to special events hosted by businesses (movie nights, makers markets, etc.). Maintenance - the maintenance crew is very active in the district during the week and is one of the most popular services for businesses in the Handle (trash pickup, special event support, graffiti abatement, sidewalk power washing and other maintenance services). Advocacy - the organization continues to advocate for and promote a number of local efforts, including lighting improvements, pedestrian safety projects, parking
1717 Capitol Avenue – Sacramento, CA 95811
(Page Three – 2023/24 Handle Annual Report) enhancements, community events and other projects that positively impact Midtown and the HBID. PROJECTS The HBID (and partners) coordinates an attractive streetlight (pole) banner program, installs and maintains 40 hanging flower baskets, services six pet waste bag dispensers and nearly 20 custom trash cans. We started an alley beautification project in late 2019, but it was put on hold in 2020. We re-started the planning effort in early 2023. The Handle continues to add bike racks and corrals (more than 80 bike parking spaces are now in the district - a one square block area) and we have been closely monitoring and advocating for a number of pedestrian safety projects. The organization’s internet presence and social media programs continue to flourish, with 10,000 followers. The district circulates high quality informational and promotional materials each year to new property owners in midtown. A “district successes” report was prepared in 2021, and updated in 2022, it highlights activities in the district over the past ten years (it is available upon request). The Handle Al Fresco (AF) project became the organization’s top priority in 2020 and the commitment continues to this day. More than $300,000.00 has been contributed by the Handle District. In late 2021 the district initiated an expanded, long-term parklet program to build on the success of the temporary AF patios. Please contact Seann Rooney, Executive Director at (916) 765-5052 or by email at [email protected] for more information on programs and projects. Sincerely, Jimmy Johnson, President, Board of Directors (Co-owner, Zocalo)
BUSINESS IMPROVEMENT DISTRICT
$118$/5(3257 CHECKLIST
FY
BID NAME: CONTRACT #
AUTHORITY
(CS&H Code Section) REQUIREMENT PAGE
FOUND
36650(b) Specify BID name
-Does the BID name exactly match the previous \HDU¶V BID name? (CKHFN one) YES NO 36650(b) Specify fiscal year to which report applies
36650(b)(1) Any proposed changes in the boundaries
36650(b)(1) Any proposed changes in any benefit zones
-Do the boundaries and benefit zones exactly match the previous year? (CKHFN one) YES NO (If not, describe change(s) in the NOTES section)
36650(b)(2) The improvements and activities for that fiscal year -Are the improvements and activities in line with the Original MDP? (CKHFN one) YES NO 36650(b)(3) An estimate of the cost of providing the improvements and activities for that fiscal year
-How does the overall budget compare to last year? (CKHFN one) HIGHER SAME /2:(5 - What is the greatest change (by percentage) between line items from last year to this year ______ 36650(b)(4)
The method of levying the assessment in sufficient detail to allow each real property ownerEXVLQHVVRZQHU to estimate the amount of the assessment to be levied against his or her property for that fiscal year 36650(b)(4)
The basis of levying the assessment in sufficient detail to allow each real propertyEXVLQHVV owner to estimate the amount of the assessment to be levied against WKHLU EXVLQHVVproperty for that fiscal year -Does the Method and Basis match the MDP? (CKHFN one) YES NO -Is there a CPI increase for this year? (CKHFN one) YES NO - If so: What is the rate? _______
36650(b)(5) The amount of any surplus revenues to be carried over from a previous fiscal year
-Is the surplus identified for use in specific categories? (CKHFN one) YES NO LIyes, What category(ies) ____________________________________________ 36650(b)(5) The amount of any deficit revenues to be carried over from a previous fiscal year 36650(b)(6) The amount of any contributions to be made from sources other than assessments levied pursuant to this part
-Are the contributions identified for use in a specific category? (CKHFN one) YES NO -Did an authorized representative of the nonprofit Board sign the report?(CKHFN one) YES NO -Does the report state the date the Board approved the Report/Budget? (CKHFN one) YES NO NOTES:
2023/24
The Handle District
1 1
n/a
n/a
2, 3
$225,000
20%
1 1
$0.00
$0
$0
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
The County ARPA grant ($100,000) will reimburse COVID related expenses from previous reporting year (21/22). Grant awarded in early 2022 but deposited in mid-2022.