City of Sacramento
City Council - 2PM Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2024-01328 8/20/2024 Consent Item 4.
Fiscal Year 2024/25 Business Improvement District (BID) Annual Proceedings File ID: 2024-01328
Location: District 4, Represented by Councilmember Valenzuela and Citywide Recommendation: Adopt: 1) a Resolution approving the Central Midtown Restaurant Business Improvement District Annual Report and confirming the annual budget and assessment for fiscal year (FY) 2024/25; 2) a Resolution approving the Handle Business Improvement District Annual Report and confirming the annual budget and assessment for FY2024/25; and 3) a Resolution approving the Sacramento Tourism Infrastructure District Annual Report and confirming the annual budget and assessment for FY2024/25.
Contact: Susanne Tam, Development Project Manager, (916) 808-7535, [email protected]; Eric Frederick, Special Districts Manager, [email protected], (916) 808-5129; Department of Finance.
Presenter: None.
Attachments:
1-Description/Analysis
2-Central Midtown Restaurant BID Resolution
3-Exhibit A, Central Midtown Restaurant BID Annual Report 4-Exhibit B, District Budget and Assessment
5-Handle BID Resolution
6-Exhibit A, Handle BID Annual Report
7-Exhibit B, District Budget and Assessment
8-Sacramento Tourism Infrastructure District Resolution 9-Exhibit A, Sacramento Tourism Infrastructure Annual Report 10-Exhibit B, Sacramento Tourism Infrastructure District Budget and Assessment Additional Description/Analysis
Issue Detail: California Streets and Highways Code section 36650 requires each Property and Business Improvement District, including a Business Improvement District (District), to file an Annual
File ID: 2024-01328 8/20/2024 Consent Item 4.
Report (Report) with the City Clerk for Council approval. There are four Business Improvement Districts in the City of Sacramento. These four Business Improvement Districts are the Central Midtown Restaurant, Handle, Sacramento Tourism Infrastructure District (STID), and the Sacramento Tourism Marketing District (STMD). The Central Midtown Restaurant and the Handle Districts were formed with the intent to increase restaurant sales within the boundaries of those Districts. The STID was formed to increase overnight tourism and the desirability of the Sacramento Convention Center as a tourist, meeting and event destination. Assessments from the STID are used to pay debt service on the bonds or other obligations issued or incurred by the City for construction of the ballroom portion of the Sacramento Convention Center expansion. The STMD was formed with the intention to increase tourism and market STMD lodging businesses as tourist, meeting, and event destinations.
The Owners’ Associations of the BIDs have prepared Annual Reports (Reports) for their respective Districts for FY2024/25 detailing the proposed budgets, assessments, and services to be provided from the assessments. The STMD was renewed on April 2, 2024, and will therefore not need to prepare an Annual Report for this year.
The Reports for FY2024/25 do not propose any changes to the services provided by the Districts, boundaries of the Districts, basis for levying the assessments, or any other aspect of the Districts’ Management District Plans (MDPs). Approval of the attached Resolutions will confirm the associated budget and assessment for each District.
Policy Considerations: The actions in the recommended resolution are required by the Property and Business Improvement Law of 1994 (California Streets and Highways Code section 36600 et seq.).
Economic Impacts: None.
Environmental Considerations: Administration of assessment districts does not constitute a project under 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: The goal of the Districts is to provide services as specified in the MDPs that supplement services provided by the City. The MDPs are plans that provide guidance for the levy of assessments to provide improvements, maintenance, and activities that benefit businesses in that District.
Financial Considerations: Financing for the Central Midtown Restaurant and the Handle Districts is
File ID: 2024-01328 8/20/2024 Consent Item 4.
provided by the levy of assessments upon businesses that benefit from the improvements and services. Financing for the STID is provided by the levy of assessments upon lodging businesses within the STID that benefit from the Sacramento Convention Center expansion. The Central Midtown Restaurant and the Handle Districts do not plan to issue bonds. However, with the STID, the City issued bonds in the amount of $50.4 million for the Convention Center ballroom project, and STID assessment revenue is used to pay debt service on the bonds or other obligations issued or incurred by the City for the ballroom. The operating budget for these three Districts fluctuates with market conditions and retail sales and is adjusted annually to reflect Council approved assessments and expenditure plans.
Based on the collected levies from FY2023/24, the total assessment budget is estimated to be $92,000 for the Central Midtown Restaurant District, while the total assessment budget is estimated to be $240,000 for the Handle District for FY2024/25. The total STID annual budget for FY2024/25 is anticipated to be approximately $3,828,354. Approximately 90.4% of the STID budget will be funded from revenues collected within the City ($3,479,973) and 9.6% from the unincorporated area of Sacramento County ($348,380). Budget details are provided in Exhibit B to the Resolution for each District. The three Districts are self-supporting and have no impact on the General Fund.
Local Business Enterprise (LBE): Not applicable.
RESOLUTION NO.
Adopted by the Sacramento City Council
August 20, 2024
RESOLUTION APPROVING THE ANNUAL REPORT FOR THE CENTRAL MIDTOWN RESTAURANT BUSINESS IMPROVEMENT DISTRICT FOR FISCAL YEAR 2024/25
BACKGROUND
A. The business owners within the boundaries of the Central Midtown Restaurant Business Improvement District no. 2017-02 (District) petitioned the City of Sacramento (City) to establish the District to provide services and improvements intended to increase restaurant sales within the District. On June 20, 2017, by Resolution No. 2017-0255, City Council approved the formation of the District, depicted in Exhibit A of the Annual Report, for a five-year term commencing on July 1, 2017. On June 14, 2022, the District was renewed by City Council for a ten-year term running through June 30, 2032.
B. 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.
C. 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) lighting and safety projects; (2) placemaking, arts, and special events; and (3) advocacy to increase patronage for food services businesses within the District. All improvements and services are as defined within the Annual Report. The Annual Report is attached to this resolution as Exhibit A and is also separately on file with the Infrastructure Finance Division of the Department of Finance, which the City Clerk has designated as the custodian of such records.
D. The Fiscal Year (FY) 2024/25 rate and methodology of assessment is not changed from the prior year.
E. 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 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 the City Manager’s designee is authorized to make any necessary budgetary adjustments associated with the District budget for FY2024/25 as shown in the attached Exhibit B, FY2024/25 District Budget and Business Assessment.
Section 4. The annual budget and assessments as set forth in the FY2024/25 Annual Report (attached hereto as Exhibit A) 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: Annual Report for Fiscal Year 2024/25
Exhibit B: FY2024/25 District Budget and Assessment
BUSINESS IMPROVEMENT DISTRICT
ANNUAL REPORT 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 year’s BID name? (Check 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? (Check 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? (Check 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? (Check one) HIGHER SAME LOWER - 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 owner/business owner 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 property/business owner to estimate the amount of the assessment to be levied against their business/property for that fiscal year -Does the Method and Basis match the MDP? (Check one) YES NO -Is there a CPI increase for this year? (Check 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? (Check one) YES NO if yes, 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? (Check one) YES NO -Did an authorized representative of the nonprofit Board sign the report? (Check one) YES NO -Does the report state the date the Board approved the Report/Budget? (Check one) YES NO NOTES:
Exhibit A
1 7/19/2024
Susanne Tam
Development Project Manager
City of Sacramento
Finance Department
915 I Street, 5th Floor
Sacramento, CA 95814
Re: 2024-2025 Fiscal Year Budget – Central Midtown Business Improvement District - CMRBID
Dear Susanne,
On behalf of the Board of Directors of the Midtown Sacramento PBID Corporation dba Midtown Association, I have enclosed our 2024-2025 fiscal year annual budget pursuant to the State of California Parking and Business Improvement Area law of 1994, Streets and Highways Code section 36600 et seq.
The total CMRBID budget for FY 2023/2024 is $92,000.00
Thank you for your continued support of Midtown, and the Central Midtown Restaurant Business Improvement District. If you have questions or need additional information, I can be reached by phone at (916) 442-1500.
Sincerely,
Emily Baime Michaels
Executive Director
2 Central Midtown Restaurant Business Improvement District 2024-2025 Annual Report
Overview: The Central Midtown Restaurant Business Improvement District (CMRBID), or Midtown Central, is an assessment district proposed to provide specific benefits to payers managed by the Midtown Association. CMRBID was established on June 13, 2017, and renewed July 1, 2022.
Location: The CMRBID includes all restaurant businesses within the portion of Midtown Sacramento generally bound by Jazz Alley to the north, 24th Street to the east, Kayak Alley to the south, and the Union Pacific Railroad to the west, as shown on the map in Exhibit A.
Services: The CMRBID is designed to provide specific benefits directly to payers by increasing restaurant food sales and revenue therefrom. Lighting and safety; placemaking, arts, and events; and advocacy and related administration programs are provided.
Budget: The total CMRBID annual budget i s projected at $92,000. The annual assessment rate is 1.5 percent of gross food sales revenue plus a fixed amount based on occupancy.
Based on the benefit received, the assessment shall not be collected on: gross alcoholic beverage sales; gross catering or banquet sales; and gross retail sales (such as coffee mugs, t-shirts, etc.). The fixed assessment amount (based on occupancy) is in addition to the gross food sales assessment and is shown in the table below:
Governance: The Board of the Midtown Association has established a CMRBID advisory committee made of assessed business owners. Membership includes: Azul, Kin Thai Street Eatery, LowBrau, Mango’s, Roscoe’s Brews & Burgers, Burger Patch, Flamingo House, Midtown Cantina Alley, Der Biergarten, Golden Bear, Mother, and Pizzasaurus Rex.
Occupancy Threshold Annual Occupancy
Assessment
Under 49 customers
50-99 customers
$500
$1,000
100-199 customers $2,500
200+ customers $5,000
3 Programs & Financial Overview:
Lighting & Safety: The lighting and safety program focuses on safety services and amenities that make the CMRBID businesses safer and more welcoming for visitors. The program includes police services for activities such as Second Saturdays and on street events adjacent to assessed businesses, and also includes ambient lighting installation.
Placemaking, Arts, & Events: The placemaking, arts, and events program focuses on attracting patrons to assessed businesses by funding family/neighborhood friendly programming in public spaces such as streets, alleyways , parking lots , and the development of a connective landscaping project between 20th and 24th Streets, across the district. The program focuses on arts and annual signature events that drive r estaurant sales, such as Second Saturday , Oktoberfest , and parking programs for assessed businesses, as well as district-wide capital improvement projects. These funds are not used to enhance events or promotions that take place exclusively inside businesses. Program costs can include special event insurance, street closure costs, entertainment fees, advertising, and placemaking projects such as CMRBID welcome signage, banners , and public art installations adjacent to assessed businesses. Assessment funds are not used to rebate businesses for their specific marketing efforts or event planning costs.
Advocacy & Administration: In order to provide the lighting and safety and placemaking, arts, and events services, the Midtown Association incurs various administrative costs, such as staffing, rent, advocacy, insurance, legal, and accounting fees. Advocacy programs will utilize ded icated staff time to provide unified attention, communication, and responsiveness throughout the CMRBID on regulations and policies affecting assessed restaurant businesses.
Collections/Contingency/Reserve: In order to ensure effective provision of services, a contingency will be established to account for uncollected assessments or unanticipated program costs. The reserve fund may be spent on programs described in this Plan in any proportion deemed appropria te by the Midtown Association. This category includes the cost of City administrative fees, not to exceed $ 9,000 per year, for collection and disbursement of the assessment . Collection fees from the City of Sacramento are calculated prior to the monthly disbursement checks received.
4 Specific Projects & Budget Overview:
Lighting and Safety projects include:
• Powerwashing entertainment areas, including private patios • Landscaping and lighting improvements next to adjacent businesses • Support with the city Al Fresco Program
Placemaking, Arts & Events projects include:
• Administration and production of Midtown Second Saturday • Development of a connective landscaping project between 20th and 24th Streets • Permitting support and specific event costs for Der Biergarten’s Oktoberfest • Permitting support and specific event costs for LowBrau • Permitting support and specific event costs for Cantina Alley’s Cinco de Mayo
• Refresh design and branding of Midtown Central including new banners. • Instagram and social media promotion of district businesses Advocacy and Administration projects include:
• A fairly allocated share of overhead expenses
• Advocacy support such as the city al fresco dining program
5 Exhibit A: Map
6 Central Midtown Restaurant Business Improvement District Annual Budget
Fiscal Year 2024/25
BIA
Resources
Beginning Reserves $ 20,000.00
Other Revenues $ -
Business Tax Collections/ County Billing $ 72,000.00
Total Resources $ 92,000.00
Expenses
Maintenance, Lighting & Safety
Maintenance & Streetscape $ 4,056.00
Lighting and Prevention $ -
City Police $ 5,000.00
Total Lighting & Safety $ 14,056.00
Placemaking Arts & Events
Pilot Projects
Activations
$ 46,424.00
$ 3,000.00
Total Placemaking Arts & Events $ 49,424.00
Advocacy & Administration
PR & Marketing $ 14,524.00
Administration $ 9,000.00
Total Advocacy & Administration $ 23,524.00
Total Expenses $ 87,004.00
7 BUSINESS IMPROVEMENT DISTRICT AMOUNTS:
ANNUAL AMOUNTS AS OF JANUARY 1, 2024
$41
Maximum Occupancy Amount:
$417
CMRBID:
Minimum Occupancy Amount (1.5% of total Prepared Food Sales) Establishment Occupancy Greater
than 200
100-199
50-99
Less than 49
Monthly Charge
$417
$208
$83
$41
Exhibit B
CENTRAL MIDTOWN RESTAURANT (FUND 2251)
PROPERTY AND BUSINESS IMPROVEMENT DISTRICT
FY2024/25 DISTRICT BUDGET & BUSINESS ASSESSMENT
Resources
Estimated Beginning Balance $20,000
Total Estimated Assessments Collected $72,000
Total Resources $92,000
Expenses (Estimated)
Lighting & Safety $14,056
Placemaking Arts & Events $49,424
Advocacy & Administration $23,524
Total Expenses $87,004
Estimated Ending Fund Balance $4,996
Year-Over-Year Change ($15,004)
Estimated Disbursement to BID $69,402
Business Assessment
Annual assessment rates are as follows: Restaurants and businesses that sell prepared food shall be assessed 1.5% of gross sales, excluding alcohol sales and certain items as described in Section V of the Management District Plan (MDP), on file with the Infrastructure Finance Division, designated by the City Clerk as the custodian of such records. The gross sales will be determined from the Business Operations Tax filings with the City of Sacramento.
New restaurant or businesses that sell prepared food that open during the term of the district shall not be exempt from assessment. Assessment rates for new restaurant or businesses that sell prepared food shall be determined by utilizing the most current quarterly gross sales information to extrapolate the annual assessment amount.
RESOLUTION NO. 2024-
Adopted by the Sacramento City Council
August 20, 2024
Resolution Approving the Annual Report for the Handle Business Improvement District for Fiscal Year 2024/25
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 for a ten-year term running through September 30, 2026. 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) maintenance such as trash pickup and sidewalk powerwashing; (2) marketing, advertising, and special events services to promote a vibrant commercial center; and (3) advocacy for projects such as pedestrian safety, lighting, and parking enhancements. All improvements and services are as defined within the Annual Report. The Annual Report is attached to this resolution as Exhibit A and is also separately on file with the Infrastructure Finance Division of the Department of Finance, which the City Clerk has designated as the custodian of such records.
E. The Fiscal Year (FY) 2024/25 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 the City Manager’s designee is authorized to make any necessary budgetary adjustments associated with the District budget for FY2024/25 as shown in the attached Exhibit B, FY2024/25 District Budget and Business Assessment.
Section 4. The annual budget and assessments as set forth in the FY2024/25 Annual Report (attached hereto as Exhibit A) 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: Annual Report FY 2024/25
Exhibit B: FY2024/25 District Budget and Assessment
1717 Capitol Avenue –
Sacramento, CA 95811
2024/25 Annual Report
INTRODUCTION
The following review is the t
hirteenth 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 eighth 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 2024 presenting new challenges for Handle businesses. The HBID has committed to a hands-on maintenance program, to supporting clean and safe projects and to exploring new improvement projects in the one-square-block district.
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.
Assessment Collection and Accounting Practices – in early 2024 the HBID board, in partnership with the City of Sacramento’s Revenue Division, re-vamped the assessment collection and remittance process. The City, who has collected assessment remittances since the inception of the district, assumed additional responsibilities with respect to collections. The Handle organization contracts with a professional accountant for daily monitoring and oversight, this 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.
2024/25 Budget - the organization’s budget coincides with the calendar year. A draft of annual budget is reviewed at two consecutive meetings in the fall, with final approval at the December Board of Director’s meeting. The original estimate of assessments to be collected, as outlined Management District Plan, was $200,000/year. This total has Exhibit A
1717 Capitol Avenue – Sacramento, CA 95811
(Page Two – 2024/25 Handle Annual Report) fluctuated over the past seven years, in particular during the pandemic years. For the upcoming budget year we estimate the collected and remitted assessments will be about $240,000 (based on 2023 data). 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 process is a good opportunity to gather input, share information and review improvement programs. Reserves - The Handle has approximately $175,000 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.). The Board will be making two large purchases in 2024, including a $45,000 purchase of new trash cans.
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 larger events have not been scheduled since the pandemic (the Dress Up – Wine Down event successfully returned in Spring 2024), the Board continues to support events in the district, from St. Baldricks, Second Saturday and the 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
1717 Capitol Avenue – Sacramento, CA 95811
(Page Three – 2024/25 Handle Annual Report) 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 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 continue to dedicate resources to helping maintain the Liestal Alley. 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 and 2023, 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 from 2020-2022 and the commitment continues to this day. More than $350,000.00 has been contributed by the Handle District. 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)
Exhibit B
HANDLE (FUND 2241)
PROPERTY AND BUSINESS IMPROVEMENT DISTRICT
FY2024/25 DISTRICT BUDGET & BUSINESS ASSESSMENT
Business Assessment
Annual assessment rates are as follows: Restaurants and businesses that sell prepared food shall be assessed 1.5% of gross sales, excluding alcohol sales and certain items as described in Section V of the Management District Plan (MDP), on file with the Infrastructure Finance Division, designated by the City Clerk as the custodian of such records. The gross sales will be determined from the Business Operations Tax filings with the City of Sacramento.
New restaurant or businesses that sell prepared food that open during the term of the district shall not be exempt from assessment. Assessment rates for new restaurant or businesses that sell prepared food shall be determined by utilizing the most current quarterly gross sales information to extrapolate the annual assessment amount.
Resources
Estimated Beginning Balance $70,000
Total Estimated Assessments Collected $240,000
Total Resources $310,000
Expenses (Estimated)
Streetscape & Safety Projects $60,000
Marketing, Advertising & Special Events $120,000
Administrative & Operations $24,000
Assessment Collection/City Services $14,400
Contingency/Renewal $21,600
Total Expenses $240,000
Estimated Ending Fund Balance $70,000
Year-Over-Year Change $0
Estimated Disbursement to BID $240,000
RESOLUTION NO. 2024-
Adopted by the Sacramento City Council
August 20, 2024
Resolution Approving the Annual Report for the Sacramento Tourism Infrastructure District for Fiscal Year 2024/25
BACKGROUND
A. Sacramento lodging business owners within the boundaries of the Sacramento Tourism Infrastructure District No. 2018-04 (District) petitioned the City of Sacramento (City) to establish the District, as a business improvement district, by which the assessments collected would be used to pay debt service on the bonds or other obligations issued or incurred by the City for construction of the ballroom portion of the Sacramento Convention Center expansion, designed to increase overnight tourism and increase the desirability of the Sacramento Convention Center as a tourist, meeting and event destination, thereby increasing room night sales for the assessed lodging businesses.
On October 30, 2018, by Resolution No. 2018-0419, City Council approved the establishment of the District for a term of no more than 40 years from the date of issuance of the first series of bonds.
B. The City Council established the District under the Property and Business Improvement District Law of 1994 (California Streets and Highway Code, Sections 36600 et seq.) (PBID Law) and has previously levied assessments on businesses in the District to pay for improvements to be provided within the District, in accordance with the PBID Law.
C. Expenditures of assessment revenues provide for the following within the District:
paying debt service for the ballroom portion of the Sacramento Convention Center expansion, with the intention to increase tourism and room night sales within the District’s boundaries. All improvements are as defined within the Annual Report. The Annual Report is attached to this resolution as Exhibit A and is also on file with the Infrastructure Finance Division of the Finance Department, which the City Clerk has designated as the custodian of such records.
D. The Fiscal Year (FY) 2024/25 rate and methodology of assessment is not changed from the prior year.
D. 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 Background statements above are true and correct.
Section 2. The City Council finds and determines that the 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 FY2024/25 as shown in the attached Exhibit B, FY2024/25 District Budget and Business Assessment.
Section 4. The annual budget and assessments as set forth in the FY2024/25 Annual Report (attached hereto as Exhibit A) are confirmed, and the Annual Report is hereby approved.
Section 5. Exhibits A and B are a part of this resolution.
Table of Contents:
Exhibit A: Annual Report FY 2024/25
Exhibit B: FY2024/25 District Budget and Assessment
Sacramento Tourism Infrastructure District
Fiscal Year 2024-25
Annual Report
Developed by Visit Sacramento, the Sacramento Tourism Infrastructure District (STID) is an assessment district proposed to provide specific benefits to payors, by providing funding for capital improvements and other infrastructure project and marketing (if funds allow) designed to increase room night sales for assessed businesses.
The STID is administered by Visit Sacramento in conjunction with an STID Tourism Committee consisting of the following members:
• Rick Jennings, Councilmember District 7
• Howard Chan, Sacramento City Manager
• Michael Ault, Executive Director, Downtown Sacramento Partnership • Nikki Glass, General Manager, Kimpton Sawyer Hotel
• David Huber, General Manager, Wyndham Sacramento
• Jeroen Gerrese, General Manager, Sheraton Grand Hotel Sacramento • Doug Warren, General Manager, Marriott Village Cal Expo • Mike Testa, President & CEO, Visit Sacramento
• Patrick Miller, General Manager, Hyatt Regency Sacramento Lo
cation
The STID includes all lodging businesses, existing and in the future, available for public occupancy within the boundaries of the City of Sacramento and the unincorporated areas of the County of Sacramento. A boundary map is attached as Exhibit A.
Assessment Rates
The annual assessment rate is one percent (1%) of gross short-term room rental revenue. Based on the benefit received, assessments shall not be collected on stays of more than thirty (30) consecutive days. The assessment shall apply to room rental revenue from all stays which are on a transient basis; a stay is considered to be on a transient basis until thirty (30) consecutive room night stays have elapsed.
Fo
r Fiscal Year 2024/25, the assessments collected from lodging businesses within the STID will be used to pay debt service on the bonds or other obligations issued or incurred by the City to finance capital improvements specified in the MDP, including the ballroom portion the Sacramento Convention Center expansion. Expansion of the Convention Center was completed in early 2021 and was designed to increase overnight tourism and increase the desirability of the Sacramento Convention Center as a tourist, meeting and event destination, thereby increasing room night sales for assessed lodging businesses.
B
udget
The total STID annual budget for Fiscal Year 2024-25 is anticipated to be approximately $3,828,354.
Approximately 90.9 percent of the budget will be funded from revenues collected within the City ($3,479,973.79) and 9.1 percent from the unincorporated area of Sacramento County ($348,380.21).
B
udget number from STID MDP and then used same percentage breakdown as this year’s STMD Estimate.
I
mprovements
The capital improvements and debt service portion of the budget will be used to fund capital improvements designed to increase room night sales for assessed businesses. The focus of the capital improvements program is to fund a portion of the planned expansion to the Sacramento Convention Center, specifically the construction of a ballroom, designed to increase overnight tourism and increase the desirability of the Sacramento Convention Center as a tourist, meeting and event destination, thereby increasing room night sales for assessed lodging businesses.
Exhibit A
EXHIBIT A
STID Boundary Map
PROPERTY BUSINESS IMPROVEMENT
DISTRICT ANNUAL REPORT CHECKLIST
FY
PBID NAME: CONTRACT #
AUTHORITY
(CS&H Code Section) REQUIREMENT PAGE
FOUND
36650(b) Specify PBID name
-Does the PBID name exactly match the previous year’s PBID name? (Check 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? (Check 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? (Check 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? (Check one) HIGHER SAME LOWER - 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 owner 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 property owner to estimate the amount of the assessment to be levied against his or her property for that fiscal year
-Does the Method and Basis match the MDP? (Check one) YES NO -Is there a CPI increase for this year? (Check 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? (Check one) YES NO if yes, 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? (Check one) YES NO -Did an authorized representative of the nonprofit Board sign the report? (Check one) YES NO -Does the report state the date the Board approved the Report/Budget? (Check one) YES NO NOTES:
Exhibit B
SACRAMENTO TOURISM INFRASTRUCTURE
BUSINESS IMPROVEMENT DISTRICT (FUND 2253)
FY2024/25 DISTRICT BUDGET & BUSINESS ASSESSMENT
Resources
Estimated Beginning Balance
Total Estimated Assessments Collected $3,828,354
Total Resources $3,828,354
Expenses
Infrastructure Finance Admin Cost $1,500
City Accounting Admin Cost $1,098
Estimated BID Expenses $3,825,756
Total Expenses $3,828,354
Estimated Ending Fund Balance $0
Year-Over-Year Change $0
Estimated Disbursement to BID $3,825,756
Business Assessment
Annual assessment rate is 1% of gross short-term room rental revenue