DATE: AUGUST 6, 2024
DEPARTMENT: COMMUNITY DEVELOPMENT
FROM: LISA BRINTON, DIRECTOR
BY: CRYSTAL CASILLAS, COMMUNITY DEVELOPMENT ANALYST
TITLE: RESOLUTION OF INTENTION TO LEVY SALINAS UNITED BUSINESS ASSOCIATION (SUBA) 2024-2025 ANNUAL ASSESSMENT RECOMMENDED MOTION:
A motion to approve a Resolution of Intention (ROI) to levy the annual assessment in the Salinas United Business Association (SUBA) Business Improvement Area (BIA) for FY 2024-2025 and set a public hearing date to consider the levy.
RECOMMENDATION:
It is recommended that the City Council receive and accept SUBA’s 2023-2024 Annual Report and approve a resolution declaring the intention to levy the 2024-2025 SUBA BIA assessment and setting September 24th, 2024, as the public hearing date to consider the levy.
EXECUTIVE SUMMARY:
The attached SUBA 2023-2024 Annual Report is a requirement of California Streets and Highways Code Section 36533, so that the City Council may be advised of the prior year’s activities and uses of annual assessments levied on businesses within the SUBA BIA. With Council approval, the SUBA Annual Report also provides direction for SUBA activities and use of assessment funds in the coming fiscal year. The City Council is required to adopt a resolution of intent to levy assessment that sets the public hearing date of September 24th, 2024. The Salinas Municipal Code Section 21B-40. Collection of assessments; delinquencies states that assessments will be due and payable in advance on November 1st.
BACKGROUND:
The Salinas United Business Association (SUBA) is a 501(c)(6) nonprofit corporation, and its Board of Directors is designated pursuant to Salinas Municipal Code section 21B-41 to serve as the Advisory Board of the Business Improvement Area formed in 2004 under the Parking and Business Improvement Area Law of 1989. Through the levying of assessments, SUBA provides district members with benefit services - support and resources they need to be successful business owners including business training, marketing, and streetscape beautification and maintenance. The SUBA BIA is located in East Salinas, its boundaries include the major commercial corridors of E. Market and E. Alisal Streets and N. Sanborn Road. A boundary map is provided as an attachment to this report. No boundary changes are proposed.
On November 5, 2019, the City Council adopted Ordinance 2622 amending the Salinas Municipal Code by transferring the responsibility of remitting and collecting the BIA assessment from the City to SUBA. Since fiscal year 2020 SUBA has remitted and collected the BIA assessment.
DISCUSSION:
In the BIA the City is responsible for providing base services including, but not limited to, trash collection, street sweeping, street and sidewalk maintenance and repair, streetlight installation, maintenance, and repair, and public safety (police and fire). Through the levying of assessments, SUBA provides members with benefit services, support, and resources they need to be successful. These services are an extra “benefit” that members receive on top of base services.
Examples of benefit services include but are not limited to streetscape beautification and extra maintenance, amenities such as additional festoon lighting, street banners, wayfinding signage, and outdoor seating. Other support includes, but is not limited to, marketing and promotion of the businesses and events in the BIA (website, social media, business directory, community events), connecting members with business education, technical assistance and capital resources, and assisting businesses to navigate regulatory processes such as licensing and permitting.
A summary of SUBA’s 2023-2024 Annual Report and proposed FY 2024-2025 Goals and Budget follows. 2023-2024 Accomplishments
The 2023-2024 Annual Report, attached to this staff report, provides the details of SUBA’s activities over the past year. Highlighted accomplishments include the following.
District Marketing and Promotion
Continued to expand SUBA district visibility through promoting district businesses and events on social media platforms and shop local initiatives.
SUBA, Monterey County Business Council and City of Salinas staff worked to sign up eligible businesses to receive free publicity on the regional tourism website See Monterey and creating websites for some businesses with the assistance of college students from GetVirtual.
Assisted businesses to obtain 28 Temporary Use of Land Permits (~value of $4,600) during September 16 Celebration, Valentine’s Day and Mother’s Day sales.
District Appearance and Safety
SUBA met with City staff throughout the year to address code enforcement issues and policies regarding illegal vendors, trash, homeless issues catering trucks as well as crime issues.
Coordinated 4 public safety meetings this past fiscal year to address issues of safety concerns regarding burglary, theft, and unhoused individuals as well as litter and other related issues. Also communicated with the City’s Code Enforcement team on code violations.
Completed 4 clean-ups in the Alisal area. SUBA assisted in the recruitment of 7 business owners to become ambassadors and held smaller bi-weekly cleanups.
Business Advocacy and Navigation Support
Continued collaboration with various agencies and non-profit groups such as Monterey County Business Council, Salinas Valley Chamber of Commerce, Building Healthy Communities, Center for Community Advocacy, Central Coast Center for Independent Living, Blue Zones, California Rural Legal Assistance, Salinas Valley Memorial Hospital, Monterey County Visitors and Convention Bureau and other partners to address the barriers in the community that impact the quality of life for East Salinas residents and businesses.
Business Education and Resources
SUBA had 443 businesses attend their workshops and classes and continued to maintain a Business Resource Center and provided basic marketing and technical support at no-cost to business members interested in creating new marketing materials, social media training and connecting members to partners and other businesses that could assist them further (business cards, flyers, logos, etc.).
Shopping Local Events
27 businesses in the SUBA area participated in the Small Shop Saturday. SUBA utilized radio, social media and live videos promoting the Small Shop Saturday event, Thanksgiving Basket Giveaway to 100 families, Valentine’s Day & Mother’s Day.
Board Elections and Training
The last SUBA Board of Director Election was held in June 2023.
Expenditures
In 2023-2024 518 businesses were billed a total of $105,521 and SUBA collected $42,448 in assessments. To date, $63,073 (60%) of the 2023-2024 assessment remains uncollected. Delinquent payments were not sent to collection. In 2023-2024, SUBA Board Members discussed delinquent accounts and decided not to pursue with this action. Approximately over $540,000 has gone uncollected over the past seventeen (17) years according to figures shared with SUBA by the City of Salinas’ Finance Department.
Actual income for 2023-2024 totaled $149,041 including $42,448 in collected assessment revenue, $0 in grants, $3,840.00 in donations, and a 2022-2023 Fund Balance carry forward of $14,253.00. Expenditures listed on page 9 of the Annual Report totaled $147,206, with a 2023-2024 Fund Balance of $1,835.
Challenges
SUBA's primary challenge continues to be accomplishing a demanding work plan with limited staff and scarce and declining financial resources. Big challenges of the past year include the following.
A significant portion of the assessment revenue remains uncollected. Currently, about sixty percent (60%) of the total assessment amount for 2023-2024 has not been collected. This issue has persisted, contributing to a substantial amount of uncollected revenue over the years.
The BIA assessments are not membership fees, and businesses may mistakenly perceive these payments as optional rather than mandatory. This misunderstanding contributes to the low collection rate, as businesses might not fully recognize the obligation to pay.
The organization faces difficulties in managing its work plan effectively due to a combination of limited staffing and declining financial resources.
To address some of these challenges City staff will continue to meet regularly (bi-weekly) with the Executive Director and attend monthly Board meetings. Last year, SUBA billed businesses three times. Next year, they plan to bill four times, sending invoices electronically and by mail. SUBA will also pursue multiple grants and host three fundraisers to increase funding.
SUBA Requests
During the approval of SUBA’s Annual report for FY 2021-2022, City Council requested that SUBA collaborate with City staff to improve the collection process by aligning the timing of the assessment with business license renewals. The Finance Department began using HdL Companies to administer and manage business licenses, leading to discussions about concurrent issuance of assessments. Currently, assessments are issued once in November, but the City explored issuing them twice a year in June and December to improve collection rates. In FY 2022-2023, per direction of the SUBA Director, Alejandro Chavez, it was determined that this change would have minimal impact on collections. Moving forward, SUBA will continue to educate business owners on the roles and benefits of a Business Improvement District for FY 2024-2025. There are no additional requests from SUBA at this time. 2024-2025 Goals and Budget
The Annual Report also outlines SUBA’s proposed 2024-2025 goals and budget. A summary of proposed activities is provided below.
Marketing and Promotions
Goal 1A- Provide Social Media Marketing for 40 SUBA businesses throughout the 24/25 Fiscal Year Goal 2A- Provide 20 Social Media Posts Marketing the SUBA area throughout the 24/25 Fiscal Year Goal 3A- Provide 15 Interviews on Television/Radio regarding promoting the SUBA area and/or services SUBA provides its members. for 24/25 Fiscal Year Goal 4A- Provide 4 Ribbon Cutting Ceremonies for SUBA businesses for 24/25 Fiscal Year.
Goal 5A- Provide 2 mixers for the SUBA area.
Business Resources
Goal 1B- Provide 4 classes/webinars for SUBA members on Business Development for 24/25 Fiscal Year.
Goal 2B- Provide 20 workshops/webinars regarding business related topics such as:
Exit Strategy for Business Owners, Retirement Plans for Business Owners, Social Media Marketing, How to Start an Online Store for 24/25 Fiscal Year.
Goal 3B- Provide 300 one-on-one meetings with SUBA members in 24/25 Fiscal Year.
Safety
Goal 1C- Provide 4 Public Safety Meetings throughout the SUBA BIA for 24/25 Fiscal Year.
Goal 2C- Coordinate and Develop a Safety Plan for our BIA in coordination with our businesses and the Salinas Police Department for 24/25 Fiscal Year.
Goal 3C- Monitor and Contact City, County and State agencies regarding Health, Safety and Sanitary Issues in the SUBA BIA for 24/25 Fiscal Year.
Beautification & Cleaning
Goal 1D- Further develop an Ambassador Cleanup and Beatification Program in coordination with the City of Salinas that aligns with the Alisal Vibrancy Plan. This plan will include meeting with the Ambassadors 4 times per year and having monthly small cleanups in the immediate area where the ambassadors have their business. Training all the ambassadors to utilize the Salinas Connect App for them to utilize the app to inform the city of graffiti, excess garbage and abandoned vehicles.
Goal 2D- Schedule and Implement 4 Cleanups throughout the SUBA BIA for 24/25 Fiscal Year. We will include the number of garbage bags collected from the Ambassador program and cleanups, along with details on volunteer participation, to provide metrics for future measurements.
SUBA proposes no changes to the method of the calculation of assessment for FY 2024-2025. Levy of assessment is based on the Salinas Municipal Code Sec. 21B-35, established by Ordinance No. 2455, adopted by Council on September 15, 2005. SUBA’s estimated 2024-2025 assessment income is pending from the Finance Department and will be based on a 100% collection rate. Due to the extension of the deadline for renewing business licenses, the final assessment amount for the upcoming year has not yet been determined and will be presented to Council on September 24th, 2024.
SUBA’s proposed 2024-2025 Budget excluding the calculated assessment revenue, includes the FY 2023-2024 carry forward of $1,242, contracts ($88,000), grant funding ($5,000) and donations ($7,500) and for event sponsorships of $5,000. At mid-year, the SUBA Board will revisit actual assessment revenues collected and will make budget adjustments accordingly.
Alisal Vibrancy Plan Implementation and Small Business Support Efforts SUBA members participated in the preparation of the Alisal Vibrancy Plan (AVP) and continue to participate in implementation meetings, specifically on topics surrounding policies on economic development. The AVP identifies a community-based organization such as SUBA as a lead entity to organize and lead volunteer beautification efforts such as the Alisal Ambassador Program, promote local business and district identity through social media, and to connect members to business resources and assist them with navigating city processes.
In addition to AVP efforts, SUBA has been a member of the City’s Small Business Economic and Recovery Taskforce, General Plan Update Steering Committee, and AVP Implementation Committee and has assisted in the interview and selection process for Mural projects representing the Alisal business district and advising City staff and other stakeholders of Alisal business community needs. As SUBA is also part of the working group collaborating with city staff to implement best practices found in A Road to Recovery for Local Businesses Blueprint (Adopted by City Council September 17, 2021), to advise the City Council on best practices to support equitable small business recovery efforts for Salinas’ businesses and to reduce future economic disasters.
Resolution of Intention
The Resolution of Intention, provided as Attachment 1, outlines the community need, authorizing law, area boundaries, area name, use of levy assessment funds, levy calculation, and public hearing and noticing requirements. The Resolution sets a date of September 24, 2024, for a public hearing for Council to consider the levy of assessment for FY 2024-2025. The Resolution of Intention will be noticed in a local newspaper not less than seven (7) days prior to the public hearing, as required by the Streets and Highways Code.
CEQA CONSIDERATION:
Not a Project. The City of Salinas has determined that the proposed action of accepting SUBA’s annual report and approving the Resolution of Intention setting the public hearing date for consideration of SUBA’s annual levy of assessment is not a project as defined by the California Environmental Quality Act (CEQA) (CEQA Guidelines Section 15378). Any subsequent discretionary projects resulting from this action will be assessed for CEQA applicability.
STRATEGIC PLAN INITIATIVE:
This staff report and recommendations aligns closely with the City Council’s goals (2022-2025) of Economic Development and Public Safety. SUBA utilized the BIA assessment to provide small businesses with access to the educational, technical assistance and financial resources they need to prosper and expand and engaging businesses in existing beautification efforts.
DEPARTMENTAL COORDINATION:
Community Development staff acts as SUBA’s city liaison. The Finance Department has assisted Community Development with verifying the assessment projections for 2024-2025. As highlighted in the Annual Report, Community Development, Public Works and Police Department staff have collaborated with SUBA to support its goals of improving the safety, cleanliness and appearance of the BIA.
FISCAL AND SUSTAINABILITY IMPACT:
The levy of assessment for FY 2024-2025 will have no fiscal impact on the General Fund. Under the amended Ordinance (2019), SUBA is to remit and collect the assessment. Designated City liaison’s time for coordination with SUBA, participation in board meetings, and review of the annual report and processing of the annual levy of assessment is already allocated through staff time in the adopted 2024-2025 City budget.
ATTACHMENTS:
Resolution of Intention
SUBA 2023-2024 Annual Report
SUBA 2023-2024 Annual Report Presentation
2023-2024 Profit & Loss Statement
SUBA Boundary Map
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