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DISCUSSION
City of San Bernardino
Request for Council Action
Date: August 19, 2026
To: Honorable Mayor and City Council Members
From: Eric Levitt, City Manager
Luis Portillo, Director of Economic Development
Department: Economic Development
Subject: Downtown San Bernardino PBID Phase II Formation - $74,500 Agreement with Civitas Advisors, Inc. and Fiscal Year 2026-2027 General Fund Budget Amendment (Ward
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Recommendation:
It is recommended that the Mayor and City Council of the City of San Bernardino, California, adopt Resolution No. 2026-143:
1. Receive and file the oral presentation from Civitas Advisors Inc., on the Downtown San Bernardino Property and Business Improvement District (PBID) Formation Phase I Final Feasibility Study and Findings / Overview of the proposed Phase II Formation process; and
2. Authorizing the City Manager, or designee, to execute the Professional Services Agreement (PSA) with Civitas Advisors Inc., for the Downtown San Bernardino Property and Business Improvement District (PBID) Formation Services Phase II in an amount not-to-exceed $74,500 and, signing subsequent, necessary, and related documents to implement the PSA; and
3. Authorizing the Director of Finance and Management Services, or designee, to amend the FY 2026/27 Operating Budget in the amount of $74,500 for the Phase II Formation of the Downtown San Bernardino Property and Business Improvement District, and; moving the funds into Economic Development Department Professional Contractual Services; and
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4. Authorizing the Director of Finance and Management Services, or designee, to issue a purchase order in the amount of $74,500 to Civitas Advisors, Inc.
City Manager's Comments
I recommend the City Council authorize moving to Phase II. I believe a PBID if supported by the City Council and downtown property owners can be a valuable tool in improving the downtown long-term. The one caution to be aware of is that the initial estimate was the City would be responsible for about $70,000 + in the assessment.
Although that still has to be determined based on Phase II. In addition, the City votes are determined based on our properties, this will need to be determined at some point prior to conclusion of Phase II Formation.
Executive Summary
In 2023, Civitas Advisors, Inc. completed a Phase I feasibility study for a potential Downtown San Bernardino Property and Business Improvement District (PBID). Based on that work, Council directed staff to proceed with formation and appropriated $39,000 for Phase II. The project did not proceed because of subsequent organizational and staffing changes, and the prior appropriation was not used.
The proposed Professional Services Agreement (PSA) will provide the technical expertise and stakeholder engagement necessary to advance the formation of a Downtown Property and Business Improvement District. A PBID is a self-funded district in which property owners within a defined area collectively invest in enhanced programs, services, and improvements that support economic vitality, district maintenance, marketing, safety, and beautification efforts. Establishing a PBID creates a dedicated and sustainable funding source that supplements City services while ensuring improvements are tailored to the unique needs and priorities of the district.
The PBID formation effort responds to interest expressed by downtown property owners and supports long-term economic development through increased stakeholder participation and investment.
The City is also the largest property owner within the proposed PBID boundary, currently owning approximately 26 percent of the property within the boundary, representing 79 of the 592 parcels. The City’s total annual assessment is based on assessment rates (per parcel sq. ft.). The proposed district framework figures reflect the 2023 Feasibility Study and set commercial parcels at $0.0150 sq ft., vacant parcels at $0.0125 sq ft., tax-exempt parcels at $0.0050 sq ft. For comparison, the County owns approximately 7 percent, and the local gas company owns approximately 9 percent. As the largest property owner in the proposed district, the City has a significant stake in the formation process and in ensuring that the district’s programs and investments align with broader downtown economic development goals while reflecting the interests of the full property owner community.
Background
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In early 2022, City staff was approached by downtown property owners interested in exploring the feasibility of establishing a PBID in downtown to finance additional services in the area. A PBID is a funding source that enables property owners within a defined geographic area to collectively invest in programs, services, and improvements that enhance the economic vitality and physical environment of a commercial district.
In a fully formed PBID, the process of funding services starts with the collection of a property owner’s assessment by the County on the property tax bill. Those funds are then managed by a selected non-profit corporation that allocates funds to the agreed upon services defined in PBID’s management district plan. PBIDs are designed to address the unique needs and priorities of a district while fostering stakeholder participation and long-term economic development. With more than 100 PBIDs operating throughout California, this model has become a widely utilized and effective tool for generating a dedicated and sustainable funding source for services that supplement those provided by local government.
A Professional Servies Agreement with Civitas Advisors, Inc., was executed on October 1, 2022, under the City Manger’s signing authority. The agreement had a not- to-exceed amount of $26,500 and expired on September 30, 2023.
Under the agreement, Civitas performed the following:
•Developed a project Steering Committee comprised of property owners proposed to be assessed in the potential PBID area. The Committee met regularly to discuss the project and evaluate possible boundaries. •In December 2022, Civitas hosted a virtual open house to showcase the proposed PBID boundaries, in which property owners, stakeholders, and City staff attended to provide feedback.
•Conducted an analysis of the proposed boundaries and stakeholder feedback was discussed by the Steering Committee in ongoing meetings to further develop the PBID.
•In January 2023, a detailed Feasibility Study was created to illustrate the proposed district parameters including budget, services, and boundaries. •In February 2023, Civitas hosted an in-person open house to further discuss PBID efforts and receive feedback from property owners, stakeholders, City Staff, elected officials, and the business community. The City shared the final Feasibility Study with attendees.
At the June 2023 Strategic Initiatives Workshop, staff formally presented information regarding the PBID initiative to the Mayor and City Council. On September 12, 2023, at the Special Meeting of the Mayor and City Council to implement the strategic initiatives, the Mayor and City Council gave direction to proceed with the PBID formation process. Subsequently, on October 4, 2023, the Mayor and City Council adopted Resolution No. 2023-144, approving a one-time allocation of $39,000 in FY 2023/24 funding for Phase II of the PBID Formation process.
Phase II of the PBID formation process was to be initiated after the adopted resolution.
Subsequent organizational leadership and staffing changes delayed progression of the 3 4
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project. In February 2025, the Director of Economic Development directed staff to request updated pricing from Civitas on the Phase II Formation as the prior quote was from 2023. Given the time lapse between quotes, the cost of services increased. City leadership ultimately decided not to pursue Phase II at that time, due to the increased costs, organizational leadership and staffing changes, which all contributed to the project being delayed.
In February 2026, City Manager Eric Levitt requested background information regarding the Downtown PBID initiative. After being briefed, the City Manager directed Economic Development to obtain updated pricing and discuss the viability of proceeding with Phase II Formation. Given the time that had elapsed since the completion of the original Feasibility Study. Civitas presented two options: (1) proceed directly with Phase II of the PBID Formation process, assuming stakeholder support and engagement remained substantially unchanged; or (2) conduct an updated Phase I Feasibility Study to reassess current conditions, validate stakeholder interest, and re- engage the business community before moving forward with formation activities.
Discussion
The Phase II formation of the PBID process would create a formal framework for stakeholder participation, ensuring that property owners have an active role in identifying priorities and guiding investments within the district. Through coordinated efforts focused on cleanliness, safety, and capital improvements, the PBID has the potential to increase property values, encourage private investment, improve business conditions, and support the continued revitalization of Downtown San Bernardino.
The formally established formation of a PBID would create a dedicated funding source to support enhanced services, economic development initiatives, business attraction, district management, and enhanced maintenance services within the downtown core.
A PBID would provide property owners and stakeholders with the resources necessary to implement targeted improvements that enhance the district’s appearance, functionality, and overall economic competitiveness.
From an economic development perspective, the PBID would serve as a collaborative public-private partnership, enabling property owners to invest directly in initiatives that support business retention and attraction, increase commercial activity, strengthen stakeholder engagement, and enhance the customer and visitor experience within our community. Services and programs funded through the PBID would supplement, rather than replace, the baseline services currently provided by the City and would allow for the implementation of improvements specifically tailored to the needs and priorities of the downtown area.
Under the Property and Business Improvement District Law of 1994, the PBID formation process can be divided into six steps.
PBID Formation Process.
1. Creation of Formation Resources
•Identify Steering Committee members
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•Obtain information needed for database
2. Owner Outreach & Education
•Educate property owners about PBIDs via handouts and meetings •Obtain input and support from property owners
•Hold focus groups and circulate surveys as needed
3. District Plan Development
•Identify district boundaries and included properties
•Identify benefit zones, if needed
•Determine services to be provided by the district
•Determine assessment rate and budget
•Determine governance structure
•Draft and review district plan
4. Petition Drive
•Prepare, distribute and collect petitions for formation •Submit petitions from owners who will pay 50% or more of the assessment to the City Council
5. Initial Hearing
•Prepare Resolution of Intention
•Prepare Notice of Public Meeting/Hearing and Ballot
•Resolution of Intention hearing
•Mail notice and ballot to all owners
6. Public Hearing
•City Council considers any protests presented and tallies ballots cast •If 50% or more of the ballots cast favor formation, the City Council can adopt Resolution of Formation
To develop, form, and implement the PBID for Downtown San Bernardino the Professional Services Agreement with Civitas Advisors, Inc., in the amount not-to- exceed $74,500, with a term through July 15, 2027, would be executed following Mayor and City Council approval. Civitas having completed the Phase I Feasibility Study, has already established the foundational work for the district, with key stakeholders remaining engaged. Under Phase II, Civitas would update and validate ownership data using current County Assessor records and reconfirm property owner support on a parcel-by-parcel basis. If formation is completed by July 2027, assessments would be placed on the 2027-2028 tax roll, with service delivery beginning in January 2028. 2021-2025 Strategic Targets and Goals
This project is consistent with Goal No. 2: Focused, Aligned Leadership and Unified Community by providing the opportunity for collaboration among City staff, business owners, property owners, and community stakeholders. Goal No. 3: Improved Quality of Life, demonstrating the City’s’ continued investment in downtown revitalization, which can help attract talent and business investment improving the City’s appearance, cleanliness and attractiveness. Goal No. 4: Economic Growth & Development, the PBID is a practical mechanism that converts strategic goals into measurable programs, services, and investments that improve downtown vitality, 3 4
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economic competitiveness, and quality of life.
Fiscal Impact
The proposed PBID Phase II Formation project requires $74,500 from the General Fund. These funds were previously allocated to Economic Development but were relinquished as part of budget reductions. Approval of this request will restore the funding to Economic Development to complete the PBID Phase II Formation project.
Following the petition process, the proposed PBID would be presented to the City Council for consideration of a Resolution of Intention, followed by the required noticing and Public Hearing prior to proceeding to the ballot.
The City’s final annual assessment cannot be determined until the formation process is completed and the proposed district’s property ownership, assessment methodology, and budget are fully evaluated. Based on the City’s current ownership of approximately 26 percent of the parcels within the proposed boundary and an estimated initial annual district budget of $301,000, the City’s preliminary annual assessment is estimated at approximately $78,260. This figure is for planning purposes only and is subject to change based on the final assessment methodology and district budget.
The City’s estimated assessment and the proposed PBID formation will be presented to the City Council at key stages of the formation process, including a meeting at which the Council will consider the Resolution of Intention and conduct the required Public Hearing. Upon completion of the formation process, the approved assessments would be placed on the property tax rolls.
Conclusion
It is recommended that the Mayor and City Council of the City of San Bernardino, California, adopt Resolution No. 2026-143:
1. Receive and file the oral presentation from Civitas Advisors Inc., on the Downtown San Bernardino Property and Business Improvement District (PBID) Formation Phase I Final Feasibility Study and Findings / Overview of the proposed Phase II Formation process; and
2. Authorizing the City Manager, or designee, to execute the Professional Services Agreement (PSA) with Civitas Advisors Inc., for the Downtown San Bernardino Property and Business Improvement District (PBID) Formation Services Phase II in an amount not-to-exceed $74,500 and, signing subsequent, necessary, and related documents to implement the PSA; and
3. Authorizing the Director of Finance and Management Services, or designee, to amend the FY 2026/27 Operating Budget in the amount of $74,500 for the Phase II Formation of the Downtown San Bernardino Property and Business Improvement District, and; moving the funds into 3 4
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Economic Development Department Professional Contractual Services; and
4. Authorizing the Director of Finance and Management Services, or designee, to issue a purchase order in the amount of $74,500 to Civitas Advisors, Inc.
Attachments
Attachment 1 - Resolution No. 2026-143
Attachment 2 - Professional Service Agreement with Civitas for the Downtown San Bernardino PBID Phase II Formation
Attachment 3 - Downtown San Bernardino PBID Formation Phase II Civitas Quote Attachment 4 - Downtown San Bernardino PBID Phase I Feasibility Study Report Attachment 5 - Downtown San Bernardino PBID Staff and Civitas Presentation Ward
Second Ward
Synopsis of Previous Council Actions
June 30, 2023 Mayor and City Council received an overview of the project at the Strategic Initiatives Workshop.
September 12, 2023 Mayor and Council held a Special Meeting where they approved a series of Strategic Initiatives and provided direction to move forward with the PBID formation.
October 4, 2023 Mayor and City Council adopted resolution no. 2023-144; funding $39,000 for FY 2023/24 as a one-time cost for the PBID formation.
CC
Eric Levitt