TO: HONORABLE MAYOR FROM: Matt Cano
AND CITY COUNCIL
SUBJECT: SEE BELOW DATE: May 16, 2022
Approved Date
05/24/22
COUNCIL DISTRICT: 6
SUBJECT: WILLOW GLEN COMMUNITY BENEFIT AND IMPROVEMENT
DISTRICT ANNUAL REPORT FOR FISCAL YEAR 2022-2023.
RECOMMENDATION
Adopt a resolution:
(a) Approving the Willow Glen Community Benefit and Improvement District Annual Report for Fiscal Year 2022-2023 as filed or modified by City Council;
(b) Confirming the individual assessments as proposed, or as modified by City Council; and
(c) Directing the Director of Public Works to deliver the assessment role to the County of Santa Clara for collection with the property taxes.
OUTCOME
Approval of these recommendations would allow the continuation of the enhanced cleaning, advancement of attractive streetscapes, improvements in parking management and increased promotions, and events funded through the levy of special assessments for Willow Glen.
BACKGROUND
The City of San José established the Willow Glen Community Benefit and Improvement District (CBID) in 2008, pursuant to Chapter 14.31 of Title 14 of the San José Municipal Code which incorporates and modifies the Property and Business Improvement District Law of 1994, Section 36600 et seq. of the California Streets and Highways Code, to fund specific enhanced services and improvements above those provided by the City from generally available funds. Since the enhanced services directly benefit individual parcels within the district rather than the City as a whole, the costs are assessed to these benefitting parcels.
COUNCIL AGENDA: 06/07/22
FILE: 22-836
ITEM: 2.22
HONORABLE MAYOR AND CITY COUNCIL
May 16, 2022
Subject: Willow Glen CBID Annual Report for Fiscal Year 2022-2023
The CBID was approved by property owners and adopted by City Council on December 16, 2008, to raise funds for cleaner sidewalks, litter pickup, more attractive streetscapes, better parking management, increased promotions, and events. The district is divided into two assessment zones based upon the frequency of the special services. The voter-approved assessment formula provides for an annual inflation adjustment tied to the Bay Area Consumer Price Index (CPI) for all urban consumers and/or other changes in program costs, but not to exceed five percent. The district has an initial term of 15 years, after which it would sunset and need to be re-established in order to continue beyond 2023. The boundary map (Attachment A) identifies the parcels included in the district.
ANALYSIS
As required by Chapter 14.31 of the Municipal Code which incorporates and modifies the Property and Business Improvement District Law of 1994 (California Streets and Highway Code) for reporting, and in accordance with the agreement between the City and Willow Glen Business Association (Association), the Association has submitted the Willow Glen Community Benefit Improvement District Annual Report for Fiscal Year July 2022-June 2023 (Report) to the San José City Council (Attachment B). The Report, which is the first of two reports for Fiscal Year 2022-2023, will be on file in the City Clerk’s Office prior to the Council meeting. A second report, the Fiscal Year 2022-2023 Financial Report, will be submitted in October 2023 to the City Council through staff from the Association. The Report contains the following information which is consistent with the original Engineer’s Report for the CBID:
1. Declaration of no material changes to the district
2. FY 2022-2023 improvements and activities
3. Cost estimates for improvements and activities in FY 2022-2023
4. Method and basis for levying the FY 2022-2023 assessment
5. Acknowledgement of revenue to be carried over
6. Other non-assessment revenue
The services provided by the CBID include sidewalk cleaning, beautification of streetscapes, parking management, marketing, promotions and events. In FY 2022-2023 new drought-tolerant plants and bark mulch will continue to be added to beautify the planter boxes. New vertical banners will be developed to replace outdated or damaged banners. There will be ongoing electrical repairs to support holiday lighting, with continued exploration of long-term solutions to issues with electrical sources. Promotions of events encourage locals as well as visitors to experience Willow Glen’s charm.
The annual change in the applicable CPI is 3.21 percent. City staff has reviewed the Association’s proposal and concurs with the recommendation that assessments increase 3.21 percent for Fiscal Year 2022-2023 in order to keep up with rising costs of providing the services within the CBID. The CBID proposed budgeted revenue of $284,437 is reflected on page 8 of
HONORABLE MAYOR AND CITY COUNCIL
May 16, 2022
Subject: Willow Glen CBID Annual Report for Fiscal Year 2022-2023
Attachment B. The total maximum aggregate assessment levy for Fiscal Year 2022-2023 will be $284,437 as shown in the CBID assessment roll filed in the City Clerk’s Office.
As a property owner within the CBID, the City’s assessment will be $12,035. The two City- owned properties are the Willow Glen Branch Library located at 1157 Minnesota Avenue and a public parking lot also located on Minnesota Avenue approximately 200 feet east of the library.
Sufficient funds to pay the City’s assessment are included in the City’s 2022-2023 Proposed Operating Budget in the Business Improvement Districts Fund.
The assessment roll and diagram for 2022-2023 will be on file with the City Clerk’s Office approximately two weeks prior to the Council meeting for public review.
Approval of the proposed resolution by the City Council will:
1. Approve the Report as filed or modified by Council;
2. Confirm the individual assessments as proposed or modified by Council;
3. Direct the Director of Public Works to deliver the assessment role to the County for collection with the property taxes.
On December 16, 2008, City Council adopted resolution 74747 forming the CBID. FY 2022- 2023 is the final assessment year for the CBID’s initial 15-year term. For CBID services to continue beyond December 31, 2023, the district must be renewed and can be extended for a term not to exceed 15 years. The Association has already reached out to City staff to coordinate the renewal process. The renewal process will require:
• Petitions signed by the property owners in the proposed district who will pay more than 30 percent of the assessments proposed to be levied;
• A resolution by City Council stating its intent to form the CBID for an additional 15-year term.
• A public hearing by City Council regarding the CBID;
• Tabulation of property owner ballots weighted by the assessment on each property; and • A simple majority of valid ballots cast in favor of the CBID weighted by the assessments must be achieved in order for City Council to adopt a resolution forming the CBID.
If the petitions are received by January 2023, the ballot tabulation has the potential to occur prior to July 2023, and if approved by affected property owners, the assessments can be collected through the County property taxes.
CONCLUSION
The CBID annual budget report proposes a 3.21 percent assessment increase for FY 2022-2023, providing $284,437 in total budgeted revenue for FY 2022-2023. The assessment on City-owned property will total $12,305 for the Willow Glen Branch Library and a public parking lot.
HONORABLE MAYOR AND CITY COUNCIL
May 16, 2022
Subject: Willow Glen CBID Annual Report for Fiscal Year 2022-2023
EVALUATION AND FOLLOW-UP
The attached Report by the Association sets the budget and proposed assessments for 2022-2023 consistent with the approved Management Plan and Engineer’s Report. The current agreement between the City and the Association also requires the Association to submit an Annual Financial Report, containing an independent Certified Public Accountant Report in October of each year.
CLIMATE SMART SAN JOSE
The recommendation in this memorandum does not have any negative impact on Climate Smart San Jose energy, water, or mobility goals.
PUBLIC OUTREACH/INTEREST
This memorandum will be posted on the City’s website for the June 7, 2022 Council Agenda.
The Report is filed in the City Clerk’s Office for public review and will also be made available to the property owners within the district upon request. Staff is also available to respond to any public inquiries. Finally, the Association’s Board of Directors approved the fiscal year budget at its publicly noticed and held meeting on April 12, 2022.
COORDINATION
This memorandum and related documents and resolutions were coordinated with the City Attorney’s Office and the City Manager’s Budget Office.
COMMISSION RECOMMENDATION
This item does not require any input from a board or commission.
FISCAL/POLICY ALIGNMENT
This action is consistent with the Council-approved Budget Principle in that it utilizes special assessments for enhanced services.
COST SUMMARY/IMPLICATIONS
HONORABLE MAYOR AND CITY COUNCIL
May 16, 2022
Subject: Willow Glen CBID Annual Report for Fiscal Year 2022-2023
If the 2022-2023 Willow Glen CBID Annual Report is approved with the 3.21 percent increase, the City’s assessment is calculated to be $12,305. The 2022-2023 Proposed Operating Budget includes an estimate of $12,618 in the Business Improvement District Fund for the City’s assessment. If the recommendations in this memorandum are approved an adjustment to the City’s assessment will be updated through future budget action.
BUDGET REFERENCE
The table below identifies the budgeted General Fund transfer in, to cover the City’s assessment, the Willow Glen CBID assessments, and the appropriation proposed to fund the services and activities proposed in the 2022-2023 Annual Report for the Willow Glen CBID as recommended as part of this memorandum.
Fund
#
Appn
# Appn. Name
Total
Appn.
Rec.
Budget
Action
2022-2023
Proposed Operating
Budget Page*
Last Budget
Action (Date,
Ord. No.)
351 R003 Transfers - General Fund $12,618 N/A 851 N/A
351 R220 Special Assessments –
Willow Glen CBID
$284,437 N/A 851 N/A
351 3787 Willow Glen Community
Benefit District
$291,472 N/A 851 N/A
* The 2022-2023 Operating Budget was released on May 4, 2022 and is scheduled to be reviewed and approved by City Council on June 14, 2022 and adopted on June 21, 2022.
CEQA
Categorically Exempt, File No. PP18-060, CEQA Guidelines Section 15301, Existing Facilities.
/s/
MATT CANO
Director of Public Works
For questions, please contact Thomas Borden, Program Manager, at (408) 535-6831.
Attachment A: District Map
Attachment B: Willow Glen CBID Annual Report for FY 2022-2023