TO: HON
ORABLE MAYOR FROM: Matt Loesch
AND CITY COUNCIL
SUBJ
ECT: SEE BELOW DATE: May 15, 2023
Approved Date
5/22/ 23
COUNCI
L DISTRICT: 6
SUBJ
ECT: APPROVAL OF THE WILLOW GLEN COMMUNITY BENEFIT AND
IMPROVEMENT DISTRICT ANNUAL REPORT FOR FISCAL YEAR 2023- 2024
RECOM
MENDATION
(a) A
dopt a resolution:
(1)
Approving the Willow Glen Community Benefit and Improvement District Annual Report for Fiscal Year 2023-2024 as filed or modified by Council, and confirming and levying the individual assessments as filed or modified by the City Council; and (2) D
irecting the Director of Public Works to deliver the assessment roll to the County of Santa Clara for collection with the property taxes.
(b)
Approve an uncodified ordinance to approve the Willow Glen Community Benefit and Improvement District Annual Report for Fiscal Year 2023-2024, as filed or modified by the City Council, and confirming and levying the individual assessments specified in the resolution.
SUM
MARY AND OUTCOME
The
Willow Glen Community Benefit and Improvement District (CBID) Annual Report describes the planned activities for the district in the upcoming fiscal year. The report also details how the assessment rate is calculated, the percentage increase in the assessment rate and justification for the increase. City staff review the report and accompanying budget details, to ensure the CBID services and funds are being managed in compliance with the district management plan. Council acceptance of the annual report ensures that there is no disruption of CBID services and allows the Department of Public Works to authorize the County of Santa Clara to continue collection of district assessments on the County property tax rolls.
COUNCIL AGENDA: 6/6/2023
FILE: 23-825
I
TEM: 2.18
HONORABLE MAYOR AND CITY COUNCIL
May 15, 2023
Subject: Approval of the Willow Glen Community Benefit and Improvement District Annual Report for Fiscal Year 2023-2024
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 Municipal Code of the City 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.
The CBID was approved by property owners and adopted by 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 for all urban consumers and/or other changes in program costs, but not to exceed 5%. The district has an initial term of 15 years, after which it would sunset and need to be re-established to continue beyond 2024. The boundary map (refer to Attachment A – District Map) 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 2023-June 2024 (Report) to the San José City Council (refer to Attachment B – Willow Glen CBID Annual Report for Fiscal Year 2023-2024). The Report, which is the first of two reports for Fiscal Year 2023-2024, will be on file in the City Clerk’s Office prior to the Council meeting. A second report, the Fiscal Year 2023-2024 Financial Report, will be submitted in October 2024 to the 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. Fiscal Year 2023-2024 improvements and activities
3. Cost estimates for improvements and activities in Fiscal Year 2023-2024
4. Method and basis for levying the Fiscal Year 2023-2024 assessment
5. Acknowledgement of revenue to be carried over
6. Other non-assessment revenue
HONORABLE MAYOR AND CITY COUNCIL
May 15, 2023
Subject: Approval of the Willow Glen Community Benefit and Improvement District Annual Report for Fiscal Year 2023-2024
The services provided by the CBID include sidewalk cleaning, beautification of streetscapes, parking management, marketing, promotions, and events. In Fiscal Year 2023-2024 new drought-tolerant plants and bark mulch will continue to be added to beautify 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 Consumer Price Index is 5.60%, however the management plan limits the maximum increase to 5%. City staff has reviewed the Association’s proposal and concurs with the recommendation that assessments increase 5% for Fiscal Year 2023-2024 in order to keep up with rising costs of providing the services within the CBID. The CBID proposed budgeted revenue of $299,060 is reflected on page 8 of Attachment B. The total maximum aggregate assessment levy for Fiscal Year 2023-2024 will be $299,060 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 $12,636. 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 2023-2024 Proposed Operating Budget in the Business Improvement Districts Fund.
The assessment roll and diagram for 2023-2024 will be on file with the City Clerk’s Office approximately two weeks prior to the Council meeting for public review.
On December 16, 2008, Council adopted Resolution No. 74747 forming the CBID. Fiscal Year 2023-2024 is the final assessment year for the CBID’s initial 15-year term. For CBID services to continue beyond December 31, 2024, 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% t of the assessments proposed to be levied;
• A resolution by Council stating its intent to form the CBID for an additional 15-year term. • A public hearing by 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 Council to adopt a resolution forming the CBID.
If the petitions are received by January 2024, the ballot tabulation has the potential to occur prior to July 2024. If approved by the affected property owners, the assessments can be collected through the County property taxes.
HONORABLE MAYOR AND CITY COUNCIL
May 15, 2023
Subject: Approval of the Willow Glen Community Benefit and Improvement District Annual Report for Fiscal Year 2023-2024
EVALUATION AND FOLLOW-UP
The attached Report by the Association sets the budget and proposed assessments for 2023-2024 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.
This report will be submitted to City Council for acceptance once received.
COST SUMMARY/IMPLICATIONS
If the 2023-2024 Willow Glen CBID Annual Report is approved with the 5% increase, the City’s assessment is calculated to be $12,637. 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 the Willow Glen CBID assessments, to cover the City’s assessment, and the appropriation proposed to fund the services and activities proposed in the 2023-2024 Annual Report for the Willow Glen CBID as recommended as part of this memorandum.
Fund
#
Appn
# Appn. Name
Total
Appn.
Rec.
Budget
Action
2023-2024
Proposed Operating
Budget Page*
Last Budget
Action (Date,
Ord. No.)
351 R003 Transfers - General Fund $12,637 N/A 838 06/21/2022 Ord. No.
80592
351 R220 Special Assessments –
Willow Glen CBID
$298,700 N/A 861 06/21/2022
Ord. No.
80592
351 3787 Willow Glen Community
Benefit District
$316,010 N/A 861 06/21/2022
Ord. No.
30790
* The 2023-2024 Proposed Operating Budget is scheduled to be reviewed by City Council on May 16, 2023, approved on June 13, 2023, and adopted on June 20, 2023.
HONORABLE MAYOR AND CITY COUNCIL
May 15, 2023
Subject: Approval of the Willow Glen Community Benefit and Improvement District Annual Report for Fiscal Year 2023-2024
COORDINATION
This memorandum and related documents have been coordinated with the City Attorney’s Office, the City Manager’s Budget Office, and the Department of Planning, Building Code Enforcement.
PUBLIC OUTREACH
This memorandum will be posted on the City’s Council Agenda website for the June 6, 2023 City Council meeting. The Report has been 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. Additionally, the Association’s Board of Directors approved the fiscal year budget at its publicly noticed and held meeting on April 11, 2023.
COMMISSION RECOMMENDATION AND INPUT
No commission recommendation or input is associated with this action.
CEQA
Categorically Exempt, File No. PP18-060, CEQA Guidelines, Existing Facilities.
PUBLIC SUBSIDY REPORTING
This item does not include a public subsidy as defined in section 53083 or 53083.1 of the California Government Code or the City’s Open Government Resolution.
/s/
MATT LOESCH
Acting Director of Public Works
For questions, please contact Stanley Wong, Senior Engineering Technician, at [email protected] or (408) 535-6833, or Joseph Dyke, Senior Transportation Specialist, at [email protected] or (408) 535-6821.
Attachment A: District Map
Attachment B: Willow Glen CBID Annual Report for FY 2023-2024
Attachment A - District Map
ATTACHMENT B