CITY COUNCIL ACTION REQUEST
DEPARTMENT(S)
Transportation
CEQA
Not a Project, File No.
PP17-009, Staff
Reports, Assessments,
Annual Reports, and
Informational Memos
that involve no
approvals of any
City action.
COORDINATION
City Attorney’s Office;
City Manager’s Budget
Office; Planning,
Building and Code
Enforcement
Department; Public
Works Department
Director Approval
/s/
John Ristow
COUNCIL DISTRICT(S)
3 & 6
CMO Approval
2/8/25
SUBJECT: Downtown San Jose Property-Based Improvement District Annual Financial Report
RECOMMENDATION
Approve the Downtown San Jose Property-Based Improvement District Annual Financial Report for Fiscal Year 2023-2024.
BASIS FOR RECOMMENDATION
The downtown San Jose Property Based Improvement District was established by City Council in August 2007, renewed for a 10-year term in 2012, and again in June 2022 for a 10-year term through December 2032. As required by the California Streets and Highways Code (Property and Business Improvement District Law of 1994) and in compliance with the current agreement between the City and the Downtown Property Owners’ Association, an annual financial report along with CPA-reviewed financial statements for the Downtown Property Owners’ Association are required to be submitted to the City by October 1 of each year. The report submitted for Fiscal Year (FY) 2023-2024 meets the requirements of the current agreement. The Financial Report contains the following information as required by the agreement. • Summary of Assessed Services
• Procurement of Goods and Services
• Downtown Property Owners’ Association meeting dates for FY 2023-2024 • FY 2023-2024 Budget Report
• FY 2023-2024 Financial Statements
The City General Fund has been combined with assessment funds to provide baseline, special benefit, and enhanced services in accordance with the current agreement between the City and the Downtown Property Owners’ Association, as well as the Property-Based Improvement District Management Plan and Engineer’s Report. Property-Based Improvement District services have created a cleaner and more vibrant downtown and have been well received by property owners.
This is reflected by the positive results from the 2024-member survey, which indicated a 67% of property owners found the cleanliness of downtown to be improved from the previous year. The beautification and street life projects and Groundwerx ambassadors have also been successful and continue to receive support from Property-Based Improvement District members. Additional program highlights, including cleaning service frequencies and outputs, are detailed in the attached Financial Report for FY 2023-24 (Attachment A). The Financial Statements produced by the accounting firm Armanino is also included (Attachment B).
COMMISSION RECOMMENDATION AND INPUT
No commission recommendation or input is associated with this action.
COUNCIL AGENDA: 2/25/25
FILE: 25-146
ITEM: 2.13
COST AND FUNDING SOURCE
There are no costs associated with this action or no additional funding is needed for the time extension of this agreement.
FOR QUESTIONS CONTACT: Eric Hon, Division Manager, [email protected] Attachments:
Attachment A: Financial Report for FY 2023-24
Attachment B: Financial Statements
Financial Report for FY 2023-24
Submitted by
Downtown San Jose Property Owners’ Association (POA)
October 1, 2024
The downtown San Jose Property-Based Improvement District (PBID), originally formed in August 2007 and renewed in June 2012 and June 2022 for consecutive ten-year terms, is an assessment district (District) that conveys special benefits to the properties located within the District boundaries.
The District encompasses the core of the downtown area bounded approximately by Seventh Street and to the east, St. John and Bassett streets to the north, Highway 87 and the SAP Center to the west and Market and First streets south to Reed Street.
Enhanced cleaning and maintenance services under the auspices of Groundwerx commenced on January 28, 2008.
A new program called the Social Impact Team commenced in June 2023, providing outreach and assistance to the unhoused population as described in our management plan.
Since the implementation of services, property owners have been surveyed annually and the results have been overwhelmingly positive. A sample of the 2024 PBID Annual Survey results show marked improvement in public perception of downtown’s clean and safe services.
Approximately sixty-seven percent (67%) of survey respondents found the cleanliness of downtown to be “much better” or “slightly better” than the previous year. That cleanliness is largely the result of our Groundwerx team, which maintained their stellar approval ratings at approximately eighty-nine percent (89%). Finally, the survey asked respondents to provide direction to the PBID team on what types of improvements or projects should take priority, approximately eighty-one percent (81%) of respondents indicated that they would like the PBID to focus on unhoused services, which aligns with the PBID’s decision to introduce a Social Impact Team (S.I.T.) in the beginning of July 2023.
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Attachment A
Subject: Downtown San Jose Property-Based Improvement District Annual Financial Report
I. Summary of Assessed Services for FY 2023-24
Service frequency Table A is from July 1, 2023 to June 30, 2024. The overall cleaning program has been consistent since the implementation of services. The enhanced cleaning program operates seven days a week, combining the use of mechanized equipment and cleaning by hand.
Sidewalk sweeping and portering services take place from 6 a.m. to 8 p.m. daily. Pressure washing is divided into two shifts (4am-12:30pm, 12pm-8 pm), which covers seven days per week. The District provided 11,740 hours of pressure washing in FY 2023-24, which equals an average 226 hours of pressure washing per week.
Table A includes the cleaning frequencies for the entire PBID district. Baseline cleaning services account for 17% of the total budget, which is equivalent to providing basic portering services daily in the core downtown areas such as Santa Clara, Paseo De San Antonio, SoFA, and San Pedro Square." Additional portering hours throughout the district, including evening and weekends, are part of the enhanced services provided by the PBID.
Table A
Cleaning Proposed in
Management Plan
FY 23-24
Maintenance F.T.E. 13 to 20 16 to 24
Pan & Broom, Litter Removal 7 days/week,
20 hours/day
7 days/week,
20 hours/day
All-Terrain Litter Vacuum/Machine
Sweeping
Daily as Needed 7 days/week,
8 hours/day
Pressure Washing Six to Twelve times
per year
Twelve times per year
Graffiti Reporting/Cleaning Daily as Needed Daily as Needed Light Landscape/Weeds As Needed As Needed
Hot Spot Patrol or “emergency cleaning” As Needed Daily Maintenance of PBID funded beautification
elements
Landscape watering 5
days/week and as
needed.
Landscape watering,
replanting, landscape
pruning, seasonal
changes of flowering
2/10
Attachment A
Subject: Downtown San Jose Property-Based Improvement District Annual Financial Report
Tree trimming Approximately ¼ of
street trees per year
Approximately ¼ of
street trees per year
Other maintenance services such as pole
painting, paver repair and refinishing street
benches.
As Needed Painting 5 days/week.
Other maintenance as
needed.
Table B shows total output for various components of the cleaning program in FY 2023-24. The amount of litter and the condition of the downtown streets resulted in more cleaning services provided by the District than projected in the management plan. Since January 2019, Groundwerx has deployed one all-terrain litter vacuum (ATLVs) allowing for more efficient removal of leaves, dirt and other debris.
Groundwerx provided service to 47 public litter cans (PLC) along First and Second Streets, Paseo De San Antonio, and Fountain Alley by closely monitoring the overflow. This number has been reduced since the VTA Transit Mall Prevailing Wage Contract was awarded to another contractor. At a minimum, the PLCs are emptied once a day, but many are frequently emptied more often. Pan and broom cleaners also wipe down each PLC and paint them as needed throughout the year. A full time painter was added to the team in January 2023 as part of the expansion in services dictated by renewal.
Graffiti clean up continues to be one of Groundwerx’s primary services. Groundwerx removes most tags within 48 hours. Offensive tags are prioritized and are often abated within 24 hours.
In addition to graffiti tags, Groundwerx removes stickers and handbills that are attached to public spaces and street fixtures.
A small portion of District graffiti is forwarded to the City contractor or private property owners.
Table B
Clean Team Services: Annual Output:
Pan/Broom 21,761 hrs
Pan/Broom: Debris Removal 483,500 lbs
Hot Spot Cleaning/Calls for Service 6,385
Pressure Washing 11,740 hrs
Trash Collected (Trash cans emptied) 209,200
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Attachment A
Subject: Downtown San Jose Property-Based Improvement District Annual Financial Report
All-Terrain Litter Vacuum: Debris
Removal 86,475 lbs
Graffiti abated by Groundwerx 37,483
Groundwerx ambassadors reinforce the image of a friendly downtown by offering visible assistance to downtown employees, visitors and residents. Ambassadors perform a variety of tasks, such as providing information to visitors, escorting pedestrians and employees to their vehicles (or other destinations in the District) and reporting graffiti and other messes to the appropriate party.
Ambassadors also report instances of vandalism and property damage to property owners and work with local social service agencies to provide referrals. Ambassadors have been called upon more frequently to interact with downtown’s unsheltered population, including coordinated outreach with the Social Impact Team.
The ambassador program incorporates mobile and foot patrols seven days a week. Ambassadors begin their routes at 6 a.m. and provide services until 8 p.m. during the week, with extended hours to 10 p.m. on Friday and Saturday.
Ambassadors are frequently the first point of contact
with many individuals in downtown’s homeless population. Ambassadors are trained on the nuances of downtown San Jose and carry helpful information such as walking maps, bus and light rail schedules, special event flyers and other collateral.
They are equipped with handheld
devices with Internet access, which allows them to access information at any time. Reporting incidents and property conditions are also made easier and more effective by this technology.
Ambassadors also play an important role in identifying potentially troublesome situations and contacting the appropriate authorities.
Table C depicts the regular deployment of Groundwerx
ambassadors. Hours and schedules may be adjusted to accommodate downtown special events.
Table C
Information and Safety
Ambassadors
Proposed in Management
Plan
FY 23-24
Safety Ambassadors F.T.E. 5-9 5-10
Coverage 7 days/week,
12-16 hours
7 days/week,
12-16 hours
Table D represents a statistical summary of the ambassador program for FY 23-24.
Ambassadors make business contacts on a regular basis as part of the enhanced services of the PBID.
These informal “check-ins” allow ambassadors to convey information to businesses and property owners such as resource referrals and property condition reports. This type of interaction also enhances the visibility of ambassadors and helps promote a friendly downtown. 4/10
Attachment A
Subject: Downtown San Jose Property-Based Improvement District Annual Financial Report
The “Sitting/Lying” statistic reflects ambassador efforts in making downtown more friendly for the general public. The presence of ambassadors can discourage vagrancy and loitering.
Ambassadors work with the Social Impact Team to assist the downtown homeless population who are interested in obtaining services.
Table D
Safety Ambassador Services: Annual Output:
Safety Ambassador hours 17,814
Directions given 6,534
Business contacts 4,755
Sitting/Lying (loitering) 7,400
Personal safety escorts 41
Bike patrol hours 268
The Social Impact Team (SIT) is a dedicated initiative under the San Jose Downtown Association’s Property-Based Improvement District (PBID). The mission of the outreach ambassadors is to support the vulnerable unsheltered population in downtown San Jose through compassionate outreach and effective service coordination. Table E outlines the service frequency of the outreach program from July 1, 2023, to June 30, 2024. The key functions of the outreach ambassadors are to build trust and connections, collaborate with Groundwerx and other outreach organizations. The outreach program provides services seven (7) days a week from 8 a.m. to 5 p.m.
Table E
Outreach Ambassadors Proposed in Management
Plan
FY 23-24
Outreach Ambassadors F.T.E. 5 5
Coverage 7 days/week,
8 hours
7 days/week,
8 hours
5/10
Attachment A
Subject: Downtown San Jose Property-Based Improvement District Annual Financial Report
Table F presents metrics captured by our outreach ambassadors during their daily shifts. These ambassadors follow up on hotspots in our district to make contact with the downtown unhoused population, building rapport with individuals on a daily basis. The SIT team is equipped with handheld devices to access the Homeless Management Information System (HMIS) system in the field for Vulnerability Index – Service Prioritization Decision Assistance Tool (VI-SPDAT), enabling them to better assist the unhoused in connecting with outreach services. Recently, our outreach ambassadors underwent training provided by Santa Clara County to administer Narcan to individuals who may be experiencing overdose symptoms.
The SIT ambassadors coordinate with local outreach programs such as PATH, HomeFirst, and the CSJ Housing Department. The SIT program conducts joint outreach with the CSJ-contracted outreach provider PATH twice a week. This is a great opportunity for our outreach programs to coordinate with each other to provide a better chance of getting help to the downtown unhoused population. Since its inception, SIT has successfully connected numerous individuals with housing, legal identification, and other critical resources. Our efforts have led to significant improvements in the quality of life for many downtown residents, contributing to a safer and more welcoming community for all.
SIT responds directly to concerns from downtown members and businesses. SIT is reachable through the Groundwerx Everywhere app and Groundwerx dispatch line, ensuring timely and efficient responses to any issues or requests for assistance.
Table F
Outreach Ambassador
Services:
Output:
Outreach hours 2,673
Outreach Contacts 4,274
Referral to Partner Agencies 2,044
Kits Distributed 1,715
SIT Requests 222
Streetscape beautification and image enhancements, also referred to as Street Life Projects, comprise the third component of the core PBID services.
The PBID continues to provide general
maintenance of the PBID’s previous installations. The Streetlife scope includes greening initiatives such as landscaping services, planting and maintaining seasonal hanging baskets, and urban canopy maintenance and plantings. It also includes partnership projects such as the SoFA Pocket Park and streetscape enhancements in the form of decorative lighting, murals, art crosswalks, and volunteer activations.
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Attachment A
Subject: Downtown San Jose Property-Based Improvement District Annual Financial Report
Our Tree Maintenance program provides support to the City of San Jose in the trimming, pruning, treatment, and planting of trees within our PBID boundaries. However, activity was reduced last year due to the removal of tree grates in FY 22-23. Limited planting occurred as trimming and pruning took precedence. Additionally, the program did not have a Street Life manager from December 2023 to March 2024, which will be reflected in the FY 23-24 report.
Table G
Beautification and Street Tree Maintenance: Output:
Number of trees trimmed 455
Number of trees treated (disease or damage prevention) 32 Number of trees receiving additional care (removal of old lights, attachments, etc)
8 Number of new/refreshed flowers installed in PBID Planters 1,518
Mural Program: Last year, downtown San Jose saw the installation of large-scale murals and in addition to this we also added a small-scale mural on the Hotworx utility box (46 W. Santa Clara street), contributing to the growing public art landscape downtown. More progress of our mural program will be seen in this upcoming fiscal year.
Santa Clara Corridor Project: This year, the board has taken on a significant new initiative focused on the Santa Clara Corridor, aiming to enhance the aesthetics of downtown's main street.
We've started with simple yet impactful improvements; replacing broken windows, upgrading lighting, and repainting buildings. These efforts are designed to make the area feel more welcoming, especially on a stretch of blocks that has faced challenges in the past.
MOMENT San Pedro Square has seen a slight downward sales trend over the last six months compared to last year. Despite fluctuating sales numbers, the MOMENT businesses continue to be very happy with the spaces themselves and maintain ~35 open hours per week. Across the board, businesses are doing well on event days, which include events produced by the tenants themselves, by our organization, MOMENT, or by third-parties. The highest grossing sales day for Woofboard and Plant Slut was during the San Pedro Square Block Party held on July 24.
● Number of current participating businesses: Four
○ Ashley Michelle Home opened their doors Sept. 21, joining existing tenants Woofboard, Plant Slut, and BohoMoonArt.
● Average gross sales per tenant per month:
○ Avg of last six months (March 2024 to August 2024) - $17,014.19 7/10
Attachment A
Subject: Downtown San Jose Property-Based Improvement District Annual Financial Report
○ Avg of last 12 months (August 2023 to August 2024) - $19,130.21 ● Total jobs created (not including owner of operators):
○ 6. Tiny Keyboards hired four staff members. Bohomoonart and Plant Slut have hired one staff member each.
The PBID’s business development services are focused on helping recruit and retain district businesses.
During the year, 242 small businesses, brokers, developers and similar stakeholders were assisted with the city permitting process, available office or retail spaces, pricing, incentives, referrals, and other issues related to the downtown business environment.
The theme of our work this year has been “re-opening.” We continued to provide location assistance, permit assistance for the surge of businesses looking to open or reopen downtown now that the major effects of Covid and the economic issues related to the lockdown period are over. While our outreach and referral numbers are down a bit this year, please keep in mind that for the last two fiscal years we were operating under a federal EDA grant that created a position solely focused on outreach, whereas for this fiscal year, we are back to having only one FTE Business Development Manager provide all of these services.
Between January and June 2024, the coordination of business grand openings/ribbon cuttings between the City of San José’s Office of Economic Development, Carlos Velasquez, and SJDA, Juan Carlos Aguirre, has improved, strengthened, and streamlined thanks to the leadership of Carlos, Public Information Manager.
In the same time period there were a total of eight (8) grand opening/ribbon cuttings that SJDA assisted with including, Cloud Kitchen, Dream Club Lab, Urban Putt, MOMENT Paseo, Purple Lotus, Nirvana Soul (at SJSU), Home Eat, and the re-opening of Angelou’s Mexican Grill.
Placer.ai software offers valuable insights for place management organizations, like SJDA, by providing real-time data on foot traffic, visitor demographics, and consumer behavior. Since acquiring Placer.ai software in the Fall of 2023, the PBID team has been able to help members make data-driven decisions to enhance marketing strategies, improve event planning, and attract visitors by understanding patterns of visitation and engagement. In the future, Placer.ai can help assess the impact of initiatives and investments, optimize resource allocation, and identify trends in downtown activity, ultimately supporting efforts to create vibrant, thriving downtown environments.
The PBID enhanced security program completed its seventh year of service in FY 23-24. These off-duty SJPD officers continued their focus in addressing quality-of-life issues in the downtown area.
The program is scheduled to provide 50 hours of weekly coverage, and has been fully staffed since April 2018. Typical program hours are Monday and Thursday from 7 a.m. to 12 p.m. and Tuesday, Wednesday and Friday from 10 a.m. to 3 p.m.
Table H
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Attachment A
Subject: Downtown San Jose Property-Based Improvement District Annual Financial Report
Secondary Enforcement Unit (SEU): Output:
Loitering Check 198
Business Contact 43
Premise Check
197
Encampment Check 34
II. Procurement of Goods and Services
The downtown Property Owners’ Association (POA) certifies all funds were expended in accordance with the Property and Business Improvement District Law of 1994, Section 36600 et seq. of the State of California Streets and Highways Code (PBID Law).
A fair and competitive
process was maintained during the procurement of goods and services as per the agreement with the City of San Jose. The POA substantially followed the procurement guidelines provided by the City of San Jose, Council Policy No. 0-35 and in accordance with the POA procurement policy adopted on August 18, 2009.
A primary use of the District’s FY 2023-24 assessment funds continued the agreement with Block-by-Block (BBB), to provide cleaning and ambassadorial services.
The POA and BBB
worked with the Office of Equality Assurance (OEA) to ensure wages complied with the City’s Living Wage policy.
District funds were used to commission artists for various murals downtown, provide enhanced maintenance and landscaping services.
III. Downtown POA meeting dates FY 2023-24:
August 22, 2023
October 13, 2023 – PBID Annual Meeting
November 14, 2023
January 30, 2024
March 19, 2024
May 21, 2024
IV . FY 2023-24 Budget report
Please see attached FY 2023-24 final reviewed financial statement for details.
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Attachment A
Subject: Downtown San Jose Property-Based Improvement District Annual Financial Report
The total PBID revenue for FY 2023-24 was $5,576449. Assessment revenues totaled $4,622,501 and the City’s baseline contribution was $500,818. Additional revenue was generated through fee-for-service agreements and grants.
Total program administrative costs were $845,293. The POA incurred several unexpected expenses this fiscal year that led to an increase in admin costs, including a 30% increase in health insurance costs for employees, City requirements to add auto insurance to our coverage, a major HV AC repair for the office, and additional expenses for contractors and overtime for team members due to staff turnover.
A balance of $856,549 was carried over, which constitutes the POA’s reserves. The POA’s prudent reserves allow the District to have the equivalent of three months operating capital and receive a two percent discount by paying Block by Block, its primary Groundwerx service provider, on a quarterly schedule.
The POA continues to leverage funds by negotiating discounts and conservatively projecting program costs.
The current fund balance will allow the POA to maintain its current service levels despite anticipated increases in operating costs, such as the City’s mandated living wage increases.
The POA will also retain the ability to add services as needs arise within the District.
The POA no longer has a fee-for-service contract with VTA and all outstanding payments related to a previous prevailing wage accounting issue have been received.
Additional small-scale fee-for-service contracts are in place with the San Jose Museum of Art, Children's Discovery Museum and Valley Oaks Partners.
V . FY 2023-24 Audited Financial Statement.
Please see attached Audited Financial Statement
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Attachment A
Subject: Downtown San Jose Property-Based Improvement District Annual Financial Report
FY 2023-24 PBID Budget
1 9/26/24 FY 23-24
2 Final
3 Actuals
4 REVENUE
5 6 Assessments
7 Assessments - thru SCC 3,689,921
8 less assessment charges SCC (15,000)
9 Assessments - exempt thru SJ 932,580
10 less assessment charges SJ (10,000)
12 13 Net Assessments 4,597,500
14 15 City baseline 500,818
16 General benefit 95,603
17 Contracts 213,963
18 Street Life Investors 140,000
19 Miscellaneous & Interest 3,563
20 21 TOTAL REVENUE 5,551,448
22 23 EXPENSES
24 25 CLEAN & SAFETY TEAMS
26 Contract service 2,904,318
27 Contract baseline 500,818
28 Total BBB Contract 3,405,136
29 30 IMAGE ENHANCEMENTS
31 Street Life Plan Projects 292,244
32 Maintenance completed projects 47,425
33 Enhanced Maintenance 24,449
34 Street Tree maintenance 10,091
35 Subtotal 374,209
36 37 DISTRICT ENHANCEMENTS
38 Business development program 151,050
39 Secondary Employment Unit 104,175
40 Fee for Service Contracts 283,250
41 Community Engagement 2,758
42 Social Impact Team 411,130
43 Miscellaneous 1,256
44 Subtotal 953,619
45 46 ADMINISTRATION
47 SJDA Management 807,844
48 Insurance 1,834
49 Professional Services 10,328
50 Office Supplies 2,787
51 Misc 22,500
52 less 2% prepay contracts (67,240)
53 Subtotal 778,053
54 55 TOTAL EXPENSES 5,511,017
56 57 REVENUE NET OF EXPENSES 40,431
58 59
60 Beginning Fund Balance 816,118
61 62 Projected Ending Fund Balance 856,549
Attachment A
Subject: Downtown San Jose Property-Based Improvement District Annual Financial Report
REVENUE
Property Based Improvement District (PBID) Assessments 4,622,501$ City of San Jose Baseline Contract Services 500,818
Other Contracts and Miscellaneous 453,130
TOTAL REVENUE 5,576,449
EXPENSES
Clean Teams Program 3,362,896
District Enhancements & Street Tree Maintanence 878,300 Street Life Program 345,354
Secondary Employment Unit (SEU) Policing Program 104,175 Business Development Program 151,050
Management & Administration 694,243
TOTAL EXPENSES 5,536,018
NET REVENUE (EXPENSES) 40,431
BEGINNING FUND BALANCE 816,118
ENDING FUND BALANCE 856,549$
STATEMENT OF REVENUE AND EXPENSES
SAN JOSE DOWNTOWN PROPERTY OWNERS' ASSOCIATION
Year ended June 30, 2024
FY 2023-24
Property Owner
Assessments
83%
City Baseline
9%
Other Contracts &
Miscellaneous
8%
Revenue Sources
Total Revenue: $5,576,449
Clean Teams,
61%
District Enhancements,
16%
Street Life, 6%
SEU Police, 2%
Business
Development 3%
Management &
Administration,
12%
Program Expenses
Total Expense: $5,536,018
Attachment A
Subject: Downtown San Jose Property-Based Improvement District Annual Financial Report
Attachment B
Subject: Downtown San Jose Property-Based Improvement District Annual Financial Report
Attachment B
Subject: Downtown San Jose Property-Based Improvement District Annual Financial Report
Attachment B
Subject: Downtown San Jose Property-Based Improvement District Annual Financial Report
Attachment B
Subject: Downtown San Jose Property-Based Improvement District Annual Financial Report
Attachment B
Subject: Downtown San Jose Property-Based Improvement District Annual Financial Report
Attachment B
Subject: Downtown San Jose Property-Based Improvement District Annual Financial Report
Attachment B
Subject: Downtown San Jose Property-Based Improvement District Annual Financial Report
Attachment B
Subject: Downtown San Jose Property-Based Improvement District Annual Financial Report
Attachment B
Subject: Downtown San Jose Property-Based Improvement District Annual Financial Report
Attachment B
Subject: Downtown San Jose Property-Based Improvement District Annual Financial Report
Attachment B
Subject: Downtown San Jose Property-Based Improvement District Annual Financial Report
Attachment B
Subject: Downtown San Jose Property-Based Improvement District Annual Financial Report
Attachment B
Subject: Downtown San Jose Property-Based Improvement District Annual Financial Report