T-OCM-150001/62151 1
Council Agenda:
Item No.:
RESOLUTION NO. ______
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF SUNNYVALE CONFIRMING THE DOWNTOWN
SUNNYVALE BUSINESS IMPROVEMENT DISTRICT
ANNUAL REPORT FOR FY 2022/23 AND TO LEVY AND
COLLECT AN ANNUAL ASSESSMENT FOR THE
DOWNTOWN SUNNYVALE BUSINESS IMPROVEMENT
DISTRICT FOR FISCAL YEAR 2022/23
WHEREAS, on April 5, 2022, the City Council of the City of Sunnyvale (the “City”) adopted Resolution of Intention to Levy and Collect an Assessment and to Reauthorize the Downtown Sunnyvale Business Improvement District (Resolution No. 1111-22) (the “District”), to levy and collect a benefit assessment on all businesses, trades, professions, and vendors within said District, the proceeds of which shall be used for the public purposes herein described in the Parking and Business Improvement Area Law of 1989, (commencing with Section 36500), of the California Streets and Highways Code (the “Act”) and Title 3, Chapter 3.60 of the Sunnyvale Municipal Code; and
WHEREAS, the City Council conducted a public hearing on the reauthorization of the assessment, having given due notice thereof as required by law, on May 3, 2022, beginning at 7:00 p.m. at City Hall, 456 West Olive Avenue, Sunnyvale, California, and every interested person was provided an opportunity to object to or protest the report, the proposed improvements and the activities to be funded from levy of the assessments.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SUNNYVALE THAT:
1. Report. The City Council hereby confirms the Business Improvement District Annual Report for FY 2022/23 (“Annual Report”) as set forth in Exhibit A.
2. Boundaries. The City Council hereby approves of the boundaries of the Business Improvement District and the benefit zones within the area as set forth in Exhibit A.
3. Assessment. The City Council finds that the amount of the assessments has fairly and properly apportioned the cost of the improvements to each business in the District in proportion to the estimated benefits to be received by each business. The City Council hereby confirms the assessment and levies each individual assessment, as provided for in the Annual Report, for fiscal year 2022/23.
Attachment 1
DRAFT 4/12/22_________
T-OCM-150001/62151 2
Council Agenda:
Item No.:
4. Protest Hearing. The City Council conducted a hearing concerning the reauthorization of the business improvement district. At the conclusion of the public hearing, the City Council considered comments from the affected businesses, considered modifications in the report, and confirmed the report as originally filed or as changed by it, which constitute the levy of the assessment for the fiscal year 2022/23.
5. Method of Collection. The benefit assessment for Downtown Sunnyvale businesses shall be billed and collected by July 29, 2022. Payments will be considered late if not received on or before the due date listed on the invoice. The business will accrue late fees for every 30 days delinquent after the original due date. A 10% late penalty will be assessed to in addition to the assessment amount for every 30 days payment is late. The penalty fees will be accrued for up to five months after original due date. If payment is not received after five months, the City will forward delinquent accounts to collections agency for further action. Once the business is assigned to the collections agency, additional fees will accrue.
Adopted by the City Council at a regular meeting held on May 3, 2022, by the following vote:
AYES:
NOES:
ABSTAIN:
ABSENT:
RECUSAL:
ATTEST: APPROVED:
__________________________________ _________________________________
DAVID CARNAHAN
City Clerk
LARRY KLEIN
Mayor
(SEAL)
APPROVED AS TO FORM:
___________________________________
JOHN A. NAGEL
City Attorney
Attachment 1
BID Renewal Request
for 2021/2022 - 2022/2023
What is a BID
A BID (Business Improvement District, authorized by State of California law) provides funding for promoting and improving a specific area. All business license holders inside the said district are self-assessed with an annual fee based on anticipated benefits they receive from the BID. The BID is reauthorized yearly by the City Council at the request of the businesses’ Board of Directors. A BID is used by over 200 business areas in California, including Mountain View, Palo Alto, Santa Clara, Morgan Hill, and San Jose.
The BID has legal requirements to be reauthorized. Specifically, the City Council must first approve the Annual Budget and then adopt a Resolution of Intent (ROI) to reauthorize the BID for another year. Once the ROI is adopted, a public hearing must be held during a Council meeting. Businesses pay into the BID, and the funds collected can only be used for projects within the BID boundaries. The business community maintains complete control of all BID funds collected.
The formula for defining our BID assessment amount is determined by the Board members and not the City.
The Sunnyvale Downtown Association (SDA) Board considers the businesses’ type, size, and location and selects the most equitable formula for every kind of business. Assessments are levied to businesses based on relative benefit from annual activities. The City collects the fee on an annual basis. Typically, BID assessments are included as a separate charge from the business license tax and billed to every business within the BID boundaries. All assessment funds collected by the City are returned to the BID through annual contract agreements. The City does collect a fee for administrative costs associated with this service. The price is reviewed and adjusted annually as needed.
The current Sunnyvale Downtown Association Board of Directors are Chair - Gary Gold of Dr. Gary Gold & Associates, Secretary – Leigh Odum of Leigh's Favorite Books, Treasurer – Katie Voong of KTea, Members At Large – Amit Rajgarhia of Dish Dash, Irene Murphy of Fibbar MaGees, Rahul Nair of The Oxford Kitchen & Gastropub and Michael Johnson, SDA Executive Director.
The mission of the SDA
Sunnyvale Downtown Association (SDA) is a non-profit membership-based organization whose mission is to promote, advocate and enhance the vitality of downtown Sunnyvale. The SDA is funded by Business Improvement District (BID) fees, City grants, sponsorships, and revenue-producing events.
The Sunnyvale Downtown Association serves as the voice of downtown Sunnyvale by:
• Advocating for policies, programs, and events that support the economic growth of the downtown • Acting as the downtown marketing arm, voice, and ambassador for the City of Sunnyvale • Producing attractive events for the community
• Promoting downtown as a premier venue for other groups to produce events • Working with other community-based organization's that share in the growth, beautification, and continued vitality of downtown Sunnyvale
• Serving as the primary information portal of all events, attractions, and programs from the downtown core.
EXHIBIT A
Attachment 1
Budget
2021/22 BID fees collected from the businesses totaled $35,000 (9.7% of Income), and the City of Sunnyvale contribution with community grants of $56,166 (15.5%) acts as SDA foundational funding. The rest of SDA revenue comes from a combination of developer support, corporate sponsorships, sales/concessions, and event participant fees. By state law, we use the BID funds to support general business activities, promote public events, decorate public places, and provide entertainment inside the BID area. BID funds also are for advertising, marketing materials, digital guides, operational expenditures, websites, e-letters, street/holiday lighting, and events.
This year we received City support city grants, in addition to developer and corporate sponsorship funding, in addition to sales and concessions we generated at events. These funds help us maintain the Sunnyvale Downtown (BID) overall operation during this challenging year. As stated previously, we can't guarantee that we will have this same level of developers and sponsorship support in any given year. So, we rely on all support channels to ensure fiscal accountability.
On February 2, 2022, the SDA Board of Directors approved the BID renewal. Below we have included a brief overview of some significant expense areas.
Account 2021/22
Actual Forecast
2022/23
Projected
INCOME
BID Fees 35,000 38,000
City Contributions 40,000 40,000
Community Grants 16,166 11,000
Developer Support & Funding 152,000 150,000
Events Revenue (Sponsorship &
Sales) 87,118 123,450
Donation 5,000 -
TOTAL INCOME 335,284 362,450
EXPENSES
Personnel Related Expenses 158,365 194,000
Office/General Admin Exp 86,175 81,000
City/Permit Fees 1,900 2,500
Covid 19-Events & Activities 30,000 9,000
Equipment 5,000 5,500
Event Expenses** 44,062 60,200
TOTAL EXPENSES 325,502 352,200
TOTAL PROFIT/LOSS 9,782 10,250
While last year we were still able to deliver half of the events we usually produce. This year, the SDA aims to increase the 2022/23 season to forty-one events, including partnering events in 2022. Twenty-one of these seasons’ events provide “No sales revenue” and support the community, city, and downtown businesses.
Attachment 1
Events
• 18 Events: Music While Dining on Murphy - Every Wednesday & Thursday in May and June. No sales revenue.
• 1 Day Event: Magic of Sunnyvale & Wine Stroll - May 7th • 1 Day Event: Pride Day - (TBD in partnership with the City of Sunnyvale & Sunnyvale Chamber of Commerce). No sales revenue.
• 2 Day Event: Art & Wine Festival - June 4th & 5th (In collaboration with the Sunnyvale Chamber of Commerce)
• 8 Events: Summer Series Every Wednesday - July and August • 8 Events: Jazz & Beyond – Every Saturday – July, and August • 1 Day Event: Technology Expo (TBD in partnership with the City of Sunnyvale). No sales revenue. • 1 Day Event: 18+ Costume Pet Parade (In collaboration with Duo-DuoProject.org. No sales revenue. • 1 Day Event: Holiday Tree Lighting. No sales revenue-generating event.
These events are significant to continue to attract new visitors to our vibrant, growing downtown as well as community pride. The SDA continues to partner with the Cityline and other developers moving forward in this next phase of the downtown’s development. We distribute updates of downtown construction, road closures, news, and additional project information that affects downtown business and the community.
Event Sponsorships & City Contribution
We are grateful for ongoing support from the city and sponsors who have helped keep our SDA events growing and serving the community in 2021/22. We want to thank the City of Sunnyvale, CityLine Sunnyvale, Minkoff Group, El Camino Health, Google, Facebook. LinkedIn, Specialty Waste, Murphy Square, StarOne Credit Union, and City National Bank for continuing their support.
The SDA and our downtown businesses will continue to need City and other Sponsorship support for these events now more than ever. With the downtown development moving forward, minimum wage increases, and COVID 19 continues to impact customers’ not being comfortable going out as often. These events allow business owners an opportunity to weather this period.
Without sponsorships and City support, we could not continue to deliver the events year over year, and it’s critical to Sunnyvale’s downtown businesses. Events help attract new consumers and visitors to our downtown.
Each year, we wait until February to evaluate what sponsorship support we have coming in. We always need to plan months ahead to ensure that we can deliver the events the SDA puts on annually. It’s always hard to predict what our budget looks like.
Event-Related Financial Breakdown
Our focus in 2022/2023 has continued to be addressing our SDA businesses’ needs amidst the ongoing COVID-19 pandemic impacting our downtown district. Businesses everywhere in Sunnyvale have struggled to keep their doors open, and employees are working. Unfortunately, some of our businesses, as well as throughout the city, could not continue doing business due to overhead costs and staffing challenges. At the same time, we have continued to work through the many financial challenges due to some corporate sponsorship reductions due to the lack of a full annual event schedule. We were fortunate to have received support from Community Grants, Annual City Support, developers, support, and critical local and corporate sponsorship help this year.
Attachment 1
Account 2021/22
Actual Forecast
2022/23
Projected
EVENT INCOME
Summer Series 19,726 42,950
Jazz & Beyond 16,017 24,000
Wine Stroll 29,000 33,500
Tree Lighting 12,500 13,000
Music on Murphy 9,875 10,000
TOTAL EVENT INCOME 87,118 123,450
** EVENT EXPENSES
Summer Series 10,900 20,000
Jazz & Beyond 10,419 13,500
Wine Stroll 12000 15000
Tree Lighting 4,042 5,000
Music on Murphy 6700 6700
TOTAL EVENT
EXPENSES 44,062 60,200
** The event expenses only reflect general marketing and promotional material, the day of staffing, Wine, Beer, Performers, and some equipment. It does not include pre-event preparation costs for Staff labor to follow up with vendors, host locations coordination, design time for marketing products, booking bands, volunteer coordination, Poster design, Flyer design, Social Media outreach & Website, ticket sales, beverage sales, and various other task required to deliver the SDA events annually. Also, event expenses don’t reflect our “Stronger Together” campaign, marketing, or payout to businesses for the “downtown bucks.” Overview
The 2021/22 year proved successful even with the many challenges Sunnyvale Downtown Association experienced. We invested in better financial strategies, operational staffing, management tools, and marketing solutions early in the year. At the end of last year, we moved into our newly acquired office on Historic Murphy Avenue.
We invested in the new SDA Website, which should go live within 30 days. We are adding new conference room technology to better prepare for the new way business will be performed. Our office worker stations have laptops rather than desktop computers, so our staff is flexible. The conference Room and Training room allow our SDA businesses to meet with vendors and customers and schedule training off-site.
Thanks to corporate donations, we will have laptops available for training sessions on things like learning social media skills, setting up an effective “Google My Business” page, Cyber Security tools, and how to use them, as well as many other possibilities.
Although we dealt with COVID-19 challenges, we still delivered sixteen Music while Dining on Murphy events, four-Summer Series concerts, four Jazz & Beyond concerts, and the annual Holiday Tree Lighting Ceremony.
This included performances by local school choirs and local community dance organizations.
Attachment 1
The SDA continues to work with Cityline and other developers, property managers, and the City of Sunnyvale to promote cohesion between the existing businesses in Sunnyvale and the expansion of one Sunnyvale downtown.
We want to thank all the Sunnyvale Downtown Businesses, who without their participation and support, this would not be possible. We appreciate the many sacrifices that our BID members have endured with the continued growth of our downtown. Moving forward, we are excited and optimistic about the future and its possibilities.
Future
Keeping the BID Fee assessment in conjunction with the City contribution provides the foundational funding for our organization. The SDA’s goal is to continue producing quality events and promoting downtown Sunnyvale as a great place to shop, dine, work and live. These events are significant to continue to attract new visitors to our vibrant, growing downtown as well as community pride.
Understand that our BID fees are a self-imposed tax to the downtown businesses. Outside of paying their standard fees, taxes, and licenses associated with owning and operating a business.
We appreciate that you have continued to support the BID, and we don’t take your support for granted. As always, we continue to be good stewards of all funds, grants, and sponsorships that we receive and consider you as partners with the common goals for a vibrant downtown.
This past year focused on building an infrastructure poised to handle the many changes coming forward. New construction will be going on for the next few years, new businesses looking for direction and support in their new community, new challenges we all will share as the Pandemic slowly fades, and we start the rebuilding process.
Questions contact:
Mike Johnson, SDA
Executive Director, at 408-480-5437
Attachment 1
IOWA
EVELYN
MATHILDA
TAAFFE
SUNNYVALE
CHARLES
MURPHYWASHINGTON
CARROLL
HENDY
FLORENCE
ARIES OLSON
MCKINLEY
MC KINLEY
ANGEL
FRANCES
FLORA VISTA
WAVERLY
ALTAIR
BAYVIEW
WB EVELYN TO NB MATHILDA
ANAHEIM
SB MATHILDA TO WB EVELYN
POLARIS
BOOKER
MATHILDA
MC KINLEY
MURPHY
TAAFFE
MURPHY
FRANCES
FRANCES
IOWA
EVELYN
MATHILDA
TAAFFE
SUNNYVALE
CHARLES
MURPHYWASHINGTON
CARROLL
HENDY
FLORENCE
ARIES OLSON
MCKINLEY
MC KINLEY
ANGEL
FRANCES
FLORA VISTA
WAVERLY
ALTAIR
BAYVIEW
WB EVELYN TO NB MATHILDA
ANAHEIM
SB MATHILDA TO WB EVELYN
POLARIS
BOOKER
MATHILDA
MC KINLEY
MURPHY
TAAFFE
MURPHY
FRANCES
FRANCES
0 260 520130 Feet
Legend
ZONE A
ZONE B
ZONE C
DOWNTOWN BUSINESS IMPROVEMENT
DISTRICT ZONES
-
Attachment 1
Actual Projected Notes
21/22 22/23
Revenue
City Contributions
Community Grants 16,165.86$ 11,000.00$
City Contributions 40,000.00$ 40,000.00$
BID Funds 35,000.00$ 38,000.00$
Total City Contributions 91,165.86$ 89,000.00$ Developers Support & Funding 152,000.00$ 150,000.00$ Holiday Tree Lighting
Sponsorships 12,500.00$ 13,000.00$
Total Holiday Tree Lighting 12,500.00$ 13,000.00$ Magic of Sunnyvale Wine Stroll
Sales 17,000.00$ 21,000.00$
Sponsorships 12,000.00$ 12,500.00$
Total Magic of Sunnyvale Wine Stroll 29,000.00$ 33,500.00$ Summer Series
Sales 5,076.00$ 15,000.00$
Vendors 400.00$ 1,200.00$
Sponsorships 14,250.00$ 26,750.00$
Total Summer Series 19,726.00$ 42,950.00$ Jazz & Beyond
Sales 4,142.18$ 11,000.00$
Sponsorships 11,875.00$ 13,000.00$
Total Jazz & Beyond 16,017.18$ 24,000.00$ Music on Murphy
Sponsorships 9,875.00$ 10,000.00$
Total 9,875.00$ 10,000.00$
Donation
5,000.00$ -$
Total Donation 5,000.00$ -$
Total Revenue 335,284.04$ 362,450.00$
Expenses
Administrative
Insurance 8,635.31$ 12,000.00$ D&O , Workers Comp & Events Marketing & Advertisement 15,900.00$ 22,000.00$
Bookeeping/Accounting 6,440.00$ 5,000.00$
Office Supplies & Expenses 14,000.00$ 6,500.00$
Rent 32,000.00$ 27,500.00$
Utilities 1,700.00$ 3,000.00$
Telephone & Website 7,500.00$ 3,000.00$
Travel Expense (CDA Conference) -$ 2,000.00$
Total Administrative 86,175.31$ 81,000.00$ Covid 19-Events & Activities
Stronger Together Campaign 1,000.00$ 1,500.00$
Ecommerce Workshops & Consulting 2,000.00$ 3,500.00$
Food and Gift Cards for SDA Employees not working 15,000.00$ -$ Website Development and ongoing maintenance 12,000.00$ 4,000.00$ Visitor Guide App -$ -$
Total Covid 19-Events & Activities 30,000.00$ 9,000.00$ Event Expenses
Building Permit Fees
City (event) Permits & Rental Fees 1,900.00$ 2,500.00$ Holiday Tree Lighting 4,042.23$ 5,000.00$
New Equipment & Maintenance 5,000.00$ 5,500.00$
Magic of Sunnyvale Wine Stroll 12,000.00$ 15,000.00$
Music on Murphy 6,700.00$ 6,700.00$
Summer Series 10,900.00$ 20,000.00$
Jazz & Beyond 10,419.32$ 13,500.00$
Total Event Expenses 50,961.55$ 68,200.00$ Staffing
Exec. Director Compensation 95,000.00$ 110,000.00$
Staff Compensation 45,000.00$ 55,000.00$
Employee Taxes 10,000.00$ 14,000.00$
Contract Labor 8,364.87$ 15,000.00$ For part-time Event Coordinator and contract labor support Total Staff & ED Compensations/Commission 158,364.87$ 194,000.00$ Total Expense 325,501.73$ 352,200.00$
Profit or Loss 9,782.31$ 10,250.00$
Here are a few reasons City Support is always important ~ Sponsorships vary from year to year. BID staff continues outreach to maintain and increase sponsorship amounts
FISCAL YEAR
~ Additional staffing is required to meet the new demand of work requirements to manage added correspondence, work with developers, additional events, city communications and general day to day operations
~ Our SDA businesses need this additional support more than ever now, with the new changes coming in 2021/22 that will make it even harder to keep their doors ~ We continue to work with outside community & non-profits to help in showcasing and promoting their causes in the downtown for better visibility, This also helps our downtown businesses as well.
Attachment 1
BID Zones & Fee Breakdown
ZONE A ZONE B ZONE C
_______________________________________________________________ Retailers,
Restaurants, Bars $500 $300 $150
_______________________________________________________________ Service $300 $200 $100
Businesses
_______________________________________________________________ Lodging $10/rm. $10/rm. $10/rm
________________________________________________________________ Professional
Services $100 $100 $100 Businesses
________________________________________________________________ Financial Institutions $500 $500 $500 ________________________________________________________________ Business type definitions:
Retail and Restaurant: Businesses that buy and resell goods, examples are clothing stores, shoe stores, office supplies as well as businesses that sell prepared foods and drinks.
Service Businesses: Businesses that sell services. Examples are beauty and barber shops, repair shops, most automotive-oriented businesses, entertainment businesses such as theaters, etc.
Lodging: Includes renting rooms by the day or week to community visitors.
Professional Services Businesses: Includes Architects, Engineers, Attorneys, Dentists, Doctors, Accountants, Optometrists, Realtors, Insurance Offices, Mortgage Brokers and most other businesses that require advanced and/or specialized licenses and/or advanced academic degrees.
Financial Institutions: Includes banking and savings and loan institutions as well as credit unions, etc.
Attachment 1
Downtown Sunnyvale Business Im
provement District
Proposed Improvements and Activities for Fiscal Year 2022/2023 Income
Zone A 36 Businesses paying an average annual benefit fee of $466. $16,800 Zone B 45 Businesses paying an average of $187. $8,400
Zone C 102 Businesses paying an average of $145. $14,850 Total potential BID assessment collections $40,050
Projected assessment collections
(COVID impact reduced annual paid average)
$38,000
Revenues from SDA special events and fund-raisers $63,000 Grants, event sponsorships and other misc. revenue $261,450 Total BID Program annual budget $362.450
Expenditures
Program Amount Percent
1) Commercial Marketing Program
a) Advertising and promotion (Ads, social media, etc.)
b)
Theme development
c) Special events and activities
d) Visitor attraction
$235,593 65%
2) Civic Beautification and Signage Program
a) Streetscape beautification, lighting
b) Public arts programs
c) Public-private direct
ional signage
$3,624 1%
3) Programs Administration and BID Management $123,233 34% Totals $362,450 100%
Attachment 1