Title
Recommendation to Approve the Webster Street Business Improvement Area (BIA) Annual Assessment Report; and
Adoption of Resolution of Intention to Levy an Annual Assessment on the Webster Street BIA for Fiscal Year 2021-22; and Set a Public Hearing for May 4, 2021 to Levy an Annual Assessment on the Webster Street BIA. (Community Development 256)
Body
To: Honorable Mayor and Members of the City Council
EXECUTIVE SUMMARY
The Webster Street Business Improvement Area (BIA)-which is managed by the West Alameda Business Association (WABA)-is funded from an assessment collected by the City of Alameda (City) from all businesses within that business district. Every year, WABA presents a report to the City Council on the activities and expenditures that have occurred during the past fiscal year. The annual report also provides recommendations on the proposed expenditure of BIA revenues for the next fiscal year.
This fiscal year is ending during the coronavirus pandemic, which has led to unprecedented challenges for the Webster Street BIA. WABA requested that there be no annual CPI adjustment to the assessment fees for the second year in a row due to the pandemic
Staff is recommending that the City Council adopt a resolution setting a public hearing on May 19, 2020 to levy the annual BIA assessment for Fiscal Year (FY) 2021-22.
BACKGROUND
In 1989, following the Parking and Business Improvement Area Law of 1979 in the California Streets and Highways Code, the City Council established regulations for Business Improvement Areas (BIAs) in the Park Street and Webster Street commercial areas. This staff report is for the Webster Street BIA, which is managed by the West Alameda Business Association (WABA).
The BIA is funded from fees collected by the City from all businesses within the business district. The pooling of resources improves the business district as a whole and directly benefits business owners through the general promotion of business activities and public events, beautification and ambiance, construction and maintenance of parking facilities, and special projects benefitting the business area.
State law and the Alameda Municipal Code (AMC) require the City Council to work in collaboration with a BIA advisory board. The board prepares an annual report and provides recommendations to the City Council on the proposed expenditure of BIA revenues for its geographic area. The AMC also require an annual review by the City Council and a yearly consideration of the assessment.
DISCUSSION
WABA’s Board of Directors, designated as the BIA’s advisory board, has prepared the Annual Assessment Report for fiscal year (FY) 2021-22 (Exhibit 1). The report describes, in general terms, the activities and expenditures that have occurred in the Webster Street BIA during the current fiscal year, FY 2020-21, as well as a work plan outlining proposed use of BIA funds for the next fiscal year, FY 2021-22. This year, the Annual Report also contains detailed financial reports, which WABA is required to submit every other year. Staff has reviewed the documents and has found them to be complete and reasonable.
The Coronavirus and the BIA assessment. The pandemic has forced the cancelation of WABA’s signature events (such as Taste of West Alameda, West End Chinese New Year Celebration, the annual “Blues, Brews, & BBQ” in collaboration with the West End Arts & Entertainment, Halloween on Webster, Santa on Webster, and “Hot August Nights” at Alameda Landing. WABA has reported that approximately 90% of its BIA membership has renewed and paid their membership fees. WABA has maintained a ready-reserve, emergency fund in excess of $75,000 to cover unexpected expenses and lost revenue. WABA has worked quickly to inform its membership of disaster relief resources, such as organizing webinars for its membership with the Small Business Administration’s public information officer.
The Webster Street BIA currently has approximately 215 members, and annual fees vary depending on the type of business. The BIA consists of a single zone (Zone A). The assessment is calculated based on gross receipts. There is a minimum and a maximum assessment. A minimum assessment was established to ensure that there would be sufficient funds to administer the BIA. The maximum assessment acknowledges that there are a few business types (gas stations, fast food restaurants, etc.) whose gross receipts are much higher than other retailers and that a cap would be appropriate for those businesses. The Webster Street BIA also has an assessment surcharge for retailers larger than 30,000 square feet (e.g. Target and Safeway).
Per the AMC, each year the BIA assessment has an automatic Consumer Price Index (CPI) increase based on the San Francisco Area CPI. This year’s CPI of 2.0%, for example, would raises the minimum retail business annual fee by $7.00, to $343.00. In an addendum to its annual report (Exhibit 2), WABA has requested, because of the financial hardship the pandemic has presented to its membership, that there not be an annual CPI adjustment to the assessment fees.
Included with this report is the FY 2021-22 BIA assessment fee schedule with no CPI adjustment (Exhibit 3), a map of the BIA (Exhibit 4), and a BIA address list (Exhibit 5).
The annual BIA assessment requires a two-step process. First, the City Council must approve the Annual Assessment Report and pass a Resolution of Intent to Levy an Assessment. Second, City Council must set a public hearing to approve the new assessment. The public hearing is scheduled for May 4, 2021. At the public hearing, the City Council can modify the Assessment Report or confirm the report as filed. At the public hearing, the Council may also decide not to include the annual CPI adjustment to the assessment fees. According to the AMC, Section 6-7.13(b):
During the course or upon the conclusion of the public hearing, the City Council may order changes in any of the matters provided in the report, including changes in the proposed assessments.
All BIA members will receive notification of the public hearing, in addition to instructions on how to protest the BIA renewal, should they wish to do so. FY 2021-22 assessments cannot be levied if protests are received by the owners of businesses in the area which will pay fifty percent (50%) or more of the proposed assessment.
ALTERNATIVES
• Staff recommends approving the Webster Street BIA annual report, adopting a Resolution of Intention to Levy an Annual Assessment, and setting a public hearing for May 4, 2021 to levy an annual assessment for the Webster Street BIA.
• Postpone the public hearing until a future City Council meeting to allow an opportunity for in-person public comment.
• Decline to adopt the Resolution of Intention to Levy an Annual Assessment
FINANCIAL IMPACT
Revenues from the BIA directly benefit business owners in specified geographic and benefit zones through the promotion of business and similar eligible activities.
Business Improvement Area billing is done concurrently with collection of fees for Business License applications/renewals. The fees are deposited into a General Fund holding account when collected, and paid out of the account to WABA monthly. The primary financial impact to the General Fund is in the form of Finance Department staff costs to process BIA billing collections and payments, estimated to be approximately $7,500 annually ($2,250 for WABA and $5,250 for DABA) and included in the Business License Program Budget (Fund 001, Program 2450).
Community Development Department staff estimates it costs $18,700 annually to support and to participate in monthly WABA and DABA board meetings and subcommittee meetings. This staffing cost has been absorbed within existing staff workloads to provide indirect financial support to the Area.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
The annual renewal of the BIA supports the goals of the Economic Development Strategic Plan through continued operation of the business association consistent with AMC. Sec. 6-7 et seq.
EDSP Strategy 4 states: “the City of Alameda’s role is to continue to support existing shopping and dining districts by working with private property owners and business associations to improve retail spaces and the public realm”.
ENVIRONMENTAL REVIEW
This action involves government fiscal activities which do not involve any commitment to any project which may result in a potentially significant physical impact on the environment and is exempt from the California Environmental Quality Act (CEQA), pursuant to CEQA Guidelines section 15378(b)(4).
CLIMATE IMPACT
There are no identifiable climate impacts or climate action opportunities associated with the subject of this report.
RECOMMENDATION
It is recommended that the City Council:
1. Approve the Webster Street Business Improvement Area (BIA) Annual Assessment Report;
2. Adopt a Resolution of Intention to Levy an Annual Assessment on the Webster Street BIA for Fiscal Year 2021-22; and
3. Set a Public Hearing for May 4, 2021 to Levy an Annual Assessment on the Webster Street BIA.
CITY MANAGER RECOMMENDATION
The City Manager recommends setting Public Hearing for May 4, 2021.Respectfully submitted,
Lisa Maxwell, Community Development Director
By
Eric Fonstein, Development Manager
Financial Impact section reviewed,
Annie To, Finance Director
Exhibits:
1. WABA’s Annual Assessment Report
2. BIA Assessment Fee Schedule FY 2020-21
3. BIA Boundaries Map
4. BIA Address List
cc: Eric Levitt, City Manager
West Alameda Business Association