HomeMy WebLinkAboutCC RESO 2005 - 171RESOLUTION NO. 2005 — 171
RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF NATIONAL CITY
CONFIRMING THE ASSESSMENT ENGINEER'S REPORT
AND PROVIDING FOR THE LEVY OF THE
ANNUAL ASSESSMENT IN THE DOWNTOWN NATIONAL CITY
PROPERTY BUSINESS IMPROVEMENT DISTRICT
WHEREAS, the Property and Business Improvement District Law of 1994,
Part 7 of Division 18 of the California Streets and Highways Code, commencing with
Section 36600, (the "Law") authorizes cities and counties to establish, for up to five
years initially, property and business improvement districts ("PBID") to promote the
economic revitalization and physical maintenance of business districts; and
WHEREAS, the Law authorizes cities to levy and collect assessments on
real property within such districts for the purpose of providing improvements and
promoting activities that specially benefit real property within such districts; and
WHEREAS, Articles XIII C and XIII D of the California Constitution and
Section 53753 of the California Government Code impose certain procedural and
substantive requirements relating to the levy of new or increased assessments; and
WHEREAS, in March, 2004, a written petition was submitted by property
owners within Downtown National City requesting the Community Development
Commission of the City of National City to initiate proceedings pursuant to the Law to
establish the Downtown National City Management District for a five (5) year period;
and
WHEREAS, such petition was signed by property owners in the proposed
district who will pay more than fifty percent (50%) of the assessments proposed to be
levied; and
WHEREAS, a Management District Plan entitled the "Downtown National
City Management District Plan" (the "Management District Plan") and a District
Assessment Engineer's Report was prepared and submitted to the City Clerk,
containing all of the information required by Section 36622 of the Law, including a
description of the boundaries of the district, the improvements and activities proposed
for the district, and the cost of such improvements and activities; and
WHEREAS, the Board of the Community Development Commission of the
City of National City did establish for five years, "The Downtown National City
Management District" (the "District") and levied and collected assessments against lots
and parcels of real property within the District, commencing with fiscal year 20004-05;
and
Resolution No. 2005 — 171
August 2, 2005
Page 2
WHEREAS, the Board did approved the Management District Plan, which
is on file in the office of the City Clerk and available for public review during normal
business hours; and
WHEREAS, the boundaries of the proposed District are included in the
Management District Plan; and
WHEREAS, the proposed activities for the District include streetscape,
sidewalk, parkway and street furniture maintenance, repair and replacement including
but not limited to trees, sidewalk pavement, sidewalk bollards, street furniture, trash
receptacles and street lights as well as periodic landscape maintenance and steam
cleaning services which benefit businesses and real property located in the District; and
WHEREAS, the assessment proposed to be levied and collected for fiscal
year 2005-06 is $240,772.01, which was the same assessment amount levied for fiscal
year 2004-2005.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City
of National City declares as follows:
RECITALS
Section 1. The above recitals are all true and correct
PROCEDURES
Section 2. The City Council hereby finds and determines that the procedures
for the consideration of the levy of the annual assessment have been undertaken in
accordance with both the Act and Article XIII D inasmuch as the proposed assessments
for the Fiscal Year 2005-06 are not proposed to be increased over the assessment
previously authorized to be levied.
DETERMINATION AND CONFIRMATION
Section 3. The final assessment and diagram for the proceedings, as
contained in the Assessment Engineer's Report, is herby approved and confirmed.
Based upon the Assessment Engineer's Report and the testimony and
other evidence presented at the public hearing, attached hereto as Exhibit "A", the City
Council hereby makes the following determinations regarding the assessments
proposed to be imposed:
Resolution No. 2005 —171
August 2, 2005
Page 3
a. The proportionate special benefit derived by each individual parcel assessed has
been determined in relationship to the entirety of the cost of the operations and
maintenance expenses.
b. The assessments do not exceed the reasonable cost of the proportional special
benefit conferred on each parcel.
c. Only the special benefits have been assessed.
d. There are no publicly owned parcels within the District.
The assessments for the District contained in the Assessment Engineer's
Report for the next fiscal year are hereby confirmed and levied upon the respective lots
or parcels in the District in the amounts as set forth in such Assessment Engineer's
Report.
ORDERING OF MAINTENANCE
Section 4. The public interest and convenience requires, and this legislative
body does hereby order the maintenance work to be made and performed as said
maintenance work is set forth in the Assessment Engineer's Report and as previously
declared and set forth in the Resolution of Intention.
FILING WITH CITY CLERK AND CITY ENGINEER
Section 5. The above -referenced diagram and assessment shall be filed in the
Office of the City Clerk, with certified copy to be filed in the Office of the City Engineer.
Said diagram and assessment and the certified copy thereof, shall be open for public
inspection.
FILING WITH THE COUNTY AUDITOR
Section 6. The City Clerk is hereby ordered and directed to immediately file a
certified copy of the diagram and assessment with the County Auditor. Said filing to be
made no later than the 3rd Monday in August.
ENTRY UPON THE ASSESSMENT ROLL
Section 7. After the filing of the diagram and assessment the County Auditor
shall enter on the County assessment roll opposite each lot or parcel of the land the
amount assessed thereupon, as shown in the assessment.
Resolution No. 2005 — 171
August 2, 2005
Page 4
COLLECTION AND PAYMENT
Section 8. The assessments shall be collected at the same time and in the
same manner as the County taxes are collected, and all laws providing for the collection
and enforcement of the County taxes shall apply to the collection and enforcement of
the assessments.
FISCAL YEAR
Section 9. The assessments as above authorized and levied for these
proceedings will provide revenue and related to the fiscal year commencing July 1,
2005 and ending June 30, 2006.
PASSED AND ADOPTED this 2nd day of August, 2005.
Nic lnzunza, yor
ATTEST:
adji
Mi hael Dalla, t
Cl
erk
lerk
APPROVED AS TO FORM:
/1 :
George H. Eiser, Ill
City Attorney
RECEIVED
Lit ':ti !i' N J GiDt
Community
Deveiopmeµ Commission
DOWNTOWN NATIONAL CITY
PROPERTY BUSINESS IMPROVEMENT DISTRICT
MANAGEMENT DISTRICT PLAN
Formed Under datatageu
Property Business Improvement District Act of 1994
FINAL PLAN
SUBMITTED TO:
THE DOWNTOWN NATIONAL CITY
P.B.I.D. STEERING COMMITTEE
THE CITY OF NATIONAL CITY
COMMUNITY DEVELOPMENT COMMISSION
EXECUTIVE DIRECTOR BEN MARTINEZ
MAYOR NICK INZUNZA
AND CITY COUNCIL MEMBERS LUIS NATIVIDAD, RON
MORRISON, FRANCISCO PARRA AND FIDELAS UNGAB
PRESENTED BY:
MARCO LI MANDRI, NEW CITY AMERICA INC.
APPROVED APRIL 30, 2004
UPDATED MAY 24, 2004
EXHIBIT "A"
PART I
EXECUTIVE SUMMARY
DOWNTOWN NATIONAL CITY MANAGEMENT DISTRICT PLAN
Statement of Purpose
Over the past two years, the people of San Diego County have begun to see National City in
a whole new light. Long identified with the extremely successful National City Mile of
Cars, the City now has the distinct identity of a municipal corporation aggressively moving
forward on a number of fronts. Whether it be the visionary Marina project, the
development of Filipino Village, the beautification of Highland Avenue or the creation of
the Education Village in Downtown National City, more things are happening in this City
than almost anywhere else in the County. Under the leadership of the Mayor and City
Council, as well as the staff of the Community Development Commission, National City is
in a race to re -position itself as a great City with bustling commerce, historic significance, a
great urban forestry plan, strengthening of ethnic neighborhoods and experimenting with
what makes Downtowns work in the 215( Century.
Led by a group of significant, small and long-time business and property owners, this effort
to establish a Property Business Improvement District was initiated in March 2004. With
great speed and tremendous commitment, it is the intent of this district to be established
and generate its first revenues by the conclusion of calendar year 2004. Such an
undertaking is unprecedented but reflects the seriousness of the effort of the Downtown
stakeholders to redefine themselves to the surrounding region.
With the growing state budget crisis in California and its resulting impact on the cities, it is
safe to assume that current National City general benefit services delivered in the
Downtown business district will not increase in the future. To make the Downtown district
and community better, commercial and institutional property owners must look at new
ways of funding special benefit services to clean up the district as well as promote the area.
Such special benefit services could include bringing a new identity to the Downtown
business district, funding new gateway signs to the district, regular sidewalk sweeping,
sidewalk steam cleaning, removal of bulky items, trash receptacle emptying, providing
private security services above and beyond that of the National City Police Department,
aiding in the coordination of homeless intervention services, proposing solutions to parking
problems, initiating beautification programs, tree planting and maintenance, coming up
with new marketing and promotions programs, defining greater visual linkages to the 8th
Street Trolley stop as well as serving as an advocacy group of business and property
owners.
This proposed Downtown National City PBID or special benefits district would be funded
through an assessment levied on each and every parcel in the finalized.and approved
boundaries in Downtown. Affected property owners have determined the exact costs of
funding these special benefit services. All properties, public and private, would be included
in this new' assessment district.
3
In early April, a survey was mailed to every property owner within the initial study area.
The area included all parcels on National City Blvd. between 2°" Street on the north, 12th
Street on the south, and along 8th Street from the Trolley Stop on the west to E Avenue on
the east.
There are 153 parcels in the proposed district, represented by 96 property owners. The
district is approximately 34 square blocks. The database compiled by New City America,
Inc. reveals the following data that would create the material basis for the apportionment
of assessments throughout the district:
• 1,465,301 square feet in total lot size;
• 448,344 square feet in total building size;
• 21,744 linear feet in total frontage
The survey results were quite stunning. The results of the survey were as follows:
NUMBER OF RESPONSES:
Respondentsrepresented the following property variables:
Lot size:
Building size
Linear Frontage
522,523 square feet or 35% of the total
240,713 square feet or 54% of the total
8,248 linear feet or 37% of the total
Of those who responded to the survey, the following respondents, (by weight) demonstrated
their support for creation of the PBID:
Responses from Property Owners Who Returned PBID Survey
Response
Lot Size
Building Size
88%
Linear Frontage
77%
Support Formation
76%
Oppose Formation
24%
12%
23%
Of those who responded, the following represent support of specific special benefits funded
by the PBID:
➢ 61% had owned their property for 9 years or less;
➢ 73% were sole proprietorship or family owned properties
➢ 52% believed that National City had been portrayed negatively by the major media
in the last few years;
➢ 84% believed that Downtown was unsafe or "safe, however suffers an image as an
unsafe district;"
> 54% would support property owners funded special benefit security services;
> 54% feel their customers would not feel safe walking from the corner of 8th and
National City Blvd. and the Trolley Stop;
➢ 64% would support initiation of property owner funded regular sidewalk/gutter
sweeping and steam cleaning services;
4
> 70% support property owner funded special events to improve the identity of
Downtown;
Based upon this level of support, the Downtown National City PBID Steering Committee is
presenting the following to all Downtown Property Owners for their consideration:
PROPERTY VARIABLES TO BE ASSESSED:
Three property variables will be used to fund the special benefit services of the district.
Those variables will include: lot or parcel size, building square footage, and linear
frontage. Each of these variables can be verified by County records. By law, the district
can only fund special benefits, not general benefit services. Building square footage will be
further categorized by "use", (retail, hotel, church, public building, office, etc). Use
determines needs and therefore special benefit to be received.
SERVICES TO BE FUNDED:
The primary special benefits to be funded by the creation of the district will be related to
maintaining order and cleanliness in the public rights of way. In addition, beautification of
the Downtown will be paramount as well as creating concrete visual linkages between the
Trolley stop west of the freeway and the heart of the business district at 8th and National
City Boulevard. After order and beautification, district identity and promotional
programs will be funded. Finally, a component for administration/corporate affairs and
contingency/reserve will be included in the budget. Consistent with state legislation, the
district shall remain in place for five years with provisions for annual CPI adjustments as
well as annual disestablishments procedures.
BENEFIT ZONES:
There will be two benefit zones in the proposed district. Benefit Zones are determined by
the level and frequency of services to one sector of the district, vs. another. For example,
the core area parcels along National City Boulevard between 2"d and 12`h, as well as 8th
Street from the freeway bridge to A Avenue, will constitute Benefit Zone 1. All other
parcels in the district will fall into Benefit Zone 2.
ANNUAL BUDGET:
The annual first year budget is anticipated to be $240,722.01. Benefit Zone 1 parcels will
pay a premium due to increased services and increased benefits anticipated to be derived
from the formation of the district. Building use will determine the annual building square
footage costs, by Benefit Zone. The proposed building uses have been categorized as
follows. Each parcel has been analyzed to determine proper category of use and therefore
benefit: (Internal parking built into structure will be credited to overall building size).
5
APPORTIONMENT OF BUILDING USES:
Building Use Code
Description of Use
A
Retail space, hotels, motels, visitor related
B
Office and Commercial uses, Independent, free standing parking structures
C
Industrial/Manufacturing/Distribution
Institutional (School, public, park Church, Tax-exempt properties
D
E
Multi -unit housing, apartments (20 units or more)
F
Multi -unit housing, apartments (9 —19 units)
G
Multi -unit housing, apartments (2 — 8 units)
H
Single Family housing units (not to exceed $240 per year)
I
Condo units - $ 240.00 flat fee per year
Approximately $146,095.30 (61%) of the assessments will be generated from parcels within
Benefit Zone 1. The balance, $94,626.71 (39%) will be generated from Benefit Zone 2
parcels.
COST:
Downtown National City PBID First Year Costs by Property Variable
PROPERTY VARIABLE
ANNUAL COST
ANNUAL COST
BENEFIT ZONE 2
TOTAL GENERATED
BY VARIABLE
Lot Square Footage
$ 0.0841 per
square foot per
year
$0.0757 per square
foot per year
$118,053.09 (49%)
Building Square
Footage (range)
$ 0.1485-$0.1886
per square foot
per year
$0.1485-$0.1697 per
square foot per year
$80,075.68 (33%)
Linear Frontage
$1.8264 per linear
foot per year
$1.8264 per linear
foot per year
$39,713.24 (17%)
Single Family Home
and Condo Annual
Fee
$ 240.00
$240.00
$2,880.00 (1%)
Total Annual Budget
$240,722.01
ANNUAL ADJUSTMENTS:
The Board of Directors of the Management Corporation will be given the option to increase
the assessments annually based upon the San Diego County regional CPI indicator or by an
amount not to exceed 5% from the previous year's assessments.
The Management Corporation shall have the right to shift allocations within the four
categories as they feel appropriate and as long as it remains consistent with the intent of the
plan. The Board shall also have the right to shift up to 10% per year from category to
category, each year, as needs change with the priorities of special benefits.
6
PART II
ADDRESS SERIES, GENERAL STREET BOUNDARIES
LOCATION: In general, the Downtown National City PBID includes all private and public
parcels within the following boundaries:
Street Address Series
Street Name
704-724
A Avenue
827
B Avenue
811— 817
C Avenue
831 — 835
D Avenue
41— 43
E. 12th St.
14 — 35
E. 3rd St.
10
E. 5th St.
22-404
E. 86 St.
419
E 9th St.
810 — 925
Hoover Avenue
205 —1146
National City Blvd.
225 —1133
Roosevelt Avenue
25 — 38
W. 11th St.
21
W. 12th St.
30
W. 2"d Avenue
21 — 27
W. 3`d Avenue
21
W. 7th St.
110 — 200
W. 8th St.
111- 225
W. 9th St.
32 — 121
W. Plaza Blvd.
7
PART III
WORK PLAN AND BUDGET
SERVICES:
Special benefit services to be financed by the Downtown National City Boulevard Property
Business Improvement District will primarily include funding the following types of
services. Based upon the survey results of the property owners, and estimated costs and
services, the preliminary special benefits funded by the Downtown National City Property
Business Improvement District are as follows:
Proposed Downtown National City PBID:
Public Rights of Way and Sidewalk Operations (PROWSO)
• Sidewalk sweeping;
• Beautification;
• Decorations and banners;
• Enhanced trash receptacle placement and regular emptying;
• Removal of bulky items;
• Tree and shrub planting and maintenance
• Work with City on hazardous issues;
• Maintenance of public order in the sidewalks;
• Homeless intervention;
• Equipment, supplies, tools;
• Misc.
2. District Identity and Streetscape Improvement (DISI)
(Predominantly in Benefit Zone 1)
• Special events (1 per year);
• Web site;
• Pedestrian kiosks/signage
• Underwriting advertising coop for hotel and retail
3. Administration and Corporate Operations:
• Staffing;
• Insurance;
• Office related expenses;
• Misc.
4. Contingency/Reserve:
• Delinquencies;
• City costs;
• County costs;
• Hardship;
• Reserves;
8
Consistent with state law, any property assessment district must confer a special benefit to
real property owners paying into the assessment district. At times, specific parcels will
derive greater benefit, due to their proximity to a "core" area. These core and peripheral
parcels, will from time to time, be designated through "benefit zones." The Downtown
National City PBID anticipates two benefit zones, each receiving varying degrees of special
benefits funded from the assessment district. The two benefit zones are proposed as
follows:
Benefit Zones:
The Downtown National City PBID Benefit Zones are created based upon the frequency
and type of special benefit services that might be desired. For example, the core area near
National City Boulevard and 8th Street may need special benefit services six days per week,
have large special events and be the focus of many promotional activities. These property
owners would pay for those specific special benefit services based upon the anticipated
benefit to be received.
Benefit Zone
Zone 1
(core area)
Zone 2
(peripheral area)
Boundaries
National City Boulevard from 2"d to 12th Street
8th Street from the freeway bridge to A Avenue
All other streets in the district not included in Benefit Zone I
TABLE 1 —FREQUENCY OF SPECIAL BENEFIT SERVICES BY BENEFIT ZONES
Special Benefit Service
Benefit Zone I
Frequency
6 days per week
Benefit Zone 2
Frequency
4 days per week
Public rights of way and
sidewalk operations
(PROWSO)
District Identity and
Streetscape Improvements
(DISI)
• Special Events
■ Holiday Decorations
Through
programs
Once per year
Seasonally
Through programs
None
None
Administration/Corporate
Operations
Monday — Friday
Monday — Friday
9
PART IV
ASSESSMENT METHODOLOGY TO FUND SPECIAL BENEFITS
BUDGET: The first year annual budget is projected to be $240,722.01. Annual
adjustments of up to a maximum of 5% over the previous year's gross assessment amount
are allowable, subject to the approval of the Downtown National City Property Business
Improvement District Management Corporation.
TABLE 2 — SPECIAL BENEFIT SERVICES BROKEN DOWN BY ESTIMATED COSTS
PER BENEFIT ZONE
PROWSO Personnel Estimated Costs
Service
Benefit Zone 1
Benefit Zone 2
PROWSO:
• Sidewalk Sweeping;
• Beautification
• Decorations and banners
• Enhanced trash receptacle
emptying
• Removal of bulky items
• Reporting hazards to City;
• Removal of bulky items;
• Tree and shrub planting and
maintenance
• Maintenance of public order
• Homeless intervention
6 days per week
As needed
As needed
As needed
As needed
Daily
As needed
Weekly
As needed
As needed
4 days per week
As needed
As needed
As needed
As needed
Daily
As needed
Weekly
As needed
As needed
ESTIMATED PERSONNEL NEEDS*
'/2 cost of Supervisor;
($ 23,040)
1 maintenance worker,
full time, 40 hours per
week ($27,850)
1 maintenance worker,
six days per week, 48
hours ($30,720)
%: cost of Supervisor;
($23,040)
1 maintenance worker,
full time, 40 hours per
week ($27,850)
Estimated maintenance personnel costs
$81,610
S 50,890
Total Estimated Personnel Cost
$ 132,500
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*THE PURPOSE OF THIS CALCULATION IS TO PROVIDE A MATERIAL BASIS
FOR THE P.R.O.W.S.O. PERSONNEL COSTS. THE ADMINISTERING
CORPORATION CAN CONTRACT OUT THESE SERVICES TO A FOR -PROFIT OR
NON-PROFIT CORPORATION, OR PROVIDE THE SERVICES IN HOUSE. THESE
COSTS ARE ONLY USED AS A REFERENCE, THE LINE ITEM IN THE BUDGET
FOR THE P.R.O.W.S.O. PERSONNEL IS ESTIMATED TO BE $132,500.00
ANNUALLY.
The basis of determining personnel costs is derived from One Source, a nationwide
company that provides employees for many building management companies, as well as
BIDs. One Source's rates on labor include workers comp, payroll taxes, check
disbursement, health benefits, vacation and sick time. Most importantly, these are
contracted employees and therefore release the management corporation of payroll and
personnel related liabilities. Total overhead factor of employees, fully loaded, is about 1.6
in an overhead factor from the base wage rate. Supervisor rate was calculated at $ 12.00
per hour, and maintenance workers at $8.00 - 9.00 per hour, starting pay.
We reiterate that this is simply a tool for calculating costs of maintenance personnel. The
free market, and competitive bidding may produce higher and better results. It is the job
of the management corporation to maximize the delivery of special benefit services to the
property owners based upon various category and line items of services. The function of
this crew is to deal with all services in the public rights of way, including but not limited to:
sweeping, beautification, decorations, security, etc.
TABLE 3 — SPECIAL BENEFIT SERVICES/P.R.O.W.S.O. NON -PERSONNEL ANNUAL COSTS
INCLUDING EQUIPMENT AND MATERIALS
PROWS() Equipment and Materials
Truck lease, insurance
Uniforms
Communications
Supplies
Water
Dumpster costs
Nursery Items
Small Equipment
Miscellaneous
Total Estimated Annual Equipment Costs
Estimated Annual Cost
$ 6,000
$ 1,000
$ 4,000
$ 8,000
$ 1,000
$ 6,000
$ 8,000
$ 3,000
$ 3,500
$ 40,500
Again, these services may be provided by an outside contractor, however accommodations
must be made for these costs whether done in-house of to an outside contractor. In
addition, this budget does not assume any grants from public agencies or foundations that
could underwrite the costs of equipment. Nor does it assume that the City would pay for
landscaping water related costs or dumpster removal fees, both of which could be
negotiated with the CDC.
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TABLE 4 — DISTRICT IDENTITY AND STREETSCAPE IMPROVEMENTS
SUGGESTED BUDGET ITEMS
Program to be funded/Both Benefit Zones
Estimated First Year Annual Cost
Special events (1 per year);
$ 5,000
Logo Creation (First Year only)
$ 1,000
Web site creation and maintenance
$ 4,000
Pedestrian kiosks/signage annually
$ 4,000
Total Estimated First Year Annual Costs
$ 14,000
TABLE 5 — ADMINISTRATION AND CORPORATE OPERATIONS
SUGGESTED ALLOCATIONS
Program to be Funded
Estimated First Year Annual Cost
Staff (Community Advocacy, retail attraction,
Corporate minutes, administration to Board)
$ 26,000
Insurance
$ 3,000
Office rent
$ 6,000
Phone/Fax
$ 1,000
E-mail Service
$ 800
Office supplies
$1,000
Office Equipment
$ 2,000
Utilities
$ 1,200
Total Estimated Annual Costs
$ 41,000
TABLE 6 — SPECIAL BENEFIT SERVICES/CONTINGENCY —
RESERVE ANTICIPATED NEED
Program to be Funded
Estimated First Year Cost
County Costs (1.7% of total assessments)
City costs ($500.00 per year)
No -pays, (uncollected assessments) (?)
Misc/Reserve (Balance of expenses)
Total Estimated Annual Costs
$ 12,772.01
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TABLE 7 — TOTAL FIRST YEAR DOWNTOWN NATIONAL CITY SPECIAL BENEFIT SERVICES
BUDGET LINE ITEMS BASED UPON SUGGESTED PROGRAMS AND ALLOCATIONS
Program
Public Rights of Way and
Sidewalk Operations —
Personnel and Equipment for
All Benefit Zones
District Identity and
Streetscape Improvements
First Year Allocation
$ 173,000.00
$.14,000.00
of Total Budget
Administrative/Corporate
Operations
Contingency/Reserve
Total Estimated First Year
Costs of Programs
$ 41,000.00
$ 12,722.01
72
6%
17%
5%
$ 240,722.01
100%
METHOD OF FINANCING:
This method of financing the special services is based upon the levy of assessments on real
property that benefits from proposed improvements and activities. This represents a
"benefit assessment district" as defined in the California Streets and Highway Code.
Assessed valuation cannot be used as the basis for special benefits assessments due to the
introduction of Proposition 13 into the state constitution in 1978. There are at least four
basic factors that will be used in determining individual assessments. These factors include
1) linear frontage, 2) land area and 3) building square footage, 4) building use. The
assessments for the Downtown National City PBID are based upon these variables, which
have been endorsed by the property owners as the most fair and equitable for
apportionment of assessments to participating parcels. Linear frontage will be assessed on
all sides of the parcel receiving benefit.
PBID assessments would be collected annually by the San Diego County tax assessor and
would appear as a line item on the annual property tax bills. The assessments are collected
by the County and transferred to the City of National City. They are then transferred
directly to the Downtown National City PBID Management Corporation. The funds are
then allocated consistent with the previously agreed upon programs in the Management
District Plan.
TABLE 8 - TOTAL GROSS DOWNTOWN NATIONAL CITY PBID PROPERTY VARIABLES
Property Variables
Total in District
Lot Size
1,465,301 square feet
Building Size
448,344 square feet
Linear Feet
21,744 linear feet
There are 153 parcels and 96 legal owners currently in the database of the above
mentioned property variables. There are about 34 square blocks in the district_
13
Apportionment of Costs to Property Variables used in the Assessment Methodology
As is common practice, various property variables fund different special benefit services in
the district. We have employed an assessment methodology that we believes supports the
relationship between assessments paid and benefits received. The following programs and
services must confer a special benefit to real property owners to be consistent with Article
XIII (d) of the state constitution.
ANNUAL BUDGET:
The annual first year budget is anticipated to be $240,722.01. Benefit Zone 1 parcels will
pay a premium due to increased services and increased benefits anticipated to be derived
from the formation of the district. Building use will determine the annual building square
footage costs, by Benefit Zone. The proposed building uses have been categorized as
follows. Each parcel has been analyzed to determine proper category of use and therefore
benefit: (Internal parking built into structure will be credited to overall building size).
TABLE 9 - DEFINITION OF BUILDING/LAND USES:
Building Use Code
Description of Use
A
Retail space, hotels, motels, visitor related
B
Office and Commercial uses, Independent, free standing parking structures
C
Industrial/Manufacturing/Distribution
Institutional (School, public, park Church, Tax-exempt properties
D
E
Multi -unit housing, apartments (20 units or more)
F
Multi -unit housing, apartments (9 —19 units)
G
Multi -unit housing, apartments (2 — 8 units)
H
Single Family housing units (not to exceed $240 per year)
I
Condo units, $ 240.00 flat fee per year
The proposed apportionment of special benefits to the various property variables are as
follows:
14
TABLE 10 - APPORTIONMENT OF SERVICES TO PROPERTY VARIABLES
Program to be Funded
Benefit Zone
Apportioned to Variable
PROWSO:
• Maintenance Personnel
1
% to all building square footage,
($ 81,610)
1/2 to all lot size in Benefit Zone 1
• Maintenance Personnel
2
V: to all building square footage,
( $50,890)
V2 to all lot size in Benefit Zone 2
• Non -personnel, equipment
1, 2
All linear frontage, apportioned
($ 40,500)
equally in both Benefit Zones
DISTRICT IDENTITY AND
STREETSCAPE IMPROVEMENTS:
• Special events (1 per year)
1
Building square footage "a" only
( $5,000)
• Logo creation
1, 2
Building square footage a — c
($1, 000)
• Web site creation/maintenance
1, 2
Building square footage a — c
($4,000)
• Pedestrian kiosks/signage
1, 2
Building square footage a — d
($ 4,000)
ADMINISTRATION AND CORPORATE
1, 2
Apportioned equally to all lot size
OPERATIONS
($ 41,000)
in both zones
CONTINGENCY/RESERVE
1, 2
Apportioned equally to all lot size
($ 12,722.01)
in both zones
The assessment methodology annual costs are summed up in the following table:
15
TABLE 11 — ANNUAL COSTS PER SPECIAL BENEFIT SERVICE AND BENEFIT ZONE
Benefit
Zone
Lot Square foot
annual costs
Building square foot
annual costs
Linear frontage
annual costs
Contribution
to total budget
1
$0.0841
a. $0.1886
b. $0.1696
c. $0.1696
d. $0.1577
e. $0.1485
f. $0.1485
g. $0.1485
$1.8264
$146,095.30
Benefit
Zone
Lot Square foot
annual costs
Building square foot
annual costs
Linear frontage
annual costs
Contribution
to total budget
2
$0.0757
a. $0.1697
b. $0.1697
c. $0.1697
d. $0.1578
e $0.1485
f. $0.1485
g. $0.1485
$1.8264
$94,626.71
Both
Condos and Single
family homes
$ 240.00 per
year per unit
Approximately $146,095.30 (61%) of the assessments will be generated from parcels within
Benefit Zone 1. The balance, $94,626.71 (39%) will be generated from Benefit Zone 2
parcels.
overall PBID database so the new condo owners are not doubly assessed for their property
variables and condo units. Condos and residentially utilized single family residences will
pay the same flat fee per year into the district. Condos will be fully assessed once they have
been constructed and parcelized. Condos under construction shall pay $240, less a 50%
reduction until completed and parcelized.
CONDO FACTOR:
It is unknown at this point how much future condos will contribute to the district. Since
the condos are being built in mixed use or commercially, zoned areas, they are not exempt
from payment into the assessment district. The condo owners will derive and appreciate
the special benefit services they will receive from the cleaning and beautification services in
the district. Provisions will be made to avoid a property variable and unit assessment for
condos. Once a parcel or parcel(s) have been converted to condos, the per unit fee will kick
in, however that parcel will have its linear frontage, building square footage and lot size
deleted as a variable to be assessed. For example, if a.5,000 square foot lot is converted
from a parking lot to a 10 unit condo development, that parcel will be reassessed to capture
the $2,400 condo assessments annually now generated from that parcel (10 x $240.00 per
year). Simultaneously, the property variables of that parcel, will be eliminated from the
16
TABLE 12 - DOWNTOWN NATIONAL CITY PBID FIRST YEAR COSTS BY PROPERTY VARIABLE
PROPERTY
VARIABLE
Lot Square Footage
Building Square
Footage (range)
Linear Frontage
Single Family Home
and Condo Annual
Fee
Total Annual
Budget
ANNUAL COST
BENEFIT ZONE 1
$ 0.0841 per square
foot per year
$ 0.1485-$0.1886 per
square foot per year
$1.8264 per linear
foot per year
$ 240.00
ANNUAL COST
BENEFIT ZONE 2
$0.0757 per square
foot per year
$0.1485-$0.1697 per
square foot per year
$1.8264 per linear
foot per year
$240.00
TOTAL GENERATED
BY VARIABLE
$118,053.09 (49%)
$80,075.68 (33%)
$39,713.24 (17%)
$2,880.00 (1%)
$240,722.01
TABLE 13 - AMOUNTS GENERATED BY DOWNTOWN NATIONAL CITY PBID
Property Variable
Parcel or Lot Size
Building Square Feet
Linear Frontage
Single Family Home
and Condo Annual Fee
Total Assessments, First
Year — Both Zones
Total Gross Variable,
Both Benefit Zones
1,465,301
448,344
21,744
12
17
Amount Generated First
Year
$118,053.09
$80,075.68
$39,713.24
$2,880.00
$240,722.01
PART V
RELEVANT ENABLING LEGISLATION, AB 1021
The relevant enabling PBID legislation, which allows the property owners of Downtown
National City to fund these special benefit services, is to be found in...
• Section 36600 of the California Streets and Highway Code known as the Property
Business Improvement District Law of 1994. (Amended in 2000, 2003)
On July 20, 2001, Governor Gray Davis signed AB 1021, approving changes to the
Property Business Improvement District Law of 1994, (Cal. Streets and Highway Code
Sections 36600 et. Seq.) which changes several procedures involving PBIDs. The law
became effective on January 1, 2002.
The major change within the law is the establishment of an "Owner's Association." This
Association will be a private, non-profit entity that will contract with the City to manage
the PBID. It will be subject to the Brown Act (Ca. Government Code Sections 54950 et
seq.) and the California Public Records Act (Cal Government Code Sections 6250 et seq.).
However, the Association will not be considered as a public entity for any other purpose.
Similarly, any board members or staff will not be considered public officials.
Under the amended law, all property owners who do not pay assessments will be subject to
penalties for delinquent payments. The amended statute also provides provisions for
renewal of the PBID. If the PBID is renewed after its first term (up to five years), the funds
from the prior district may be used in the renewed district only for the benefit of the
parcels within the boundaries of the prior district. If no parcels from the prior district are
within the renewed district, the funds must be returned to the property owners. Also, upon
renewal, a district may be renewed for up to ten years.
These changes clarify issues regarding PBID operations and formation and the status of the
non-profit organizations that manage PBIDs in the aftermath of the court ruling in Epstein
vs. the Hollywood Entertainment District. The Epstein decision classified non-profit
organizations that managed PBIDs as public entities for purposes of the Brown Act.
The issue has been raised that if the organizations were public entities for the Brown Act,
could they also be public entities for other acts, such as the Political Reform Act. The
changes in the new legislation ensure that these PBID and BID Management Corporations
are not considered public entities for any California law except the Ralph M. Brown Act
and the Public Records Act.
Proposition 218 (Article XIII D of the state constitution) states in Section 4 (a):
"No assessment shall be imposed on any parcel which exceeds the reasonable cost of the
proportional benefit conferred on that parcel. Only special benefits are assessable, and art
agency must separate the general benefits from the special benefits conferred on a parcel."
18
FORMATION:
• District formation requires submittal of petitions from property owners
representing at least 50% of the total assessment. The "Right to Vote on Taxes Act"
(Proposition 218) requires that more than 50% of the ballots received, weighted by
assessment, be in support of the District.
• This petition support ensures that the mail ballot procedure will be successful in the
formation of the district. Once the necessary threshold of petitions have been
collected, the management district plan will then be submitted to the City to begin
processing the public hearing. With the adoption of an ordinance of intention, the
City Council will authorize the City Clerk to send out the mail ballots to all affected
property owners to determine their support for the establishment of the district.
• When all is said and done, the first assessments should be collected with the annual
property tax bill in December 2004 with the Management Corporation receiving its
first installment payment in January 2005.
DURATION:
• Pursuant to State Law, the District will have a set terra. The proposed district will
have a five-year Life commencing January 1, 2005. After five years, the petition
process must be repeated for the District to be re-established.
19
TIME LINE AS SPECIFIED BY LAW:
The district must be established to take advantage of the County's tax assessment
notification schedule. Mindful of that, all property related assessment districts must be
established by the end of July in any calendar year, in order to have assessments levied on
parcels for the upcoming fiscal year. In our case, the district must be established through
an assessment ballot proceeding in late July 2004, in order to notify the County in time for
the 2004-05 fiscal tax year. The first assessments would then appear on the property tax
statements due in December 2004. In order to take advantage of this schedule, as well as to
generate revenues in early 2005, the following time line has been adopted to ensure timely
funding of special benefit programs:
To work effectively, we must look at the completion date and work backwards:
Date must be completed by
Task to be completed
July 206, 2004
Public hearing/assessment balloting proceeding, ballots
counted by weight
June 8th
Resolution of intent by City to establish the district
May 1st-June7`11
Property owners representing 50% of the weight, based
upon assessments to be levied, must sign petition endorsing
the management district plan;
Assessment engineer certifies plan as compliant with
Proposition 218
April 30th
Finalize management district plan including special benefit
services to be provided, duration of district, boundaries,
benefit zones, assessment methodology, administration, etc.
Initiate petition drive
April 20, 2004
First rough draft Management District Plan submitted to
PBID Steering Committee
20
PART VI
ENGINEER'S REPORT, EXEMPTIONS, ANNUAL ASSESSMENT
INCREASES AND THE DURATION OF THE DISTRICT
A. Assessment Methodology
Property owners in Downtown National City have emphasized that an assessment formula
for a PBID be fair, balanced and commensurate with special benefits received.
NEW CITY AMERICA has contracted with Ed Henning and Associates to come up with a
plan that has been certified by a licensed engineer.
In preparing the engineer's report for the Downtown National City PBID, the engineer
concluded that the special benefit to each parcel was found to be proportional to the
property variable and their apportionment.
An Engineer's report for the PBID is provided in the Appendix.
B. Time and Manner for Collecting Assessments:
As provided by state law, the Downtown National City Property Business Improvement
District will appear as a separate line item on the annual property tax bills prepared by the
San Diego County Tax Assessor. Property tax bills are generally distributed in the Fall
and payment is expected by lump sum or in two installments. The County Assessor shall
distribute the assessments to the City who will in turn then forward them to the designated
Downtown National City PBID Management Corporation pursuant to the authorization of
this plan. Existing laws for enforcement of property taxes apply to the Management
District assessments.
The assessments shall be collected at the same time and in the same manner as for any
possessory interest tax paid to the County of San Diego. These assessments shall provide
for the same lien priority and penalties for delinquent payment as is provided for the
possessory interest tax.
The "property owner" of the possessory interest shall be any person as the owner/taxpayer
on the last equalized possessory interest assessment roll or otherwise known to be the
owner/taxpayer by the City Council. The City Council has no obligation to obtain other
information as to the ownership of the interest, and its determination or ownership shall be
final and conclusive for the purposes of this district.
21
C. Publicly Owned Parcels and Government Assessments:
The Downtown National City PBID Steering Committee assumes that the City of National
City, The Community Development Commission, Southwestern College, the County, the
Unified School District, the State of California and any other publicly owned parcels will
pay assessments for the special benefits conferred upon government owned property within
the boundaries of the PBID.
Article XIII D of the California Constitution, (Proposition 218), explains the basis for
assessing publicly owned parcels:
"Parcels within a district that are owned or used by any agency, the State of California
or the United States shall not be exempt from Assessments unless the agency can
demonstrate by clear and convincing evidence that those publicly owned parcels in fact
receive no special benefit.
D. Annual Assessment Adjustment:
The PBID Management Corporation, will be granted the option of increasing the
assessments annually based upon the Consumer Price Index of San Diego County or by a
flat amount, not to exceed 5% per year.
E. District Duration:
Pursuant to State PBID Law, the Downtown National City PBID will have a duration of
five years, commencing on January 1, 2005 and extending through December 315t 2009.
This is the maximum period allowable for a new PBID under state legislation. Any
continuation of the District after its five-year period will require compliance with all
regulations and statutes in place at the time relative to the establishment of the new PBID.
22
rganiz
a program
owners;
• Maximize coordination
leverage resources;
Deliver services through
0
PART VII
DISTRICT GOVERNANCE AND THE
DOWNTOWN NATIONAL CITY P.B.I.
MANAGEMENT CORPORATION D.
A few rules and regulations should be considered
A few rules Coregulations
in the administration by the Downtown National City
ministration of the district, PBID
Conflict of Interest.
Any stakeholder who serves on the administering corporation's
shall recuse himself or herself from
apparent, Such any vote in which a n a Boardnof Directorsinteresti
capital reimprovementpotential conflicts include Potential conflict of izing
projects which result ins pecialarebenefit to spenot limited cific
owners, prioritization of services to benefit a � Prioritizing
hiring or selecting the relatives of BoardParticular owner or specific property
members, etc. group of owners,
In addition, the Management Corporation s
objectives for the district...
shall aim to meet the following operational
• Create and man ge
of th
s
e
a
that best respond to the top priorities of district property
City government to avoid duplication of services and to
atronal structure; cost-effective, noir-b
Provide a non -bureaucratic and eas
ecountability and responsiveness to those who pay through open access to
l to access
Board meetings, elections to the Board and Board records.
23
APPENDIX A
MAP OF THE DISTRICT
24
.....--,.. ., , .........--1,1
/
*"..."-
IA: N.-..- ‘. • '':-"''''. 1..:---' .----
Downtown National City PBID
Benefit Zone 1
Benefit Zone 2
•
..•
\
APPENDIX B
FIVE-YEAR PROJECTION OF THE ASSESSMENTS
ASSUMING THE MAXIMUM ANNUAL INCREASE
25
Downtown National City P.B.I.D.
FIVE YEAR PROJECTION OF ASSESSMENTS
WITH 5% ANNUAL ADJUSTMENT
Projected Budget
2005
5%
2006
5%
2007
5%
2008
5%
2009
Public Rights of Way and
Sidewalk Operations
$173,000.00
$8,650.00
$181,650.00
$9,082.50
$190,732.50
$9,536.63
$200,269.13
$10,013.46
$210,282.58
District Identity and
Streetscape Improvements
$14,000.00
$700.00
$14,700.00
$735.00
$15,435.00
$771.75
$16,206.75
$810.34
$17,017.09
Administrative/Corporate
Operations
$41,000.00
$2,050.00
$43,050.00
.
$2,152.50
$45,202.50
$2,260.13
$47,462.63
$2,373.13
$49,835.76
Contingency/Reserve
$12,722.01
$636.10
$13,358.11
$667.91
$14,026.02
$701.30
$14,727.32
$736.37
$15,463.68
Total
$240,722.01
$12,036.10
$252,758.11
$12 637.91
$265 396.02
$13 269.80
$278,665.82
$13,933.29
$292,599.11
6/9104
APPENDIX C
LIST OF PARCELS INCLUDED IN THE DISTRICT
26
APN
5 J30 01 00
355 030 02 00
555 030 03 00
555 030 04 00
555 030 05 00
555 030 06 00
555 030 07 00
555 030 08 00
555 030 09 00
555 030 10 00
555 030 11 00
555 030 12 00
555 030 13 00
555 030 14 00
555 030 17 00
55c 030 20 00
5:...030 21 00
s55 030 22 00
555 041 01 00
555 041 02 00
555 041 03 00
555 041 04 00
555 041 05 00
555 041 06 00
555 041 07 00
555 041 08 00
555 041 09 00
555 041 10 00
555 042 10 00
555'042 15 00
555 042 17 00
555 042 18 00
5, J52 04 00
55 052 05 00
555 052 06 00
555 052 14 00
Annual
Assessment
$240.00
$427.32
$0.00
$0.00
$240.00
$0.00
$240.00
$1,358.46
$278.41
$339.52
$270.50
$344.51
$282.92
$500.53
$1,089.50
$4,997.45
$3,644.29
$6,609.58
$878.28
$472.48
$3,616.36
$1,063.44
$570.74
$571.49
$694.46
$511.82 .
$511.82
$1,206.28
$1,080.70
$3,104.82,
$3,458.95
$7,001.77
$694.46
$649.75
$471.60
$2,453.40
NATIO
PARCE
APN
555 052 15 00
555 053 1'7 00
555 054 12 00
555 081 09 00
555 081 10 00
555 081 14 00
555081'1500
555 081 16 00
555 081 17 00
555 082 01 00
555 082 02 00
555 082 03 00
555 082 04 00
555 082 05 00
555 082 06 00
555 082 10 00
555 082 11 00
555 083 21 00
555 083 22 00
555 083 23 00
555 083 24 00
555 085 01 00
555 085 02 00
555 085 03 00
555 085 04 00
555 085 05 00
555 085 06 00
555 085 07 00
555 113 04 00
555 113 05 00
5551130800
5551131100
5551131200
555 113 13 00
555 114 01 00
555 114 02 00
NAL CITY PBID
LS TO BE ASSESSED
Annual
Assessment
$2,361.54
$22,785.90
$6,377.83
$510.24
$267.23
$396.50
$216.88
$695.37
$1,992.94
$1,855.29
$244.19
$527.88
$399.68
$1,137.98
$960.23
$1,533.33
$4,097.40
$1,846.85
$5,094.43
$2,989.50
$5,751.78
$622.48
$240.00
$240.00
$464.11
$2,797.35
$187.37
$4,258.90
$808.87
$792.75
$1,269.33
$2,084.78
$1,569.72
$1,133.05
$240.00
$240.00
APN
5551140300
555 114 04 00
555114 0500
555 114 06 00
555 114 07 00
555 114 11 00
5551141200
55511413 00
556 101 01 00
556 101 02 00
556101 1500
556 101 16 00
556 104 01 00
556 104 02 00
556 104 18 00
556 210 25 00
556 210 26 00
5562102700
556 212 01 00
556 212 02 00
556 212 03 00
556 212 04 00
556 212 05 00
556 212 06 00
556 212 07 00
556 331 03 00
556 331 04 00
556 331 05 00
556 331 14 00
556 331 15 00
556 331 20 00
556 331 21 00
556 331 22 00
556 331 23 00
556 331 24 00
556 331 25 00
Annual
Assessment
$215.59
$220.14
$452.48
$652.46
$1,151.14
$330.42
$1,594.28
$1,569.62
$1,614.58
$1,815.33
$5,492.84
$2,276.33
$2,485.63
$240.00
$1,820.45
$1,662.72
$1,510.43
$1,077.40
$240.00
$240.00
$496.74
$276.94
$419.14
$563.61
$754.77
$249.09
$505.91
$1,181.45
$2,439.68
$926.31
$748.13
$2,720.06
$1,255.39
$566.21
$715.80
$3,133.35
APN Annual APN
Assessment Annual
Assessment
556 332 20 00
$1,764.62 556 553 09 00 $515.54
556 332 21 00 $535.59
556 553 12 00 $567.57
556 332 22 00 $375.86 556 553 13 00
$526.29
556 332 23 00 $253.70
556 554 16 00 $4,415.42
556 332 24 00 $1,409.83
556 554 17 00 $6,245.33
556 333 15 00 $2,626.38 556 554 18 00
$1,195.18
556 333 17 00 $4,907,21 556 554 19 00
$569.85
556 333 18 00 $522.19
556 554 20 00 $1,205.03
556 334 19 00 $2,101.81
556 554 21 00 $1,568.79
556 334 20 00 $282.35
556 334 21 00 $410.30
556 334 22 00 $452.14
556 471 03 00 $2,233.31
556 471 04 00 $575.76
556 471 16 00 $1,585.34
556 471 17 00 $2,691.26
556 471 23 00 $4,830.57
556 471 24 00 $3,673.51
556 472 23 00 $2,019.79
556 472 24 00 $527.74
556 472 26 00 $3,056.70
556 472 27 00 $265.95
556 473 15 00 $1,526.52
556 473 16 00 $792.75
556 473 17 00 $962.08
556 474 01 00 $1,610.56
556 474 02 00 $739.54
556 474 21 00 $2,527.99
556 493 01 00 $1,290.96
556 493 04 00 $934.44
556 493 05 00 $240.00
556 553 01 00 $694.46
556 553 02 00 $357.75
556 553 03 00 $409.23
556 553 04 00 $616.95
556 553 05 00 $1,592.79
NATIONAL CITY PBID
PARCELS TO BE ASSESSED
APN
Annual
Assessment
APPENDIX D
ENGINEER'S REPORT
27
Edward Henning & Associates
URBAN REVITALIZATION • FUNDING
Downtown National City
Property Business Improvement District
CITY OF NATIONAL CITY - CALIFORNIA
DISTRICT
ASSESSMENT ENGINEER'S
REPORT
Prepared by
Edward V. Henning,
California Registered Professional Engineer # 26549
Edward Henning & Associates
Phelan California
June 1, 2004
1333o Buttemere Rd .• Phelan CA 92371 • (76o) 868,9963 • (fax) (76o) 868-6490 • mred2@earthlink_net
ATTACHMENT N
Edward Henning & Associates
URBAN REVITALIZATION • FUNDING
DISTRICT ASSESSMENT ENGINEER'S REPORT
To Whom It May Concern:
I hereby certify to the best of my professional knowledge and experience that each of the identified benefiting
properties located within the proposed Downtown National City Property Business Improvement District will receive
a special benefit over and above the benefits conferred on the public at large and that the amount of the proposed
assessment is proportional to, and no greater than the benefits conferred on each respective property.
/'� Prepare • by Edward V. Henning, California Registered Professional Engineer # 26549
a
Edward V. H
RPE #26549 June 1, 2004
Date
(NOT VALID WITHOUT EMBOSSED CERTIFICATION SEAL AND SIGNATURE HERE)
Introduction
This teyort shall serve as the "detailed engineer's report" required by Section 4(b) of Article XIIID of the California
Constitution (Proposition 218) to support the benefit property assessments proposed to be levied within the
Downtown National City Property Business Improvement District (Downtown National City PBID) in the City of
National City, California being established for a five year period. The discussion and analysis contained within
constitutes the required "nexus" of rationale between assessment amounts levied and spekial benefits derived by
properties within the Downtown National City PBID.
NOTE 1: The terminology "identified benefiting parcel" or "property" is used throughout this report pursuant to SB
919 - "Proposition 218 Omnibus Implementation Act" which clarified portions of Prop 218. It provides the Engineer
and District Consultant with the ability to actually identify individual parcels which will benefit directly either in
whole or in part from the proposed District funded programs and improvements and does not imply that all parcels
receive assessable benefits .
1
13330 Buttemere Rd • Phelan CA 92371 • (76o) 868-9963 • (fax) (760) 868-6490 • mred2@earthlink.net
Edward Henning & Associates
URBAN REVITALIZATION • FUNDING
Background
The Downtown National City PBID is a property -based benefit assessment type district being established pursuant to
Section 36600 et seq. of the California Streets and Highways Code, also known as the Property and Business
Improvement District Law of 1994 (the "Act"). Due to the benefit assessment nature of assessments levied within a
PBID, district program costs are to be distributed amongst all identified benefiting properties based on the
proportional amount of program benefit each property is expected to derive from the assessments collected. Within
the Act, frequent references are made to the concept of relative "benefit" received from PBID programs and activities
versus amount of assessment paid. Only those properties expected to derive special benefits from PBID funded
programs and activities may be assessed and only in an amount proportional to the relative benefits expected to be
received.
The method used to determine benefits derived by each identified property within a PBID begins with the selection
of a suitable and tangible basic benefit unit. For property related services, such as those pi ',posed in the Downtown
National City PBID, the benefit unit may be measured in linear feet of street frontage or parcel size in square feet or
building size in square feet or number of building floors or proximity to major corridors in average linear feet, or any
combination of these factors. Qu entity takeoffs for each parcel are then measured or otherwise ascertained.. From
these figures, the amount of benefit units to be assigned to each property can be calculated. Special circumstances
such as unique geography, land uses, development constraints etc. are carefully reviewed relative to specific
programs and improvements to be funded by the PBID in order to determine any levels of diminished benefit which
may apply on a parcel by parcel or categorical basis.
Based on the factors described above such as geography and nature of programs and activities proposed, an
assessment formula is developed which is derived from a singular or corupvsite basic benefit unit factor or factors.
Within the assessment formula, different factors may be assigned different "weights" or percentage of values.
Next, all program and activity costs, including incidental costs, district administration, ancillary programs, and
volunteer and comped resource and material credits are estimated. It is noted, as stipulated in Proposition 218, and
now required of all property based assessment districts, indirect and general benefits may not be incorporated into
the assessment formula and levied on the district properties; only direct or "special" benefits and costs may be
considered. Indirect or general benefit costs must be calculated and factored out of the assessment cost basis to
produce a "net" cost figure. In addition, Proposition 218 no longer exempts government owned property from paying
benefit assessments and these properties must be factored into the assessment roll if special benefit is determined to
be conferred upon such properties.
2
13330 Buttemere Rd • Phelan CA 9237t • (76o) 868-9963 • (fax) (76o) 868-6490 • mred2@earthlink.net
Edward Henning & Associates
URBAN REVITALIZATION • FUNDING
From this, the value of a basic benefit unit or "basic net unit cost" can be computed by dividing the total amount of
estimated net program costs by the total number of benefit units. The amount of assessment for each parcel can be
computed at this time by multiplying the Net Unit Cost times the number of Basic Benefit Units per parcel. This is
known as "spreading the assessment" or the "acsment spread" in that all costs are allocated proportionally or
"spread" amongst all properties within the PBID.
The method and basis of spreading program costs varies from one PBID to another based on local geographic
conditions, types of programs and activities proposed, and size and development complexity of the district. PBIDs
may require secondary benefit zones to be identified to allow for a tiered assessment formula for variable or
"stepped -down" benefits derived.
Supplemental Proposition 218 Procedures and Requirements
Proposition 218, approved by the voters of California in November of 1996, adds a supplemental array of procedures
and requirements to be carried out prior to levying a property -based assessment like the Downtown National City
PBID. These requirements are in addition to requirements imposed by State and local ascPcsment enabling laws.
These requirements were "chaptered" into law as Article XIIII.) of the California Constitution and then further
clarified by the Proposition 218 Omnibus Legislation in 1997 chaptered in section 53750 et seq of the California
Government Code.
Since Prop 218 provisions will affect all subsequent calculations to be made in laying out the final property
assessment roll for the Downtown National City PBID, Prop 218 requirements will be taken into account first. The
key provisions of Prop 218 along with a description of how the Downtown National City PBID complies with each of
these provisions is delineated below.
(Note: All section references below pertain to Article X111 of the California Constitution):
Finding 1. From Section 4(a): "Identify all parcels which will have a special benefit conferred upon them and
upon which an acceisment will be imposed"
There are 153 "identified" individual parcels within the Downtown National City PBID which will all derive some
level of special benefit from the proposed District programs and activities. These parcels are shown on the
Boundary Map within the Management District Plan and are listed as an attachment to the Plan - identified by
assessor parcel number and site address. Two benefit zones have been identified within the District which generally
includes all properties along and surrounding the National City Boulevard corridor from 2"d to 12th and the 8th
Street corridor from the freeway to A Avenue.
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Finding 2. From Section 4(a): "Separate the general benefits from the special benefits conferred on parcel(s).
Only special benefits are assessable. "
As stipulated by Prop 218, assessment district programs and activities confer a combination of general and special
benefits to district properties, but the only program benefits which can be funded through assessments are those
attributed to special property related benefits. Thus, a portion of the program costs must be considered attributable
to general benefits and assigned a value. Conventional assessment engineering experience has found that general
benefits within a given district typically average 10% of the total adjusted costs with a 5% deviation. (Total
adjusted costs include actual proposed PBID program costs plus any additional supplemental or matching program
costs as well as applied credits from sources such as start up grants, Board/Committee member service credits and
spcx,ialized assessment reductions/adjustments.) There are three common methods for determining general and
special benefit ratios within assessment districts:
(1) The parcel by parcel allocation method
(2) The program/activity line item allocation method, and
(3) The composite district overlay determinant method.
The vast majority of PBIDs in California have used Method #3, the composite district overlay determinant method
which will be used for the Downtown National City PBID. Using empirical data from other PBIDs, a focused range
for general benefits from 5-15% is used. Based on a composite of district criteria such as the shape of the
Downtown National City PBID, the existence of two benefit zones, a three-four element assessment formula, the
proximity all of district properties to the applicable program benefit zones, and the nature of the proposed programs
and activities, a specific "overlay" value of 5% is assigned to the general benefit portion of the total adjusted costs.
This leaves a value of 95% assigned to special benefit related costs. Since the total program cost is estimated at
$265,572.01 (see Table 1 later in this Report), the maximum special benefit portion which can be recouped through
property assessments, is $252,293.41. Remaining costs which are attributed to general benefits, will need to be
derived from other sources. (e.g. public/private matching grants, startup grants, startup volunteer credits or ongoing
board member volunteer ucdits).
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Finding 3. From Section 4(a): "(Determine) the proportionate special benefit derived by each parcel in
relationship to the entirety of the. ....cost of public improvement(s) or the maintenance and operation
expenses. or the cost of the property related service being provided.
The proportionate special benefit cost for each parcel is listed in an attachment to the Management District Plan.
The individual percentages (i.e. proportionate relationship to the total special benefit related program and activity
costs) were computed by dividing the individual parcel assessment by the total program costs.
Finding 4. From Section 4(a): "No assessment. shall exceed the reasonable cost of the proportional special
benefit conferred on parcel(s)."
Not only are the proposed program costs reasonable due to the benefit of group purchasing and contracting which
would be possible through the Downtown National City PBID, they are also considerably less than other options
considered by groups like the Downtown National City PBID Formation Committee.
Finding 5. From Section 4(a): "Parcels. —..„.that are owned or used by any (public) agency shall not be exempt
from assessment"
Parcels within the District that are owned by public agencies (i.e. City of National City, the Community
Development Commission, Southwestern College etc) will also be assessed and at rates equivalent to private sector
owned parcels. The "fair market value" of such public properties is identical to surrounding privately owned
parcels and any increased values and benefits derived from PBID programs and services would be similar for either
public or privately owned parcels, with or without improvements. Just as the costs and effects of blight are shared
by both public and private properties, so are the rewards of clean and safe as well as district promotions and
marketing programs. Since there is no compelling finding or evidence that such properties would receive less direct
benefit from the proposed PBID programs and services than surrounding private parcels, the same assessment rates
would be levied.
Finding 6. From Section 4(b): "All assessments must be supported by a detailed engineer's report prepared by
a registered professional engineer certified by the State of California".
This report shall serve as the "detailed engineer's report" to support the benefit property assessments proposed to
be levied within the Downtown National City PBID.
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Finding 7. From Section 4(c): "The amount of the proposed assessment for each parcel shall be calculated
(along with) the total amount thereof chargeable to the entire district, the duration of such payments, the
reason for such assessment and the basis upon which the amount of the proposed assessment was calculated."
The individual and total parcel assessments attributable to special property benefits are shown on an attachment to
the Management District Plan. The district and resultant assment payments will continue for five years and may
be renewed again at that time. The reasons (purposes) for the proposed assessments are outlined in the Management
District Plan. The calculation basis of the proposed assessment for the PBID is attributed in part to the specific
amount of property size, building size and street frontage.
Special Benefit and Assessment Analysis
Step 1. Select "Basic Benefit Unit(s)"
PBID assessment formulas typically are based on either property street frontage or parcel and building size or
location, all which can affect the amount of benefit conferred on a particular parcel and the proportionate assessment
to be paid. The formula may base assessments on a single factor or a combination of factors.
Based on the nature of the program activities to be funded by the Downtown National City PBID, which relate to the
proportionate amount of real estate (i.e. land) held in ownership, development intensity (i.e. building area) and
property street frontage as well as land use, it has been determined that the assessments for the PBID will be based
proportionately on a combination of parcel size, building size, land use and street frontage. In addition a flat rate will
be applied to single family residential (SFR) and residential condo units located on non -residentially zoned land.
The `Basic Benefit Unifi' will be expressed as a function of land square footage (Basic Benefit "A" Units), building
area (Basic Benefit "B" Units - further refined by land use) and linear feet of property frontage (Basic Benefit "C"
Units). Based on the shape of the Downtown National City PBID, as well as the nature of the District program
elements, it is determined that two benefit zones exist in which identified properties will gain a direct, albeit,
proportionate degree of benefit based on the respective amount of parcel size, building size, land use and street
frontage.
Step 2. Quantify Total Basic Benefit Units
Taking into account all identified benefiting properties, there are 1,465,301 square feet of assessable parcel land area
within the District, 448,344 square feet of assessable building area and 21,744 linear feet of property street frontage.
In addition, there are 12 assessable single family/condo units. Since the selected Basic Benefit Unit is based on a
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combination of parcel area, building area and street frontage, there are, in turn, corresponding amounts of Basic
Benefit Units in the PBID as shown in Step 7 herein. The target weighted revenues from each formula component
were 50% for land area, 30% for building area and 20% for street frontage. The final adjusted weights are 49% for
land, 33% for building area, 17% for street frontage and 1% for SFR and condo flat rates. Further, the targeted
weighted revenues for each Benefit Zone were 60% for Zone 1 and 40% for Zone 2. The final adjusted weights are
61 % for Zone 1 and 39% for Zone 2.
Step 3. Calculate Benefit Units for Each Property.
The number of Benefit Units for each identified benefiting parcel within the Downtown National City PBID was
computed from data extracted from City of National City, San Diego County and third party real estate data services
property and land use records. These data sources delineate current land uses, property areas and dimensions of
record for each tax parcel and are listed as an attachment to the Management District Plan. While it is understood
that this data does not represent legal field survey measurements or detailed title search of iwvrded land subdivision
maps or building records, it does provide an acceptable basis for the purpose of calculating property based
assessments. All respective property data being used for assessment computations has been provided to each property
owner in the PBID for their review. All known or reported discrepancies or errors have been coirwted.
Step 4. Determine Assessment Formula
For a District with a single Basic Benefit Unit with one Benefit Zone, the assessment formula would be the same for
each identified benefiting property as follows:
Number of Basic Benefit Units x Basic Unit Cost = PBID Assessment
The Downtown National City PBID assessment is to be based on three Basic Benefit Unit factors; land square
footage (Basic Benefit "A" Units), building area (Basic Benefit "B" Units) and linear feet of property frontage (Basic
Benefit "C" Units). It has been determined that the acxeccment should be based partially on parcel size, building size
and street frontage as follows:
Zone 1:
Assessment = [(No. of Benefit "A-1"Units x Basic "A -I" Unit Cost)] +
[(No. of Benefit "B-1" Units x Basic "B-1" Unit Cost)] +
[(No. of Benefit "C-1" Units x Basic "C-1" Unit Cost)]
Zone 2:
Assessment =
[(No. of Benefit "A-2"Units x Basic "A-2" Unit Cost)] +
[(No. of Benefit `B-2" Units x Basic "B-2" Unit Cost)] +
[(No. of Benefit "C-2" Units x Basic "C-2" Unit Cost)]
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Note A: Benefit "B" Unit Costs vary based on land use as shown in Table 3 later in this report.
Note B: Assessments for single family residential and residential condos are based on a flat fee per unit as
shown in Table 3.
Step 5. Estimate Total Program and Activity Costs
Total estimated proposed program and activity costs are shown below in Table 1. These costs include expenses for
general as well as special benefits and related programs/activities.
TABLE 1
Estimated Total Year 1 Program & Activity Costs (Special+General Benefits)
Program/Activity
Year 1
%
Public Rights of Way & Sidewalk Operations
$173 000.00
65.14%
District Identity/Streetscape Improvements
T
514,000.00
5.27%
Administration/Corporate Operations
$41,000.00
1 5.44%
Contingency/Reserve
$12 722.01.
4.79%
Misc Costs (Credits)
$24,850.00
9.36%
Total
$265,572.01
100.00%
Step 6. Separate General Benefits from Special Benefits and Related Costs (Prop 218)
Total program and activity costs are estimated at $265,572.01 (see Table 1 above). General benefits are factored at
5% of total (see Finding 2 on page 4 of this report) with special benefits set at 95%. Prop 218 limits the levy of
property assessments to costs attributed to special benefits only. The 5% general benefit cost is computed to be
$13,278.60 with a resultant 95% special benefit limit computed at $252,293.41. This is the maximum amount of
revenue that can be derived from property assessments from the subject PBID. The total amount of revenue
proposed to be derived from PBID assessments is $240,722.01 for Year 1, which is less than the special benefit limit
of $252,293.41. Therefore, no Prop 218 adjustments need to be made to the proposed assessment formula. All
program costs associated with general benefits will be derived from sources or credits other than PBID assessments
as shown below in Table 2.
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TABLE 2
Total Adjusted Year 1 Revenue (For Special + General Benefit Programs/Activities)
Funding Source
Subtotal Revenue
%
PBID Assessments
SZ40,722.01
90.64%
PBID Formation Pro -rated Credit/Year (S35,000 base)
S7,000.00
2.64%
PBID Formation Pro -Rated Volunteer Credit/Year (50% base)
$3,500.00
1.32%
Annual Board/Volunteer Credit (35% base Admin)
S14,350.00
5.40%
TOTAL ADJUSTED REVENUE
S265,572.01
100.00%
Step 7. Calculate `Basic Unit Cost" (Special Benefits Only)
With a Year 1 budget of S240,720.01 (special benefit only), the Basic Unit Costs ("A", `B" and "C") from the
Management Plan are:
TABLE 3
Basic Unit
Land Use Description
Benefit Zone 1
Benefit Zone 2
"A" Cost
All except SFR and condos
50.0841/sf
50.0757/sf
"B-a" Cost
Retail, hotels, motels, visitor
50.1886/sf
50.1697/sf
"B-b" Cost
Office, commercial, pkg struc.
$0.1696/sf
SO.1697/sf
`B-c" Cost
Industrial, manufacturing
50.1696/sf
$0.1697/sf
"B-d" Cost
Institutional, government etc
50.1577/sf
$0.1578/sf
"B-e" Cost
Residential 20+ units
$0.1485/sf
50.1485/sf
`B f Cost
Residential 9-19 units
S0.1485/sf
50.1485/sf
"B-g" Cost
Residential 2-8 units
50.1485/sf
50.1485/sf
"B-h" Cost
Single family residential
$240 flat rate
_
$240 flat rate
"B-i" Cost
Residential Condo
$240 flat rate
$240 flat rate
"C" Cost
All except SFR and condos
$1.8264/LF
$1.8264/LF
Since the PBID is planned for a five year term, maximum assessments for future years (Years 2 through 5) must be
set at the inception of the PBID. A maximum annual flat rate increase of 5% may be imposed each year, subject to
approval by the PBID Board.
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Step 8. Spread the Assessments
The resultant assessment spread calculations for each parcel -within the PBID are shown in an attachment to the
District Management Plan and were determined by applying the District assessment formula to each identified
benefiting property. This list of all identified benefiting parcels in the PBID delineates each parcel and benefit units
for property street frontage and parcel area.
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EDWARD HENNING & ASSOCIATES
Edward Henning and Associates is a multi -disciplined consulting firm offering a diverse range of community development
and funding services focusing on downtown business districts and the unique problems and opportunities associated with
center city areas.
Types of services provided
• Business Improvement District (BID & PBID) Formations, Modifications, Expansions, Updates
• Prop 218 Assessment Engineering Analyses and Reports (Licensed Engineer)
• Downtown Revitalization Plans/Redevelopment Planning and Implementation
• Establish/Administer/Field Supervision for Rehabilitation Programs and Projects
• Architectural Design Guidelines/ Sign Ordinances
Partial list of agencies and clients represented
• Town of Apple Valley
• City of Berkeley
• City of Buena Park
• City of Culver City
• City of Huntington Park
• City of Huntington Beach
• City of Los Angeles
- Gateway to LAX
- Historic Downtown Core
- Hollywood District
- Melrose/Fairfax
— Larchmont
- Los Feliz
- San Fernando Valley (6 areas)
- San Vicente
- Wilshire Center
• City of Monterey Park
• City of Napa
• City of Newport Beach
• City of Ontario (Downtown)
• City of Oxnard
• City of Pasadena
• Placer County (Tahoe City)
• City of San Francisco (Union Square)
• City of Vacaville
• City of Whittier
• City of Yucaipa
PBID Formation (Village)
BID Formation (Downtown)
BID Formation Analysis (Auto Row & Entertainment Corridor)
BID Formation (Downtown)
BID Formation (Pacific Blvd.)
BID Formation (Auto Row District)
PBID Formation & Renewal (Prop 218 Compliance)
PBID Formation (Prop 218 Compliance)
PBID Formation (Prop 218 Compliance)
PBID Formation (Prop 218 Compliance)
PBID Formation & Renewal
BID Formation
PBID Formation (Prop 218 Compliance)
Private Sector PBID Formation
Hybrid BID/PBID Formation
BID Modification (Downtown)
PBID Formation (Downtown)
BID Advising
BID Modification
PBID Formation (Downtown)
PBID Formation (Playhouse District)
Citywide Tourist Improvement District (TID)
PBID Formation (Downtown)
PBID Formation (Prop 218 Compliance)
BID Formation (Downtown)
Citywide Tourist Improvement District Evaluation (TID)
BID Modification (Uptown)
PBID Formation & Renewal(Uptown)
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RLCEIVED
2
Community
!Development CiJiil,"rissio'
DOWNTOWN NATIONAL CITY
PROPERTY BUSINESS IMPROVEMENT DISTRICT
MANAGEMENT DISTRICT PLAN
� �p,5@ryjkS'�
Formed Under C``c>at�uti rectsaaad lig: 'ay odeSccto
Property Business Improvement District Act of 1994
FINAL PLAN
SUBMITTED TO:
THE DOWNTOWN NATIONAL CITY
P.B.I.D. STEERING COMMITTEE
THE CITY OF NATIONAL CITY
COMMUNITY DEVELOPMENT COMMISSION
EXECUTIVE DIRECTOR BEN MARTINEZ
MAYOR NICK INZUNZA
AND CITY COUNCIL MEMBERS LUIS NATIVIDAD, RON
MORRISON, FRANCISCO PARRA AND FIDELAS UNGAB
PRESENTED BY:
MARCO LI MANDRI, NEW CITY AMERICA INC.
APPROVED APRIL 30, 2004
UPDATED MAY 24, 2004
l
EXHIBIT "A"
DOWNTOWN NATIONAL CITY PROPERTY BUSINESS IMPROVEMENT DISTRICT
MANAGEMENT DISTRICT PLAN
FINAL PLAN - MAY 24, 2004
TABLE OF CONTENTS
I. INTRODUCTION, EXECUTIVE SUMMARY
II. ADDRESS SERIES, GENERAL STREET BOUNDARIES
III. WORK PLAN AND BUDGET
IV. ASSESSMENT METHODOLOGY TO FUND THE SPECIAL BENEFITS
V. RELEVANT ENABLING LEGISLATION, AB 1021
VI. ENGINEER'S REPORT AND RELATIONSHIP BETWEEN ASSESSMENTS PAID
AND SPECIAL SERVICES RECEIVED
VII.. DISTRICT GOVERNANCE
APPENDIX
A. MAP OF I'HE DISTRICT
B. FIVE YEAR PROJECTION OF ASSESSMENTS
C. LIST OF PARCELS INCLUDED IN DISTRICT
D. CERTIFIED ENGINEER'S REPORT
2
Passed and adopted by the Council of the City of National City, California, on August 2,
2005, by the following vote, to -wit:
Ayes: Councilmembers Morrison, Natividad, Parra, Zarate.
Nays: None.
Absent: Inzunza
Abstain: None.
AUTHENTICATED BY:
NICK INZUNZA
City
fe
Jerk of th G`
G
f National City, California
By:
Deputy
I HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of
RESOLUTION NO. 2005-171 of the City of National City, California, passed and
adopted by the Council of said City on August 2, 2005.
City Clerk of the City of National City, California
By:
Deputy