HomeMy WebLinkAboutCC RESO 2008-112RESOLUTION NO. 2008 — 112
RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF NATIONAL CITY
DECLARING ITS INTENTION TO PROVIDE FOR
AN ANNUAL LEVY AND COLLECTION OF ASSESSMENTS
IN THE DOWNTOWN NATIONAL CITY PROPERTY BUSINESS
IMPROVEMENT DISTRICT, AND SETTING A TIME AND
PLACE FOR A PUBLIC HEARING THEREON
(MORGAN SQUARE)
WHEREAS, the City Council of the City of National City has previously formed a
special maintenance district pursuant to the terms of the "Property and Business Improvement
District Law of 1994," being Division 18, Part 7 (Section 36600 et seq.) of the California Streets
and Highways Code, said special maintenance district known and designated as the Down
Town National City Property Business Improvement District (hereinafter referred to as the
"District"); and
WHEREAS, at this time the City Council is desirous to conduct proceedings to
provide for the annual levy of assessments for the next ensuing fiscal year to provide for the
annual costs for maintenance of improvements within the Maintenance District; and
WHEREAS, there has been presented, and the City has approved the
Assessment Engineer's Report ("Report"), as required by Section 36600 et seq. of the Streets
and Highways Code and Article XIII D of the Constitution ("Article XIII D"), and this City Council
is desirous of continuing with the proceedings for said annual levy.
NOW THEREFORE, BE IT RESOLVED by the City Council of the City of
National City as follows:
RECITALS
Section 1. The above recitals are all true and correct
PROCEDURES
Section 2. That the public interest and convenience requires, and it is the intention of
this legislative body, to levy and collect assessments to pay the annual costs and expenses for
the maintenance and/or servicing of the improvements for the above -referenced National City
Property Business Improvement District, said improvements generally described as set forth in
Exhibit "A" attached hereto and incorporated herein by this reference.
BOUNDARIES OF MAINTENANCE DISTRICT
Section 3. That said works of improvement are of special benefit to the properties
within the boundaries of said Property Business Improvement District, which District the
legislative body previously declared to be the area specially benefited by said works of
improvement, and for particulars, reference is made to the boundary map as previously
approved by the legislative body, a copy of which is on file in the Office of the City Clerk and
Open for public inspection, and is designated by the name of this Maintenance District.
Resolution No. 2008 — 112
June 17, 2008
Page 2
REPORT OF ENGINEER
Section 4. That the "Report" of the Engineer, as preliminarily approved by this
legislative body, is on file with the City Clerk and open for public inspection. Reference is made
to said "Report" for a full and detailed description of the improvements to be maintained, the
boundaries of the Maintenance District and any zones therein, and the proposed assessments
upon assessable lots and parcels of land within the Maintenance District.
PUBLIC HEARING
Section 5. NOTICE IF HEREBY GIVEN THAT A PUBLIC HEARING IS HEREBY
SCHEDULED IN THE REGULAR MEETING PLACE OF THIS LEGISLATIVE BODY, BEING
THE COUNCIL CHAMBERS, CITY HALL, 1243 NATIONAL CITY BOULEVARD, NATIONAL
CITY, CA, 91950, ON JULY 1, 2008, AT 6PM.
ALL INTERESTED PERSONS SHALL BE AFFORDED THE OPPORTUNITY TO HEAR
AND BE HEARD. THE CITY COUNCIL SHALL CONSIDER ALL ORAL STATEMENTS AND
ALL WRITTEN PROTESTS OR COMMUNICATIONS MADE OR FILED BY ANY INTERESTED
PERSONS.
PASSED and ADOPTED this 17th day of June
ATTEST:
A
tia,a
Mic el Della, y Clerk
APPROVED AS TO FORM:
George H. iser, III
City Attorney
on Morrison, Mayor
RECEIVED
JUN 0' V
Corrmunity
Deveiepment Ccrnmiss on
DOWNTOWN NATIONAL CITY
PROPERTY BUSINESS IMPROVEMENT DISTRICT
MANAGEMENT DISTRICT PLAN
Formed Under California Streets and Highway Code Section 36600
Property Business Improvement District Act of 1994
FINAL PLAN
SUBMITTED TO:
THE DOWNTOWN NATIONAL CITY
P.B.I.D. STEERING COMMII"I I E
THE CITY OF NATIONAL CITY
COMMUNITY DEVELOPMENT COMMISSION
EXECUTIVE DIRECTOR BEN MARTINEZ
MAYOR NICK INZUNZA
AND CITY COUNCIL MEMBERS LUIS NATI VIDAD, 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"
DOWNTOWN NATIONAL CITY PROPERTY BUSINESS IMPROVEMENT DISTRICT
MANAGEMENT DISTRICT PLAN
FINAL PLAN - MAY 24, 2004
TABLE OF CONTENTS
1. INTRODUCTION, EXECUTIVE SUMMARY
II. ADDRESS SERIES, GENERAL STREET BOUNDARIES
III. WORK PLAN AND BUDGET
IV. ASSESSMENT MET'IIODOLOGY 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 THE DISTRICT
B. FIVE YEAR PROJECTION OF ASSESSMENTS
C. LIST OF PARCELS INCLUDED IN DISTRICT
D. CERTIFIED ENGINEER'S REPORT
1
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 21'' 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 Mare 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. 4
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 YIl1D 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 2nd Street on the north, 12"'
Street on the south, and along 8t° 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:
Respondents represented 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
Res onse
Lot Size
Building Size
Linear Frontage
Su ort Formation
76%
88%
77%
Oppose Formation
24%
12%
23%
Of those who responded, the following represent support of specific special benefits handed
by the PBID:
➢ 61% had owned their property for 9 years or less;
> 73% were sole proprietorship or family owned properties
> S2%, 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 forded special benefit security services;
➢ 54% feel their customers would not feel safe walking from the corner of 8'h 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 ii'h 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 discstablishments 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 8'h
Street from the freeway bridge to A Avenue, will constitute Benefit Zone I. All other
parcels in the district will fall into Benefit Zone 2.
ANNUAL BUDGET:
The annual first year budget is anticipated to be S240,722.01. Benefit Zone l 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).
APPORTIONMENT OF BUILDING USES:
Building Use Code
Description of Use
A
Retail space, hotels, motels, visitor related
B
Office and Commercial uses,jndependent, free standing parking structures
C
Industrial/Manufacturing/Distribution
D
Institutional (School, public, park Church, Tax-exempt properties
.
Multi -unit housing, apartments (20 units or mores
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
BENEFIT ZONE 1
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%)
a
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 previou'S 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 IO% per year from category to
category, each year, as needs change wfth 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. 12`h St.
14 — 35
E. 3`d St.
10
E. 5`hSt —
22-404
E. 891St.
419
E. 9th St.
810 — 925
Hoover Avenue
205 — 1146
National City Blvd.
225 —1133
Roosevelt Avenue
25-38
W.11`hSt.
21
W. 12`a St.
30
W. 2"Avenue
21 — 27
W. 3`d Avenue
21
W. 7i" St.
110 — 200
W. 8`' St.
111- 225
W. 9 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:
1. 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 Cerporate Operations:
• Staffing;
• Insurance;
• Office related expenses;
• Misc.
4. Contingency/Reserve:
• Delinquencies;
■ City costs;
• County costs;
• Hardship;
• Reserves;
8
4
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 PB1D 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 PB1D 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 891 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 bride to A Avenue
All other streets in the district not included in Benefit Zone 1
TABLE 1 --- FREQUENCY OF SPECIAL BENEFIT SERVICES BY BENEFIT ZONES
Special Benefit Service
Public rights of way and
sidewalk operations
(PROWSO)
District Identity and
Streetscape Improvements
(DISI)
• Special Events
• Holiday Decorations
Benefit Zone 1
Frequency
6 days per week
Through
programs
Once per year
Seasonally
Benefit Zone 2
Frequency
4 days per week
Through programs
Administration/Corporate
Operations
Monday — Friday
None
None
Monday Friday
9
PART IV
ASSESSMENT METHODOLOGY TO FUND SPECIAL BENEFITS
BUDGET: The first year annual budget is projected to be $240,722.01. Annual
adjustments of up to a maximum of 5% over the previous year's gross assessment amount
are allowable, subject to the approval of the Downtown National City Property Business
Improvement District Management Corporation.
TABLE 2 — SPECIAL BENEFIT SERVICES BROKEN DOWN BY ESTIMATED COSTS
PER BENEFIT ZONE
PROWSO Personnel Estimated Costs
Service
PROWSO:
• Sidewalk Sweeping;
• Beautification
• Decorations and banners
• Enhanced trash receptacle
emptying
• Removal of bulky items
• Reporting hazards to City;
• Removal of bulky items;
• Tree and shrub planting and
maintenance
• Maintenance of public order
• Homeless intervention
ESTIMATED PERSONNEL NEEDS*
Estimated maintenance personnel costs
Total Estimated Personnel Cost
Benefit Zone 1
6 days per week
As needed
As needed
As needed
As needed
Daily
As needed
Weekly
As needed
As needed
Benefit Zone 2
4 days per week
As needed
As needed
As needed
As needed
Daily
As needed
Weekly
As needed
As needed
%: cost of Supervisor;
($ 23,040)
1 maintenance worker,
full time, 40 hours per
week ($27,850)
1 maintenance worker,
six days per week, 48
hours ($30,720)
10
$81,610
'/2 cost of Supervisor;
($23,040)
1 maintenance worker,
full time, 40 hours per
week ($27,850)
$ 50,890
$ 132,500
*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 I.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
PROWSO Equipment and Materials
Estimated Annual Cost
Truck lease, insurance
$ 6,000
Uniforms
$ 1,000
Communications
$ 4,000
Supplies
$ 8,000
Water
$ 1,000
Dumpster costs
$ 6,000
Nursery Items
$ 8,000 . _ -
Small Equipment
$ 3,000
Miscellaneous
$ 3,500
Total Estimated Annual Equipment Costs
$ 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.
TABLE 4 — DISTRICT IDENTITY AND STREETSCAPE IMPROVEMENTS
SUGGESTED BUDGET ITEMS
Program to befunded/Both Bend Zones
Estimated First Year Annual Cost
Special events (1 per year);
$ 5,000
Logo Creation (First Year only)
S 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
12
TABLE 7 — TOTAL FIRST YEAR DOWNTOWN NATIONAL CITY SPECIAI. BENEFIT SERVICES
BUDGET LINE ITEMS BASED UPON SUGGESTED PROGRAMS AND ALLOCATIONS
Program
First Year Allocation
% of Total Bud: et
Public Rights of Way and
Sidewalk Operations —
Personnel. and Equipment for
All Benefit Zones
$ 173,000.00
72%
District Identity and
Streetscape Improvements
$ 14,000.00
6%
Administrative/Corporate
Operations
$ 41,000.00
17 %
Contingency/Reserve
$ 12,722.01
5%
Total Estimated First Year
Costs of Programs
$ 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
Lot Size
Building Size
Linear Feet
Total in District
1,465,391 square feet
448,344 sic uare 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.
1.3
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 parcelhas 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/LANt) USES:
Building Use Code
Description of Use
A
Retail space, hotels, motels, visitor related
13
Office and Commercial uses, Independent, free standing parking structures
C
IndustriaUManufacturing/Distribution
D
Institutional (School, public, park Church, Tax-exempt properties
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)
N
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
PROWSO:
■ Maintenance Personnel
■ Maintenance Personnel
• Non -personnel, equipment
DISTRICT IDENTITY AND
STREETSCAPE IMPROVEMENTS:
• Special events (1 per year)
• Logo creation
• Web site creation/maintenance
• Pedestrian kiosks/signage
Benefit Zone
1
($81,610)
Apportioned to Variable
'/: to all building square footage,
1/2 to all lot size in Benefit Zone 1
2 'h to all building square footage,
($50,890) '/: to all lot size in Benefit Zone 2
1, 2 All linear frontage, apportioned
($ 40,500) equally in both Benefit Zones
1
( $5,000)
1, 2
( $1,000)
1, 2
($ 4,000)
1, 2
($ 4,000)
Building square footage "a" only
Building square footage a — c
Building square footage a — c
Building square footage a — d
ADMINISTRATION AND CORPORATE
OPERATIONS
1, 2 Apportioned equally to all lot size
($ 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
• . $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 parOls within
Benefit Zone 1. The balance, $94,626.71 (39%) will be generated from Benefit Zone 2
parcels.
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 developrnent, 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
overall PBIll. 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.
16
TABLE 12 - DOWNTOWN NATIONAL CITY PBID FIRST YEAR COSTS BY PROPERTY VARIABLE
PROPERTY
VARIABLE
ANNUAL COST
BENEFIT ZONE 1
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)
S 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
footper 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
TABLE 13 - AMOUNTS GENERATED BY DOWNTOWN NATIONAL CITY PBID
Property Variable
Total Gross Variable,
Both Benefit Zones
Amount Generated First
Year
Parcel or Lot Size
1,465,301
$118,053.09
Building Square Feet
448,344
$80,075.68
Linear Frontage
21,744
$39,713.24
Single Family Home
and Condo Annual Fee
12
$2,880.00 +
Total Assessments, First
Year — Both Zones
$240,722.01
1i
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 .luly 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 pro visions 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 he 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 publicentities for purposes of the Brown Act.
The issue has been raised that if the organisations 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 pdreel. Only special benefits are assessable, and an
agency must separate the general benefits from the special benefits conferred on a parcel."
18
t?ORMAT1ON:
• 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 tbat 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 hill 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 term. 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
July 20"', 2004
.June 8t°
May 1"-June 7'W
April 30`h
April 20, 2004
Task to be completed
Public hearing/assessment balloting proceeding, ballots
counted by weight
Resolution of intent. by City to establish the district
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 coinpliant with
Proposition 218
Finalize management district plan including special benefit
services to be provided, duration of district, boundaries,
benefit zones, assessment methodology, administration, etc.
Initiate petition drive
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 id 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'31st 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
PART VII
DISTRICT GOVERNANCE AND THE
DOWNTOWN NATIONAL CITY P.B.I.D.
MANAGEMENT CORPORATION
A few rules and regulations should be considered by the Downtown National City PBID
Management Corporation in the administration of the district.
Conflict of Interest:
• Any stakeholder who serves on the administering corporation's Board of Directors
shall recuse himself or herself from any vote in which a potential conflict of interest
is apparent. Such potential conflicts include, but are not limited to, prioritizing
capital improvement projects which result in special benefit to specific property
owners, prioritization of services to benefit a particular owner or group of owners,
hiring or selecting the relatives of Board members, etc.
In addition, the Management Corporation shall aim to meet the following operational
objectives for the district...
• Create and manage programs that best respond to the top priorities of district property
owners;
• Maximize coordination of the City government to avoid duplication of services and to
leverage resources;
• Deliver services through a cost-effective, non -bureaucratic and easy to access
organizational structure;
Provide accountability and responsiveness to those who pay through open access to
Board meetings, elections to the Board and Board records.
23
APPENDIX A
MAP OF THE DISTRICT
24
A Atm.
It
it t
I 11 7,1v/I
;
B Av
•
..„
f :t r ! •
:11
i,1 • !.4 • ,
! • ! 4
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
$8,550.00
$181,650.00
$9,082.50
$190.732.50
$9,536.63
S200,269.13
$10,013.46
S210,282.58
District Identity and
Streetsca,eITorovementsI
$14,000.00
$703.00
j $14,700.00
$735.00
$15,435.00
$771.75
$16,206.75
$810.34
$17,017.09
AC ministrative/Corporate
Oooraoons
841,000.00
$2,050.00
$43,050.00
$2.152.50
$45,202.50
82,280.13
• $47,462.63
$2,373.13
$49,835.76
Contingency'Reserve
512,722.011 $636.10
S13,358.11
$667.91
$14,026.02
$701.30
$14,727.32
$736.37
515,463.68
Total
5240,722.01I 512,036.10
$252,758.11
512,637.91
$265,396.02
513,269.80
$278,665.82
513,933.29
5292,599.11
4,
APPENDIX C
LIST OF PARCELS INCLUDED IN TnE DISTRICT
26
EN An ua
Assessment
555 030 01 00 $240.00
555 030 02 00 $427.32
555 030 03 00 $0.00
555 030 04 00 $0.00
555 030 05 00 $240.00
555 030 06 00 $0.00
555 030 07 00 $240.00
555 030 08 00 $1,358.46
555 030 09 00 $278.41
555 030 10 00 $339.52
555 030 11 00 $270.50
555 030 12 00 $344.51
555 030 13 00 $282.92
555 030 14 00 $500.53
555 030 17 00 $1,089.50
55 030 20 00 $4,997.45
555 030 21 00 $3,644.29
555 030 22 00 $6,609.58
555 041 01 00 $878.28
555 041 02 00 $472.48
555 041 03 00 $3,616.36
555 041 04 00 $1,063.44
555 041 05 00 $570.74
555 041 06 00 $571.49
555 041 07 00 $694.46
555 041 08 00 $511.82
555 041 09 00 $511.82
555 041 10 00 $1,206.28
555 042 10 00 51,080.70
555 042 15 00 $3,104.82
555 042 17 00 $3,458.95
'55 042 18 00 $7,001.77
555 052 04 00 $694.46
555 052 05 00 $649.75
555 052 06 00 5471.60
555 052 14 00 $2,453.40
NATIONAL CITY PBID
PARCELS TO BE ASSESSED
APN
555 052 15 00
555 053 17 00
555 054 12 00
555 081 09 00
555 081 10 00
555 081 14 00
555 08t 15 00
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
5551130400
555 113 05 00
555 113 08 00
5551131100
555 113 12 00
5551131300
555 114 01 00
555 114 02 00
Annua
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
51,533.33
$4,09 7.40
$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
51,569.12
$1,133.05
$240.00
$240.00
EN
Annual
Assessment
555 114 03 00 $215.59
555 114 04 00 $220.14
555 114 05 00 $452.48
555 114 06 00 $652.46
5551140700 $1,151.14
5551141100 $330.42
555 114 1200 $1,594.28
555 114 13 00 $1,569.62
5561010100 $1,614.58
556 101 02 00 $1,815.33
556 101 1500 $5,492.84
556 101 16 00 $2,276.33
556 104 01 00 $2,485.63
556 104 02 00 $240.00
5561041800 $1,820.45
556 210 25 00 $1,662.72
5562102600 $1,510.43.
556 210 27 00 $1,077.40
556 212 01 00 $240.00
556 212 02 00 $240.00
556 212 03-00 $496.74
556 212 04 00 $276.94
5562120500 $419.14
556 212 06 00 $563.61
5562120T00 $754.77
556 331 03 00 $249.09
556 331 04 00 $505.91
556 331 05 00 $1,181.45
556 331 14 00 $2,439.68
556 331 15 00 $926.31
556 331 20 00 $748.13
556 331 21 00 52,720.06
556 331 22 00 $1,255.39
556 331 23 00 $566.21
556 331 24 00 $715.80
556 331 25 00- $3,133.35
APN Annual
Assessment
556 332 20 00 $1,764.62
556 332 21 00 $535.59
556 332 22 00 $375.86
556 332 23 00 $253,70
556 332 24 00 $1,409.83
556 333 15 00 $2,626.38
556 333 17 00 $4,907.21
556 333 18 00 $522.19
556 334 19 00 $2,101.81
556 334 20 00 $282.35
556 334 21 00 $410.30
556 334 22 00 $452.14
556 471 03 00 52,233.31
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
b56 553 02 00 5357.15
556 553 03 00 $409.23
556 553 04 00 $616.95
556 553 05 00 $1,592.19
NATIONA
PARCELS 7
APN
556 553 09.00
556 553 12 00
556 553 13 00
556 554 16 00
556 554 17 00
556 554 18 00
556 554 19 00
556 554 2000
556 554 21 00
L CITY PB ID
0 BE ASSESSED
Annual
Assessment
$515.54
$567.57
$526.29
$4,415.42
$6,245.33
$1,195.18
$569.85
$1,205.03
$1,568.79
Annual
Assessment
Edward Henning & Associates
URBAN REvrrAI invrIoN • FUNDING
Downtown National City
Property Business Improvement District
CITY OF NATIONAL CITY - CALIFORNIA
DISTRICT
ASSESSMENT ENGINEER'S
REPORT
Prepared by
Edward Y. Henning,
California Registered Professional Engineer # 26549
Edward Henning & Associates
Phelan California
June 1, 2004
13330 Buttemere Rd • Phelan CA 92371 • (760) 868-9963 • (fax) (760) 868-6490 • mred2@earthlink_net
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.
Prepareby Edward V. Henning, California Registered Professional Engineer # 26549
RPE 1126549
Edward V. He
June 1, 2004
Date
(NOT VALID WITHOUT EMBOSSED CERTIFICATIONSEAL AND SIGNATURE HERE)
Introduction
This report shall serve as the "detailed engineer's report" required by Section 4(b) of Article X111D 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 special 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 fimded programs and improvements and does not imply that all parcels
receive assessable benefits .
1
13330 linttemere Rd • Phelan CA 92371 • (76o) 868-9963 • (fax) (76o) 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 Strews 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 proposed 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. Quantity 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 composite 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 casts, including incidental costs, district administration, ancillary programs, and
volunteer and romped 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 10
produce a "net" cost figure. In addition, Proposition 218 no longer exempts govenunent 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 9237i • (76o) 868-9963 • (fax) (26o) 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 "spn ading the assessment" or the "assessment 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 assessment enabling laws.
These requirements were "chaptered" into law as Article )(MD of the California Constitution and then further
clarified by the Proposition 218 Omnibus Legislation in 1997 cbaptered in section 53750 ct seq of the California
Government Code.
Since Prop 218 provisions will affect all subsequent calculations to be made in laying out the final property
accecsment 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 XIII of the California Constitution):
Findintr 1. From Section 4(a): "Identify all parcels which will have a special benefit conferred upon them and
upon which an assessment 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 mimber 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`"' to 12th and the 8`h
Street corridor from the freeway to A Avenue.
3
13330 Buttemcre Rd • Phelan CA 92371 • (760) 868-9963 • (fax) (76o) 868 6490 • mred2@earthlink.net
Edward Henning & Associates
URBAN REVITALIZATION • FUNDING
Finding 2. From Section 4(3): "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
attnbutexl 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 PB1D program costs phis 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
specialized assessment reductions/adjustments.) There arc 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 clement 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 ]caves a value of 95% assigned to special benefit related costs_ Since the total program cost is estimated at
S265,572.01 (see Table I later in this Report), the maximum special benefit portion which can be recouped through
property assessments, is S252,293.41. 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 credits).
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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 set -vice 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 theindividual 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 proposal 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 PBU) Formation Committee.
Finding 5. From Section 4(a): "Parceb........tbat 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 apt 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 world 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 safc as well as district promotions and
marketing programs. Since then: is no compelling finding or evidence that such properties would receive less direct
benefit from the proposed P13ID 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 cadre district, tbe duration of such payments, tbe
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 spwial property benefits are shown on an attachment to
the Management District Plan. The district and resultant assessment 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, ail which can affect the amount of benefit conferred on a particular parcel and the proportionate assessment
to be. paid. The formula may base -is'sments 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 !elate 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 PIMA) 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 Unit" 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 Bask 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 arca, building area and street frontage, there are, in tarn, 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 l% 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 recorded land subdivision
reaps or building records, it does provide an acceptable basis for the purpose of calculating property based
assessments. MI 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 corrected.
Step 4. Determine Assessment Formula
r
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). 1t has been determined that the assessment 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-1" Unit Cost)] +
[(No. of Beuefit "B-I" Units x Basic "B-1" Unit Cost)] +
[(No. of Benefit "C-1" Units x Basic "C-l" 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 33enefit "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
°fo
Public R9hts of Way & Sidewalk Operations
SI71000.00
65.14%
District Identity/Streetscape Improvements
S14,000.00
5.27%
Administration/Corporate Operations
$41,000.00
4
15.44%
Contingency/Reserve
S12,722.01.
4.79%
Misc Costs (Credits)
S24,850.00
9.36%
Total
5265,572.01
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 spxdal 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 l'BID. The total amount of revenue
proposed to be derived from PBID assessments is $240,722.01 for Year I, 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 Adinsted Year 1 Revenue (For Special + General Benefit Programs/Activities)
Funding Source
Subtotal Revenue
I %
PBID Assessments
S240.722.01
90.64%
PBID Formation Pro -rated Credit/Year (S35,000 base)
$7,000.00
2.64%
PBID Formation Pro -Rated Volunteer Credit/Year (50% base)
$3,500.00
1.32%
Annual Board/Volunteer Credit (35% base Admln)
S14,350.00
5.40%
TOTAL ADJUSTED REVENUE
$265,572.01
100.00%
Step 7. Calculate "Basic Unit Cost" (Special Benefits Only)
With a Year 1 budget of $240,720.01 (special benefit only), the Basic Unit CosLs ("A", "13" and "C") from the
Management Plan are:
TABLE 3
Basic Unit
Land Use Description
Benefit Zone I
Benefit Zone 2
"A" Cost
All except SFR and condos
$0.0841/sf
$0.0757/sf
"B-a" Cost
Retail, hotels, motels, visitor
$0.1886/sf
$0.1694/sf
_B-b" Cost
Office, commercial, pkg struc.
S0.1696/sf
50.1697/sf
"B-c" Cost
Industrial, manufacturing
50.1696/sf
50.1697/sf
"B-d" Cost
Institutional, government etc
$0.1577/sf
$0.1578/sf
"B-e" Cost
Residential 20+ units
$0.1485/sf
$0.1485/sf
"B-f" Cost
Residential 9-19 units
50.1485/sf
$0.1485/sf
"B-g" Cost
Residential 2,8 units
50.1485/sf
50.1485/sf
"B-b" Cost
Single (amity residential
$240 flat rate
$240 flat rate
"13-1" Cost
Residential Condo
$240 flat rate
$240 flat rate
"C" Cost
All except SFR and condos
51.82641LF
-
$1.8264/LF
Since the PBID is planned for a five year term, maximum ass mcnts for future years (Years 2 through 5) roust 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 PIM Board.
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Sten 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 &m offering a diverse range of community development
and funding services focusing on downtown business districts and the unique problems and opportrmitics 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 Ordinance's
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
- Larchn ont
- 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
PBlD Formation (Prop 218 Compliance)
Private Sector PBID Formation
Hybrid BID/PBID Formation
BID Modification (Downtown)
PBID Formation (Downtown)
BID Advising
BID Modification
PB1D 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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Passed and adopted by the Council of the City of National City, California, on June 17,
2008 by the following vote, to -wit:
Ayes: Councilmembers Morrison, Parra, Ungab, Zarate.
Nays: None.
Absent: Councilmember Natividad.
Abstain: None.
AUTHENTICATED BY: RON MORRISON
Mayor of the City of National City, California
AP/City ofal City, California
erk of the City
By:
Deputy
I HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of
RESOLUTION NO. 2008-112 of the City of National City, California, passed and
adopted by the Council of said City on June 17, 2008.
City Clerk of the City of National City, California
By:
Deputy