TITLE
Recommendation to approve the Magnolia Industrial Group Property and Business Improvement District Annual Report and Assessment for the period of December 1, 2015 through November 30, 2016, automatically extending the current agreement with the Magnolia Industrial Group, Inc., for a one-year period; and authorize payment of $1,511 in City property assessments from the General Fund (GF) in the Public Works Department (PW).
(District 1)
DISCUSSION
Pursuant to the Property and Business Improvement Law of 1994 (Law), the Magnolia Industrial Group Property and Business Improvement District (MIG-PBID) was initially established by the City Council in 1996 for a three-year period. On July 20, 1999, the City Council re-established the MIG-PBID for an additional five years. On July 23, 2013, following a majority vote of the property owners in favor of a new ten-year term, the City Council again re-established the MIG-PBID for an additional ten-year term. Under the Law, Magnolia Industrial Group (MIG) property owners assess themselves an additional fee to pay for supplemental security patrol and the cleanup and removal of items such as weeds, trash, abandoned furniture and tires within the MIG area.
The Law requires that the Magnolia Industrial Group, Inc., as the MIG-PBID Advisory Board, approve and file an Annual Report describing their projected budget and expenditures. The 2015-2016 Annual Report is attached for City Council approval. The levy of assessment will cover the period of December 1, 2015 through November 30, 2016.
The MIG-PBID assessment area contains properties owned by private commercial owners and the City of Long Beach. In Fiscal Year 2016, the City assessment is $1,511.
The Board-approved MIG-PBID rate of assessment is based on the square footage of developed property within the boundaries, as shown on the map in Section 5 of the attached Annual Report. The MIG-PBID Management Plan allows up to a 4 percent per year cost-of-living increase in the assessment rate. For Fiscal Year 2016 (FY 16), the applicable increase in the Consumer Price Index was approximately 0.51 percent, and the MIG Board voted to increase the assessment by 1.56 percent for FY 16.
In FY 16, properties under or equal to 20,000 square feet are assessed a monthly amount of $63. Properties larger than 20,000 square feet are assessed a monthly amount of $63 plus $0.001133408 for each square foot in excess of 20,000, with the maximum monthly assessment limited to $126. The effective maximum assessment is $1,511 per owner per year. This is within the maximum allowed for the district according to Section 6.1 of the MIG-PBID Management Plan. The total property assessment to be collected by the City and paid to the MIG-PBID for the period of December 1, 2015 through November 30, 2016 is estimated at $88,642.
The Law also allows the City to contract with service providers to carry out the MIG-PBID Program. Since 1996, the City of Long Beach has contracted with MIG, Inc., to carry out the security and maintenance program. The current agreement provides that the term be automatically extended on a year-to-year basis upon City Council approval of the Assessment Report (included in the Annual Report) and related levy of assessments.
This matter was reviewed by Deputy City Attorney Amy Webber on October 19, 2015, and by Budget Management Officer Victoria Bell on October 23, 2015.
TIMING CONSIDERATIONS
The MIG-PBID’s 2015 contract ends on November 30, 2015. City Council approval of the Annual Report and Assessment is requested on November 17, 2015 to continue the assessment and extend the contract for another year.
FISCAL IMPACT
It is estimated that the MIG-PBID will generate $88,642 in FY 16 through the proposed continutation of the assessment. Sufficient funds are included in the FY 16 Budget in the Parking and Business Area Improvement Fund (SR 132) in the Department of Economic and Property Development (EP), for City pass-through payments to MIG-PBID.
The estimated MIG-PBID revenue includes the City’s assessment of $1,511 for City-owned parcels, which will be absorbed in the General Fund (GF) in the Public Works Department (PW).
Approval of this recommendation will result in a positive local job impact.
SUGGESTED ACTION
Approve recommendation.
Respectfully Submitted,
MICHAEL P. CONWAY, DIRECTOR
DEPARTMENT OF ECONOMIC AND PROPERTY DEVELOPMENT
APPROVED:
PATRICK H. WEST
CITY MANAGER