TITLE
Recommendation to receive supporting documentation into the record, concluding the public hearing to consider the renewal of the Midtown Business Improvement District (MBID); direct City Clerk to tabulate the ballots and report the results of the tabulation to the Mayor and City Council during the July 19, 2022 meeting; and, if a majority of ballots received are in favor of the renewal of the MBID, adopt resolution to renew the MBID for a term of 10 years, effective January 1, 2023 through December 31, 2032. (District 6)
DISCUSSION
The State of California Property and Business Improvement District Law of 1994 (Section 33600 et seq. of the California Streets and Highways Code) and Article XIIID of the California Constitution (Proposition 218) enables the City to create a property-based assessment district allowing property owners to be assessed for various services beyond those provided by the City of Long Beach (City), including enhanced maintenance, public safety, marketing, and economic development programs. All properties located within the Midtown Business Improvement District (MBID) that receive special benefits, as determined by the Engineer’s Report, must be allocated a proportional share of the assessment.
Property owners of record located in the MBID, who will pay more than 50 percent of the proposed assessment, have submitted petitions to the City for the renewal of the MBID. Renewal of the MBID is accomplished through a majority vote of the property owners in favor of the proposed assessment for the new term. Pursuant to the California Constitution, the vote on a proposed special assessment must be weighted according to the proportional financial obligation of the affected properties. The assessment is based upon the special benefits each individual parcel receives as determined by an independent Engineer's Report prepared pursuant to State law.
The MBID Management District Plan (MDP) (Resolution, Exhibit A) details the boundaries of the MBID, the method of assessment for each parcel, and the improvements and activities for which the assessment funds will be used. If renewed, the MBID will have a ten (10) year life. Special benefit services will begin January 1, 2023, and end December 31, 2032. The City Council will annually review and consider approving the annual assessment of the levy, budgets, and reports as submitted by the Owners’ Association for the MBID. The assessment methodology will generate approximately $158,944 in revenue for the MBID during the first year. Property owned by the City will be assessed at $22,499.
The MDP proposes that the MPBOA will manage the MBID under contract with the City and shall serve as the Owners’ Association per California Streets and Highways Code Section 36651. The MPBOA Board of Directors is required to adhere to the Ralph M. Brown Act. Pursuant to the Streets and Highways Code, Section 36650, the MPBOA will provide the City with an Annual Report. The City will pay its assessment as a parcel owner for the duration of the MBID.
As approved by the City Council on May 24, 2022, and to comply with the California Constitution, a notice of assessment and an assessment ballot were mailed to property owners who are proposed to be assessed. During the public hearing held at the City Council meeting on July 19, 2022, an independent third party will tabulate the ballots, and will return to City Council later during the July 19, 2022 meeting to announce the results. If a majority of ballots received are in favor of the renewal of the MBID, the City Council may proceed with the adoption of the Resolution renewing the MBID. If a majority of the ballots received do not support the renewal of the MBID, then the MBID cannot be renewed.
This matter was reviewed by Deputy City Attorney Lauren Misajon on June 23, 2022 and by Budget Operations and Development Officer Rhutu Amin Gharib on June 27, 2022.
TIMING CONSIDERATIONS
City Council action is requested on July 19, 2022, to allow timely completion of the balloting process and submittal of the levy to the Los Angeles County Assessor before August 10, 2022, for the new ten-year term.
FISCAL IMPACT
If the MBID is approved and renewed it will generate approximately $158,944 in its first year through the assessment. The estimated total annual City share of the MBID assessment for Fiscal Year 2023 (FY 23) would be $22,499 which is not currently budgeted in the FY 23 budget. The assessments will be paid by various City departments for properties in the General Fund Group. The Economic Development Department is responsible for $5,676, the Library Services Department is responsible for $4,120, and the Parks, Recreation, and Marine Department is responsible for $12,703. Should the assessments need to be paid, the responsible departments may return to the City Council for a future budget adjustment, as needed. Upon annual review, per the MDP, the City Council can increase the property assessment up to four (4) percent per year based on demonstrated need. This recommendation has no staffing impact beyond the budgeted scope of duties and is consistent with existing City Council priorities. There is no local job impact associated with this recommendation.
SUGGESTED ACTION
Approve recommendation.
Respectfully Submitted,
JOHNNY M. VALLEJO
ACTING DIRECTOR
ECONOMIC DEVELOPMENT
APPROVED:
THOMAS B. MODICA
CITY MANAGER