HomeMy WebLinkAbout19 - Confirm the Levying of Assessments, and Appointing the Advisory Board of Directors for the CDMBID Fiscal Year 2019-20TO:
FROM
CITY OF
NEWPORT BEACH
City Council Staff Report
June 25, 2019
Agenda Item No. 19
HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
Grace K. Leung, City Manager - 949-644-3001,
gleung@newportbeachca.gov
PREPARED BY: Mary Locey, Administrative Analyst
mlocey(Dnewportbeachca.gov and
Melanie Franceschini, Administrative Analyst
mfranceschini(a�newportbeachca.gov
PHONE: 949-644-3031 1 949-644-3028
TITLE: Public Hearing, Adopt a Resolution to Confirm the Levying of
Assessments, and Appointing the Advisory Board of Directors for the
Corona del Mar Business Improvement District's Fiscal Year 2019-
20
ABSTRACT:
The annual renewal of the Corona del Mar Business Improvement District (CdM BID)
requires a public hearing to determine if a majority of the members protest the
assessments or a specific improvement, activity or benefit proposed by the CdM BID for
fiscal year 2019-20. In addition, the City Council appoints an advisory board of directors
to the CdM BID during the annual renewal process.
RECOMMENDATIONS:
a) Hold a public hearing regarding the renewal of the Corona del Mar Business
Improvement District for Fiscal Year 2019-20;
b-1) If the protests received are less than 50 percent of the total assessment amount,
adopt Resolution No. 2019-60, A Resolution of the City Council of the City of
Newport Beach Confirming the Levying of Assessments for the Fiscal Year of
July 1, 2019 to June 30, 2020 for the Corona del Mar Business Improvement District;
or
b-2) If the protests received are more than 50 percent of the total assessment amount,
abandon the renewal proceedings for the Corona del Mar Business Improvement
District;
c) Determine this action is exempt from the California Environmental Quality Act
(CEQA) pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines
because this action will not result in a physical change to the environment, directly
or indirectly; and
19-1
Public Hearing, Adopt a Resolution to Confirm the Levying of Assessments,
and Appointing the Advisory Board of Directors for the
Corona del Mar Business Improvement District's Fiscal Year 2019-20
June 25, 2019
Page 2
d) Appoint the following Corona del Mar Business Improvement District members to
serve as the Corona del Mar Business Improvement District's Advisory Board of
Directors for fiscal year 2019-20:
BID Member
Representing Business
Ernie Caponera
Newport Properties
Keith Dawson
Dawson & Dawson
Edward Hanley
Hanley Investment Group
Scott LaFleur
Representing Cafe Jardin
Scott Laidlaw
Laidlaw Schultz Architects
Shawn Lim
Rose Bakery Cafe
Jasmin Mortazavi
Mathnasium
Bernie Svalstad
Upland Stor Kin
FUNDING REQUIREMENTS:
The City of Newport Beach (City) contracts with a vendor (the CdM BID pays for these
services) to collect the stakeholder assessments on behalf of the City and remits the
money directly to the CdM BID's bank account. The monies are used for funding the BID's
activities as described in the annual report, which was filed with the City Council on
June 11, 2019.
DISCUSSION:
The Corona del Mar Business Improvement District (CdM BID) was formed in 1997
(Ordinance 97-24) pursuant to the Parking and Business Improvement Area Law of 1989
(1989 Law), codified in Streets and Highways Code Sections 36500 et seq., for the
purpose of financing activities and programs to benefit the member businesses located
and operating in the area. The CdM BID territory encompasses the area generally located
along East Coast Highway from Hazel Drive to Avocado Avenue in Corona del Mar.
In accordance with the 1989 Law, a public hearing must be held prior to the City Council
adopting a resolution to confirm the BID's renewal. Owners of member businesses may
submit a written or oral protest against the assessment levy and / or against the furnishing
of a specific type of improvement, activity, or benefit proposed for the BID's upcoming
fiscal year.
• If the majority protest are from member business owners, which pay 50 percent or
more of the total assessment to be levied, the City Council should abandon the
renewal. If abandoned, no further proceedings to renew the BID shall be taken for
a period of one year from the date of the finding of a majority protest by the City
Council.
• If the majority protest is only against the furnishing of a specific type of
improvement, activity or benefit within the BID, those types of improvements,
activities, or benefits shall be eliminated from the BID's proposed plan.
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Public Hearing, Adopt a Resolution to Confirm the Levying of Assessments,
and Appointing the Advisory Board of Directors for the
Corona del Mar Business Improvement District's Fiscal Year 2019-20
June 25, 2019
Page 3
• If protests represent less than 50 percent of the total assessment, the City Council
may renew the BID.
The CdM BID is nearing the end of its FY 2018-19 operating period and the Advisory
Board of Directors (Board) has requested renewal of the BID for FY 2019-20. In addition
to holding a public hearing prior to the BID's renewal, and pursuant to the 1989 Law, the
City Council must approve the BID's annual report and budget and adopt a resolution of
intention to renew the assessment levy and set the public hearing.
During the June 11, 2019 regular meeting, the City Council approved the CdM BID'S FY
2018-2019 Revised Annual Report and FY 2019-20 Budget, adopted a Resolution of
Intention (Resolution No. 2019-46) to levy and collect assessments in FY 2019-20, and
set a public hearing for June 25, 2019. See Attachment A for the June 11, 2019 staff
report (without attachments).
A public notice of Resolution No. 2019-46 declaring the City Council's intent to levy and
collect assessments for the CdM BID and the time and place of the public hearing was
published in the Daily Pilot newspaper (print) on Saturday, June 15, 2019. In addition, it
was posted on the City's website (newportbeachca.gov/publicnotices) and, per the 1989
Law, a full copy of the resolution was mailed to each member of the CdM BID.
At the time this report was published by the City Clerk, no letters of opposition have been
received to the CdM BID's assessment renewal, the levying of assessments, or to a
specific improvement, activity or benefit proposed. Any subsequent correspondence, with
a tabulation of the protests, will be provided to the City Council at its June 25, 2019
meeting.
Advisory Board Appointments
The City Council has the authority to appoint an advisory board of directors to the CdM
BID. The City may limit membership on the board to persons' subject to the BID
assessment, or a designated representative of a member business in good standing. The
board that serves the CdM BID is different and distinct from other City advisory bodies
and is not appointed in the same manner. The City relies upon the Streets and Highways
Code for BID advisory board appointments rather than Council Policy A-2. The CdM BID's
bylaws allow for the appointment of up to nine board members.
The City Clerk posted a vacancy announcement for the nine available CdM BID advisory
board seats (board members serve a one-year term). To be eligible to serve on the CdM
BID Board, the applicant must be the member business owner or their designated
representative. In addition, the business represented must be in good standing (no debt
owed to the City or the CdM BID). By the May 15 deadline, nine applications were
received.
The CdM BID Board met on May 23, 2019 and recommended the nomination of the nine
applicants for City Council appointment to the FY 2019-20 CdM BID Advisory Board of
Directors as follows:
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Public Hearing, Adopt a Resolution to Confirm the Levying of Assessments,
and Appointing the Advisory Board of Directors for the
Corona del Mar Business Improvement District's Fiscal Year 2019-20
June 25, 2019
Page 4
BID Member
Representing Business
Ernie Caponera
Newport Properties
Keith Dawson
Dawson & Dawson
Edward Hanley
Hanley Investment Group
Scott LaFleur
Representing Cafe Jardin
Scott Laidlaw
Laidlaw Schultz Architects
Shawn Lim
Rose Bakery Cafe
Jasmin Mortazavi
Mathnasium
Bernie Svalstad
Upland Stor King
ENVIRONMENTAL REVIEW:
Staff recommends the City Council find this action is not subject to the California
Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not
result in a direct or reasonably foreseeable indirect physical change in the environment)
and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA
Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no
potential for resulting in physical change to the environment, directly or indirectly.
NOTICING:
The agenda item has been noticed according to the Brown Act (72 hours in advance of
the meeting at which the City Council considers the item).
ATTACHMENTS:
Attachment A — June 11 Staff Report (without attachments)
Attachment B —Resolution No. 2019-60
19-4
ATTACHMENT A
Q �EwPpRT
CITY OF
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z NEWPORT BEACH
<,FORN'P City Council Staff Report
June 11, 2019
Agenda Item No. 9
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Grace K. Leung, City Manager - 949-644-3001,
gleung@newportbeachca.gov
PREPARED BY: Mary Locey, Administrative Analyst
mlocey(�Oewportbeachca.gov
PHONE: 949-644-3031
TITLE: Resolution No. 2019-46: Resolution of Intention to Renew the Corona
del Mar Business Improvement District, Levy Assessments in
FY 2019-20, and Fix the Time and Place of a Public Hearing
ABSTRACT:
On May 28, 2019, the City Council considered staff's recommendation to renew the
Corona del Mar Business Improvement District (CdM BID). The City Council, after
discussion and public comment, approved a motion to withhold City funding support to
the BID and continued the item to provide the BID Board time to meet and revise its
annual report and budget, which is attached for City Council approval.
RECOMMENDATION:
a) Determine this action is exempt from the California Environmental Quality Act (CEQA)
pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because
this action will not result in a physical change to the environment, directly or indirectly;
b) Approve the Corona del Mar Business Improvement District's Fiscal Year 2018-19
Annual Report and its Proposed Fiscal Year 2019-20 Budget; and
c) Adopt Resolution No. 2019-46, A Resolution of the City Council of the City of Newport
Beach, California, Declaring its Intention to Renew the Corona del Mar Business
Improvement District and Levy Assessments for the Fiscal Year of July 1, 2019 to
June 30, 2020, and Fix the Time and Place of a Public Hearing for June 25, 2019.
FUNDING REQUIREMENTS:
The City of Newport Beach (City) contracts with a vendor (the CdM BID pays for these
services) to collect the stakeholder assessments on behalf of the City and remits the
money directly to the CdM BID's bank account. The monies are used for funding the BID's
activities as described in the attached annual report.
19-5
Resolution No. 2019-46: Resolution of Intention to Renew the Corona del Mar Business
Improvement District, Levy Assessments in FY 2019-20, and
Fix the Time and Place of Public Hearing
June 11, 2019
Page 2
DISCUSSION:
The Corona del Mar Business Improvement District (CdM BID) was formed in 1997
(Ordinance 97-24) pursuant to the Parking and Business Improvement Area Law of 1989
(1989 Law), codified in the Streets and Highway Code Sections 36500 et seq. The CdM
BID was established for the purpose of financing activities and programs to benefit the
businesses located and operating in the area. The CdM BID territory encompasses the
area generally located along East Coast Highway from Hazel Drive to Avocado Avenue
in Corona del Mar (A boundary map is attached to the Resolution).
The CdM BID Board, which serves in an advisory capacity to the City Council, has
requested renewal of the BID for FY 2019-20. Pursuant to the 1989 Law, an annual report
and budget must be prepared and filed with the City Council and a public hearing
(scheduled for June 25) must be held prior to the BID's renewal.
It is important to note that during the 2018 renewal process members of the City Council
requested staff review the potential to reform the City's two 1989 Law BIDs (the CdM BID
and the Newport Beach Restaurant Association BID) under the 1994 Law. (See the
separate staff report for more on the NBRA BID.) For quick reference, the table below
highlights a few of the major differences between the two types of BIDs.
Operating as a 1994 Law BID provides autonomy from the City's oversight in BID
management and operations and, since a majority membership vote is required,
validation that the members perceive a benefit of belonging to the organization.
19-6
.;. 1
as 1
FFR -
NaTH-WITIOW-1 FNR%-
Establishment
. City Council may establish on
• Members submit written
its own.
petition to form.
• Based on a majority member
• Based on a majority member
protest.
vote.
Management
• Compliance with the Ralph M.
• Compliance with the Ralph M.
Brown Act.
Brown Act.
• Annual renewal by the City
• Renewed every five or up to
Council.
10 years by the City Council.
• Compliance with all City
• Compliance with the City
policies and procedures.
Council approved
Management District Plan.
Governing Body
. City Council appointment of an
• City Council approves a
advisory board.
contract with a designated
nonprofit to serve as an
owners association.
Other
. More City oversight and staff
• More independence to
time to operate and manage.
operate and manage.
Operating as a 1994 Law BID provides autonomy from the City's oversight in BID
management and operations and, since a majority membership vote is required,
validation that the members perceive a benefit of belonging to the organization.
19-6
Resolution No. 2019-46: Resolution of Intention to Renew the Corona del Mar Business
Improvement District, Levy Assessments in FY 2019-20, and
Fix the Time and Place of Public Hearing
June 11, 2019
Page 3
At its May 28 meeting, the City Council considered the CdM BID Board's request to renew
as a 1989 Law BID and receive $40,000 in annual funding support from the City. The City
Council discussed the BID's request and its current formation as a 1989 Law BID. The
Council reaffirmed its desire for confirmation that the BID members are receiving a
benefit.
A motion was approved to withhold the City's $40,000 in funding support and continue
the item to allow the BID Board an opportunity to revise its budget. In addition, the creation
of a Council Ad Hoc Committee to review how the BID aligns with City Council priorities
was recommended. (See the separate staff report for the creation of the committee.)
Per direction from the City Council, the CdM BID Board held a special meeting on June
3 to revise its FY 2018-19 Annual Report and FY 2019-20 Budget. The Board revised its
budget to eliminate the anticipated funding support from the City, reducing its proposed
expenditures by $40,000 from its streetscape / maintenance and landscaping budget line
items. The Board believes that these two maintenance items can be absorbed by the
City's Public Works Department in lieu of the $40,000 in funding to the BID to pay for the
items.
The revised annual report and budget are included for the Council's consideration and
approval (Attachment A).
Fiscal Year 2018-19 Operating Results
The estimated year-end operating budget for the CdM BID's FY 2018-19 is reflected in
the below table.
Income (Assessments and Late Fees) $138,681
Fund Balance (Retained Earnings) $84,178
Total Income and Fund Balance $222,859
Total Expenditures $143,016
Fund Balance (Retained Earnings for FY 2019-2020) $79,843
Proposed Budget for Fiscal Year 2019-20
The proposed operating budget for FY 2019-20 is attached to the CDM BID's annual
report for the City Council's approval. A summary is reflected in the table on the following
page.
19-7
Resolution No. 2019-46: Resolution of Intention to Renew the Corona del Mar Business
Improvement District, Levy Assessments in FY 2019-20, and
Fix the Time and Place of Public Hearing
June 11, 2019
Page 4
Proposed FY 2019-20 Operating Budgef--.
Income
Late Fees
Member Assessment
$2,000
$100,000
Total Income
$102,000
Expenses
Highway Decor and Banner Program
$34,000
Website Maintenance and Support Services
$8,550
Marketing and Administration Services
$55,578
Streetscape Furniture and Maintenance
$200
Landscaping
$857
Administration(Board/Admin/Bookkeeping Services
$20,308
Improvements
$59,350
Outreach
$3,000
Total Expenses
$181,843
Net Ordinary Income
$79,843
Other Income Expense Retained Earnings/Carry Over
$79,843
Net Income
$0
Resolution of Intention
The Resolution of Intention (Attachment B) for the CdM BID provides for the following:
The intention to renew the CdM BID assessments for fiscal year 2019-20.
The assessment levies shall be:
o $500 per year for banks and financial institutions that are exempt from City
business license regulations;
o $250 per year for insurance agencies that are exempt from City business
license regulations;
o $0 per year for independent contractors (hair stylists, nail technicians and
real estate agents) operating in an establishment owned by another person;
and
o 150 percent of the annual business license tax for all other businesses.
The improvements and activities to be funded shall be:
o Marketing, advertising, and public relations;
o Public area improvements and maintenance programs;
o Promotion of public events in the area;
o Promotion of retail trade activities; and
o Administration.
The public hearing shall be heard on June 25, 2019 at 7 p.m. in the City Council
Chambers.
Per the 1989 Law, the City Council may revise, change, reduce or modify the assessment
or the type or types of improvements and activities proposed to be funded by the CdM
BID Board.
Resolution No. 2019-46: Resolution of Intention to Renew the Corona del Mar Business
Improvement District, Levy Assessments in FY 2019-20, and
Fix the Time and Place of Public Hearing
June 11, 2019
Page 5
ENVIRONMENTAL REVIEW:
Staff recommends the City Council find this action is not subject to the California
Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not
result in a direct or reasonably foreseeable indirect physical change in the environment)
and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA
Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no
potential for resulting in physical change to the environment, directly or indirectly.
NOTICING:
The agenda item has been noticed according to the Brown Act (72 hours in advance of
the meeting at which the City Council considers the item).
ATTACHMENTS:
Attachment A — CdM BID Revised Annual Report and Budget
Attachment B — Resolution No. 2019-46
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ATTACHMENT B
RESOLUTION NO. 2019 - 60
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF NEWPORT BEACH, CALIFORNIA, CONFIRMING
THE LEVYING OF ASSESSMENTS FOR THE FISCAL
YEAR OF JULY 1, 2019 TO JUNE 30, 2020 FOR THE
CORONA DEL MAR BUSINESS IMPROVEMENT
DISTRICT
WHEREAS, on June 11, 2019 the Corona del Mar Business Improvement District
("CdM BID") annual report and budget was filed and approved by the City Council;
WHEREAS, on June 11, 2019 the City Council adopted a Resolution of Intention
(No. 2019-46) declaring the intention to levy assessments for the CdM BID for fiscal year
July 1, 2019 to June 30, 2020; and
WHEREAS, on June 15, 2019 the City Clerk published Resolution No. 2019-46
declaring the City Council's intention to levy assessments for the CdM BID for fiscal year
July 1, 2019 to June 30, 2020; and
WHEREAS, a public hearing regarding the renewal of the CdM BID was held on
June 25, 2019 without a majority protest.
NOW, THEREFORE, the City Council of the City of Newport Beach resolves as
follows:
Section 1: The City Council does hereby confirm the levying of assessments as
described in the Resolution of Intention, dated June 11, 2019, for the CdM BID for the
fiscal year July 1, 2019 to June 30, 2020.
Section 2: The recitals provided in this resolution are true and correct and are
incorporated into the operative part of this resolution.
Section 3: If any section, subsection, sentence, clause or phrase of this
resolution is, for any reason, held to be invalid or unconstitutional, such decision shall not
affect the validity or constitutionality of the remaining portions of this resolution. The City
Council hereby declares that it would have passed this resolution, and each section,
subsection, sentence, clause or phrase hereof, irrespective of the fact that any one or
more sections, subsections, sentences, clauses or phrases be declared invalid or
unconstitutional.
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Resolution No. 2019 -
Page 2 of 2
Section 4: The City Council finds the adoption of this resolution is not subject to
the California Environmental Quality Act ("CEQA") pursuant to Sections 15060(c)(2) (the
activity will not result in a direct or reasonably foreseeable indirect physical change in the
environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378)
of the CEQA Guidelines, California Code of Regulations, Title 14, Division 6, Chapter 3,
because it has no potential for resulting in physical change to the environment, directly or
indirectly.
Section 5: This resolution shall take effect immediately upon its adoption by the
City Council, and the City Clerk shall certify the vote adopting the resolution.
ADOPTED this 25th day of June, 2019.
Diane B. Dixon
Mayor
ATTEST:
Leilani I. Brown
City Clerk
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
Aaron C. Harp
City Attorney
19-11