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Home My WebLink About22 - Levying of Assessments and Appointment of the Advisory Board of Directors for the NBRABID's Fiscal Year 2020-2021Q �EwPpRT CITY OF O � z NEWPORT BEACH <,FORN'P City Council Staff Report June 23, 2020 Agenda Item No. 22 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Grace K. Leung, City Manager - 949-644-3001, gleung@newportbeachca.gov PREPARED BY: Melanie Franceschini, Administrative Analyst mfranceschini@newportbeachca.gov PHONE: 949-644-3028 TITLE: Resolution No. 2020-65: Confirming the Levying of Assessments and Appointment of the Advisory Board of Directors for the Newport Beach Restaurant Association Business Improvement District's Fiscal Year 2020-2021 ABSTRACT: Pursuant to the Parking and Business Improvement Area Law of 1989 (1989 Law), codified in Streets and Highways Code Sections 36500 et seq., the annual renewal of a 1989 Law Business Improvement District 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 Newport Beach Restaurant Association Business Improvement District (NBRA BID) for Fiscal Year 2020-21 (FY 2020-21). If a majority protest is not received, the City Council may confirm the levying of assessments for FY 2020-21 and appoint the advisory board of directors to the NBRA BID. RECOMMENDATIONS: a) Hold a public hearing regarding the renewal of the Newport Beach Restaurant Association Business Improvement District for Fiscal Year 2020-21; b-1) If the protests received are less than 50 percent of the total assessment amount, adopt Resolution No. 2020-65, A Resolution of the City Council of the City of Newport Beach Confirming the Levying of Assessment for the Fiscal Year of July 1, 2020 to June 30, 2021 for the Newport Beach Restaurant Association Business Improvement District, or b-2) If the protests received are 50 percent or more of the total assessment amount, abandon the proceedings to renew the Newport Beach Restaurant Association 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 22-1 Resolution No. 2020-65: Confirming the Levying of Assessments and Appointment of the Advisory Board of Directors for the Newport Beach Restaurant Association Business Improvement District's Fiscal Year 2020-2021 June 23, 2020 Page 2 d) Appoint the following Newport Beach Restaurant Association Business Improvement District members to serve as the Newport Beach Restaurant Association Business Improvement District's Advisory Board of Directors for Fiscal Year 2020-21: BID Member Representing BID Business Mark Bunim Hopdoddy Burger Bar Philip Crowley Modo Mio Cucina Rustica Thaddeus Foret Pirozzi Juan Carlos Godinez Tavern House Kitchen + Bar Marin Howarth Arc Butcher & Baker Jordan Otterbein A Restaurant and A Market; CDM Kenyon Paar Five Crowns Nicole Paskerian Buddha's Favorite Eun'oo Pluenneke Balboa Lily's; Boardwalk by Balboa Lily's Christopher Roman Fork, Knife + Spoon Talia Samuels Representing Mutt L nch's FUNDING REQUIREMENTS: The City of Newport Beach (City) contracts with a vendor (the NBRA BID pays for these services) to collect the member assessments on behalf of the NBRA BID and remits the monies directly to the NBRA BID's bank account. The monies are used for funding the activities described in the annual report, which was originally filed with the City Council on June 9, 2020. DISCUSSION: The Newport Beach Restaurant Association Business Improvement District (NBRA BID) was formed in 1995 (Ordinance 95-55) 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 businesses located and operating in the area. The NBRA BID encompasses any food service business within the City boundaries, such as restaurants, markets with dine -in or take-out service, bars serving food, dessert shops, coffee shops, juice bars, catering companies or similar food -related businesses. 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 written or oral protests 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. 22-2 Resolution No. 2020-65: Confirming the Levying of Assessments and Appointment of the Advisory Board of Directors for the Newport Beach Restaurant Association Business Improvement District's Fiscal Year 2020-2021 June 23, 2020 Page 3 • If the majority protest is from member business owners that pay 50 percent or more of the total assessment to be levied, the City Council should abandon the renewal. If abandoned, no further proceeding 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 or types of improvements, activity or benefit within the BID, those types of improvements, activities or benefit zones shall be eliminated. • If protests represent less than 50 percent of the total assessment, the City Council may renew the BID. During its June 9, 2020 regular meeting, the City Council approved the NBRA BID's FY 2019-20 Annual Report and FY 2020-21 Budget, adopted a Resolution of Intention (Resolution 2020-59) to levy and collect assessments in FY 2020-21, and set a public hearing for June 23, 2020. See Attachment A for the June 9 staff report (without attachments). A public notice of Resolution No. 2020-59, declaring the City Council's intention to levy and collect assessments for the renewal of the NBRA BID and setting the time and place of the public hearing, was published in the Daily Pilot newspaper (print edition) on Saturday, June 13, 2020. In addition, it was posted on the City's website (newportbeachca.gov/publicnotices) and, per the 1989 Law, a copy was mailed to each member of the NBRA BID. At the time this staff report was published by the City Clerk, no letters of opposition have been received to the NBRA BID's renewal, the levying of assessments, or to a specific improvement, activity, or benefit proposed. Any subsequent correspondence, with a tabulation of protests, will be provided to the City Council at its June 23, 2020 meeting. Advisory Board Appointments The City Council has the authority to appoint an advisory board of directors to the NBRA BID. The City may limit membership on the board to persons subject to the BID assessment or a designated representative of a stakeholder business. The advisory board that serves the NBRA BID is different and distinct for 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 NBRA BID's bylaws allow for the appointment of up to eleven (11) board members. The City Clerk posted a vacancy announcement for the eleven (11) available NBRA BID advisory board seats (board members serve a one-year term). To be eligible to serve on the NBRA BID Board, the applicant must be the member business owner or their designated representative. In addition, the business must be in good standing (no debt owed to the City or the NBRA BID). Fourteen (14) eligible applications were received in response to the vacancy announcement published on April 14, 2020. 22-3 Resolution No. 2020-65: Confirming the Levying of Assessments and Appointment of the Advisory Board of Directors for the Newport Beach Restaurant Association Business Improvement District's Fiscal Year 2020-2021 June 23, 2020 Page 4 The NBRA BID Board met on May 24, 2020 to review the applications and recommended the nomination of eleven (11) applicants as recommended above for City Council appointment to the FY 2020-21 NBRA BID Advisory Board of Directors: 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 9, 2020 Staff Report (without attachments) Attachment B —Resolution No. 2020-65 22-4 ATTACHMENT A Q �EwPpRT CITY OF O � z NEWPORT BEACH <,FORN'P City Council Staff Report June 9, 2020 Agenda Item No. 15 TO: HONORABLE MAYOR AND CITY COUNCIL FROM: Grace K. Leung, City Manager - 949-644-3001, gleung@newportbeachca.gov PREPARED BY: Melanie Franceschini, Administrative Analyst mfranceschini@newportbeachca.gov PHONE: 949-644-3028 TITLE: Resolution No. 2020-59: Resolution of Intention to Renew the Newport Beach Restaurant Association Business Improvement District, Levy Assessments in FY 2020-21 and Fix Time and Place of Public Hearing ABSTRACT: The Newport Beach Restaurant Association Business Improvement District (NBRA BID) Advisory Board of Directors (Board) has submitted the BID's annual report and budget for the City Council's review and approval. The Board also submitted a letter requesting the renewal of the NBRA BID for fiscal year 2020-21 and thanking the City Council for considering $40,000 in funding support to the BID due to the economic impact of the COVID-19 pandemic on Newport Beach restaurants. RECOMMENDATIONS: 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 and/or modify the Newport Beach Restaurant Association Business Improvement District's Fiscal Year 2019-20 Annual Report and its Proposed Fiscal Year 2020-21 Budget; c) Direct staff to return to the City Council with the NBRA BID's detailed plan and budget for how $40,000 in COVID-19 economic relief funds will be utilized before the City of Newport Beach releases the funds; and d) Adopt Resolution No. 2020-59, A Resolution of the City Council of the City of Newport Beach, California, Declaring its Intention to Renew the Newport Beach Restaurant Association Business Improvement District and Levy Assessments for the Fiscal Year of July 1, 2020 to June 30, 2021, and Fix the Time and Place of a Public Hearing for June 23, 2020. 22-5 Resolution No. 2020-59: Resolution of Intention to Renew the Newport Beach Restaurant Association Business Improvement District, Levy Assessments in FY 2020-21 and Fix Time and Place of Public Hearing June 9, 2020 Page 2 FUNDING REQUIREMENTS: The City of Newport Beach (City) contracts with a vendor (the NBRA BID pays for these services) to collect the stakeholder assessments and remit the money directly to the NBRA BID's bank account. The monies are used for funding the BID's activities as described in the annual report (Attachment A). At the May 26, 2020 City Council meeting, the Ad Hoc Committee on Local Business Advancement recommended, and a straw vote of the Council indicated the majority favored, providing the NBRA BID with $40,000 for COVID-19 economic relief support. Once the City Council determines the NBRA BID's COVID-19 relief spending plan to be satisfactory, the allocation will be disbursed to the NBRA BID. DISCUSSION: The Newport Beach Restaurant Association Business Improvement District (NBRA BID) was formed in 1995 (Ordinance 95-55) 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 NBRA BID was established for the purpose of financing activities and programs to benefit its member businesses. The NBRA BID membership encompasses any food -service business within the city boundaries, including restaurants, markets with dine -in or take-out food service, bars serving food, dessert shops, coffee shops, juice bars, catering companies, and similar food -related business. A boundary map is attached to the Resolution of Intention (Attachment D). The NBRA BID is nearing the end of its FY 2019-20 operating period and the Board, which serves in an advisory capacity to the City Council, has requested renewal of the BID for FY 2020-21. Pursuant to the 1989 Law, an annual report must be prepared and filed with the City Council and a public hearing must be held prior to the BID's renewal. If the City Council adopts the Resolution of Intention, the public hearing will be held on June 23, 2020. The NBRA BID Board prepared and submitted the annual report for the City Council's review and approval. The report includes a summary of the NBRA BID's FY 2019-20 accomplishments and revenues as well as its proposed activities and budget for the upcoming fiscal year. In addition, the NBRA BID Board met on May 27 and recommended that its president submit a letter to the City Council requesting the BID's renewal and thanking the City Council for considering allocating $40,000 in COVID-19 economic relief funding to the BID (Attachment B). To meet the requirements for the City Council's consideration of COVID-19 economic relief funding, the BID will focus its efforts on creating a comprehensive marketing campaign and promotions to further encourage dining in or ordering take-out. Phase one of their Restaurant Recovery Plan includes a Summer 2020 Restaurant Week promotion in July to help jump-start the financial recovery of the restaurants. The BID also plans to host stakeholder training, education and forums to assist restaurants with re -opening. 22-6 Resolution No. 2020-59: Resolution of Intention to Renew the Newport Beach Restaurant Association Business Improvement District, Levy Assessments in FY 2020-21 and Fix Time and Place of Public Hearing June 9, 2020 Page 3 Further, the NBRA BID Board voted at its May 27 meeting to reduce the member assessment rates by 25% for Fiscal Year 2020-21 and to postpone billing until October 2020 to help provide financial relief to the stakeholders. The BID Board hopes these efforts will allow the restaurants to take advantage of the busy summer season to pay off other outstanding debts before paying a reduced assessment to the BID. Staff believes these proposed activities support the Council's desire to have COVID-19 relief funds provided by the City utilized to facilitate the reopening and recovery of BID member businesses and/or used to offset revenue losses resulting from a temporary decrease in assessments. However, it is also staff's understanding that the Council wants to see a detailed plan and budget that explains the specific activities the NBRA BID will accomplish with $40,000 in COVID-19 relief funds. Therefore, staff is recommending that the City Council direct staff to return with the NBRA BID's detailed plan for Council review and approval before the monies are distributed to the NBRA BID. Fiscal Year 2019-20 Accomplishments The NBRA BID Board used this fiscal year to focus on increasing market awareness, enhancing stakeholder benefits, elevating the BID's community profile, and ensuring financial and administrative effectiveness. Highlights of some of the activities from FY 2019-20 are listed below: 1. Restaurant Week. The 2020 Newport Beach Restaurant Week had a record number of stakeholder businesses participating (72 restaurants, including eight new restaurants). The event celebrated the 14th anniversary of Restaurant Week and resulted in a 19 -percent increase in revenue and an estimated $3.9 million in consumer spending, a 3 -percent increase year over year. The Newport Beach Restaurant Week launched its first year with a charity partner, Second Harvest Food Bank in Orange County, raising $4,090 in an effort to "Dine to Make a Difference." 2. Marketing. The NBRA BID provides strategic and comprehensive marketing programs to promote dining in Newport Beach. This year, marketing efforts included publishing the online Dine NB newsletter; running the 52 Weeks of Dining email campaign; distributing quarterly stakeholder emails; and creating the Weekly Bites and Culinary Journeys video series highlighting stakeholder establishments. The remainder of the FY 2019-20 activities are listed in the annual report. Fiscal Year 2019-20 Operating Results The estimated year-end operating budget for the NBRA BID's FY 2019-20 is reflected in the table below. -. Operating Budget Income (City Event Grant Funding, Assessments, Late Fees $184,787 Special Event Income (Restaurant Week) $39,299 Total Income and Fund Balance $224,086 Total Expenditures $216,964 End of Year Balance (Retained Earnings) $7,122 22-7 Resolution No. 2020-59: Resolution of Intention to Renew the Newport Beach Restaurant Association Business Improvement District, Levy Assessments in FY 2020-21 and Fix Time and Place of Public Hearing June 9, 2020 Page 4 In addition, the NBRA BID has set aside year-end balances since 2016 into a reserve. As of June 30, 2019, the NBRA had a reserve fund balance of $162,312. Proposed Budget for Fiscal Year 2020-21 The proposed operating budget for FY 2020-21 is attached to the NBRA BID's annual report for the City Council's approval and summarized in the table below. - ... - . • • - . .. - Income Proposed City Support Funding (COVID Recovery & Special Event Grant) * Restaurant Week Income $49,000 $25,000 Member Assessment (Projecting 60% income decrease due to COVID-19) $57,500 Retained Earnings from FY 2019-20 $7,122 Money from Reserve Account (carry-over from prior ears $70,000 Total Income $208,622 Expenses Operational Expenses $14,600 Event Expenses $54,122 Administration(Board/Admin/Bookkeeping Services $55,000 Vendor/Contractor Services $33,000 Outreach $51,900 Total Expenses $208,622 *This income is proposed as it has not been approved by the City Council, the $40,000 is the economic grant and the NBRA is asking for a $9,000 Special Events grant from the City, which will be considered separately. Should this funding not become available, the NBRA would revise its budget accordingly or take the balance from their reserves. The NBRA BID Board approved taking $70,000 from the BID's reserve account to use in the FY 2020-21 operating budget. This leaves a reserve fund balance of $90,000, which the NBRA BID would utilize if economic conditions worse. BID Stakeholder Benefits The NBRA BID provides marketing, advertising, public relations and event promotion in support of its stakeholders. Through a City agreement, Newport Beach & Company (NB&Co.) provides these services to, and are paid for by, the NBRA BID. The NBRA BID prepared its FY 2019-20 marketing highlights to show the value of the benefits received by the BID stakeholders (Attachment C). FY 2019-20 stakeholder highlights include the following: Website traffic reached over 270,525 unique visitors. Social media channel followers increased by 42 percent. 22-8 Resolution No. 2020-59: Resolution of Intention to Renew the Newport Beach Restaurant Association Business Improvement District, Levy Assessments in FY 2020-21 and Fix Time and Place of Public Hearing June 9, 2020 Page 5 • Videos achieved 113,447 views on social media platforms. • Email subscription database increased by 63 percent. • Email campaigns yielded over 162,000 impressions. Resolution of Intention The Resolution of Intention (Attachment D) for the NBRA BID provides for the following: Renews the NBRA BID for fiscal year 2020-21 with assessment levies as follows: o $450 for full -serve restaurants o $375 for fast -casual restaurants o $375 for grocery or markets o $112.50 for coffee, tea or specialty shops, dessert, bakery or treat shops, juice bar or smoothie shop, and catering companies. Explains the improvements and activities to be funded are: o Marketing, advertising, and public relations; o Brochure development and distribution; o Promotion of public events; o General promotion of restaurant trade activities; o Educational and training classes for members; and o Membership in various organizations. Sets the public hearing for June 23 at 7 p.m. Per the 1989 Law, the City Council may revise, change, reduce or modify the assessment or the type(s) of improvements and activities proposed to be funded by the NBRA BID Board. 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). 22-9 Resolution No. 2020-59: Resolution of Intention to Renew the Newport Beach Restaurant Association Business Improvement District, Levy Assessments in FY 2020-21 and Fix Time and Place of Public Hearing June 9, 2020 Page 6 ATTACHMENTS: Attachment A — NBRA BID Annual Report and Budget Attachment B — Letter from the NBRA BID Board Chair Attachment C — NBRA BID Marketing Highlights Attachment D — Resolution No. 2020-59 22-10 ATTACHMENT B RESOLUTION NO. 2020- 65 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, 2020 TO JUNE 30, 2021 FOR THE NEWPORT BEACH RESTAURANT ASSOCIATION BUSINESS IMPROVEMENT DISTRICT WHEREAS, on June 9, 2020, the Newport Beach Restaurant Association Business Improvement District annual report and budget was filed and approved by the City Council; WHEREAS, on June 9, 2020, the City Council adopted Resolution 2020-59 declaring City Council's intention to levy assessments for the Newport Beach Restaurant Association Business Improvement District for fiscal year July 1, 2020 to June 30, 2021; WHEREAS, on June 13, 2020, the City Clerk published Resolution No. 2020-59 declaring the City Council's intention to levy assessments for the Newport Beach Restaurant Association Business Improvement District for fiscal year July 1, 2020 to June 30, 2021; and WHEREAS, a public hearing regarding the renewal of the Newport Beach Restaurant Association Business Improvement District was held on June 23, 2020, without a majority protest. NOW, THEREFORE, the City Council of the City of Newport Beach resolves as follows: Section 1: The City Council hereby confirms the levying of assessments as described in Resolution 2020-59 dated June 9, 2020, for the Newport Beach Restaurant Association Business Improvement District for the fiscal year July 1, 2020 to June 30, 2021. 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. 22-11 Resolution No. 2020 - 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 23rd day of June, 2020. Will O'Neill Mayor ATTEST: Leilani I. Brown City Clerk APPROVED AS TO FORM: CITY ATTORNEY'S OFFICE _ �,- C, �- Aaron C. Harp City Attorney 22-12