DATE: September 11, 2024
TO: Honorable Mayor and City Councilmembers
FROM: City Manager's Office
TITLE: RESOLUTION AUTHORIZING THE CITY MANAGER TO SIGN THE PETITION AND BALLOT FOR CITY-OWNED PROPERTIES IN SUPPORT OF THE RENEWAL OF THE DOWNTOWN OCEANSIDE PROPERTY AND BUSINESS IMPROVEMENT DISTRICT
RECOMMENDATION
title
Staff recommends that the City Council adopt a Resolution authorizing the City Manager to sign the petition and ballot on behalf of properties owned by the City of Oceanside in support of the renewal of the Downtown Oceanside Property and Business Improvement District (DTOPBID).
body
BACKGROUND AND ANALYSIS
On June 19, 2019, the City Council authorized the City Manager to execute two petitions to execute special assessment proceedings to form the DTOPBID, and adopt a Resolution of Intention to establish the DTOPBID. The PBID area includes properties across approximately 25 blocks in the core of downtown Oceanside. The boundaries are Civic Center Drive to the north, Seagaze Drive to the south, Nevada Street to the east and the Strand to the west.
On August 7, 2019, the City Council conducted a public hearing regarding the proposed formation of the DTOPBID, authorized the City Clerk to count ballots received from affected property owners and unanimously adopted Resolution 19-R0487-1 forming the DTOPBID, approving the Management District Plan, approving the assessment formula and levying the assessments.
On December 18, 2019, the City Council approved an agreement with MainStreet Oceanside for implementation of the Management District Plan for the DTOPBID and approved the by-laws proposed for the DTOPBID Governing Committee.
On April 24, 2024, the City Council adopted a Resolution authorizing the City Manager to sign the petition and ballot on behalf of properties owned by the City of Oceanside in support of the renewal of the DTOPBID, and approved an appropriation in the amount of $29,440 from the General Fund unassigned fund balance to account for an increase in City-owned property assessments for Fiscal Year 2024-2025. At that time, the PBID was proposed to be renewed for a period of ten years, and the boundaries were proposed to be expanded and include two zones. The new eastern boundary extended to Interstate 5, with Harbor Drive as the new northern boundary and Wisconsin Avenue as the new southern boundary.
Subsequent to the City Council’s action in April, it became apparent that petitions in favor of district renewal submitted by property owners would not achieve the 50 percent (50%) plus one requirement to allow the Council to initiate proceedings for DTOPBID renewal. In response to concerns from property owners in the newly proposed “Zone 2” area of the DTOPBID, Zone 2 was removed from the Management District Plan and the petition process has been restarted. It is anticipated that petitions in favor of district renewal submitted by property owners with Zone 2 removed will achieve the 50 percent (50%) plus one requirement.
The DTOPBID is a benefit assessment district whose main goal is to continue a revenue source to provide maintenance, safety, destination development, economic enhancement, advocacy and administration services, providing special benefits to assessed properties. This approach is used successfully in other cities throughout the country to provide special benefits to property owners, namely increased sales, attraction of new tenants, increased occupancies, and increased property values.
DTOPBID property owners are pursuing renewal of the DTOPBID in order to continue a revenue source devoted to providing special benefits to assessed property owners. If renewed, the DTOPBID would generate approximately $751,413 assessment revenue on an annual basis for improvements and activities that are above and beyond those provided by the City and other government agencies. The assessment funds will be supplemented by non-assessment funds. The total budget for the initial year is estimated at $776,350.
Mainstreet Oceanside (MSO) will continue to serve as the Owners’ Association for the DTOPBID. MSO is a nonprofit organization established in 2000 to assist the City in developing Downtown Oceanside as a pedestrian-friendly community with unique and exciting attractions, including both daytime and evening activities for residents and visitors alike. MSO is focused on improving and enhancing the economic viability of Downtown Oceanside by supporting the preservation of unique existing structures and encouraging new development by attracting visitors, customers and residents.
The PBID Governing Committee (PGC), a standing advisory committee formed by the MSO Board of Directors and comprised of downtown property owners and their representatives, will retain the authority to manage DTOPBID assessment funds and full decision-making authority regarding DTOPBID programs.
The City of Oceanside is a significant property owner in the proposed district. Staff is requesting Council support of the DTOPBID programs by designating the City Manager with the authority to sign the petition and ballot in favor of renewal on behalf of City-owned properties during the renewal process.
Management District Plan
The Management District Plan (MDP) attached includes the proposed boundary of the DTOPBID, a service plan, assessment methodology, budget, a proposed means of governance and Engineer’s Report. The renewed DTOPBID generally includes parcels in the downtown area of the City of Oceanside. There are two notable changes to the DTOPBID MDP from its current iteration: 1.) The service area has been expanded; however, not to the extent that it was proposed to be expanded in April 2024; and 2.) The renewed DTOPBID will have a 10-year term, beginning January 1, 2025, or as soon as possible thereafter, and ending ten (10) years from its start date. A map of the current DTOPBID boundaries is included on page 7 of the attached Management District Plan, and a map of the expanded boundaries proposed for the DTOPBID renewal is included on page 9 of the attached Management District Plan.
If renewed, the assessment will be implemented beginning January 1, 2025. Once per year beginning on the anniversary of DTOPBID renewal, there is a 30-day period in which property owners paying fifty percent (50%) or more of the assessment may protest and begin proceedings to terminate the DTOPBID.
As provided by State Law, the district assessment will appear as a separate line item on annual property tax bills prepared by the County of San Diego. Property tax bills are generally distributed in the fall, and payment is expected by lump sum or installment. The County of San Diego will distribute funds collected to the City of Oceanside, and the City will forward those funds to Mainstreet Oceanside. Existing laws for enforcement and appeal of property taxes, including penalties and interest, apply to the DTOPBID assessments.
DTOPBID Renewal Timeline:
September 25, 2024: Resolution of Intention to Renew DTOPBID
Upon the submission of a written petition, signed by the property owners in the proposed DTOPBID who will pay more than 50 percent (50%) of the assessments proposed to be levied, the City Council may initiate proceedings to renew the district by the adoption of a resolution expressing its intention to renew the district.
Should petitions in favor of district renewal be submitted by property owners which represent over 50 percent (50%) of the total DTOPBID assessment, this majority petition would allow the Council to initiate proceedings for DTOPBID renewal at the September 25, 2024 meeting.
No later than October 4, 2024: Notice and Proposition 218 Ballot
The Property and Business Improvement District Law of 1994 and Proposition 218 require the City to mail written notice and assessment ballots to the owners of all properties proposed to be assessed within the DTOPBID. Mailing the notice and assessment ballot begins a mandatory 45-day period in which owners may cast ballots.
November 20, 2024: Public Hearing and Ballot Count
Council will open a public hearing and receive public testimony. At the end of testimony, Council will close the public hearing and direct tabulation of assessment ballots submitted and not withdrawn to determine whether there is a majority protest against the assessment. A majority protest exists if the ballots in opposition to the proposed assessment exceed the ballots in support of the proposed assessment, weighted by the amount each owner will pay. If there is no majority protest, Council is authorized to adopt a Resolution of Formation to renew the DTOPBID and levy the assessment. The Resolution shall go into effect 30 days later on December 20.
FISCAL IMPACT
If the DTOPBID is renewed, the City’s annual contribution would be $115,987 beginning in Fiscal Year 2024-2025 and charged to account 170174101.5395.0032 which has an available balance of $142,416. Future assessment rates may be subject to an increase of no more than six percent (6%) annually for the 10-year duration of the DTOPBID, which shall not exceed the San Diego Area Consumer Price Index (SDCPI) for the year the increase occurs.
CITY ATTORNEY’S ANALYSIS
The referenced documents have been reviewed by the City Attorney and approved as to form.
end
Prepared by: Michelle Geller, Economic Development Manager
Reviewed by: Michael Gossman, Assistant City Manager
Submitted by: Jonathan Borrego, City Manager
ATTACHMENTS:
1. Staff report
2. Resolution
3. Petition
4. Oceanside PBID Management District Plan