Peggy Flynn, Public Communications Coordinator Cathy Capriola, Assistant City Manager

Transcription

1 STAFF REPORT MEETING DATE: November 11, 2014 TO: FROM: City Council Peggy Flynn, Public Communications Coordinator Cathy Capriola, Assistant City Manager 922 Machin Avenue Novato, CA (415) FAX (415) SUBJECT: DOWNTOWN NOVATO BUSINESS IMPROVEMENT DISTRICT ANNUAL RENEWAL FOR THE 2015 CALENDAR YEAR -- RESOLUTION OF INTENTION TO LEVY AN ANNUAL ASSESSMENT AND SET PUBLIC HEARING FOR NOVEMBER 11, 2014 REQUEST Consider continuing the annual assessment process for the Downtown Business Improvement District (DBID or BID), to include taking the following actions: A. Provide the DBID Advisory Board with flexibility to manage its budget within prescribed limits through the year by including language in the Resolution Confirming the 2015 Annual BID Report and adding an addendum to the 2015 Annual Report as outlined within the staff report. B. Consider adopting the Resolution Confirming the 2015 Annual BID Report and thereby Confirming the Levy of BID Assessments for Calendar Year 2015 including DBID budget authorization language. C. Direct staff to return to Council by June 2015 with a revised memorandum of understanding between the City and the DNBA serving as the DBID Advisory Board. 1 RECOMMENDATION Take actions as requested. DISCUSSION In 1989, the State Legislature passed legislation called the Parking and Business Improvement Area Law of This legislation was based on the finding that businesses located and operating within the business districts of this state's communities are economically disadvantaged, are underutilized, and are unable to attract customers due to inadequate facilities, services, and activities in the business districts. The Legislature also found that assessments levied for the purpose of providing improvement and promoting activities which benefit individual businesses may also 1 Whenever in this report reference is made to the DNBA, it is meant to refer to the DNBA acting in its capacity as the DBID Advisory Board. cc14_

2 benefit the property within the area directly or indirectly and that those assessments are not taxes for the general benefit of a city, but are assessments for the improvements and activities which confer special benefits upon the businesses for which the improvements and activities are provided. Based on this background, law was passed which outlines implementation details for the creation and annual processing of business improvement districts. Novato s Downtown Business Improvement District In 1999, a group of merchants (the BID Formation Committee) worked with the City to create the Business Improvement District. The goal was to attract more business to Downtown Novato and enhance the customer and visitor experience. The BID was seen as an important part of the continued revitalization of Downtown Novato. In partnership with the merchants, the Novato City Council formed the Novato Downtown Business Improvement District (BID) in 1999 which was incorporated into the Novato Municipal Code as Section 2-25 Downtown Novato Business Improvement District. The Municipal Code allows the City and the BID Advisory Board to establish agreements for the administration of the district. This is a typical structure used by cities across the nation. Since 1999, the City Council has contracted with the Downtown Novato Business Association (DNBA) to serve as the BID Advisory Board and to administer and manage BID activities and funding since the creation of the BID. The DNBA is a non-profit organization with a volunteer Board of Directors and historically has had no paid staff. It has adopted bylaws to govern the DNBA Board activities and functions. BID Boundaries and Assessment There are approximately 380 businesses in the BID which self-assess an annual fee that generates up to $54,000 for the purposes of enhancing the downtown including advertising, marketing, improvements, and promotions. In 2005, the BID fee was increased by five percent and the BID boundary was expanded to include the two retail centers at Seventh and Grant Avenues (Lucky's and DMV centers), northward along Redwood Avenue from Vallejo Avenue to Golden Gate Place (Trader Joe's and Atherton Ranch commercial areas), and eastward the area around Whole Foods was changed from a Zone B to a Zone A. Exhibit A shows the boundaries of the BID with Zone A and B. The current total anticipated BID assessment for the 2015 calendar year is approximately $54,000. As shown below and on Exhibit B, the assessment schedule is as follows: Type of Business Benefit Assessment Type of Business Benefit Assessment Zone A Zone B Zone A Zone B Retailers/Restaurants Professional Businesses $131 $ Employees $158 $79 Financial Institutions $525 $ Employees $263 $131 Lodging (Bed and Breakfast) $158 $ Employees $368 $184 Lodging (Hotels and Motels) $263 $263 Service Businesses $158 $79 2 2

3 Annual Assessment Process As part of the annual renewal process for the BID, the BID Advisory Board is required to prepare an annual report each year on or before November 1. The annual report includes a detailed budget, summary of accomplishments and proposed work plan for the coming year. The DNBA serves as the BID Advisory Board and prepares the annual report, including budget. Below is the established annual assessment process for the BID which requires City actions-- including two City Council meetings, legislative actions by the Council, and public and member notification. 1 st Council Meeting (October 28, 2014) Approval of Resolution of Intention to Levy o Presentation by the BID Advisory Board of the annual report and budget o Approval of Annual Report and Budget o Adopt Resolution of Intention to Levy an Annual Assessment Public Notice and Member Mailing o Mailing to each member of the BID (at least 7 days prior to the public hearing) with materials including: cover letter from City, Annual Report, Budget, and overview of BID background and process for participating in the annual process, and to inform members about the public hearing at the 2 nd Council Meeting o Publish Resolution of Intention to Levy an Annual Assessment in the newspaper (at least 7 days prior to the public hearing) (All public noticing has been completed for the 2015 process as outlined above.) 2 nd Council Meeting (November 11, 2014) Public Hearing o Public hearing on the Annual Assessment o Council action on Resolution Confirming the Annual Report (which approves the levy of assessments) If the Council approves the annual assessments, City Finance staff incorporates the BID levies into the business licenses bills which are distributed in mid-november to all members. Making Progress Each year, City staff works with DNBA (acting as the BID Advisory Board) to review the process, timeline and information needed for the annual assessment process outlined above. Throughout this partnership, the City has supported the activities of the DNBA and its management of the BID, and has provided oversight without extensive intrusion into or control over the daily management of the BID. In fall 2013, the City responded to growing concerns over the management of the BID and requests from businesses for greater oversight by the City. City staff reached out to the DNBA Board who acknowledged the need for improvements. With direction from the City Council, the City forged a stronger partnership with the DNBA and merchants with the goal to strengthen the management and effectiveness of the BID and to support the DNBA and its members. City staff with past experience working with downtown associations had two key recommendations for the City Council. The first recommendation was to have an outside assessment conducted by a neutral third party, an industry expert, to review the BID efforts and capacity and to make recommendations. The second recommendation was to hire an Executive Director to manage the DNBA and related activities including proactive member support and communications, as well as 3 3

4 planning. A paid staff position was seen as critical to the long-term success and effectiveness of the BID funds and investments. Working with the DNBA, the position can maximize and leverage the investment of the BID members. Staff suggested that the City could provide interim office space and access to a phone and computer for this position. The Council approved an interim budget for the BID, and directed that the BID Advisory Board return with an update on its progress and for approval of the final 2014 budget later in the year. Specifically, the City Manager recommended that City staff work with the BID Advisory Board to achieve the following goals: 1. increase outreach, dialogue and communication with members; 2. increase transparency and administrative efficiency and effectiveness; 3. develop a multi-year DBID budget and work plan; 4. increase member involvement in the management of the BID and the DNBA; and, 5. update the current Memorandum of Understanding agreement between the DNBA and the City. Outside Assessment - Early in 2014, City staff contacted Civitas Advisors, a consulting firm that specializes in business improvement districts to perform the assessment. John Lambeth, Principal of Civitas Advisors, reviewed written documents and spent a day in Novato interviewing key stakeholders and conducting meetings to learn about the BID. Mr. Lambeth completed a written assessment and presented his findings to the City Council on September 30, Overall, Mr. Lambeth s report stated that the DNBA, acting as the BID Advisory Board, is making positive progress. Mr. Lambeth s report made a variety of recommendations for the long term success of the BID including the need to increase funding, hire an Executive Director, provide training for the Board of Directors and administrative changes. A copy of Civitas Advisor s report can be found in the staff report for the September 30, 2014 meeting on the City s website at Executive Director - The DNBA has moved forward to hire an Executive Director who formally started on October 13. City staff facilitated the recruitment for the Executive Director position. The new Executive Director has an extensive marketing background and owned her own marketing/branding business for ten years. The DNBA Board and City staff are looking forward to partnering with the new DNBA Executive Director who will be formally introduced to the City Council and community on October 28 th at the Council meeting Mid-Year Update On September 30, 2014, City staff and the DNBA provided an update to the City Council regarding the progress and efforts of the DNBA and its work as the BID Advisory Board. For the previous nine months, City staff and new DNBA Board had been working diligently to realign and refocus the oversight and management of the BID. Overall progress has been made in the strengthening of the DNBA Board, its administrative processes, member communication, and marketing efforts. The DNBA Board has demonstrated its commitment to an economically-vibrant Downtown, and there are exciting opportunities on the horizon. Below are links to additional information from the September 30, 2014 Council meeting. DBID 2014 Budget DBID 2014 Progress Report Downtown Novato BID Update PowerPoint Staff continues to believe that the original intent of the BID in 1999 is still valid and integral to the 4 4

5 economic health of Downtown. Staff has seen vast improvement in the management and effectiveness of the BID. There is still more to do, but as outlined below, the DBNA is making progress and positioned well for the upcoming future. DIB Annual Report & 2015 Proposed Budget Attached for the City Council s review is the 2015 Annual BID Report and 2015 Budget. The DBID Advisory Board made a presentation at the October 28, 2014 Council meeting. City Financial Investment in Downtown Activities Civitas Advisors recommended that for the long term success of the DBI there needed to be a wider and deeper budget base of at least $150,000. Based on staff s experience in many other cities, we believe that the DNBA can provide a great service to the downtown businesses and the City, but there needs to be additional financial resources to make it successful. The true strength of a business improvement district is the public/private partnership that can be forged between the individual businesses, the non-profit helping businesses work in unison, and the local public agency providing assistance in numerous ways. While the DNBA has the right vision to grow their revenues with key special events and sponsorship, it will take them time to build their financial resources to become more effective and financially strong. At Council's last Strategic Planning Retreat, there was an extensive conversation about projects in, and the importance of, Downtown. Based on Council's commitment to downtown and Civitas Advisors recommendation that more funding is needed in order to create a truly sustainable and effective BID, the City Council gave staff direction at the September 30, 2014 Council meeting to make a multi-year investment into the BID. Specifically, the City will be making a one-time 3-year financial investment in downtown with the BID/DNBA $50,000 per year for a total of $150,000 to help the organization stabilize and move forward to a new level of effectiveness. Staff proposes that the funding will come from the General Fund and would start in January Clarify DBID Authority for Budget Management Under State law, the annual report filed by the DBID Advisory Board with the City is not required to include a detailed, line-item budget. Pertinent to this discussion, all that is required is a description of the activities to be provided in the year for which the assessments are proposed to be levied, an estimate of the costs of providing the activities, the method and basis of levying the assessment, and the amount of any surplus or deficit revenues to be carried over from a previous year. Cal. Streets & Highways Code sec Historically, however, the City has requested the DBID Advisory Board to provide more information about its financial operations. In order to provide the City Council and DBID members with a clearer picture of the financial plans and priorities of the DBID, the DBID budget has typically included the following expense categories which correspond to areas of investment and focus: administration, member outreach/services, beautification projects, events, and marketing. Historically, the DBID Advisory Board has made changes to the budget during the year in order to respond to emerging event and marketing opportunities. When these changes occurred historically, there was no mid-year budget review or approval by the City Council. For 2014, however, in order to increase transparency, the DBID Board submitted an updated current-year budget (which made some adjustments to the 2014 budget approved by the Council in 2013 but did not result in any change to the assessments to DBID members) at the September 30, 2014 Council meeting which was approved by the City Council. 5 5

6 Going forward, staff believes that the DBID Advisory Board should be expressly granted some budget management authority in order to respond to changes and opportunities during the relevant budget year. To provide this flexibility and ensure that the expenditures continue to reflect the objectives of the DBID Advisory Board, staff recommends the following language (or language substantially to the same effect) to be added to the 2015 Annual Report and to the Resolution Confirming the Levy. The City Council recognizes that the DBID Advisory Board requires the ability to manage and modify its budget to respond to emerging opportunities and issues through the fiscal year for which the assessment is levied. By approving the DBID budget, the City Council is approving the operating budget, revenue estimates, the expense categories, and the use the excess receipts. As an integral part of the City Council s approval of the budget, it is additionally granting the DBID Advisory Board the following authority: The DBID cannot expend more than the overall Expense Budget, namely, for fiscal year 2015, $154,350. The DBID Board has the authority to adjust budget allocations between categories of expenses in an aggregate amount not to exceed 15% of the total expense budget. For reference, below are the categories with the 2015 Budget amounts and the corresponding budget parameters outlined above. OPERATING BUDGET DBID Budget Categories Administration Member outreach/services Beautification/capital improvements Events Marketing TOTAL EXPENSES 15% of Total 2015 YEAR $25,250 $67,800 $5,000 $38,300 $23,000 $154,350 $23,152 Proposed Actions - Adopt Resolution Confirming the 2013 Annual BID Report The 2015 Annual BID Report was accepted and approved at the October 28, 2014 City Council meeting and the public hearing to consider levying BID fees for the 2015 calendar year was set for tonight s meeting. The public hearing is the second step in the two step process to approve the BID assessments and operations for the upcoming 2015 calendar year. As required by state law and enacted locally by City Ordinance No. 1414, the adopted Resolution of Intention to Levy an Annual Assessment was adopted at the previous meeting. A packet of information regarding the DBID assessment was mailed to all BID members on October 31, It was brought to staff s attention that the budget sheet that was distributed did not have the revised 2014 budget that the City Council approved on September 30, Staff is working to provide a corrected version before Tuesday s meeting. In addition, the resolution was published in the Marin IJ on November 3,

7 At the conclusion of the public hearing, the City Council may adopt a Resolution Confirming the Annual Report as originally filed, or as modified by the City Council. The adoption of the resolution will constitute a levy of benefit assessments within the BID for calendar year As an alternative, if there are a large number of protests votes that come forward prior to the close of the public hearing, the City Council may close the public hearing and continue adoption of the resolution levying the annual DBID assessment to November 18, This will allow staff the time to count and verify all protest votes and then return to Council on November 18, 2014, with this information. FISCAL IMPACT The Business Improvement District encourages economic development in Downtown Novato. As the businesses within the BID assess themselves, there is no direct cost to the City currently. The City provides, at no cost to the BID, billing and collection of the annual benefit assessments, as well as administration of the annual BID renewal including staff time, mailing costs, and notification costs. Staff time and support have been provided to the DNBA throughout this process and the City has offered to provide office space for the new Executive Director. Staff recommends a 3-year seed investment program of $150,000 to help the BID grow and stabilize with funding coming from the General Fund and other sources will be explored. This investment by the City directly aligns with a key Council strategic objective, to enhance and improve Downtown. ALTERNATIVES 1. Do not accept and approve BID annual report and budget, or Resolution of Intention to Levy an Annual Assessment as proposed. Give direction to staff. 2. Close the public hearing and continue the DBID assessment to the November 18, 2014 meeting if needed. ATTACHMENTS 1. Resolution Confirming the 2015 Annual BID Report 2. DBID Annual Mailing to Members o Letter from City Manager o DBID Annual Report / DBID Budget o DBID Overview documents including assessment formula and history o DBID Map 7 7

8 CITY COUNCIL OF THE CITY OF NOVATO RESOLUTION NO. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NOVATO CONFIRMING THE 2015 ANNUAL REPORT OF THE BOARD OF DIRECTORS OF THE DOWNTOWN NOVATO BUSINESS IMPROVEMENT DISTRICT AS MODIFIED WHEREAS, the California Streets and Highways Code Section et seq, authorizes cities to establish parking and business improvement areas for the purpose of promoting economic revitalization and physical maintenance of business districts in order to create jobs, attract new business and prevent erosion of the new business district; and WHEREAS, the Downtown Novato Business Improvement District (BID) was established in 1999 by Ordinance No. 1414; and WHEREAS, pursuant to Ordinance No and the California Streets and Highways Code 36533, the Advisory Board of the BID shall prepare an annual report for each calendar year in which assessments are to be levied which the City Council shall review; and WHEREAS, the BID Advisory Board did prepare such a report (which included a budget) and submitted same to the City Council for consideration at the City Council s meeting on October 28, 2014; and WHEREAS, pursuant to Streets and Highways Code 36534, the City Council may approve or modify and approve, as modified, the report. Following such approval, the Council must issue a resolution of intent to levy assessments, and schedule a public hearing on the levy of the proposed assessment; and WHEREAS, on October 28, 2014, by Resolution No , the City Council approved the proposed report and called for a public hearing to be held on November 11, 2014, to address the question whether the businesses in the BID should be assessed the amounts specified in said modified report; and WHEREAS, under State law, the annual report filed by the BID Advisory Board with the City is not required to include a detailed, line-item budget. Relevant here, all that is required is a description of the activities to be provided in the year for which the assessments are proposed to be levied, an estimate of the costs of providing the activities, the method and basis of levying the assessment, and the amount of any surplus or deficit revenues to be carried over from a previous year. Cal. Streets & Highways Code sec Historically, however, the City has requested the BID Advisory Board to provide more information about its financial operations. In order to provide the City Council and BID members with a clearer picture of the financial plans res

9 and priorities of the BID, the BID s annual report has included a budget which has typically described the following expense categories: administration, member outreach/services, beautification/capital projects, events, and marketing; and WHEREAS, it is in the best interests of the BID Advisory Board, the BID and its members that the BID Advisory Board be expressly granted some budget management authority in order to respond to changes and opportunities during the relevant budget year. To provide this flexibility and ensure that the expenditures continue to reflect the objectives of the BID Advisory Board as described in its annual report, the Council, by this Resolution and pursuant to the terms and conditions set forth below, vests the BID Advisory Board with limited discretion in modifying and adjusting the annual budget set forth in the annual report. NOW, THEREFORE, based upon the staff report, the BID Advisory Board s annual report, the facts and documents referred to therein, and the evidence adduced at the hearing on this Resolution, and the public meeting on the Resolution of Intention to Levy Assessments, the City Council of the City of Novato does hereby resolve, determine and find as follows: 1. The City Council has received the annual report of the Downtown Novato BID for the 2015 calendar year. 2. The City Council adopted a Resolution of Intention to Levy Assessments on October 28, The City Council approves the proposed 2015 Budget in the Annual Report subject to (a) the modifications set forth herein, (b) the BID Advisory Board supplementing the 2015 Budget to reflect the modifications set forth herein; and (c) any other changes to the Annual Report and/or 2015 Budget set forth in Exhibit A, attached hereto and incorporated by this reference. 4. The City Council recognizes that the BID Advisory Board requires the ability to manage and modify its budget to respond to emerging opportunities and issues through the fiscal year for which the assessment is levied. As an integral part of the City Council s approval of the 2015 Budget, the BID Advisory Board is granted the following authority: The DBID cannot expend more than the overall Expense Budget, namely, for fiscal year 2015, $154,350. The BID Board has the authority to adjust budget allocations between categories of expenses in an aggregate amount not to exceed 15% of the total expense budget. res

10 For reference, below are the budgeted expense categories with the 2015 Budget amounts and the corresponding budget parameters outlined above. OPERATING BUDGET 2015 YEAR DBID Budget Categories Administration $25,250 Member outreach/services $67,800 Beautification/capital improvements $5,000 Events $38,300 Marketing $23,000 TOTAL EXPENSES $154,350 15% of Total $23, The City Council held a public hearing on the proposed assessments on November 11, BE IT FURTHER RESOLVED that the City Council of the City of Novato does hereby confirm the revised Annual Report of the Advisory Board of the Downtown Novato BID. Adoption of this resolution shall constitute confirmation of the 2015 Annual BID Report and approval of the levy of assessments described in the 2015 Annual BID Report for the 2015 calendar year as changed above. * * * * * * I HEREBY CERTIFY that the foregoing resolution was duly and regularly adopted by the City Council of the City of Novato, Marin County, California, at a meeting hereof, held on the 11th day of November, 2014, by the following vote, to wit: AYES: NOES: ABSTAIN: ABSENT: Councilmembers Councilmembers Councilmembers Councilmembers City Clerk of the City of Novato Approved as to form: res

11 City Attorney of the City of Novato res

12 October 30, 2014 Dear Downtown Business Owners: 922 Machin Avenue Novato, CA / FAX 415/ Mayor Eric Lucan Mayor Pro Tem Jeanne MacLeamy Councilmembers Denise Athas Pat Eklund Madeline Kellner City Manager Michael S. Frank In 1999, a group of downtown businesses asked the City Council to create a Business Improvement District (BID) to create a fund through an annual assessment to allow for collective marketing and promotion of Downtown Novato. The goal was to attract more business Downtown and enhance the customer and visitor experience. Across the state, BIDs are an effective way for downtowns to co-market and create activities and events in order to compete more effectively with the marketing that occurs in traditional shopping centers. Since 1989, the City has contracted with the Downtown Novato Business Association, a separate non-profit, to invest the BID funds in Downtown. Currently there are approximately 380 businesses in the BID which are assessed differentiated annual fees that generate approximately $54,000 for the purposes of enhancing the downtown through marketing and promotion, events, and improvements. For the last 15 years, the City has supported the activities of the DNBA and its management of the DBID, and has provided oversight without extensive intrusion. In 2014, City staff worked in close partnership with a newly constituted Board of Directors to increase communication and outreach, improve administrative processes, and enhance marketing of monthly events to bring people downtown. Civitas Advisors, a statewide expert in BID s, completed an assessment of the DBID s status and efforts which provided a roadmap for moving forward. Based on those recommendations, the DNBA recently hired a dedicated staff person--an extremely talented Executive Director with expertise in marketing, branding and event planning, who will provide a consistent presence for the membership and support for the DNBA Board. The City Council and I believe great progress was made this year in the DBID, due to the efforts of the DNBA, and there is great excitement about 2015! At the City Council's last Strategic Planning retreat, there was an extensive conversation about projects in, and the importance of, Downtown. As a commitment to this progress, the City Council has recently pledged to make a three-year seed investment of $50,000 per year in the DBID. Through a strong public/private partnership, we believe the economics and energy of our Downtown can be strengthened. Each fall, the DNBA, acting as the BID Advisory Board, prepares an annual report and a budget for the following calendar year. As a member of the Downtown Business Improvement District, the attached packet provides you with a copy of the Annual Report and the 2015 budget and it outlines the assessment process. On Tuesday, October 28, the City Council initiated the process for the annual DBID assessment process. On Tuesday, November 11, there will be a public hearing at 901 Sherman at 6:30 p.m. on this topic. The City Council will hear comments during the public hearing and then decisions regarding the annual assessments will be finalized for Ultimately, we all want to ensure a vital and vibrant Downtown for you, the investors in our city center, for our Novato community, and for our visitors. As we step out of the recession, we believe there are amazing opportunities ahead of the downtown if we all work together. We encourage you to get involved with this effort by attending DNBA meetings, and/or by connecting with us. We welcome your thoughts and questions. For more information, please contact City staff Peggy Flynn or Cathy Capriola at or city@novato.org. Sincerely, Michael Frank, City Manager 12

13 Coming Together is a Beginning. Keeping Together is Progress. Working Together is Success ANNUAL REPORT Dear members, Downtown is often described as the "heart" of a city. As the heart, Downtown Novato is home to diverse businesses and restaurants and it is the city's central gathering point; the place where visitors and local residents congregate. Throughout 2014, the Downtown Novato Business Association strove to develop a stronger sense of place in our Downtown, to build emotional attachment, and to encourage economic activity. At the top of the year, we quickly realized that in order to effectively shape and leverage our unique Downtown, we first needed to become a more solid, strategic, and accountable organization. Our committees and our board worked diligently to develop new, exciting events and advance our marketing techniques, while at the same time attempting to build community partnerships and shine a light on our financial practices and overall structure. As 2014 comes to a close, this report offers reflections on the accomplishments achieved, in addition to a sneak peak at the more robust and dynamic objectives we have in place for the coming year. Downtown Novato is the place that gives our city its character and provides it with a sense of unity. It is also where you have chosen to locate your business. We believe, by working collectively, we can enhance the success of our members and the Downtown as a whole. We hope you will join us on this journey to help our Downtown realize its true potential. Sincerely, Mark Dawson President - dnba@novato.org 13

14 A Year in Review Accomplishments in was a period of reflection, reform, and adjustment at the DNBA. With a new board in place, a strong commitment to our members and to the success of the Downtown, and eight months of meetings and planning sessions, we emerged with a new clarity. The following accomplishments are a direct result of our efforts: Creating a Buzz Downtown Determined to support our membership by drawing customers to our Downtown, our 2014 Board of Directors, together with our tireless marketing committee, created a monthly drumbeat strategy, with the goal of ensuring one event in our Downtown per month. By the end of 2014, we will have hosted or partnered in a total of 10 events, including three new additions: The Sweetheart Stroll, the St. Paddy s Scavenger Hunt, and Snow Days. Other events included the Spring Event, School Fuel Tour of Novato, Festival of Art, Wine, & Music, Fourth of July Parade/Wounded Warrior Project Fundraiser, Nostalgia Days, Safe-Trick-or-Treat/Scream on the Green, Small Business Saturday/Holiday Shopping Season, and Tree Lighting. Hired a place branding expert as executive director The recruitment process is complete and we are so pleased to announce that we have hired our first dedicated staff member. Tiffany Steeves is an award-winning place branding professional with specific expertise in the use of multimedia and social media. Her full bio can be found on our website. We are looking forward to witnessing the impact that a dedicated expert can have on our Association, and on our Downtown. Tightened our purse strings In 2014, we took a step back on spending, tightened our purse strings, and reviewed lessons learned from previous years spending. Our financial committee, treasurer and volunteers from the banking community worked closely with our CPA to create best practices accounting procedures. We simplified our financial reports, instituted a reliable invoicing and payment process, and closely adhered to our approved budget. This exercise produced a clear record of our spending and a solid reserve of funds that will allow us to move forward, both cautiously and strategically. "I had forgotten how cute it is down here... We're going to have to come down more often!" 14 2

15 "Things sure have changed since I was here last. I didn't know there were so many different stores." relationship building The 2014 Board of Directors committed at its first meeting in January to build new and nurture existing partnerships. We have supported or co-sponsored events with the Chamber of Commerce, Novato Theater, and School Fuel, and are working more closely than ever with the tourism committee. Over the course of 2014, we also worked diligently to fortify our relationship with the City of Novato and to build their confidence in our intentions and ability to manage the Downtown Business Improvement District (DBID). This effort has paid off. In partnership with the City, we have been able to secure: office space for our incoming Executive Director; wayfinding signage throughout the Downtown including six kiosks which the DNBA will program to feature our members and upcoming events; access to large self-watering planters along Grant and Vallejo Avenues to beautify our Downtown; and coming soon, interpretive signage for a dozen Downtown historic buildings, which will create a self-guided "history-walk" in our city center. a $150,000 vote of confidence We are pleased to announce that the CIty of Novato has committed to invest a total of $150,000 over a period of three years in the DNBA and management of the DBID. We are thrilled with this vote of confidence. The projected use for these funds is laid out in the attached 2015 budget. Analyze. then act. In order to ensure our strategy for the coming year is on point, the DNBA, together with the City of Novato, contracted with Civitas Advisors Inc., a firm that is known for its expertise in forming, modifying, and renewing downtown business improvement districts. The feedback laid the foundation for our 2015 budget and strategy, and in essence stated that we are on the right track, and by continuing to strengthen our relationship with the City and our partners, through dedicated staffing, Board training, tightening our administrative procedures, and strategically leveraging our funding the DNBA can secure a successful future for Downtown Novato. (The full report is available on our website at

16 OUR vision for Become a leader and 'go to' partner in downtown novato. In 2015, the DNBA will take a stronger role in the Downtown by creating events, increasing exposure of our members through targeted promotion, and developing more robust partnerships with organizations such as The Chamber of Commerce and its Tourism Committee, and the City of Novato. refine and expand our funding sources & strategy. Traditionally, funding for the DNBA has come largely from the assessment generated by the DBID, in addition to a small event 2 sponsorships. In the coming year, not only will we explore opportunities for additional funding, i.e. grants, sponsorships, and advertising opportunities, we also plan to develop and leverage our funding sources and event and promotions strategy more effectively. For example, we will invest in event promotion which will generate additional sponsorship dollars and produce free publicity through public relations activities and reduce the need to spend our resources on direct advertising leverage our membership. As a volunteer-based organization, our members are the lifeblood of our organization. We need you to make our collective dollars work for all of us in the best way possible. Our plan for 2015 is to improve our dialogue with you, get your feedback, and increase your involvement. develop the brand & overall image of downtown novato. Places, just like people, have personalities. Our goal in the coming year is to determine what our desired image and overarching brand is, and then devise new, creative ways of transmitting it. Social media will be a big part of this effort. do a better job. Ultimately, the Board and each Committee just want to do a better job in We want to ensure that all our members see and feel the value of this organization. 16 4

17 Downtown Novato Business Association 10/22/2014 Jan - Sep 14 Budget 2014 rev Budget 2015 Receipts: Associate Membership Income 55,301 54,000 55,000 City Sponsorship 50,000 Farmers Market sponsorship 10,000 Event Income Jan - Paint the Town Red 1,000 Feb - Valentines Day 1,000 Mar - St Patricks 1,000 Apr - Springtime 3,000 May - Cinco de Mayo 1,000 June - Art, Music & Wine 2,500 July - Wounded Warrior Project 20,000 Aug -Nostalgia Days 21,907 20,000 30,000 Sept- Movie Night (3 nights) 10,000 Oct - Safe Trick or Treat 3,000 Nov - Holiday Shopping/Restaurant promo 3,000 Dec - Holiday Tree Lighting & Snow Days 0 4,000 10,000 Total Event Income 21,907 24,000 85,500 Interest Income Total Receipts 77,243 78, ,530 Expense Administration Accountant 1,216 2,000 2,400 Board and Association Development 10,000 Board Education and Conferences 1,500 Bulk Permit - Postage 0 1,200 1,000 Filing Fee Insurance 4,862 5,487 5,500 Legal Fees General Membership Meeting 2, ,000 Membership ,000 Membership campaign 0 1,550 Office Supplies Total Administration 8,829 12,137 25,250 Member Outreach/Services Executive Director ($50K annual) 30,000 50,000 Employee Tax & Insurance 6,000 Mailings & Communications 301 1,500 2,500 Survey 0 5,000 1,000 Newsletters 307 1,800 2,400 Website Hosting 1, ,900 Total Member Outreach/Services 2,112 39,080 67,800 Beautification/Capital Improve. 0 5,000 5,000 Event Expense Jan - Paint the Town Red 500 Feb - Valentines Mar - St Patricks Day Apr - Springtime Event 813 1, May - Cinco de Mayo Page 1 of 2

18 Downtown Novato Business Association 10/22/2014 Jan - Sep 14 Budget 2014 rev Budget 2015 June - Art & Wine July - Wounded Warrior Project 2,000 Aug -Nostalgia Days. 19,220 20,000 20,000 Sept- Movie Night (3 nights) 7,000 Oct - Safe Trick or Treat 750 1,000 1,000 Nov - Holiday Shopping/Restaurant promo 1,000 Dec - Tree Lighting-Holiday 4,740 4,000 4,000 Total Event Expense 27,417 26,000 38,300 Marketing Expense Sponsorship Expense 77 5,000 Social Media campaign 3,000 Advertising & Promotion 11,087 15,000 15,000 Total Marketing Expense 11,164 15,000 23,000 Total Expense 49,523 97, ,350 Excess of receipts over expense (deficit) 27,720 (19,190) 46,180 cash at 12/31/13 49,366 cash at 9/30/14 77,086 anticipated cash at 12/31/14 30,176 anticipated cash at 12/31/15 76, Page 2 of 2

19 What is the Novato Downtown Business Improvement District? 1 Background A Business Improvement District, or BID or DBID, is a revitalization tool for commercial neighborhoods such as shopping areas and downtown business districts. Established by law in the late 1980 s and early 1990 s, BIDs are public/private sector partnerships that perform a variety of services to improve the image of their cities and promote individual business districts. They also carry out economic development services by working to attract, retain and expand businesses. Today, there are over 1,200 BIDs in the United States alone, with additional BIDs throughout other countries. 2 Novato s Downtown Business Improvement District In 1999, a group of merchants (the BID Formation Committee) worked with the City to create the Business Improvement District. The goal was to attract more business Downtown and enhance the customer and visitor experience. The BID was seen as an important part of the continued revitalization of Downtown Novato. In partnership with the merchants, the Novato City Council formed the Novato Downtown Business Improvement District (BID) in 1999 which was incorporated into the Novato Municipal Code as Section 2-25 Downtown Novato Business Improvement District. The Municipal Code allows the City and the BID Board of Directors to establish agreements for the administration of the district. This is a typical structure used by cities across the nation. Since 1999, the City Council has contracted with the Downtown Novato Business Association (DNBA) to serve as the BID Advisory Board and to administer and manage BID activities and funding since the creation of the BID. The DNBA is a non-profit organization with a volunteer Board of Directors and historically has had no paid staff. It has adopted bylaws to govern the DNBA Board activities and functions. 3 Novato BID Boundaries and Assessments There are approximately 380 businesses in the BID which self-assess an annual fee that generates about $54,000 per year. In 2005, the BID fee was increased by five percent and the BID boundary was expanded to include the two retail centers at Seventh and Grant Avenues (Lucky's and DMV centers), northward along Redwood Avenue from Vallejo Avenue to Golden Gate Place (Trader Joe's and Atherton Ranch commercial areas), and eastward the area around Whole Foods was changed from a Zone B to a Zone A. The map attached (Exhibit A) shows the boundaries of the BID with Zone A and B. Business Improvement District assessments are levied on the basis of the estimated benefit to the businesses and property within the BID area. A BID may assess property according to zones of benefit, in relation to the benefit being received by businesses within each zone. The BID assessment is billed annually with the City of Novato s business license distribution. As shown below, the assessment schedule is as follows: Type of Business Benefit Assessment Type of Business Benefit Assessment Zone A Zone B Zone A Zone B Retailers/Restaurants Professional Businesses $131 $ Employees $158 $79 Financial Institutions $525 $ Employees $263 $131 Lodging (Bed and Breakfast) $158 $ Employees $368 $184 Lodging (Hotels and Motels) $263 $263 Service Businesses $158 $79 4 Isn t This Just Another Tax? No. Business improvement district assessments are not taxes. BID assessments are vehicles which convey a special benefit upon those who pay. While it is true that all affected parties in a given district must pay the assessment, it is important to remember that the BID was established originally through the consent of those businesses which paid a majority of the assessment. 19

20 5 What is the Annual Assessment Process? As part of the annual renewal process for the BID, the BID Advisory Board is required to prepare an annual report each year on or before November 1. Among other things, the annual report includes a detailed budget, summary of accomplishments and proposed work plan for the coming year. For this BID, the DNBA serves as the BID Advisory Board and prepares the annual report and budget. Below is the annual assessment process for the BID which requires City actions--including two City Council meetings, legislative actions by the Council, and public and member notification. 1st City Council Meeting (October 28, 2014) o Presentation by the DNBA/BID Advisory Board of its Annual Report, which includes 2014 accomplishments and plans for 2015, including the 2015 Budget and the proposed assessment for 2015 o Council approves the 2015 BID Budget and Annual Report o Council takes action on a Resolution of Intention to Levy assessments for 2015 Public Notice and Member Mailing o As a courtesy, mailing to each member of the BID (at least 7 days prior to the public hearing) with materials including: cover letter from City, Annual Report, Budget, and overview of BID background and process for participation; inform members about the public hearing o Publish Resolution of Intention to Levy an Annual Assessment in newspaper (at least 7 days prior to the public hearing); 2nd City Council Meeting (November 11, 2014) o Public hearing on the Annual Assessment and to receive protests against levy of assessments o Council action on Resolution Confirming the Annual Report (approves the levy of assessments) After the assessments are approved, City finance staff incorporates the BID levies into the business licenses bills which are distributed in mid-december to all members. 6 Public Hearing & Comments For or Against At the public hearing on November 11th, all members of the BID and public are welcome to speak to the City Council regarding the annual BID assessment. Written comments for or against the benefit assessments to be levied can be mailed to the City Clerk of the City of Novato at 922 Machin Avenue, Novato, California 94945, or submitted to the City Clerk at or before the public hearing on November 11, To be counted, protests must be received by the City Clerk no later than the public hearing on November 11, A protest against the levy of assessments may be made orally or in writing. An oral protest shall be made at the public hearing. To count in calculating whether businesses paying 50% or more of the proposed assessments are against the assessments, a protest must be in writing. Each written protest shall contain a written description of the business in which the person signing the protest is interested, sufficient to identify the business, and its address. If the person signing the protest is not shown on the official records of the City of Novato as the owner of the business, then the protest shall contain or be accompanied by written evidence that the person is the owner of the business. Any written protest as to the regularity or sufficiency of the proceedings shall be in writing and clearly state the irregularity or defect to which objection is made. A written protest may be withdrawn from record at any time before the conclusion of the public hearing. If there are a large number of written protests timely submitted, the City Council has the option to close the public hearing and then continue the matter to its November 18, 2014 meeting to allow for a thorough counting of the submitted written protests. If written protests have been timely submitted by the owners of the businesses within the BID that will pay fifty percent (50%) or more of the total assessments of the entire BID, then no further proceedings to levy the assessments shall occur for the 2015 year and any new proceedings to levy assessments shall not be undertaken again for a period of at least one (1) year from the date of the finding of the 50% or more written protest by the City Council. If the 50% or more written protest is only as to an improvement or activity proposed in the DBID s annual report, then that type of improvement or activity shall not be included in the BID for Further Information Interested persons may view the BID documents on file with the City Clerk s office which are also posted on the City s web site with the agenda packet for the November 11, 2014 Council meeting. Further information regarding the Downtown Novato Business Improvement District may be obtained from the City Clerk of the City of Novato, at 922 Machin Avenue, Novato, California, 94945, from 9:00 a.m. - 5:00 p.m., Monday through Thursday, or telephone All written comments shall be mailed and/or delivered to said address. 20

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