HomeMy WebLinkAbout05/06/2008, BUS 3 - OPPORTUNITY TO HEAR TESTIMONY REGARDING PROPOSED DOWNTOWN ASSOCIATION ASSESSMENT INCREASE council MSD. 5-6-08
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CITY O F SAN LUIS O B I S P O
FROM: Shelly Stanwyck, Assistant City Administrative Officer
Prepared By: Deborah Cash, Administrator of the Downtown Association;
Claire Clark,Economic Development Manager;
Christine Dietrick, Assistant City Attorney
SUBJECT: OPPORTUNITY TO HEAR TESTIMONY REGARDING PROPOSED
DOWNTOWN ASSOCIATION ASSESSMENT INCREASE
CAO RECOMMENDATION
Receive public testimony regarding a proposed increase in the Downtown Parking and Business
Improvement Area (BIA) assessment.
DISCUSSION
On April 1, 2008, the Council adopted a Resolution of Intention to increase the Downtown
Business Improvement Area assessment. The increase currently under consideration is consistent
with the recommendation by the Downtown Association Board of Directors, which endorsed an
increase to the BIA Assessment at the rate of 110% of the City business tax (0.00055 of gross
receipts), with a minimum assessment of $150. The existing rate is 100% of the business tax
(.00050 of gross receipts), with a minimum assessment of$25. Thus, a member currently paying
$250 for $500,000 in gross receipts would now pay $275 (an increase of $25 for the year, or
about $2 per month). Businesses paying less than $150 would be increased to that minimum
amount. If approved, the proposed assessment increase will generate about $60,000 in added
BIA revenues to be expended for the benefit of downtown businesses.
In order to implement the increased levy on area businesses, the Council must adopt an ordinance
authorizing the proposed increase. Prior to adopting the ordinance, state law requires that the
City provide notice of its intention to increase the assessment and that Council conduct both a
public meeting to receive general comments on the proposal; and a public hearing to consider
business owner protests to the proposed increase. In accordance with State law, the City
provided published and mailed notice to affected business owners of the adoption of the
Resolution of Intention; the public meeting on May 6, 2008; and the public hearing on May 20,
2008.
The Council's role at this public meeting is simply to provide an opportunity for interested
members of the public to provide testimony that may be relevant to Council's consideration of
the proposed increase. The Council should not take any action in response to the testimony
received beyond discussion and consideration. At the public hearing scheduled for May 20, 2008,
the Council will consider protests, if any, of affected business owners and introduce the
ordinance authorizing the assessment increase, if no valid business owner protest is made.
TADowntown Association\DA CAR.5-6-2008 Final Docs\DA_CAR_5-6-2008.doc a
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ERECEIVED
JDG Financial Advisors 008
John D.Grady,CFP LERK
525 Marsh Street
San Luis Obispo,CA 93401 701R Tel. (805) 5442242 CCU NCIL IRMay 1,2008 ACRORHIEFRED FILE ATTORNEY RCity Clerk CLERK/ORIG E CHF990 Palm Street MEETING AGENDA ❑ DEPT HEADS IRSan Luis Obispo, CA 93401 ITEM #f3us 3 IRDA-I-I
Dear City Clerk and City Council Members, �`eoce"ee
I am writing to express my concern with the proposed fee increased in annual assessments to
be charged to businesses located within the Downtown Association area
My objection is not with the modest increase of$5 per$100,000 of gross revenue, but rather
with the dramatic increase in the minimum assessment to businesses. This increase represents
a significant increase to many smaller businesses,particularly to the sole proprietors who
conduct business within this zone.
Please consider the following examples...
A business with gross revenues of$50,000 would normally pay$27.50($50,000 * .00055),
but with the new minimum of$150 would actually see an increase in fees of nearly 6 times!
A business with gross revenues of$100,000 would normally pay$55 ($100,000 * .00055),
but with the new minimum of$150 would actually see an increase in fees of nearly 3 times!
And finally,a business with gross revenue of$150,000 would normally pay$82.50
($150,000 * .00055), but with the new minimum of$150 would actually see their annual fees
nearly double!
In fact, a business owner would need to generate gross receipts in excess of$272,000 before
his or her new fee would surpass the new minimum fee of$150! 1 submit to you that there
are manv sole proprietors conducting business within this Downtown Association fee area
who do not have gross receipts in excess of$272,000. And, due to the nature of their
business,they likely receive little or no benefit from the fees they now pay to the association.
I urge you to keep the limit on the minimum annual fee at the current$25,or at most allow it
to increase to $50, so as to not unfairly burden the small sole proprietor business owners with
such a dramatic fee increase.
Respectfully yours,
&r4r' Cg �-
John D. Grady