Agenda Item Wording:
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Receive the Annual Operation Report for the Town-Center Business Improvement Area and approve amended agreement with Downtown Visalians Inc. to administer the revenues generated from the business tax override to support Downtown Visalia.
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Deadline for Action: 5/15/2023
Submitting Department: Finance and Technology Services
Contact Name and Phone Number:
Melody Murch, (559) 713-4379, melody.murch@visalia.city <mailto:melody.murch@visalia.city>
Department Recommendation:
It is recommended that the City Council receive the Annual Operations Report for the Town-Center Business Improvement Area (TCBIA) and approve the revised TCBIA agreement between City and Downtown Visalians Inc. to be effective July 1, 2023.
Background Discussion:
Summary:
Business owners located in the Town-Center Business Improvement Area (TCBIA) voluntarily voted to pay a surcharge on their Business Tax (BT) for the purpose of providing parking, decorations, music, and promotion of public events and Downtown business. The revenue from this surcharge is collected during the City's BT billing process, and administered by Downtown Visalians, Inc. (DTV) through a management agreement with the City. This agreement requires the presentation of an Annual Operations Report (Report) of all matters covered under the agreement for the preceding fiscal year. Approval of the Report triggers renewal of the management agreement for another year. The 2022 Report is provided as Attachment A to this agenda item, and the presentation to be given tonight by Steve Nelson, the Executive Director and CEO of DTV.
The current TCBIA Management Agreement was approved in October of 2012, and requires minor revisions to incorporate changes to the payment schedule of assessments and update the reports provided along with these payments. In addition, staff requests a change of the TCBIA fiscal year to be the calendar year, making the reporting period match the Downtown Visalia Property and Business Improvement District (DTVPBID) assessment year. The TCBIA and the DTVPBID are both administered by DTV. The ability to combine reporting of the goals and accomplishments for both revenue sources will allow a more comprehensive annual reporting of the activities administered by DTV in the Downtown area. Administration of the DTVPBID and the TCBIA by the DTV is a feature that was built into the design of these assessments, and no change in the management of these revenue sources is expected to occur during the life of these areas. The proposed revisions to the existing agreement are included in this item as Attachment B, and staff is requesting Council approval of this revised agreement to be effective July 1, 2023.
Additional Background:
The economic vitality of the Downtown Visalia area has long been a high priority for both the City, and the business owners located there. The Town-Center Business Improvement Area (TCBIA) was formed with the support of Downtown business owners, under the authority of State legislation in 1966 to support merchants in the downtown area. The formation of The TCBIA generated revenue with a 100% business tax surcharge for the purpose of improving the downtown area and promoting businesses located there. The TCBIA has generated an average of $172,000 annually over the last 5 calendar years and is projected to achieve the same level of funding in 2023. This funding, shown in Graph 1: Town-Center Business Improvement District 5-Year Average, is tied directly to business revenues within the Downtown area, and for this reason, fluctuates based upon larger economic conditions, such as the recent pandemic.
Graph 1: Town-Center Business Improvement District 5-Year Average
The DTV was formed in 1963 and laid the foundations of the long-standing efforts of both the business owners and the City to keep Downtown Visalia thriving. The DTV was instrumental in the adoption of the TCBIA, and this funding source was enacted to support their activities. For this reason, the DTV has been contracted for the administration of the TCBIA since its inception, and, as noted in the management contract, the DTV Board also serves as the TCBIA Board. Membership of this board is limited to property and business owners in the Downtown area and is governed by the DTV Board By-Laws. A listing of current DTV and POA Board members is included in the attached report.
The TCBIA was formed under the California Streets and Highways Code, Part 5. Parking and Business Improvement Area Law of 1965 (Sections 36000-36081). Under this law, the TCBIA revenue may be used for the following purposes:
a) The acquisition, construction, or maintenance of parking facilities for the benefit of the area.
b) Decoration of any public place in the area.
c) Promotion of public events which are to take place on, or in public places in the area.
d) Furnishing of music in any public place in the area.
e) The general promotion of retail trade activities in the area.
The report required by the Management Agreement is to include:
i. All actual revenue, activities and expenditures during the Program year of the TCBIA
ii. A specific management plan, including operating budget, for the following Program year.
Fiscal Impact:
The TCBIA surcharge is one of many funding sources used by the DTV to promote Downtown businesses. 100% of the revenue generated from the TCBIA surcharge is collected by the City and passed through to the DTV to be used for the purposes stated in California Law and discussed above. Billing for these funds happens concurrently with collection of the regular business tax payments at no material increase in cost to the City.
Prior Council Action:
10/15/2012: Approval of current TCBIA Management Agreement
Other: N/A
Alternatives: None recommended.
Recommended Motion (and Alternative Motions if expected):
recommendation
I move that Council:
1) Accept and approve the Annual Operations Report for the Town-Center Business Improvement Area (TCBIA), and
2) Approve the revised TCBIA agreement between the City and Downtown Visalians Inc. to be effective July 1, 2023.
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Environmental Assessment Status: N/A
CEQA Review: N/A
Attachments:
Attachment A: TCBIA Report 2023
Attachment B: Revised TCBIA Management Agreement as Proposed
Attachment C: DTV Profit and Loss Statement 2022
Attachment D: DTV Balance Sheet