Agenda Item Wording:
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Downtown Visalia Property and Business Improvement District Annual Report - Receive the 2026 Annual Operations Report for the organization.
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Agenda Date: 05/18/2026
Prepared by:
Nichol Ritchie, Finance Manager, (559) 713-4379, Nichol.ritchie@visalia.gov,
Ruth Pena, Financial Analyst (559) 713-4327, ruth.pena@visalia.gov,
Renee Nagel, Finance & Technology Director, (559) 713-4375 Renee.Nagel@visalia.gov
Department Recommendation:
It is recommended the City Council receive the Annual Operations Report for the Downtown Visalia Property and Business Improvement District (DTVPBID), provide comment and direction as appropriate.
Summary:
This item provides an overview of the Downtown Visalia Property and Business Improvement District (DTVPBID) annual operations, financial activity, assessment history, and proposed assessment structure for the 2027 tax year. Included in the report are summaries of district revenues and expenditures, fund balances, assessment collections, reporting requirements under PBID Law, and the projected long-term impact of assessment decisions through the remainder of the current Management District Plan (MDP) term ending in 2029. The DTVPOA Board reviewed the possibility of an assessment increase and is recommending no increase to DTVPBID assessments for the 2027 tax year. As a result, current assessment amounts will remain unchanged for 2027.
Background Discussion:
The Downtown Visalia Property and Business Improvement District (DTVPBID) is an assessment district which provides activities and improvements to Downtown property owners. DTVPBID was created in 1998 and has been extended by ballot of the affected property owners ever since. The DTVPBID is in its 5th iteration, and the current duration is January 1, 2020, through December 31, 2029. In accordance with the DTVPBID Management District Plan (MDP), the City has contracted with the Downtown Visalia Property Owner’s Association (DTVPOA) for the administration of the DTVPBID, and the DTVPOA has subcontracted this administration to Downtown Visalian’s, Inc.
The DTVPBID is required to submit the annual operations report by May 31st each year in accordance with the Property and Business Improvement District Law of 1994 (PBID Law) and the current agreement between the City and the DTVPOA. The attached report (Attachment A) summarizes past, current, and planned activities, improvements, and the financial state of the DTVPBID. The report must also include any proposed assessment increases. No increase is proposed for the 2027 tax year, and this recommendation is discussed in this agenda item. The council’s role, according to PBID Law, is to review the attached report to ensure consistency with the Management District Plan (MDP) and make any changes that it deems necessary to ensure compliance with the MDP as balloted by the affected property owners.
The MDP establishes the maximum annual increase permitted for assessments within the DTVPBID. To accommodate increases associated with California minimum wage adjustments occurring through January 2022, the MDP allowed annual increases of 10% through the third year of the plan (2022). Beginning in year four (2023), annual increases were limited to a maximum of 5% for the remainder of the plan term. Although the MDP allows for a maximum increase of 5% for the 2027 tax year, the DTVPOA Board is recommending no increase to assessment rates for 2027 for a second year in a row. Therefore, the current assessment amounts will remain unchanged for the 2027 tax year, as shown in Table 1: Summary of Proposed 2027 DTVPBID Assessment.
Table 1: Summary of Proposed 2027 DTVPBID Assessment
Although none is proposed, any assessment increase approved, or changes directed by Council tonight would be included in the June 1, 2026, agenda item for the Tax Roll process.
Additional Information:
DTVPBID V Formation: Since 1998, the DTVPBID has collected assessments under PBID Law to provide funding for improvements and activities to preserve and enhance the economic condition of Downtown Visalia. The 5th iteration of the DTVPBID was formed on July 15, 2019, by a ballot of the owners of property located within the district and began on January 1, 2020. As prescribed by the current MDP, administration of the DTVPBID is being performed by the Downtown Visalia Property Owners Association (DTVPOA) under a management agreement approved by City Council on December 3, 2019. As required by PBID Law, and included in the agreement with the DTVPOA, the annual operations report is to be prepared and presented to the City Council each year. The deadline of May 31st has been set to allow the inclusion of any assessment increases approved by Council in the annual Tax Roll process.
Reporting Requirement: The annual operations report is required by PBID Law, and the DTVPOA Management Agreement, to include certain information summarized by the following items excerpted from section 2.B. of the agreement. The full PBID Management Agreement is included as Attachment B to this item.
Agreement Section 2.B.
B. Prepare and provide to the City, for review by the City Council, an annual
operations report for all matters covered under this Agreement on or prior to
May 31, 2020, and thereafter no later than May 31st of each year. Such
annual report shall include financial summaries to be provided in the format set
forth in Exhibit A, and account for:
i. all actual revenue, activities and expenditures during the fiscal year of the district (January 1 through December 31) prior to the year of the report.
ii. all to-date and projected revenue, activities and expenditures during the then current fiscal year; and
iii. a specific management plan, including operating budget, for the fiscal year following the year of the report. The specific management plan and budget for the following fiscal year shall specify the actual maintenance, activities and improvements proposed to be provided for in that year along with their estimated cost; and
iv. shall be filed with the clerk and shall refer to the property and business improvement district by name, specify the fiscal year to which the report applies and include any additional information required under §36650(b) of the PBID Statute, such as:
1. Any proposed changes to the boundaries, benefit zones, or classification of property within the district.
2. The method and basis of levying assessments, including any proposed increases, in sufficient detail to allow property owners to estimate the amount of their individual assessments.
3. The estimated amount of any surplus or deficit revenues to be carried from previous fiscal years.
The estimated amount of any contributions to be made from sources other than
district assessments.
The City Council shall review the report to ensure consistency with the Plan. In accordance with the provisions of PBID Statute, the City Council may approve the report as filed by the DVPOA or may modify any particular contained in the report and approve it as modified.
Report Elements
While the City is required by the MDP to contract with the DTVPOA for management of the DTVPBID, the power to modify any aspect of the annual report, prior to approval, lies with the City Council, with one notable exception. The City Council may not make or approve any changes that would prevent the DTVPBID from funding scheduled payments on any executed contract or debt service obligation. This is the City Council’s opportunity to review the justification for any changes or assessment increases and hold the DTVPBID accountable for any controllable rising costs. Proposed items are intended to be reviewed by the City Council to ensure consistency with the MDP.
Financial and Budget Information: The report included in Attachment A contains a summary of receipts and disbursements for the 2025 Calendar Year (January 1-December 31) as well as the 2026 Budget which lists planned and projected revenues and disbursements. Expenditures that are summarized in the report comply with the Service Plan and Budget contained in section VI. of the Management District Plan (MDP).
PBID Fund (375) Balances: The City administers the collection of DTVPBID revenue through the annual tax roll process. Once collected, the funds are held in a separate Fund, pending quarterly payment requests from the POA. The projected fund balance for FY 25/26 for the PBID Fund (375) is $702,701 which includes assessments paid to DTV through December 31, 2025. As shown in Table 2: PBID V - Cash Balance assessments paid to DTV vary and are dependent on payment requests. In addition, delinquent assessments are not recognized until they are paid. The table below provides a summary of the cash balance in the PBID V fund over the last 5 years.
Table 2: PBID V - Cash Balance
Fiscal Year July 1 to June 30*
The cash balance summary in Table 2 is based upon funds collected and paid out by the City and does not include any cash balances paid to the DTVPOA that may remain unspent. The annual report in Attachment A provides a summary of any DTVPBID balances held by the DTVPOA.
Plan Changes and Assessment Increases: The attached report submitted by DTVPOA (Attachment A) is accompanied by this staff report. The possibility of an increase was discussed by the POA Board on April 28, 2026, and the POA Board has recommended no increase in DTVPBID assessments for the 2027 tax year. The maximum annual inflationary increase allowed by the MDP was set at 10% for years two and three (2021 and 2022) and reduced to 5% for the remaining 7 years (2023 to 2029). This was due to the expectation that costs would continue to increase at a rate higher than 5% until mandated increases to the California Minimum Wage were completed in January 2022.
The maximum assessment increase allowed for the 2027 DTVPBID year is set by the MDP rather than by any Consumer Price Index (CPI) rate. For this reason, it is important to consider the justification for any requested increase in the DTVPBID assessments. To date, the DTVPBID assessment increases have exceeded the CPI for All Urban Consumers (CPI-U) provided by the Bureau of Labor Statistics. This is due to the increases built into the years 2021 and 2022 which were affected by the mandatory California minimum wage increase, which is not fully reflected in the CPI-U. Although the CPI-U increased 3.3% over the 12 months leading up to March of 2026, the DTPOA Board is recommending no increase in assessment amounts to minimize the lingering effect on downtown businesses already dealing with the increased prices resulting from the high inflation experienced in recent years. Any increase, or lack thereof, has a compounding effect on future DTVPBID years, changing the maximum assessment which can be achieved in the 10-year term of PBID V. Table 3: Maximum Assessment DTVPBID V - Years 2020-2029 below show the updated maximum assessment amounts based upon a 0% increase in 2027.
Table 3: Maximum Assessment DTVPBID V - Years 2020-2029
As shown on page 8 of the MDP (Attachment C), the original maximum annual assessment was projected to reach $851,791 by the 2029 tax year. With the DTVPOA Board’s recommendation to implement no increase for the 2027 tax year, the projected maximum assessment for 2029 would be reduced to $750,526, representing a reduction of $101,265 from the original projected maximum assessment. All property assessments are brought before Council on June 1, 2026, as part of the Tax Roll process.
Fiscal Impact including annual maintenance and operating costs:
As shown above in Table 1: Summary of Proposed 2027 DTVPBID Assessment, no additional cost to the City’s combined assessments is proposed. If approved, the City contribution of $156,245 to the DTVPBID would remain the same for the 2027 tax year. Shown below, in Table 4: City DTVPBID Assessment Detail, is the breakdown of the payment between the General Fund, Convention Center, and Visalia Transit.
Table 4: City DTVPBID Assessment Detail
Prior Council Action:
July 15, 2019: DTVPBID V Ballot process and formation
December 3, 2019: Approval of Management Agreement with DTVPOA Annual Reports received, and Assessment Increases approved on:
May 18, 2020 (10% increase for 2021)
May 17, 2021 (10% increase for 2022)
May 16, 2022 (5% increase for 2023)
May 15, 2023 (5% increase for 2024)
June 3, 2024 (2% increase for 2025)
June 3, 2025 (0% increase for 2026)
Alternatives: None
Recommended Motion (and Alternative Motions if expected):
recommendation
I move to accept the Annual Operations Report for the Downtown Visalia Property and Business Improvement District and approve a zero percent (0.0%) increase in assessments for the 2027 tax year (or as amended by Council).
Environmental Assessment Status: N/\A
CEQA Review: N/A
Deadline for Action: 05/31/2026
Attachments:
Attachment A: Annual DTVPBID Operations Report
Attachment B: Current DTVPBID Management Agreement dated January 1, 2020 Attachment C: DTVPBID Management District Plan & Engineer’s Report (MDP)
Strategic Goal: Indicates which City Strategic Goal(s) this item supports. Check all that apply.
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