HomeMy WebLinkAbout10. Adopt Reso Designating CM or his Designee as Rep on Downtown Downey Improv Assoc BoardRem No.
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BY: ALDO E. SCHINDLER, DIRECTOR OF COMMUNITY DEVELOPM15N
DATE- •2018
DOWNTOWN DOWNEY IMPROVEMENT• • 1
DISBURSEMENT AGREEMENT AND DESIGNATION OF CITY REPRESENTATIVE
That the City Council approve and authorize the City Manager to execute a Management and
Disbursement Agreement with the Downtown Downey Improvement Association, and designate a City
Representative by adopting the following resolution:
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DISCUSSION
Following the establishment of the Downtown Downey Community Benefit District (CBD) at the -
July 24, 2018 City Council meeting, staff directed the Los Angeles County Auditor -Controller's Office to
add the CBD's special assessment fees to the affected property tax bills; this task was accomplished in
August 2018 for all privately held parcels within the CBD boundary. The special assessments have
begun to be collected by the County, and a first remittance is to be completed to the City by December
2018. The City will then transfer the funds to the designated CBD nonprofit management corporation,
recently named the Downtown Downey Improvement Association (DDIA), for expenditure in accordance
with the Management District Plan. As such, and to move forward with the release and expenditure of
funds to and by the DDIA, the City must enter into a Management and Disbursement Agreement with the
DDIA.
The DDIA is in its infancy, and the DDIA consultant is assisting property owners to form a nonprofit
management corporation to administer the funds and activities of the DDIA and complete all the legal
processes necessary to set up a functioning DDIA. As such, an interim board has been elected and has
met to move these CBD processes forward, and while City staff has attended all DDIA-related meetings
to date, the City Council is being asked to formally designate a representative to sit on the board in future
meetings. Accordingly, staff recommends that the City Manager, or his designee, be assigned as the
City's representative on the DDIA board, via the attached resolution.
DDIA AGREEMENT AND CITY REPRESENTATIVE DESIGNATION
NOVEMBER 13, 2018
PAGE 2
Economic Vibrancy
There are no fiscal impacts related to t e a opt on o t e a ormentioned Resolution or in entering into the
Management and Distribution Agreement.
ATTACHMENTS
F,'MFWm7W--nm 1!,K4KrJM-19 9 'o --11-1
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DOWNEY DESIGNATING
THE CITY MANAGER, OR HIS OR HER DESIGNEE, TO ACT AS THE CITY'S
REPRESENTATIVE ON THE DOWNTOWN DOWNEY IMPROVEMENT
ASSOCIATION BOARD
WHEREAS, after a duly noticed public hearing and balloting procedure, the City Council
adopted Resolution No. 7829 on July 24, 2018 forming the Downtown Downey Community
Benefit District (CBD) to facilitate and encourage additional growth and revitalization in the
Downtown Downey area;
WHEREAS, it is necessary that the City Council appoint a staff member to represent the
city on the governing board, known as the Downtown Downey Improvement Association (DDIA),
of said CBD;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF DOWNEY DOES
HEREBY RESOLVE AS FOLLOWS:
SECTION 1. That the City Manager, or his or her designee, act as the City's
representative on the DDIA. The City's Representative shall have the power to act on behalf of
the City for all purposes under this resolution.
SECTION 2. The City Clerk shall certify to the passage and adoption hereof.
APPROVED AND ADOPTED this 13th day of November, 2018.
SEAN ASHTON, Mayor
MARIA ALICIA DUARTE, CMC
City Clerk
I HEREBY CERTIFY that the foregoing Resolution was adopted by the City Council of
the City of Downey at a Regular Meeting held on the 13th day of November, 2018, by the
following vote, to wit:
AYES:
Council Members:
NOES:
Council Member:
ABSENT:
Council Member:
ABSTAIN:
Council Member:
MARIA ALICIA DUARTE, CMC
City Clerk
Attachment "A"
i .-
California • Corporation and
Charter City
m
The Downtown Downey improvement Association,
California •PublicBenefitCorporation
r
This Management and Disbursement Agreement ("Agreement") between the City
of Downey, a California municipal corporation and charter city, (the "City") and the
Downtown Downey Improvement Association of Downey, a California Non -Profit Public
Benefit Corporation, (the "DDIA") is entered into this of November 13, 2018 ("Effective
Date"). City and DDIA shall respectively be referred to as the "Party" or collectively as
the "Parties."
WHEREAS, under Article II Chapter 14 of the Downey Municipal Code entitled
"Downey Community Benefit District Procedural Ordinance" (`Ordinance"), which was
adopted by the City Council on October 27, 2015, the City is authorized to establish a
Community Benefit District("CBD") for a maximum of 20 years to enhance security,
safety appearance and economic viability within such districts; and
WHEREAS, consistent with the process defined by Ordinance, on July 24, 2018,
following a public hearing, the City Council adopted Resolution No. 18-7829 approving
the creation of the Downtown Downey Community Benefit District of 2018 ("District"); and
WHEREAS, the Management District Plan ("District Plan") and Engineer's Report
that provide the legal basis for the District describe and set forth the intended particular and
special benefit the property owners in the District will receive including but not limited to
special events, private security, beautification, marketing, promotional activities, public
space development, enhancement for property owners, street sweeping, steam cleaning,
public art and administration to be provided by the DDIA through implementation of the
District Plan (the "District Plan Improvements"); and
WHEREAS, the City through a District ballot held on July 24, 2018 received more
than 50%weighted approval to levy and collect the property assessments for use and
administration pursuant to the District Plan; and
WHEREAS, the District Plan Improvements will be funded through an annual levy of
special assessments upon real property within the District (the "Assessments"),
commencing on December 1, 2018, and continuing for period not to exceed twenty (20)
years or until the property owner petition and vote to disestablish the District; and
WHEREAS, the City desires to contract with DDIA to provide for the operation and
management of the District and the implementation of the District Plan; such services
include but are not limited to creating a District budget and policies to comply with the
District Plan; for preparing and filing quarterly and annual reports with the City reflecting
compliance with the District Plan; and for overseeing the day-to-day implementation of the
District Plan Improvements; and
WHEREAS, the Parties desire to enter into this Agreement in order to coordinate
their respective activities necessary for the successful operation, administration and
implementation of the District Plan and District Plan Improvements.
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NOW THEREFORE, the Parties to this Agreement do hereby covenant and agree as
fol lows;'
1. DDIA Remonsibilities.
2. Scope of Disbursement Duties. DDIA agrees to promptlyperform all duties' specified in
the District Plan, attached hereto as Exhibit A and on file with the City Clerk. DDIA and
the City shall each respectively designate an individual or individuals who shall be
responsible for communications with each other for the duration of this Agreement.
Nothing in this Agreement shall be construed to require DDIA to perform as specified in
the District Plan if funds are not available to perform those duties due to lack of funding
from Assessments or other revenues from operation of the District (the "District
Revenues"). DDIA shall notify City in writing as soon as DDIA is aware that District
Revenues are insufficient or not available to perform duties specified in the District Plan.
3. Method of Perform ing Disbursement Duties. The method, details and means of
performing the disbursement of District Revenues shall be as described in the District
Plan attached hereto as Exhibit A, and as set forth herein (the "Disbursement Duties").
In the event of any conflict between the District Plan and this Agreement, disbursement
of District Revenues shall be for the special benefits described in the District Plan.
4. District Term. DDIA's Disbursement Duties shall begin on December 1, 2018, or as
soon as the first year Assessments have been transferred by the City to the DDIA.
DDIA shall complete their Disbursement Duties if and when the District has been
disestablished through a mail ballot procedure of the CBD property owners , subject to
the annual review and termination provisions in Section 13 of this Agreement.
4.1: Pro ram Im lementation and:O enation. DDIA shall be fully responsible for
developing, implementing, directing and operating the District Plan attached hereto
as Exhibit A and on file in the City Clerk's Office. DDIA assumes all responsibility
for completing activities required to implement the District Plan and its programs.
4.2. Competitive idoin< DDIA shall competitively bid all contracts over $50,000 and
shall keep and provide copies of all bids submitted for review to any affected
property owners or to the City upon request. The lowest bidder will not necessarily
receive the contract that is bid, but is a factor in awarding the contract. The quality,
performance and experience of bidding contractor shall also be taken into
consideration prior to the awarding of that contract. The maximum contract term
shall be three years for competitively bid projects. Employment contracts are
exempt from this provision. Administrative services or staffing shall be bid out but
not be subject to the three-year review and renewal of services if both parties agree
to keep the agreement in place and there is a 30 -day "no cause" termination
provision in the agreement.
4.3.'Separate Bank Account for District Revenues. All District Revenues received by
DDIA pursuant to this Agreement shall be held in a bank account separate and
apart from any other funds managed or administered by DDIA, and shall not be co
mingled with any other funds (the "Account"). Copies of all DDIA District Revenue
Account statements shall be made available within ten (10) working days to the
City upon request. DDIA shall provide the City with evidence of the establishment
of the required District Revenue Account prior to the City transferring any
Assessments to the DDIA.
4.4. Use of Downtown Downev Communitv Benefit District or DDIA Name. The name
"Downtown Downey Community Benefit District" or the " Downtown Downey
Improvement Association" as its management corporation, or an appropriate
abbreviation, shall appear on all marketing and promotional materials funded in part
or in whole by District Revenues.
4.5._Reporting to Property Owners within the District. A statement of activities/programs
funded by District Revenues, and the cost of each such activity or program shall be
mailed to every property owner within one -hundred and twenty days (120) of the
close of the fiscal year consistent with Section 9 of the DDIA By-laws, (the "Activity
Statement") commencing after the end of the first Fiscal Year November 30, 2019.
A copy of the Activity Statement and a list of property owner names and addresses
shall be provided to the City no later than June 1St, of each year during the Term.
4.6. Coen Meetin slaws. DDIA shall comply with the open meeting requirements of
the Ralph M. Brown Act with regard to its performance of this Agreement. DDIA
must maintain and disclose any District -related records in accordance with the
requirements of the California Public Records Act.
4.7. Program and Budget Reports.
4.7.1. AnnualRe arts 1�Plans and ud ets. The DDIA shall "submit an Annual
Report to the City for each fiscal year for which Assessments were levied and
collected by the City. An Annual Report will include at the minimum, copies
of Board minutes and meeting notes. In addition, the DDIA shall also submit
for City approval an Annual Work Plan and Budget on or before December
1 st of each year for each fiscal year for which Assessments are to be levied
and collected (the "Annual Report and Budget"). The Annual Work Plan and
Budget shall be prepared in accordance with Section 36622 of the Streets
and Highways Code, and Article XIII.D of the California Constitution. The
Annual Work Plan and Budget, assuming that no structural changes are
recommended to the Engineer's Report, will be approved each year before
December 1, the beginning of the new Fiscal Year. If changes to the Annual
Work Plan and/or Budget that require changing the Engineer's Report are
requested that would require a public hearing and/or a public meeting
pursuant to state law, the Ordinance, or which would affect the Assessment
database and resulting budget of the upcoming fiscal year, then such
modification shall be submitted prior to May 1 St of each year. The City must
report any changes to the database or boundaries to the County by July 15th
of each year during the Term. Each program or activity specified in the District
Plan and succeeding programs and activities shall be implemented within the
approved budget amounts in accordance with the District Plan and this
Agreement. Any obligations or expenditures not specifically budgeted shall
not be paid from District Revenues.
4.7.2. City's General Fund Not Liable. The City shall only be responsible for
payment of its property assessment as a property owner in the District.
Neither the City's General Fund, nor any other City fund, revenue source, or
any other City monies, except the actual Assessment for property the City
owns in the District, shall be collected from the County and transferred to the
DDIA by the City. The City is not obliged to loan or procure funding for the
District. All Parties acknowledge and agree that any unpaid Assessments in
the District are not a debt of the City, nor legal or equitable pledge, charge,
lien or encumbrance upon any City property or upon City income, receipts or
revenues.
4.8. Financial Statements.
4.8.1. Annually, in conjunction with the Annual Report and Budget, DDIA shall
prepare financial statements that document the disposition, commitment and
line item expenditures of all District Revenues received during the previous
calendar year (the "Financial Statement"). The Financial Statement shall be
prepared by a Certified Public Accountant (CPA) acceptable to the City who
will provide a "Review Opinion" regarding whether or not there are any
material modifications that should be made to the Financial Statement in order
for them to be in conformity with accounting principles generally accepted in
the United States..
4.8.2. DDIA shall conduct a financial auditfollowing their first year in operation. The
audit shall be submitted the City for review. The City shall have the right to
request that a financial audit be conducted every five (5) years during the term
of this Agreement. During the interim years, Financial Statements may
submitted in lieu of a financial audit. The City may request a full audit of
DDIA's Financial Statements, if in its sole and absolute discretion, the City
believes such an audit is necessary. The review or audit will be paid for by
DDIA.
4.8.3. The City's review of the DDIA Financial Statements shall be conducted in
accordance with Government Auditing Standards (2003 and subsequent
revisions) prescribed by the Comptroller General of the United States. All
other audits shall be prepared in accordance with Generally Accepted
Accounting Principles in the United States of America.
.8.4. Any District Revenues necessary to cover DDIA's portion of the Financial
Statement shall beset aside in the Budget.
4.8.5. The Financial Statement shall be delivered to the City at the same time as the
Annual Report and Budget or within 90 days of the completion of each fiscal
year of the DDIA;
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4.9 Coo enation: DDIA shall perform its obligations and carry out its responsibilities
under this Agreement and the Management Plan in a cooperative manner with
the City. Implementation activities shall be coordinated with the City as
necessary.
4.10 Assessment Records. DDIA shall maintain a complete database for each parcel
assessed within the District, containing the following information:
4.10.1 Assessor's Parcel Number;
4.10.2 Street Address;
4.10.3 Name and Address of Owner(s) of Record;
4.10.4 Amount of the Assessment Levied;
4.10.5 Proportionate Financial Obligation Imposed, compared to District; and
4.10.6 Assessment Calculations, including all variables used
DDIA agrees to maintain such information and make it available to property
owners within the District during regular business hours.
4.11 Annual Assessment Pre aration. By June 1 st of each operating year, DDIA shall
provide the City with Assessment data for the subsequent tax year (July 1 — June
30), in a format prescribed by the City. The Assessment data shall include all of
the information required in "Assessment Records," as described in paragraph
4.10.
4.12 liaison with Cornmun,i. DDIA shall maintain on-going communication and
coordination with District property owners, residents and property owners, which
shall include:
4.12.1 Annual Meeting. . At its own cost and expense, DDIA shall organize and
conduct, at a minimum, one (1) annual public meeting to be noticed in
writing and mailed to all record owners of property in the District. This
meeting will be conducted at a location convenient to the District. A City
representative may attend as a member of the panel to provide information
and assistance.
4.12.2 Other Events. Such other events and activities involving District members
that encourage attainment of the District goals and objectives.
4.12.3 Cost and Expense ,Records. DDIA shall maintain full and complete records
of activities performed under this Agreement. Such records shall be open
to inspection by the City, and shall be maintained for minimum of four (4)
years after the termination of this Agreement.
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4.12.4 Payment of Taxes. DDIA is responsible for paying, when due, all taxes,
including income taxes, if any, including estimated taxes, incurred as a
result of activities completed under this Agreement. On request, DDIA will
provide City with proof of timely payment of any taxes. DDIA agrees to
indemnify and defend City, with counsel acceptable to the City, for any
claims, costs, losses, fees, penalties, interest or damages suffered by City
resulting from DDIA's failure to comply with this provision.
4.12.5 Payment Qf Expenses. DDIA will be responsible for all expenses incurred in
performing its duties under this Agreement.
4.12.6 Tools. Materials and EAujpr gnt. DDIA will supply all tools, materials and
equipment required, if any, to perform the Disbursement Duties.
4.12.7 Cort aensaf/cera. DDIA agrees and understands that it shall receive no
compensation for any of the Disbursement Duties or other obligations set
forth in this Agreement.
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5.1 Administration. This Agreement shall be administered by the City Manager or
his/her designee (referred to herein as "City") on behalf of the City. The City
agrees to:
5.1.1 Coordinate the collection of the annual Assessment through an agreement
with Los Angeles County; (hereafter referred to as "the County"), ensure the
billing of those public or tax-exempt entities not billed through the County
property tax billing procedures; and monitor the payment process to obtain
timely payment of Assessments by public entities and other tax-exempt
District property owners;
5.1.2 Provide timely District property tax roll information to the County Auditor -
Controller in order to include the annual Assessment amounts on the
County's property tax bills;
5.1.3 Direct the disbursement of collected Assessments to DDIA in accordance with
this Agreement and the approved Annual Report and Budget; and
5.1.4 Perform other related tasks, as agreed to by the City.
5.2 Discre ancies and Assessment Dis utas: The City may assist with the resolution
of any discrepancies in individual Assessment amounts or calculations and has
the authority to:
5.2.1 Conduct reviews and or audits of any Assessment related data; verify
Assessment data as compiled by any consultant, sub -consultant, or other
party hired by DDIA; perform field or on-site inspections to verify the accuracy
of Assessment data or investigate any property owner claims concerning the
accuracy of any Assessment data; and
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5.2.2 Recalculate the Assessment amount due and request the Tax Collector of
Los Angeles County to make the requested adjustments. Provided however,
that if the Tax Collector does not honor the City's request to recalculate the
Assessment, the City shall not be liable in any way for any Assessments other
than its own, and shall not be obligated to pursue any action against the Tax
Collector to obtain any adjustment or recalculation.
5.3 Disbursements. The annual District Assessments, including Assessments to be
collected from the City and tax-exempt property owners, will be collected through
the County property tax collection procedures and will be transmitted to the City
pursuant to agreements between the City and County. City shall disburse all of
the collected Assessments to DDIA pursuant to the terms and conditions of this
Agreement. The City shall not be obligated to disburse Assessments which have
not been collected. Upon request by DDIA, and with approval of the City subject
to compliance with this Agreement, any Assessments received by the City that
are in excess of the annual Assessment (penalties, late -payments, etc.) shall be
disbursed to the DDIA upon receipt.
5.4 Assessment Disbursement Schedule. Contingent uponreceipt of District
Assessment funds from the County as well as those collected by the City for
parcels that are tax-exempt and contingent upon DDIA's compliance with this
Agreement and the District Plan, the City shall disburse to the DDIA the
Assessments received from the County in accordance with the following
schedule:
December 23rd Fifty percent (50%) of annual Assessment received
from the County, or the full amount transferred by the
County to the City in the December installment,
whichever is greater. Plus 50% of the annual
Assessments received and collected by the City for tax-
exempt and publicly owned parcels within the District.
Nothing in this agreement_ shall prevent the City or its
entities from paying its full assessments after the
beginning of the fiscal year, (July 1S);
May 10th Fifty per cent (50%) of the annual Assessment received
from the County, or the full amount transferred by the
County to the City in the April installment, whichever is
greater. Plus 50% of the annual Assessments received
and collected by the City for tax-exempt and publicly
owned parcels within the District.
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June 20th Any additional Assessment amounts transferred to the
City that were collected during the fiscal year
(terminating on June 30th) and transferred to the City,
shall be forwarded to DDIA based on the schedule set
forth in 5.4 herein above. Said additional amounts may
include any delinquency or penalty amounts from the
late or non-payment of Assessments by any property
owner in the District.
5.5 Subseouent Adjustments. If there is an adjustment in the Disbursement due to
changes in receipts of the District, such Disbursement may be adjusted in the
following year. The City shall not be responsible for delays in payments due to
delays in transmittal by the County.
5.6 City Review of Financial Summary. The City reserves the right at any time to
request a current financial summary of all District Revenues committed and/or
spent from DDIA. DDIA shall submit such financial summary to the City within
thirty (30) business days of the City's request. The City reserves the right to
review the summary and to refuse to disburse any further installments if it is not
satisfied with the statement or with regard to the propriety of DDIA's
commitment or expenditure during the previous quarter(s).
6 Costs and Expenses. The Parties acknowledge that the County will deduct from the
funds collected on behalf of the District the County's administrative costs for the
collection and distribution of Assessments to the City (the "County Administrative
Costs"). The City shall not charge any administrative fees for the transfer of funds
annually to the DDIA.
7 Ownership of Documents. The designs, plans, reports, files, invoices, investigation
materials, documents prepared or acquired by or for DDIA pursuant to this Agreement
become the joint property of the City and DDIA. DDIA agrees to exercise due diligence
in providing for the secure storage of all such materials and to provide copies for official
City records upon the request of City.
8 Independent Contractor. It is expresslyagreed that in the performance of this
Agreement, DDIA is an independent contractor and is not an employee of City. DDIA
retains the right to control and supervise its activities, and employment, direction,
compensation and discharge of all persons assisting DDIA in the performance of this
Agreement. DDIA shall be solely responsible for all matters relating to the payment of its
employees, including compliance with social security, withholding and all other
regulations governing such matters, and shall be solely responsible for DDIA's own acts
and those of DDIA's subordinates and employees.
9 DDIA Not Agent of City'. Neither DDIA nor any of its employees, agents, representatives
or subcontractors are or shall be deemed to be agents of the City or public officials for
any purpose, including fulfillment of DDIA's obligations pursuant to this Agreement.
None of the funds generated by the Downtown Downey Community Benefit District are
to be considered "public funds" as defined or controlled by the City of Downey.
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10 DDIA's Qualifications. DDIA represents that it has the qualifications and skills necessary
to perform the Disbursement Duties under this Agreement in a competent and
professional manner without the advice or direction of City. Failure to perform all of the
Disbursement Duties constitutes a material breach of this Agreement, and is cause for
termination.
11 Non -Exclusive Relationship. DDIA may perform services for, and contract with other
clients, persons or companies in its sole discretion so long as such services and
contracts do not breach this Agreement.
12 Compliance with Downey CBD Ordinance; The DDIA shall comply with all
requirements of the Ordinance under Downey Municipal Code.
13 Term and Termination
13.1 Term and Termination. This Agreement shall become effective on the Effective
Date and terminate when the District ceases to exist due to a successful
disestablishment of the District.
13.2 Early Termination. Either Party may terminate this Agreement at anytime upon
giving the other party sixty (60) days' prior written notice and upon successful
disestablishment of the District.
13.3 Termination for Default. 1f either Party defaults in the performance of any of the
terms and/or provisions to be performed by a Party pursuant to this Agreement,_ then the
non -defaulting Party shall provide written notice to the defaulting Party describing the
default and requesting a cure ("Default Notice"). If such default is not cured within thirty
(30) days (or if the default is not susceptible to cure within said thirty -day period) after
the Default Notice is mailed or delivered, then the non -defaulting Party may terminate
this Agreement. To the extent the alleged default concerns or relates to the use or
expenditures of District Revenues, DDIA shall holdall unencumbered District Revenues
in an escrow account until the default is cured and provide proof of escrow account
deposit within seven (7) days of the City's written request.
14. Inspection of Books and Records. During the Term, and for a period of four (4)
years after the Term, or two (2) years after the closure of any disputed matter, whichever
occurs later, (the "Audit Period"), DDIA shall maintain financial and operational records
related to this Agreement, which include, but are not limited to the Annual Financial
Statements, the Annual Reports andBudgetsand any audits (the "Books and Records")._
At the request of the City, DDIA shall make all Books and Records open to inspection by
the City, or its designee during normal business hours.
15. on -Discrimination in Employment. DDIA certifies and agrees not to discriminate
against any employee or person who is subject to this Agreement because of race, color,
religion, religious belief, national origin, ancestry, citizenship, age, sex, sexual
orientation, marital status, pregnancy, parenthood, medical condition, or physical or
mental disability or other protected classes asmaybe added under State or Federal law.
Evidence of discrimination shall be sufficient cause for termination of this Agreement.
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16. Public Liability and Property Damage Insurance. DDIA shall assume all
responsibility for damages to property and injuries to persons, including accidental death,
which may arise out of or may be caused by DDIA's performance of this Agreement, by
its employees, agents, representatives or subcontractors , and regardless of whether such
damage or injury may accrue, or may be discovered, before or after termination of this
Agreement. At its own expense, DDIA shall obtain, pay for and maintain during the life of
the Agreement an "occurrence" policy for Commercial General Liability (including
Contractual Liability) and for Automobile Liability which shall protect it from claims for
injuries and damages. The DDIA shall demonstrate that it has such policies fully paid for
and in place within 60 days of the transfer of the first installment of assessment funds
from the City in December 2018. DDIA shall require that any of its subcontractors,
independent contractors and subconsultants maintain the same level of insurance as
required under this Agreement_ prior to performing work for the DDIA. The policy shall
name the "City of Downey, its elected and appointed officials, officers, agents and
employees" as additional insureds under the policy in the following amounts:
16.1 COMMERCIAL GENERAL LIABILITY INSURANCE in an amount not less
than Two Million Dollars ($2,000,000) per occurrence for personal injuries,
including accidental death, to any one person; property damage insurance in an
amount not less than Two Million Dollars ($2,000,000) and subject to the above limits
and combined single limit of insurance in an amount not less than Two Million Dollars
($2,000,000). If a general aggregate limit applies, either the general aggregate limit
shall apply separately (ISO CG 25 03 or 25 04) or the general aggregate limit shall be
twice the required occurrence limit; and
16.2 AUTOMOBILE LIABILITY INSURANCE endorsed for all vehicles (whether
rented, leased, hired, scheduled, owned or non -owned), in an amount not less than
One Million Dollars ($1,000,000) per occurrence for personal injuries, including
accidental death, to any one person; property damage insurance in an amount not
less than One Million Dollars ($1,000,000) and subject to the above limits and
combined single limit of insurance in an amount not less than One Million Dollars
($1,000,000).
16.3 PROFESSIONAL LIABILITY (ERRORS & OMISSIONS): Insurance
appropriate to the DDIA's profession with limits of no less than $2,000,000 per
occurrence or claim; $2,000,000 in the aggregate.
16.4 At all times, the insurance company issuing said policy shall be an "admitted"
insurer in the State of California and shall carry an A.M. Best & Company minimum
rating of AA:VII.
16.5 All policies shall contain a "Severability of Interest" clause and a "Primary
Coverage" clause for any loss arising out of or caused by DDIA's performance of the
Agreement. In addition, the policies shall contain a statement of obligation on the
insurance carrier's part to notify City, by registered mail, at least thirty (30) days in
advance of any policy cancellation, termination or reduction in the amount of
coverage.
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16.6 Within sixty (60) days of the first transfer of funds from the City, the DDIA shall
deliver to City a "certificate of insurance" and an "additional insured endorsement",
both documents countersigned by the insurance carrier or its authorized
representative, on forms satisfactory to the City, which set forth the above provisions.
16.7 The countersigned certificate, along with the additional insured endorsement,
shall state:
"The City of Downey, its elected and appointed officials, officers, agents and
employees are named as additional insureds under this policy. This insurance is
primary to the coverage of the Downey Successor Agency and the City of Downey.
Neither the Agency nor the City or any of their insurers shall be required to contribute
to any loss. This policy contains a severability of interest clause. The issuing
company shall mail thirty (30) days advance notice to the City of any policy
cancellation, termination or reduction in the amount of coverage."
16.8 Additionally, the certificate of insurance shall state if any claim has been paid
or is currently pending under the policy, and if so, the amount of the claim(s) and the
amount of liability limits as lowered by the paid or pending claim(s). Any deductibles
or self-insured retentions shall be set forth on the certificate and shall be subject to
City's review and approval.
16.9 WORKERS' COMPENSATION INSURANCE. DDIA understands and agrees
that all persons furnishing services to DDIA under this Agreement are, for the purpose
of workers' compensation liability, employees solely of DDIA and not of City. DDIA
shall bear the sole responsibility and liability for furnishing workers' compensation
benefits to its employees, or anyone it directly or indirectly employs, for injuries arising
out of or connected with services performed on behalf of DDIA.
16.10 At its ownexpense, DDIA shall obtain, pay for, and maintain for the duration
of the Agreement, complete workers' compensation insurance. DDIA shall provide
proof of workers' compensation coverage by delivering to City either an insurance
certificate or a certificate of consent to self -insure. The City shall not be responsible
for any claims at law or in equity caused by DDIA's failure to comply with this
paragraph. All workers' compensation insurance policies shall bear an endorsement,
or shall attach a rider, which provides that the insurer will Notify City, by registered
mail, at least thirty (30) days in advance of the policy's expiration, termination or
cancellation.
16.11 DDIA'S FAILURE TO OBTAIN, PAY FOR, OR MAINTAIN INSURANCE.
DDIA shall deliver to City the required certificate(s) of insurance and endorsement(s)
to the City within sixty (60) days of the first transfer of funds under this Agreement.
DDIA's failure to obtain, pay for, or maintain any required insurance shall constitute a
material breach upon which City may immediately terminate or suspend this
Agreement. In the event of any termination or suspension, City may use the services
of another consultant or consultants, without City incurring any liability to DDIA. At its
sole discretion, City may obtain or renew DDIA's insurance, and City may pay all or
part of the premiums. Upon demand, DDIA shall pay City all monies paid to obtain
12
or renew the insurance. City may offset the cost of the premium against any
monies due DDIA from City.
17. Laws. DDIA shall comply with all laws, statutes, ordinances and rules of all
applicable governmental authorities.
18. Indemnification. Throughout the term of this Agreement, as and from the date
hereof, DDIA agrees to defend, indemnify and hold harmless, the Downey Successor
Agency, the City of Downey and its elected and appointed officials, officers agents and
employees ("Indemnitees"), from and against any and all liabilities, suits, proceedings,
judgments, claims, charges, damages, liens, causes of action, losses or injuries (whether
in contractor in tort, including personal injury, accidental death or property damage, and
regardless of whether the allegations are false, fraudulent or groundless), costs and
expenses (including attorney's fees, litigation, arbitration, mediation, appeal expenses)
which in whole or in part arise out of or are connected with acts or omissions of,
performance of, or breach of this Agreement by DDIA or DDIA's independent contractors,
agents, employees or delegates except to the extent such is cause by the negligent acts
or willful misconduct of City. In the event of any such claim, demand, proceeding or
lawsuit against the Indemnitees, DDIA agrees to assume the immediate defense of
Indemnitees by hiring and paying for legal counsel acceptable to City.
19. Political Prohibition. Subject to applicable State and Federal laws, monies paid
pursuant to this Agreement shall not be used for political purposes including the support
or defeat of candidates for elected or appointed office, sponsoring or conducting
candidate's meetings, engaging in voter registration activity, or for publicity or
propaganda purposes designed to support or defeat legislation pending before federal,
state or local governmental bodies.
20. Conflict of Interest
20.1 -DDIA certifies that no member, officer, or employee of the City who exercises any
functions or responsibilities with respect to the programs or projects covered by this
Agreement, shall have any interest, direct or indirect in this Agreement, or in its
proceeds during his/her tenure or for one year thereafter.
20.2 DDIA shall immediately notify the City of any real or possible conflict of interest
between work performed for the City and for other clients served by DDIA.
20.3 DDIA warrants and represents, to the best of its present knowledge, that no
employee of the City who has been involved in the making of this Agreement, or who is
a member of a City board or commission which has been involved in the making of this
Agreement whether in an advisory or decision-making capacity, has or will receive a
direct or indirect financial interest in this Agreement in violation of the rules contained in
California Government Code Section 1090, et seq., pertaining to conflicts of interest in
public contracting. DDIA shall exercise due diligence to ensure that no such employee
will receive such an interest.
20.4 DDIA further warrants and represents, to the best of its present knowledge and
excepting any written disclosures as to these matters already made by DDIA to City,
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that no employee of the City who has participated in concerning this
Agreement or has used his or her official position to influence decisions regarding this
Agreement, has an economic interest in DDIA or this Agreement. For purposes of this
paragraph, an official is deemed to have an "economic interest" in any (a) for-profit
business entity in which the official has a direct or indirect investment worth $2,000 or
more, (b) any real property in which the official has a director indirect interest worth
$2,000 or more, (c) any for-profit business entity in which the official is a director,
officer, partner, trustee, employee or manager, or (d) any source of income or donors of
gifts to the official (including nonprofit entities) if the income or value of the gift totaled
more than $500 the previous year. DDIA agrees to promptly disclose to City in writing
any information it may receive concerning any such potential conflict of interest. DDIA's
attention is directed to the conflict of interest rules applicable to governmental decision-
making contained in the Political Reform Act (California Government Code Section
87100, et seq.) and its implementing regulations (California Code of Regulations, Title
2, Section 18700, et seq.).
20.5 DDIA shall incorporate or cause to be incorporated into all subcontracts for work
to be performed under this Agreement aprovision governing conflict of interest in
substantially the same form set forth herein.
21. NoWaiver. Nothing herein is intended to waive any applicable federal, state or
local conflict of interest law or regulation.
22. Remedies and Sanctions. In addition to the rights and remedies otherwise
available to the City under this Agreement and under federal, state and local law, DDIA
understands and agrees that, if the City reasonably determines that DDIA has failed to
make a good faith effort to avoid an improper conflict of interest situation or is responsible
for the conflict situation, the City may (1) suspend payments under this Agreement, (2)
terminate this Agreement, (3) require reimbursement by DDIA to the City of any amounts
disbursed under this Agreement. In addition, the City may suspend payments or
terminate this Agreement whether or not DDIA is responsible for the conflict of interest
situation.
23. Assignment. DDIA shall not assignor otherwise transfer any rights, duties,
obligations or interest in this Agreement or arising hereunder to any person, persons,
consultant or sub -consultant, entity or entities whatsoever without the prior written
consent of City and any attempt to assign or transfer without such prior written consent
shall be void. Consent to any single assignment or transfer shall not constitute consent
to any further assignment or transfer.
24. Time of the Essence; Third Pady Beneficiaries. Time is of the essence in the
performance of this Agreement. This Agreement is made and entered into for the sole
protection and benefit of the Parties, their successors and assigns. No other person shall
have any right of action based upon any provision of this Agreement.
25. Commencement, Completion and Close Out. 1t shall be the responsibility of the
DDIA to coordinate and schedule the work to be performed so that commencement and
completion take place in accordance with theprovisionsof this Agreement. Any time
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extension granted to DDIA to enable DDIA to complete the work must be in writing and
shall not constitute a waiver of rights the City may have under this Agreement. Should
the DDIA not complete the work by the scheduled date or by an extended date, the City
shall be released from all of its obligations under this Agreement.
26. Governing -Law. This agreement shall be governed by the laws of the State of
California.
27. Notices. If either party shall desire or be required to give notice to the other, such
notice shall be given in writing, by prepaid U.S. certified or registered postage, addressed
to recipient as follows:
For the Ci!y of Downey:
City of Downey
ATTN: City Manager
11111 Brookshire Avenue
Downey, CA 90241
With a Copy provided to;
City of Downey
City Attorney's Office
11111 Brookshire Avenue
Downey, CA 90241
For DDIA
Jorge Villa, President
8255 Firestone Blvd., Suite 201
Downey, CA 90241
27. Entire Agreement of the Parties. This Agreement supersedes any and all
agreements, either oral or written, between the parties with respect to the rendering of
disbursement duties by DDIA for City with regard to the Downtown Downey Community
Benefit District of 2018andcontains all of the representations, covenants and agreements
between the parties with respect to the rendering of those duties. Each party to this
agreement acknowledges that no representations, inducements, promises or agreements,
orally or otherwise, have been made by any party, or anyone acting on behalf of any parties,
which are not contained in this agreement, and that no other agreement, statement or
promise not contained in this agreement will be valid or binding.
28. Modification. Any alteration, change or modification of or to this Agreement shall not
be effective unless made in writing in each instance signed on behalf of each Party.
29. Severability. If any term, provision, or covenant of this Agreement, or its application
to any Party or circumstances shall be held by a court of competent jurisdiction, to be to any
extent, invalid, void or unenforceable, the remaining provisions will continue in full force and
effect without being impaired or invalidated in any way.
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IN WITNESS WHEREOF, the Parties hereto have • this Agreement • the
.Pespective dates set forth below.
CITY:
City
• Downey, a California
•. Corporation and Charter City
(Date)
City Clerk
DDIA:
Downtown • mprovemen
Association,
Corporation
T -
Jorge Villa, President
(Date)
H[W,*(1TV
The Downtown
Management•
•
• • •- r X11;• �• •rRIT.• - 'r
Ems
• -•. -• Me
New City America, Inc.
and
The Downtown Downey CBD Steering Committee
CorporateOff ice 0710 W. Ivy Street it San • •619-233-5009 # Fax 619-239-7105
San Francisco Bay Area Office w 954 Lee Avenue, a San Leandro, CA • W .;
New England Office:
Downtown owney
Management District Plan
Section Number
1. Management District Plan Summary 3
2. Downtown Downey CBD Boun aries 11
3. District Improvement and Activity Plan 14
4. Assessment Methodology 20
5. District Rules, Regulations and Governance 31
6. Implementation .•
Attachment:
A. Engineer's Report
0
W
9N
Section
Management District Plan Summary
The name of this Community Benefit District is the Downtown Downey Community Benefit
District (the "CBD"). The District is formed under Article 2, Chapter 14 of the Downey Municipal
Code (entitled "Community Benefit Districts" and hereinafter referred to as the "Ordinance")
and section 400 of the Downey City Charter.
The proposed Downtown Downey CBD serves to improve the individual parcels, attract new
customers to their businesses, increase sales, increase occupancies and enhance the benefitting
individual parcels within the CBD. The proposed CBD seeks to fund the special benefits that will
be provided over the next fifteen years, based upon keeping the greater Downtown Downey
area clean, safe, orderly, attractive, well marketed with special events and programs, and
increase commerce within the boundaries.
Since last summer, a Downtown Downey group consisting of property owners has worked to
gauge support within the community for a new Special Benefit District for both the Downtown
Downey property owners and business community. The City of Downey has hired New City
America - specializing in Special Benefit District formation and management throughoutthe
Country - to work with the property owners to investigate the viability of a CBD in Downtown.
Following meetings conducted last summer, the newly -formed Downtown Downey CBD
Steering Committee approved and mailed out a survey to Downtown property owners,
informing them that once New City America had received a reasonable number of responses, -
updates would be sent out regarding the survey results. This newsletter outlines the
continuation of a series of communication pertaining to the proposed CBD.
Changes in Downtown Downew
In 2011, the State Legislature dismantled 408 redevelopment agencies, redirecting the flow of
funds back to the counties, and school districts; rather than reinvesting back into cities. The
California League of Cities filed a lawsuit to stop this elimination, resulting in a 2012 California
Supreme Court ruling ceasing the operations of all redevelopment agencies by February 2013.
Consequently, the method of financing used previously by the City of Downey to fund
Downtown improvements no longer existed. In the past, the opportunity to fund pedestrian
lighting, new sidewalks, and public improvements in Downtown Downey has typically been
through this redevelopment tax -increment financing.
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The investigation of a new Downtown Downey CBD centered on these four questions:
How do property owners make sure that...
1. Downtown's brand will become positive?
2. Greater demand will be placed on the buildings resulting in greater rental rates?
3. Commerce will increase for retailers?
4. Public rights of way will become more orderly and attractive?
Downtown Downey has many things going for it, in part to the City Council's investment in the
following projects, programs, and activities over the past few years:
a itallrn rovernents
• Invested $6.7million for Firestone Blvd. street and streetscape improvements.
• Invested $4.6 million to support the Downey View apartments; the first new residential
units in Downtown in years.
• Funded over $600,000 to improve Downtown Downey roadway lighting (upgrading the
decorative lights to LED, remove and replace 30 feet cobra head lights with decorative
lighting, repainting light poles as necessary, etc...) on Downey Ave. from Firestone Blvd.,
to 5th Street.
Additional operational annual costs
• Allocated over $100,000 annually for private security services related to the public
parking structure and immediate surrounding area.
• Provided tens of thousands of dollars in annual maintenance costs (including but not
limited to: sidewalks and seat -wall cleaning, tree trimming, median landscape
maintenance, parking structure and other public parking maintenance, and roadway
lighting— not done elsewhere in the City).
• Funded sidewalk and hardscape/pavers and seat benches, pressure washing/steam
cleaning -$66,000.
• Funded parking structure maintenance and operations - $64,000.
• Funded $7,000 for Downtown tree trimming (on a two year cycle).
• Funded the cost for electricity and lighting in Downtown of roughly $10,000 per year.
Additional activities and program costs include:
• Underwriting $36,000 for rooftop events in Downtown.
• Underwriting up to $55,000 for the Downtown International Food Festival.
• Underwriting $70,000 for holiday and seasonal decor (banners, lighting, signage)
annually.
Underwriting the Annual Rock and Ride Events for $25,000 per year.
The general services listed above are NOT provided City wide; rather exclusively to Downtown
business and property owners. In that sense, they can be considered "enhanced general
benefit" that are dependent upon year-to-year budgeting by the City Manager and City
Council. The proposed Downtown Downey CBD will provide"special benefits", thereby
4
enhancing rent and attracting new capital investment, in turn improving the visiting, retail, and
business experience.
Boundaries:
The proposed Downtown Downey CBD consists of approximately 10 to 12 square blocks
consisting of 82 parcels and 57 property owners. See the Downtown Downey proposed CBD
map in Section 2, pages 10 and 11. The District is generally bounded by:
On the south by the parcels along the north side of Burns Avenue
On the west, parcels on the west side of La Reina Avenue, including parcel 6254 001
017.
On the east, the parcels on the west side of Brookshire Avenue and
•
On the north, the parcels on the north side of 3rd Street, including the two full blocks
bounded by 3rd Street/New Street/4th Street and the parcels fronting the east side of
Downey Avenue between 3rd and 4th Street, excluding the undeveloped parcels east of
US Bank, but including City Hall
Bud et
Thetotalfirst year Downtown Downey CBD budget based upon assessable individual parcel
owners for FY 17/18, will be $ 232,385.00, and the budget will increase by 5% annually. Please
see Section 3 for a breakdown of the categories of special benefit services.
Improvements. Activities and Services of the Downtown Downey,CBD Plan:
There are five basic categories of special benefit services that will be funded by the Downtown
Downey CBD. All of these services will confer a special benefit to the individual parcels within
the Downtown Downey CBD. The categories of special benefits are as follows:
1. Sidewalk Operations, Beautification and Order: This includes all sidewalk and gutter
cleaning services, sidewalk steam cleaning services, graffiti removal, trash removal, as
well as enhanced services to beautify the district. Sidewalk operations services totals
$ 120,000 or 51% of the first year annual budget of the new CBD.
2. District Identity: These services include the branding of the Downtown Downey area,
marketing and promotions, newsletter, public relations, media relations, social media,
publicity,, special events, website development and maintenance, public space develop
and holiday decorations. These services equal $ 55,000 or 24% of the first year annual
budget of the new district.
3. Enhanced ,Residential Improvements: Though there are currently not any single
residential units in the form of residential condos within the boundaries of the district, -
future condo developments that will be constructed within the CBD boundaries will be
assessed to fund their particular special benefits. These special benefit services will
include, but are not limited to: enhanced beautification in blocks with a high density of
condos,_ public space development, implementation of pet related services and
5
administrative costs. These assessments will be allocated based on the percentage that
the costs for the enhances residential improvements form of the overall budget."
4. Program Management and Corporate Operations: These services equal $48,000 or
21% of the first year annual budget of the new district.
5. Contingency/Reserve. This contingency anticipates a "historic" non-payment rate
percentage of 2 to 4% and any City or County collection fees. This fund equals $ 9,385
or 4% of the first-year annual budget of the new district._
Category of Services Annual Allocation - % of budget
Sidewalk Operations (curb to property line services) $120,000 — 51%
District Identity — District Promotion $ 55,000 — 24%
Program Management/Corporate operations $ 48,000 — 21%
Contingency $ 9,385.00 — 4%
Total Annual Revenue $ 232,385.00
Method of Financing
The financing of the Downtown Downey CBD is based upon the levy of special assessments
upon real property that receive special benefits from the improvements and activities. See
Section 4 for assessment methodology and compliance with Proposition 218. There will be
four factors used in the determination of proportional benefit to the parcels in the CBD.
Those four factors are:
• Linear frontage
• Lot size or the footprint of the parcel
• Building square footage (excluding parking structures built within the building that
predominantly serve the tenants of the building and are not open to the public) and
• Future residential condos that will be constructed within the District.
The following data constitutes the basis for the property assessments that will fund special
benefit services in the proposed CBD:
Building square footage: 988,676 sq. feet
Lot size: 1,977,093 square feet
Linear Frontage: 14,936 linear feet
M
Enhanced Residential Benefits Funded by building square footage of residential
condos (do not currently exist)
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Each property variable will fund adifferent "bucket of special benefit services" in the
district. Each variable, multiplied by the proposed annual cost yields the following:
Property Variable Annual Cost Total assessment by variable
Building square footage $0.050608 per square foot per year $ 50,035.00
Lot square footage $0.030540 per square foot per year $ 60,380.00
Linear frontage $8.166254 per linear foot $ 121,970.00
Residential condos $0.20 per square foot 0
Total Annual Revenue $ 232,385.00
Costs:
Annual assessments are based upon an allocation of program costs by assessable linear
frontage, assessable on all sides of the parcels that receive benefit; PLUS lot or parcel
square footage; PLUS assessable building square footage, and in the case of residential
condos, by building square footage.
Future residential condo owners will be assessed differently since they are, in essence,
acquiring air rights with the purchase of their residential condos and linear frontage and lot
size will not be relevant to their parcels. This alternate assessment methodology is created
to respond to their special needs of homeowners within this growing Downtown district. All
four property variables will be used in the calculation of the annual assessment.
Residential Condos: There are currently not any documented residential condos within the
boundaries of the proposed Downtown Downey CBD. However, when
they are constructed, these future units will be assessed at the rate of
$0.20 per square foot for their verifiable building square footage per
parcel.
Benefit Zones:
State law and the State constitution, Article MID require that special assessments be levied
according to the special benefit each individual parcel receives. There are two proposed
benefit zones under this plan.
Benefit Zone 1: All commercial parcels,_ including City and non-profit owned parcels in the
proposed CBD;
Benefit Zone 2: Parcels owned by the First Baptist Church of Downey will be assessed for
linear frontage, since that is the special benefit service (Sidewalk operations) that it will
receive. Lot size and building square footage property assessment will not be paid by Benefit
8
Zone 2 parcels since those property assessments fund marketing and promotion, social
media and district identity, and administration and it has been determined that those parcels
will not derive benefit from these special benefit services.
Cap:
The CBD budget and assessmentsmay be subject to annual increases not to exceed 5% (five per
cent) per year. Increases will be determined by the Owners' Association/District Management
Corporation and will vary between 0% and 5%annually. Changes in land use, development of
empty parcels, conversion of tax exempt to profitable land uses, demolition of existing
buildings, and creation of new parcels through new building or residential condo development
may alter the budget from year to year based upon the changes in the building square footage
of an individual parcels. Since linear frontage and lot size normally are not altered in the
redevelopment of a site, the only changes realized in the CBD will be through the building
square footage. In addition, changes in the budget may occur due to the conversion of single
parcels to multiple parcels due to the construction of residential or commercial condos.
Bonds:
The District will not issue any bonds related to any program.
District Formation;
Under the local enabling ordinance, District formation and modification requires a submission
of petitions from property owners representing more than 30% of the total assessments.
Once the City verifies the petitions totaling a minimum of 30% of $ 232,385.00 (or $ 69,716.00)
in assessment contribution to the District, the Downey City Council may adopt a Resolution of
Intention to mail out ballots to all affected property owners. The City will then hold a public
hearing and tabulate the mail ballots. The Downtown Downey CBD will be formed if the
weighted majority of all returned mail ballots support the District formation and if the City
Council adopts a resolution of formation to levy the assessments on the benefiting parcels. At
this point, the date for that public hearing has not been scheduled.
Disestablishment:
Streets and Highways Code Section 36670 provides for the disestablishment of a District.
Provisions for annual disestablishment of the CBD are provided for in the local Downey CBD
ordinance. Property owners dissatisfied with the results, management or quality of the services
may petition the City Council to disestablish the CBD, in the same method in which they
petitioned the City Council to establish the District.
Section 36670 states:
(b) The city council shall adopt a resolution of intention to disestablish the district prior to
the public hearing required by this section. The resolution shall state the reason for the
disestablishment, shall state the time and place of the public hearing, and shall contain a
proposal to dispose of any assets acquired with the revenues of the assessments levied
0
within the property and business improvement district. The notice of the hearing on
disestablishment required by this section shall be given by mail to the property owner of
each parcel or to theownerof each business subject to assessment in the district, as
appropriate. The city shall conduct the public hearing not less than 30 days after mailing the
notice to the property or business owners. The public hearing shall be held not more than 60
days after the adoption of the resolution of intention."
Unexpended surplus funds will be returned to property owners based upon each parcel's
percentage contribution to the previous fiscal year's assessments if the District is not renewed.
Time and Manner for Collecting Assessments.`
The Downtown Downey CBD assessments will appear as a separate line item on annual
property tax bills prepared by the County of Los Angeles. The assessments shall be collected at
the same time and in the same manner as for the ad valorem property tax paid to the County of
Los Angeles. These assessments shall provide for the same lien priority and penalties for
delinquent payment as is provided for the ad valorem property tax.
Any delinquent assessments owed for the first year will be added to the property tax roll for the
following year together with any applicable interest and penalties. The "property owner"
means any person shown as the owner/taxpayer on the last equalized assessment roll or
otherwise known to be the owner/taxpayer by the City.
Government Assessments:
The Downtown Downey CBD Management Plan assumes that the City of Downey and the
Downey Community Development Commission Housing Successor Agency will pay assessments
for the public property they own within the boundaries of the District. Article Xlll D, Section 4 of
the California Constitution was added in November of 1996 to provide that public agencies such
as the City and Downey Community Development Commission Housing Successor Agency shall
not be exempt from the assessments.
Parcels owned by the City of Downey and identified below shall receive benefits,
commensurate with the assessments paid into the Downtown Downey CBD. These publicly
owned parcels are presumed to benefit equally to the privately -owned parcels for all of the
special benefit services outlined in this Management District Plan.
Duration:
The Downtown Downey CBD shall have a fifteen -year term which shall commence on
December 1st, 2018 and expire on November 30th, 2033, with operations winding down by
November 30th, 2033, unless the district is renewed by the CBD property owners through a new
assessment ballot proceeding.
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Governance:
Pursuant to the City of Downey Community Benefit District Ordinance and Section 36650 of the
California Streets- and Highway Code, a District Management Corporation or Owners'
Association, will review District budgets and policies annually within the limitations of the
Management District Plan. The Management Corporation will file Annual Reports with the City
of Downey (City) and will oversee the day-to-day implementation of services as defined in the
Management District Plan. Section 36612 states:
The "Owners' association" means a private nonprofit entity that is under contract with a
city to administer or implement activities and improvements specified in the
management district plan. An owners' association may be an existing nonprofit entity or
a newly formed nonprofit entity. An owners' association is a private entity and may not
be considered a public entity for any purpose, nor may its board members or staff be
considered to be public officials for any purpose."
Boundaries.:- The following text will define the boundaries of the Downtown Downey CBD.
•
Northern bo Beginning at parcel 6254 016 912 (City Hall), head westward on
3rd Street running in a line down the middle of the street including all of the southern
parcels until parcel 6254 018 024 at the northeast corner of the intersection of 3rd Street
and Downey Avenue. Proceed northeasterly up Downey Avenue to include the parcels
on both sides of the street up to the south side of 4th Street. Proceed westward to New
Street, run southward to include the parcels fronting 3rd Street including parcels 6254
007 013, 6254 007 004, and parcel 6254 004 028 at the northwest corner of the
intersection of La Reina Avenue and 3rd Street.
$
Southern bounday. Beginning at parcel 6255 002 023 at the northwestern corner of
the intersection of Union Pacific Railroad Right -of -Way and Brookshire Avenue, proceed
westward including all of the parcels fronting on the north side of Burns Avenue
including parcel 6255 003 900, (the City parking lot) at the intersection of La Reina
Avenue and Burns Avenue.
• Eastern boundo ; Beginning at parcel 6255 002 023 at the northwestern corner of
the intersection of Union Pacific Railroad Right -of -Way and Brookshire Avenue, proceed
northward including all of the parcels on the west side of Brookshire up to City Hall,
parcel number 6254.16912.
Westem boundary: Beginning at the parcel 6255 003 900, (the City parking lot) at the
intersection of La Reina Avenue and Burns Avenue, proceed northward including the
parcels on both sides of the street fronting on La Reina Avenue up to the parcel 6254
004 028atthe northwestern corner of the intersection of La Reina Avenue and 3'd
Street. The western boundary will also include parcel 6254 002 023 which is found to
the west of parcel 6254 002 024.
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14
m
Process to Establish the ins rovernent and Activi Plan Outreach Efforts:
Since the Fall of 2014, business and property owners in Downtown Downey have met first in
small settings, and then in a larger Steering Committee format, to discuss the advantages of
creating this Downtown Downey special benefits district. An initial survey was sent to every
property owner in the proposed CBD area in the Fall of 2014 to ascertain their level of
conceptual support for the establishment of this assessment district and obtain information
regarding the type of enhanced services they were interested in receiving. The survey
information was instrumental in determining the services to be delivered by the CBD. A follow
up survey was sent out in early 2015'to ensure that every property owner had an opportunity
to respond.
Survey results
Special benefit services are those that are over and above the services currently being provided
by the City general fund. The results of that survey prompted the Steering Committee to
assemble a presentation for the property owners.
Since all properties would be included in the proposed Downtown Downey CBD, the basis for
support was reviewed by parcel linear frontage, lot square footage, and building square
footage. These figures are used because they are what each property has in common. In
California, one cannot use assessed valuation to determine support since assessed valuation of
a property is: 1) based upon when someone bought the property, not upon its actual market
value, and 2) not relevant to public parcels, which don't have an assessed valuation per se, but
which will also be assessed due to the services they would be receiving.
When combined with the City level of support (the City properties will also be required to pay
into the new CBD), the following property variables demonstrated conceptual support for the
continued investigation of the new CBD.
These responses demonstrated to the CBD Steering Committee that the majority of the
responding property owners thought there was merit in the CBD concept. This proposed
Downtown Downey Community Benefit District can only be formed by a mail -in vote of the
majority of weighted property owners within the proposed district boundaries.
A summary of the survey results and the resulting CBD plan, beginning with the services it
would fund, are as follows:
Priority special Benefit Services — According to the Survey
The survey asked a variety of specific questions regarding property owner -funding of services
over and above what the City and County were currently providing. The priority services
outlined by the responding property owners prioritized the following:
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• By a two to one margin, property owner respondents stated that they support services
to deal with homelessness and panhandling issues.
• By a two to one margin, property owners stated they supportedproperty owner funded'
regular sidewalk and gutter sweeping in Downtown.
• By a two to one margin, property owner respondents stated that they support services
related to planting, trimming and maintenance of trees, plants, flowers and other
landscaping in Downtown Downey.
• By almost a two to one margin, property owner respondents stated that they support
services for public relations and social media to support the branding of Downtown.
The CBD Steering Committee began reviewing the results of the survey, and possible benefit
zones within a boundaried area.
Under the state constitution, Proposition 218 defines the purpose of property assessments, and
Unlike special and general taxes, there must be a relationship between how much a property
owner pays into a property assessment district and what type of benefit they receive. property
owners must receive more benefits due to the size of their linear frontage, lot square footage,
or buildings square footage. All parcels within the boundaries of the Downtown Downey CBD
will be required to pay into the assessment district (no properties will be exempt). Costs are
determined by the type and frequency of services.
In the Fall of 2014, Aldo Schindler, the Director of Community Development of the City of
Downey and Marco Li Mandri of New City America held a series of one on one meetings with
property owners throughout the proposed district to explain the upcoming survey of property
owners. Once that rounds of 8 to 10 meetings were held, the survey was distributed.
In early 2015, we were still collecting surveys and after another mailing of the survey to
maximize the response, we set the first meeting of the CBD Steering Committee. Numerous
public meetings have been held with the Downtown Downey CBD Steering Committee. Public
meeting dates were held on the following dates:
April 28th, 2015
June 2nd
July 21st
August 4th
■ January 13th, 2016
Marco Li Mandri of New City America continued to meet with Aldo Schindler the Director of
Community Development, the City Council and City Council sub -committees, the City Attorney,
City staff, and many property owners individually throughout this process.
17
Explanation of Special Benefit Services
All of the improvements and activities detailed below are provided only to properties defined
as being within the boundaries of the Downtown Downey CBD, as the improvements and
activities will provide special benefit to the owners of those properties. No improvements or
activities will be provided to properties outside the Downtown Downey CBD boundaries.
The City will continue to provide general benefit services from the general fund to the
Downtown which will include public safety, street tree trimming, street sweeping, trash
collection of public refuse containers, etc. The frequency of these general benefits may change
from year to year and time to time based upon budget constraints. _However, City general
benefits will not be withdrawn from the Downtown Downey CBD unless they are withdrawn by
an equal amount City wide. The CBD funded special benefits will not replace City funded
general benefits, but rather will provide special benefits to parcel owners over and above the
general benefits provided by the City of Downey.
All services funded by the assessments outlined in the Management District Plan are intended
to directly benefit the properties within this area to support increased commerce, business
attraction and retention, retain and increase commercial property rentals, attract new
residential developments, enhance safety and cleanliness in the CBD, improve district identity, -
and eventually fund specialized beautification and enhanced services for the condo residential
unit parcels within the District.
The total improvement and activity plan budget for FY 2018-19 is projected to be $ 232,385.00.
The costs of providing each of the budget components was developed from actual experience
obtained in reviewing these same services in similar districts throughout the State of California.
Based upon the survey of property owners, as well as the discussions held in the CBD Steering
Committees held since April 2015, the Committee has prioritized the following categories of
special benefit services for the new CBD. The categories of special benefit services set forth the
intent of the budget category, but also gives the new District Management Corporation the
flexibility to allocate the services based upon the changing needs of the District from year-to-
year within each budgeted category.
The specific category of services are considered to be "buckets" of special benefit services and
the points listed under each bucket of services may be funded on a case by case basis or annual
basis based upon the decision of the Owners Association or District Management Corporation.
Improvements Activities and Services of the Downtown Downey CBD Plan::
There will initially be four basic categories of special benefit services that will be funded within
the Downtown Downey CBD. All of these services are designed to confer a special benefit to
the individual parcels within the Downtown Downey CBD over and above the general benefits
they are currently receiving. The categories of special benefits are as follows:
18
Category of Services Annual Allocation - % of budget
Sidewalk Operations (curb to property line services) $120,000 — 51%
District Identity — District Promotion $ 55,000 — 24%
Program Management/Corporate operations $ 48,000 — 21%
Contingency $ 9,385.00 — 4%
Total Annual Revenue $ 232,385.00
The following buckets or categories of special benefit services shall only be provided to parcels
within the District.
SIDEWALK ®PERATIONSBEAUTIFICATION ®RDER $ 12®,®®® 51%
Examples of these special benefit services and costs may include, but are not limited to
❑
Regular sidewalk and gutter sweeping
❑
Regular sidewalk steam cleaning
❑
Beautification of the district
❑
Enhanced trash emptying (over and above city services)
❑
Timely graffiti removal, within 24 hours as necessary
❑
Tree and vegetation maintenance (over and above city services)
❑
Special events maintenance and set up
❑
Maintenance of existing and new public spaces
❑
Hanging plants, planting flowers throughout the district
❑
Possible private security and/or camera system
❑
Administration of the sidewalk operations services or staff
DISTRICT IDENTITY AND STREETSCAPE IMPROVEMENTS:- $55,000 24%
Examples of these special benefit services and costs may include, but are not limited to:
o
Web site development and updating
❑
App development
❑
Management and coordination of special events
❑
Social media
❑
Public relations firm
❑
Holiday and seasonal decorations
❑
Branding of Downtown Downey so a`positive image is built
❑
Banner programs
❑
Public art displays
❑
Downtown landmark sign and maintenance
❑
Logo development
19
❑ Public space design and improvements
❑ Administration of District Identity Services
PROGRAM MANAGEMENT AND CORPORATE OPERATIONS:. $48,000 24%
Examples of these special benefit services and costs may include, but are not limited to:
❑ Staff and administrative costs
❑ Director's and Officers Insurance
❑ Office related expenses
❑ Rent
❑ Financial reporting and accounting
❑ Legal work
CONTINGENCY CITY p No COUNTY FEES RESERVE`: $ 9,385 4%
Examples of these special benefit services and "costs include, but are not limited to
❑ Delinquencies
❑ City Fees
❑ County fees
❑ Reserves
ENHANCED RESIDENTIAL CONDO UNIT IMPROVEMENTS: (currently don't exist) $ 0
Examples of these special benefit services and costs may include, but are not limited to
Future residential condos built within the boundaries of the Downtown Downey CBD will be
assessed separately due to their unique parcel status and special benefit needs in the district.
Residential condos buildings or Town Homes will have the following special benefit services
conferred on the frontage their parcels. These services in the future will include, but will not be
limited to:
❑ Installation, stocking and upkeep of pet waste distribution stations on the
frontages adjacent to the high concentrations of residential condo individually
assessed parcels;
Li Enhancement and beautification of sidewalks on the frontages adjacent to the
high concentrations of residential individually assessed parcels;
Installation of hanging plants, and enhanced upkeep in the sidewalks
surrounding these frontages adjacent to these residential condos;
u Other services requested by the residents that confer special benefit to the areas
directly adjacent to the parcels with high concentrations of residential condos;
u Proportional share of the Administrative and Contingency costs to cover the
oversight of the Enhanced beautification special benefit services.
Fifteen -Year OIeratng Budget:
A projected fifteen -year operating budget for the Downtown Downey CBD is provided below.
The projections are based upon the following assumptions:
20
• Assessments will besubject toannual increases not toexceed 5Y6per year.
• Increases will be determined by the District Management Corporation and in no case
shall annual increases exceed 5Y6per year.
• Changes in land use, demolition of existing buildings, and new development may modify
both the amount of the maximum assessment and the CBD's budget projections.
The budget for specific programs may be reallocated within the categories by up to 10% of each
budget category. The Management Corporation Board may alter the budget bayed upon
service needs and such changes shall be included in the Annual report and submitted to the
Downey City Council for review and approval.
Downtown Downey CBD
Sidewalk' — -
Beautification and $120,000.00 $126,000.00 m132,30Ho $138,915.00 $145,860,75 $153,15179 $160.81 1A8
OrderDistrict Identity $55,000.00 $57,750.00 $60,637.50 $63,669.38 $66,85Z84 $70,195.49 $73,705.26
Prop. Mgmt/Corp.
Operations $48,000,00 $50,400.00 $52,92HO $55,566.00 $58,344.30 $61,261,52 $64,324M
`
Total �32,385,00*244,004.25�6,204.46m269�4.69 �2,465.42 $296,588.69 /�1,418.18
mdewalk
Beautification and $168,852,05 $177,294-65 $186�59.39 $195,467u6 $205,240.72 $215,50278 $226,277,90 $226,86.65
Order
Prop. Mgmt/Corp.
Operations �7,540.82 $70,917.86 m74�63,75 $78,186.94 $90,511.18 $90,726.66
'
Total �6,989.03 �3,338.48 �0,505,41 $378,530.68 $397,457.|$417,330.�8,196.58 $439,239.90
Notes:
• Assumes 5%yearly increase onall budget items.
w Any accrued interest ordelinquent payments will beexpended inthe above categories.
• Residential condo assessments are zero for the first year, and 1obedetermined when the first
residential condos are actually built inDowntown
The Downtown Downey CBD is a property -based special benefit assessment district being
established pursuant to the Downey Community Benefit District enabling ordinance adopted in
September 2015 by the Downey City Council. Due to the special benefit nature of assessments
levied within a CBD, program costs are to bedistributedamongst all identified specially
benefited properties based on the proportional amount of special program benefit each
property is expected to derive from the assessments collected.
The ordinance refers to the requirement that relative "benefit" received from CBD funded
programs and activities be used to determine the amount of assessment paid. Only those
properties expected to derive special benefits from CBD funded programsandactivities may be
assessed and only in an amount proportional to the relative special benefits expected to be
received.
General vs. S
2eciol,Benefits:
As provided by Proposition 218, assessment district programs and activities confer a
combination of general and special benefits to properties, but the only program benefits that
can be assessed are those that provide special benefit to the assessed properties. Special
Benefit" as defined by the California State Constitution means "a particular and distinct benefit
over and above general benefits conferred on real property located in the District or to the
public at large". For the purposes of this analysis, "General Benefits" are benefits from the
provided within Downtown Downey that are not special in nature, are not "particular and
distinct" and are not over and above the benefits that other city parcels receive.
General benefits are not restricted to benefits conferred only on persons and property outside -
the assessment district, but can include benefits both conferred on real property located in the
district or to the public at large. "At large" means not limited to any particular person --and
means all members of the public- including those who live, work, and shop within the district
and not simply transient visitors.
The property uses within the boundaries of the proposed Downtown Downey CBD which will
receive special benefits from CBD funded programs and services, are currently a mix of retail,
service, office, religious, residential and parking. Services, programs and improvements
provided by the Downtown Downey CBD are primarily designed to provide special benefits to
identified parcels within the boundaries of the District.
Parcels that receive the special benefit programs, services and improvements outlined in this
Management District Plan will attract more customers, employees, tenants and investors as a
result of these programs, services and improvements, thereby increasing business volumes,
sales transactions, occupancies, and rental income, and for future residents, make this
22
Downtown more walkable, attractive and livable. These benefits are particular and distinct in
that they are not provided to non -assessed parcels within or outside of the District. Because
these programs, services and improvements will only be provided to each individual assessed
parcel within the Downtown Downey CBD boundaries, these _programs, services and
improvements will constitute "special benefits".
Existing City of Downey services will not be replaced or duplicated by Downtown Downey CBD
funded services. The very nature of the purpose of this District is to fund supplemental
programs, improvements and services within the Downtown boundaries above and beyond
what is being currently funded either via normal tax supported methods or other funding
sources. All benefits derived from the assessments to be levied on parcels within the
Downtown CBD are for services, programs and improvements directly benefiting each
individual parcel within this area and support increased cleanliness, commerce, business
attraction and retention, increased commercial property rental income and improved District
identity. No CBD funded services, activities or programs will be provided beyond the CBD
boundaries.
While every attempt is made to provide CBD services and programs to confer benefits only to
those identified assessed parcels within the district, the California State Constitution was
amended via Proposition 218 to provide that general benefits exist, either by design or
unintentionally, in all assessment districts and that a portion of the program costs must be
considered attributable to general benefits and assigned a value. General benefits cannot be
funded by assessment revenues. General benefits might be conferred on parcels within the
District, or "spillover" onto parcels surrounding the District, or to the public at large who might
be passing through the District with no intention of transacting business or residing within the
District or interest in the District itself. Empirical assessment engineering analysis throughout
California has found that general benefits within a given similar special benefits districts tend to
range from 1-5% of the total costs.
There are three methods that have been used by the Downtown Downey CBD Assessment
Engineer for determining general and special benefit values within assessment districts:
(1) The parcel by parcel allocation method
(2) The program/activity line item allocation method, and
(3) The composite district overlay determinant method.
A majority of CBDs in California for which ourAssessmentEngineer has provided assessment
engineering services since the enactment of Proposition 218, have used Method #3, the
composite district overlay determinant method which will be used for this CBD. This method of
computing the value of general benefit involves a composite of three distinct types of general
benefit — general benefit to assessed parcels within the District, general benefit to the public at
large within the District and general benefit to parcels outside the District.
23
Downtown Downey CBD Pro rams and lm rovements:
The total special and general benefit program activities and budget allocations that will be
provided to each individual parcel assessed in the proposed Downtown Downey CBD are shown
in the chart below:
Total Year 1 018 - Soecial + General Benefit Costs
All program costs associated with general benefits will be derived from sources or credits other
than CBD assessments. Sample "other" revenue sources can be derived from special events,
grants, volunteer hours and must simply equal a total of $ 4,740 per year which wouldequal
the general benefit cost of 2% of the computed total CBD cost of $232,385.00 from the Table
above. Here, program costs are spread among property variables that are common to each
parcel include linear frontage, lot or parcel size and building square footage, and residential
condo parcels. Assessed valuation cannot be used as the basis for revenue generation in the
state of California since Proposition 13 sets the assessed valuation at the time of purchase of
the parcel, therefore adjacent parcels may be similar in size, but have different assessed
valuations. We must therefore spread the assessments among the consistent factors of each
parcel, based upon 2018 data. The following data represents the foundation of the assessments
that will generate the revenue to fund the Downtown Downey CBD:
All program costs associated with general benefits will be derived from sources or credits other
than CBD assessments. Sample "other" revenue sources can be derived from special events
grants, farmers' markets, donations, volunteer hours and must simply equal a total of $ 4,740
per year which would equal the general benefit cost of 2% of the computed total CBD cost of
$ 237,125 from the Table above. Here, program costs spreading variables include linear
frontage, lot or parcel size and building square footage, and residential condo parcels. The
following data represents the foundation of the assessments that will generate the revenue to
fund the Downtown Downey CBD: (verified as of February 15Y,-2018);
Benefit Zones:
24
YR 1- 2018
YR 1- 2018
YR 1="2018
% of Total
Assessment
Non -Assessment
Total Costs
Service
Costs
Costs
Sidewalk Operations __
$120,000
$2,448
$122,448
51%
District Identity
$55,000
$ 1,122
$56,122
24%
Program Management
$48,000
$ 979
$48,979
21%
Contingency/Reserve
$9,385
$191
$9,576
_4%
Total
$232,385.00
$ 4740
$237,125.00
100%
All program costs associated with general benefits will be derived from sources or credits other
than CBD assessments. Sample "other" revenue sources can be derived from special events,
grants, volunteer hours and must simply equal a total of $ 4,740 per year which wouldequal
the general benefit cost of 2% of the computed total CBD cost of $232,385.00 from the Table
above. Here, program costs are spread among property variables that are common to each
parcel include linear frontage, lot or parcel size and building square footage, and residential
condo parcels. Assessed valuation cannot be used as the basis for revenue generation in the
state of California since Proposition 13 sets the assessed valuation at the time of purchase of
the parcel, therefore adjacent parcels may be similar in size, but have different assessed
valuations. We must therefore spread the assessments among the consistent factors of each
parcel, based upon 2018 data. The following data represents the foundation of the assessments
that will generate the revenue to fund the Downtown Downey CBD:
All program costs associated with general benefits will be derived from sources or credits other
than CBD assessments. Sample "other" revenue sources can be derived from special events
grants, farmers' markets, donations, volunteer hours and must simply equal a total of $ 4,740
per year which would equal the general benefit cost of 2% of the computed total CBD cost of
$ 237,125 from the Table above. Here, program costs spreading variables include linear
frontage, lot or parcel size and building square footage, and residential condo parcels. The
following data represents the foundation of the assessments that will generate the revenue to
fund the Downtown Downey CBD: (verified as of February 15Y,-2018);
Benefit Zones:
24
State law and theStateconstitution, Article MID require that special assessments be levied
according to the special benefit each individual parcel receives. There are two benefit zones in
the proposed Downtown Downey CBD.
Assessable Data in the CBD:
Benefit Zone 1
Building Square Lot Size (square feet) Linear Frontage Condo Sf
footage (square
feet)
988,676 sq. ft. 1,977,093 14,936 0
Benefit Zone 2:
Building Square Footage Lot Size (square feet) Linear Frontage
0 1 0 631
Total Assessment District Property Variables:
Building Square Footage Lot Size (square feet) Linear Frontage
988,676 1,977,093 14,305
Amount of revenue generated by each benefit zones
Assessment District Revenue Generation in Fiscal Year 2017 from each assessable property
variable:
Linear Frontage
Building Square Footage:
Lot Square Footage:
Residential Condos Unit Square
Footage:
$ 121,970.00
52%
$50,035.00
23%
$60,380.00
25%
L 0
Total: $ 232,385.00 100%
25
First Year Annual Costs:
Y
Property Variable First Year Annual Costs
Linear Frontage $ 8.166254 per linear foot/year
Building Square Footage $ 0.050608 per square foot/year
Lot Size $ 0.030540 per square foot/year
Residential Condominiums $ 0.20 per square foot
Proportional Allocation of Assessments to Benefiting Property Owners
Generation of assessments which fund categories of special benefit services.
Funded by Property Variable
Approximate Amount First
Program
Assessment
Year Budget - %
Sidewalk Operations,
Funded— by approximately 100% of
$ 120,000 — 51%
Beautification and Order
the linear frontage assessments
(the Board decides how this
sidewalk and gutter cleaning,
Residential Condo assessments will
amount will be allocated month by
landscaping, steam cleaning,
pay for services in the some
month, prioritizing services and
public space maintenance
proportion as allocated in the budget
proportionally allocating per
benefit zones based upon
payments made)
District Identity and
Funded by approximately 100% of
Streetscape Improvements
the building square footage and
some from the lot size assessments
(Marketing, promotions,
Residential Condo assessments will
$ 55,000 — 24%
website, social media, events,
pay for services in the same
business attraction, public
proportion as allocated in the budget
space design)
Program Management/
Funded by Lot Size assessments
Corporate Operations
Residential Condo assessments will
Administration, outreach to
pay for services in the some
$ 48,000 — 21 %
public agencies, community
proportion as allocated in the budget
relations, office rent, supplies,
insurance, legal
Funded by Lot size assessments
Contingency/Reserve
Residential Condo assessments will
$9,385 4%
pay for services in the some
proportion as allocated in the budget
Total for all Special Benefit
$ 232,385.00
Services
26
Linear Frontage Defined:
Individual parcels will be assessed for all sides of each parcel fronting on a public street. Alley
frontage is not assessed. Each side of the parcel (excluding alley areas) will receive Sidewalk
Operations special benefit services based upon the frequency of services articulated in this
plan, linear front footage data was obtained from the County Assessor's parcel maps.
undine Sauare Footage Defined.
Building square footage is defined as gross building square footage throughout the Downtown
Downey CBD. The percentage of building square footage that is dedicated to private or internal
tenant parking needs may be deducted from the gross building square footage. Only parking
structures that are open to the public and charge fees to the general public on a regular basis
will have their building square footage assessed as any other commercial building. Apartment
buildings within the boundaries of the Downtown Downey CBD will be assessed as commercial
buildings since there is a landlord/tenant relationship in that property.
Lot Square Footage Defined'
Lot square footage is defined as the total amount of area within the borders of the parcel The
lot square footage of a parcel has been verified by the County Assessor's parcel maps.
Commercial Condominium Parcels Defined:
Ground floor commercial condominiums will be treated as independent "mini" commercial
buildings and assessed based on their actual building square footage, the footprint of land they
cover or lot size of the commercial condo, and the amount of direct primary street frontage on
the exterior of the building. Ground floor commercial condominiums will pay 100% of the
special benefits for the assessment, based upon which benefit zone they are within.
FutureResidential Cando Unit Parcels Defined:
Future residential condo units building square footage is defined as the livable building square
footage within the walls of the condo residential unit parcel. They are included in a special
category to designate their unique special benefits relative to the other commercial parcels
within the Downtown Downey CBD. Unlike the other commercial parcels in the district,
including commercially operated apartment buildings, residential condo parcels are assessed
for building square footage only, and are not assessed for linear frontage and lot square
footage.
Future residential condo individually assessed parcels are assessed as a separate category.
These future residential condo individual parcels will be assessed for their building square
footage only at the rate of $0.20 per square foot per year, commencing the first year of their
completion. The rationale for assessing future residential condos only for the building square
footage rate is provided below.
Future residential condo individually assessed parcels are assessed differently than multi -unit,
for -rent apartment buildings, due to the frequency of special benefit services required by each
parcel as described below. The multi -unit apartment buildings are commercial properties in
27
which the tenant and landlord have an economic relationship as opposed to residential condo
buildings where individual property owners own separate"air space parcels" on a single floor.
Future residential apartment buildings can be bought or sold just as like commercial buildings
whereas residential condo individual units are separately owned and must be individually
bought and sold.
Distinctions between residential apartment buildings with tenants and residential condominium
building with individual parcel owners are as follows:
1. The Davis Sterling Act establishes rules and regulations for residential condo owners
based upon "separate interests" (i.e. ownership rights), as opposed to renters who
only have a possessory interest.
2. Generally, residential condo unit owners demonstrate greater care for their property
and concerns about quality of life issues due to their investment in real estate.
3. Residential owners and have the right to vote in a Proposition 218 hearing, tenants
do not have that right.
4. Residential condo owners are required to contribute to a legally established
Homeowners Associations to oversee building maintenance, tenants are not.;
5. Residential tenants may have their dwelling unit sold or have their rent raised
arbitrarily due the lack of ownership of their residential unit.
The assessment methodology has been written to confer special benefits to future residential
condo individual assessed parcels since future residential condo owners have unique
investment backed expectations about the care and maintenance of the building and its
surroundings compared to the interest of residential tenants who have a possessory not an
ownership interest. The future residential condos' special assessment methodology ensures
that a fund will be established to maintain high levels of special benefit services that apply
directly and proportional to the blocks that demand virtually seven days per week, 365 days per
year special benefits.
Exemptions:
No benefitting parcels, regardless of taxable or tax-exempt property tax status, will be exempt
from the assessments funding the special benefit services of the Downtown Downey CBD.
Special benefit services will not be provided to any parcels outside of the boundaries of the
district.
Any current single family residential land uses, in the form :of single family homes on
independent parcels within the boundaries of the CBD are included in the District, however will
be assessed only for the services they receive on their frontage or until such time that the single
family land uses are converted to multi -family or commercial/retail uses.
Calculation of Assessments:
The proportionate special benefit derived by each identified parcel shall be determined in
relationship to the entirety of the improvement or the maintenance and operation expenses of
28
an improvement or for the cost of property service being provided. Per California Constitutional
Amendment Article XIII D, Section 2(i), "Special Benefit", means a particular and distinct benefit
over and above general benefits conferred on a real property located in the district or to the
public at large. No assessment will be imposed on any parcel that exceeds the reasonable cost
of the proportional special benefits conferred upon that parcel. Only special benefits are
assessable and these benefits must be separated from any general benefits. Properties are
assessed as defined on the County Assessor's most current parcel maps. The preceding
methodology is applied to the database of parcels within the District. The process for compiling
the property database includes the following steps:
• A report was generated from data obtained from the Los Angeles County Tax Assessors
office.
• A list of properties to be included within the CBD is provided in Section 7.
Parcel Assessments
The annual assessment method to calculate all parcels and ground floor commercial
condominiums for Benefit Zone 1 will be:
Total Street Frontage X $ 8.166254 per foot
Total Lot Square Footage X $0.030540 per square foot
Total Building Square footage X $0.050608 per square foot
TOTAL PARCEL ASSESSMENT
The annual assessment method to calculate all parcels and ground floor commercial
condominiums for Benefit Zone 2 will be:
Total Street Frontage X $ 8.166254 per foot
Total Lot Square Footage X $0.00 per square foot
Total Building Square footage X $0.00 per square foot
TOTAL PARCEL ASSESSMENT
Residential Condo Assessment:
The annual assessment method for a residential condo once they are built, regardless of Benefit
Zone will be:
Total Residential Unit Building Square footage X $0.20 per Square Foot
29
TOTAL RESIDENTIAL CONDO UNIT ASSESSMENT
30
Future Development:
As a result of continued new development, the Downtown Downey CBD will experience the
addition or subtraction of assessable commercial buildings or the conversion of empty parcels
into new commercial and residential or buildings and units. The Management District Plan
assessment methodology will reflect any and all land use changes within the term of the District
with annual adjustments being submitted to the City, as these assessment calculation and
property variable alterations occur.
Maximum Assessment:
Assessments may be subject to annual increases not to exceed 5% per year. Increases will be
determined by the CBD District Management Corporation and will vary between 0% and 5% in
any given year. The maximum the assessments can be increased is 5% over the previous fiscal
year's base assessments. Not implementing the increase for one year does not give the District
Management Corporation the authority to accumulate increases above 5% within any given
fiscal year. The following projections illustrate a potential 5% annual increase.
Table 4-A
..-
Projected
Assessment
FY6
FY1
FY7
FY2
FY8
FY3
FY9
FY4
FY10
FY5
Linear Frontage
$
8.1663
$
8.5746
$
9.0033
$
9.4535
$
9.9261
Building Sq. Ft.
$
0.050608
$
0.053138
$
0.055795
$
0.058585
$
0.061514
Lot Square Ft.
$
0.030540
$
0.032067
$
0.033670
$
0.035354
$
0.037122
Condo Sq. Ft.
$
0.20000
$
0.21000
$
0.22050
$
0.23153
$
0.24310
Projected
Assessment
FY6
FY7
FY8
FY9
FY10
Linear Frontage
$
10.4224
$
10.9436
$
11.4907
$
12.0653
$
12.6685
Building Sq. Ft.
$
0.064590
$
0.067820
$
0.071211
$
0.074771
$
0.078510
Lot Square Ft.
$
0.038978
$
0.040927
$
0.042973-
$
0.045121
$
0.047378
Condo Sq. Ft.
$
0.25526
$
0.26802
$
0.28142
$
0.29549
$
0.31027
Projected
Assessment
FY11
FY12
FY13
FY14
FY15
Linear Frontage
$
13.3020
$
13.9671
$
14.6654
$
15.3987
$
16.1686
Building Sq. Ft.
$
0.082435
$
0.086557
$
0.090885
$
0.095429
$
0.100200
Lot Square Ft.
$
0.049746
$
0.052234
$
0.054845
$
0.057588
$
0.060467
Condo Sq. Ft.
$
0.32578
$
0.34207
$
0.35917
$
0.37713
$
0.39599
31
Budget Adjustments:
Annual budget surpluses, if any, will be rolled into the following year's budget. Assessments
will be annually, within the constraints of the Management District Plan's allowed increase
or through land use changes. Revenues from the delinquent accounts may be expended in the
year they are received. If the District is not renewed, any remaining funds will be returned to
property owners in the proportion by what each property owner paid.
If after the initial term the District decides to renew and if there is money left over from the
previous term, the balance of remaining funds will be rolled over into the renewed district. -
These "rolled over" funds may only be used within the boundaries of the original
district and cannot be expended for activities, services, or improvements in an area expanded
beyond the original District. However, the rolled over funds may be used to finish District
Management Corporation activities in the original district.
Time and Manner for Collecting; Assessments:
In September 2018, the Downtown Downey CBD assessments will appear as a separate Tine
item on annual property tax bills prepared by the County of Los Angeles. The assessments shall
be collected at the same time and in the same manner as for the ad valorem property tax paid
to the County of Los Angeles. These assessments shall provide for the same lien priority and
penalties for delinquent payment as is provided for the ad valorem property tax.
Disestablishment:
California Streets and Highways Code Section 36670 provides for the disestablishment of a
District. Provisions for annual disestablishment of the CBD are provided for in Article 2, Chapter
14 of the local Downey CBD ordinance. Property owners_ dissatisfied with the results,
management or quality of the services may petition the City Council to disestablish the CBD, in
the same method in which they petitioned the City Council to establish the District.
Section 36670 states:
(b) The city council shall adopt a resolution of intention to disestablish the district prior to
the public hearing required by this section. The resolution shall state the reason for the
disestablishment, shall state the time and place of the public hearing, and shall contain a
proposal to dispose of any assets acquired with the revenues of the assessments levied
within the property and business improvement district. The notice of the hearing on
disestablishment required by this section shall be given by mail to the property owner of
each parcel or to the owner of each business subject to assessment in the district, as
appropriate. The city shall conduct the public hearing not less than 30 days after mailing the
notice to the property or business owners. The public hearing shall be held not more than 60
days after the adoption of the resolution of intention."
32
Unexpended surplus funds will
be returned to property owners based upon each parcels
percentage contribution to the previous fiscal year's assessments if the District is not renewed.
Government Assessments:
The Downtown Downey D Management Plan assumes that the City of Downey will pay
assessments for the public property they own within the boundaries of the District as per the
methodology within this plan. Article X||| D, Section 4 of the California Constitution was added
in November of 1996 to provide that the City is not exempt from such assessments.
Parcels owned bvthe City ofDowney and the Downey Successor Agency shall receive benefits
commensurate with the sidewalk operations administration and contingency assessments paid
into the Downtown Downey CBD. These publicly owned parcels are presumed to benefit
equally tqthe privately owned parcels for the special benefits provided.
Table 4-B
Ay ;IMrITAJYATAAjRTA?I-�
3�
Annual
APN
Legal Owner
Site #
Site Street
Assessment
Percent
6254008901
City of Downey
ozoz
2nd St
$
5,/0496
2.20%
625400e900
City ofDowney
zzzoo
LaneinaAve
$
3'115.98
1.34%
6254016e12
City ofDowney
zzzzz
Brookshire Ave
$
16'610.87
7.15m
625401*900
City ofDowney
oszz
2nd St
$
446.34
0.19%
6254019e01
City nfDowney
xszo
3rd St
g
446.31
0.19%
6254020903
City nfDowney
8313
Firestone Blvd
$
85.76
0o4%
6254020913
City ofDowney
ose
Firestone Blvd
g
i'zssJy
0.50%
6254021919
City ofDowney
11131
Brookshire Ave
$
6'620.60
2.85%
6254021922
City ofDowney
8435
Firestone Blvd
$
110.49
uusm
6254021*23
City ofDowney
8435
Firestone Blvd
$
3'145u8
z.*s%
6255002900
City ofDowney
8356
Firestone Blvd
g
4,349.90
1.87%
6255003900
City ofDowney
*no Site
$
s'ausJz
Address*
2.75m
TOTAL
$
47'587.81
20.48%
6254019*04
communitvoev
Commission ufDowney
City
ouzz
Downey Ave
$
1'47*.15
0.64%
TOTAL
$
1'479.15
0.64%
3�
There are no specific rules and regulations prescribed for the proposed Downtown Downey
Community Benefit, District Management Corporation except that it will adhere to the open
meeting and open records provisions of the Ralph M. Brown Act and will seek to be as open and
transparent to the CBD assessees and the public at large as is reasonably possible.
Pursuant to the City of Downey Community Benefit District Ordinance and Section 36650 of the
California Streets and Highway Code, a District Management Corporation or Owners'
Association, will review District budgets and policies annually within the limitations of the
Management District Plan. The Management Corporation will file Annual Reports with the City
of Downey and will oversee the day-to-day implementation of services as defined in the
Management District Plan. Section 36612 states:
The "Owners' association" means a private nonprofit entity that is under contract with
a city to administer or implement activities and improvements specified in the
management district plan. An owners' association may be an existing nonprofit entity or
a newly formed nonprofit entity. An owners' association is a private entity and may not
be considered a public entity for any purpose, nor may its board members or staff be
considered to be public officials for any purpose."
Bonds:
The District will not issue any bonds related to any program.
34
The Downtown Downey CBD is expected to be established and begin assessing benefiting
parcels eamffiscal year JO18-1g. Due bothe timing ofrevenue collection and need toestablish
the owners' association or District Management Corporation, implementation of the
Management District Plan and the delivery ofservices is scheduled to commence in or around
the beginning of 2019. Consistent with the local enabling ordinance, the Downtown Downey
C8Dm/i||haveafHteen-yearternnthroughWovennber3Ci2Q33xxithopenationsxvindingdovvnby
November 3Q,3O33unless renewed byDowntown property owners.
35
i
t •'+ • i i• • ' i
APN
Annual
6254 020 003
$951.15
Assessment
6254 020 014
$1,160.47
6254 001014
$2,843.36
6254 020 017
$1,739.08
6254 001017
$4,157.61
6254 020 020
$836.77
6254 007 004
$2,676.44
6254 020 023
$1,623.42
6254 007 013
$3,881.48
6254 020 024
$451.43
6254 008 005
$8,513.20
6254 020 025
$533.85
6254 008 901
$5,104.96
6254 020 027
$8,257.93
6254 009 002
$2,017.23
6254 020 028
$1,909.16
6254 009 012
$3,328.59
6254 020 029
$2,003.14
6254 009 013
$773.36
6254 020 808
$2,158.96
6254 009 014
$1,341.13
6254 020 903
$85.76
6254 009 900
$3,115.98
6254 020 913
$1,165.79
6254 010 033
$4,042.44
6254 021023
$2,059.57
6254 010 034
$2,905.38
6254 021025
$1,072.70
6254 010 035
$5,517.83
6254 021030
$5,032.22
6254 011003
$2,010.28
6254 021031
$16,260.95
6254 011 008
$699.90"
6254 021919
$6,620.60
6254 011010
$809.41
6254 021922
$110.49
6254 011012
$5,262.62
6254 021923
$3,145.08
6254 011013
$2,435.07
6255 001012
$724.83
6254 011014
$1,188.60
6255 002 008
$2,204.26
6254 012 008
$596.39
6255002 009
$3,231.19
6254 012 009
$623.02
6255 002 010
$977.35
6254 012 010
$2,137.21
6255 002 011
$1,115.64
6254 012 011
$3,523.33
6255 002 012
$3,416.56
6254 012 013
$3,996.82
6255 002 013
$4,067.92
6254 012 015
$1,559.58
6255 002023
$2,775.94
6254 016 912
$16,610.87
6255 002 028
$4,739.43
6254 018 005
$538.97
6255 002 032
$5,888.06
6254 018 023
$969.39
6255 002 033
$2,255.23
6254 018 024
$3,682.74
6255 002 034
$2,831.13
6254 018 028
$863.92
6255 002 900
$4,349.90
6254 019 001
$2,445.95
6255 003 001
$3,114.60
6254 019 003
$758.41
6255 003 005
$891.16
6254 019 004
$761.41
6255 003 006
$564.85
6254 019 027
$2,148.53
6255 003 007
$1,153.76
6254 019 028
$4,613.93
6255 003 015
$2,659.70
6254 019 900
$446.34
6255 003 018
$8,010.09
6254 019 901
$446.31
6255 003 019
$2,185.15
6254 019 904
$1,479.15
6255 003 900
$6,385.72
6254020001
$119.80
6254 020 002
$717.73
Ko
IN
i
City of Downey Community Benefit District Resolution
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DO NEY,
FORMING THE DOWNTOWN DOWNEY COMMUNITY BENEFIT DISTRICT
AND LEVYING ASSESSMENTS THEREWITH
WHEREAS, on October 27, 2015, the City Council of the City of Downey (City) adopted
Ordinance No. 15-1346 (Ordinance), the City's Downey Community Benefit District Procedural
Ordinance, authorizing the City to establish a Community Benefit District (CBD) to enhance the
security, safety, appearance, and economic viability within such districts;
WHEREAS, the Ordinance authorizes the City to levy and collect assessments on real
property within such districts for the purpose of providing improvements and promoting
activities that specially benefit real property within such districts;
WHEREAS, the Ordinance authorizes the City to use the procedures set forth in the
Property and Business Improvement District Law of 1994 (Streets & Highways Code sections
36600, of seq.) (PBID Law) as modified by the Ordinance for purposes of forming an
assessment district;
WHEREAS, Articles XIIIC and XIIID of the California Constitution and Section 53753 of
the California Government Code (Proposition 218 Omnibus Implementation Act) also impose
certain procedural and substantive requirements relating to the notice, protests and hearing
requirements pertaining to new or increased assessments;
WHEREAS, Section 3007 of the Downey Municipal Code initiates the proceedings to
form a new Community Benefit District with the submittal of written petitions that have been
received from property owners within the area of the proposed CBD in Downey requesting the
City Council to initiate proceedings pursuant to Chapter 14 of the Downey Municipal Code and
establish a Downtown Downey Community Benefit District;
WHEREAS, inclusive of the properties owned by the City of Downey Community
Development Commission Housing Successor Agency, such petitions were signed by
property owners in the proposed CBD who will pay more than thirty percent (30%) of the
assessments proposed to be levied and such petitions were provided to the City Council of
their meeting on June 7, 2018;
WHEREAS, a Management District Plan entitled the "Downtown Downey Community
Benefit District 2018 Management District Plan" ("Management Plan") for the proposed
Downtown Downey CBD has been prepared and contains all of the information required by the
Ordinance, including, but not limited to, a description of the boundaries of the proposed CBD,
the special benefit improvements and activities and an assessment amount for every parcel
within the CBD.
WHEREAS, on June 7, 2018, the City Council adopted Resolution No. 18-7808, a
resolution of the City Council of the City of Downey, California, declaring its intention to
establish the Downtown Downey Community Benefit District and to levy and collect
assessments within said district pursuant to Chapter 14 of the City of Downey Municipal Code
pertaining to the formation of a community benefit district, and calling an assessment ballot
proceeding, authorizing the City Manager to sign the petition and the ballot, and establishing
a time and place for a public hearing on July 24, 2018;
WHEREAS, as directed by Resolution No. 18-7808, on June 8, 2018, no less than 45
days prior to the public hearing, the City Clerk mailed to 70 record owners of affected parcels a
ballot packet including: a notice of July 24, 2018 public hearing on the formation of the
Downtown Downey Community Benefit District, a ballot with the proposed assessment amount,
ballot instructions, Management District Plan, Assessment Engineer's Report ("Engineer's
Report"), and other data describing the process, as required by Article Xlll D, Section 4 of the
California Constitution and Section 53753 of the Government Code;
WHEREAS, on July 24, 2018 at 6:30 pm or as soon thereafter as was practicable, in
the City Council Chamber, the City Council held a public hearing, at which it heard and
considered oral and written testimony from all interested persons.
WHEREAS, the City Council directed that the proposed boundaries of the Downtown
Downey CBD, be amended to exclude 31 parcels that will not receive a special benefit from the
District's projects and activities under Streets and Highways Code section 36624, as are shown
in the amended Management Plan that is attached hereto as Attachment A;
WHEREAS, following the public input portion of the Public Hearing, all assessment
ballots submitted by property owners within the amended boundaries of the District that had
been returned to the City and received prior to the end of the public hearing, and not
withdrawn, were tabulated pursuant to the procedures set forth in Resolution No. 18-7808
and applicable law;
WHEREAS, based on the Assessment Ballot ProceedingResults tabulation attached
hereto as Attachment B, the City Council determined that a majority protest, as defined by
Article Xlll D, Section 4(e) of the California Constitution and Section 53753 of the California
Government Code, does not exist with respect to the assessment proposed in connection
with the Downtown Downey Community Benefit District; and
WHEREAS, the property within the amended area of the CDB will be benefitted by the
improvements and activities funded by the assessments levied in connection with the CBD. The
assessment against each parcel does not exceed the reasonable cost of the proportional
special benefit conferred on that parcel.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF DOWNEY DOES
HEREBY RESOLVE AS FOLLOWS:
SECTION 1. The above recitals are true and correct.
SECTION 2. Pursuant toChapter14 of the of the Downey Municipal Code
(Ordinance No. 15-1346) which incorporates provisions of Section 36621 of the PBID
Law, the Downtown Downey Community Benefit District (CBD) is hereby formed.
RESOLUTION O
PAGE 3
SECTION 3. The City Council hereby approves the Downtown Downey Community
Benefit District 2018 Management District Plan, as amended, and Engineer's Report, as
amended, for the proposed Downtown Downey CBD, which amended Management Plan
and amended Engineer's Report are attached hereto as
Attachment A.
SECTION 4. The amended boundaries of the CBD described in the amended
Management Plan generally encompass the core commercial areas of Downtown Downey
from 3rd and 4th Streets on the north to Union Pacific Railroad Right -of -Way on the south
and from Brookshire Avenue on the east to La Reina Avenue on the west.
SECTION 5. The proposed activities of the CBD as set forth in the amended
Management Plan include special events, private security, beautification, marketing,
promotional activities, public space development, enhancement for property owners, street
sweeping, steam cleaning, public art and administration of the services and an appropriate
contingency/reserve. All proposed services and improvements will provide a special
benefit to businesses and real property located within the CBD and shall not be provided
outside the district or for any purpose other than the purposes specified in the Resolution
of Intention. Notwithstanding the foregoing, improvements, and activities that must be
provided outside of the district boundaries to create a special or specific benefit to the
assessed parcels may be provided, but shall be limited to marketing and signage pointing
to the district.
SECTION 6. The assessments will be levied on the parcels located within the
amended district boundaries and no bonds will be issued.
SECTION_ 7. The activities, as set forth in Section 5 herein, of the Downtown
Downey CBD will be funded by a total assessment levied and collected within the
proposed Downtown Downey -CBD for fiscal year 2018-19 of approximately $232,385.
Section 7 of the amended Management Plan sets forth the proposed Downtown Downey
CBD annual assessment amount by Assessor's Parcel Number. The amount to be levied
and collected for subsequent years may be increased by an amount not to exceed five
percent (5%) per year as approved by the Board of Directors of the CBD.
SECTION 8. The duration of the new CBD shall be no greater than specified in
Resolution of Intention for the CBD, and shall in no event be in excess of twenty (20)
years.
SECTION 9. For complete description of the CBD, its boundaries and activities,
total amount of special benefits to be conferred on the real property and businesses in the
district, as well as complete description of the assessment authorized in connection with
the Downtown Downey CBD, reference is made to the amended Downtown Downey
Community Benefit District Management District Plan, and the amended CBD Engineer's
Report, each of which are attached hereto, and will be available on file in the City Clerk's
Office, available for public inspection, and incorporated herein by reference. The
amended Management Plan and amended Engineer's Report are hereby approved._
RESOLUTION NO. 18-7829
PAGE 4
Law.
SECTION 10. The adoption of this Resolution constitutes the levy of the
assessment, as amended, in each of the fiscal years; however, each year's levy shall be
conditioned on the approval, by resolution, of an annual report pursuant to Section 36650
of the PBID Law. The approval of such report is at the discretion of the City Council.
SECTION 11. The City Clerk is hereby authorized and directed to record the
notice of assessment required by Section 36627 of the PBID Law.
PKNI
APPROVED AND ADOPTED this 24th July, 2018.
I
SEAN ASHTON, Mayor
ALI �IA D�UART�EMC���
City Clerk
14WASU111 &NI
J, a 7 NT-rej—SW a regliar me0ung new on iflF"2W-73Tr-7MMIjr, ZIq, 10
to wit:
AYES:
Council Members: Pacheco, Saab, Rodriguez, Mayor Ashton
NOES:
Council Member: None.
ABSENT:
Council Member: None.
ABSTAIN:
Council Member: Vasquez.