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HomeMy WebLinkAbout6988RESOLUTION NO. 6988 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARCADIA, CALIFORNIA, APPROVING THE FORMATION OF THE DOWNTOWN ARCADIA COMMINITY BENEFIT DISTRICT WHEREAS, Ordinance No. 2306, as set forth in the Arcadia Municipal Code, Chapter 14, authorizes the Arcadia City Council to establish a community benefit district ( "CBD ") in the City of Arcadia based on the Property and Business Improvement Law of 1994 (California Streets and Highway Code 36600 et seq.), which sets forth the regulations for establishing a property -based benefit assessment district; and WHEREAS, the Downtown Arcadia Community Benefit District Steering Committee ( "Steering Committee ") requested that the City Council establish such a community benefit district in Downtown Arcadia; and WHEREAS, on June 18, 2013, the City Council adopted Resolution No. 6982, a Resolution of Intention to establish the Downtown Arcadia CBD based on the Steering Committee having received petitions representing over 30% of the weighted assessments in the proposed District; and WHEREAS, on June 18, 2013, the Council directed staff to proceed with the balloting process to determine whether the requisite 50% of the weighted ballots (based on the amount of assessments) of property owners with the proposed CBD support its establishment; and WHEREAS, the City Council conducted a duly noticed public hearing on August 6, 2013 on the formation of the Downtown Arcadia CBD, at which affected property owners could give testimony for and against the CBD; and 1 WHEREAS, the City Council received ballots through the close of the public hearing, and thereafter directed the City Clerk or his designee to unseal and tally the ballots in the Council Chambers Conference Room, which was open to the public as required by law; and WHEREAS, the City Clerk completed tallying the ballots and reported to the City Council that the ballot count in support of the CBD represented more than 50% of the returned ballots weighted based upon the amount of assessments; and WHEREAS, based on the weighted majority support for the establishment of the Downtown CBD, the City Council desires to form the proposed Downtown Arcadia CBD without imposing any changes to the district boundaries pursuant to Streets and Highways Code Section 33624. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ARCADIA, CALIFORNIA, DOES HEREBY RESOLVE AS FOLLOWS: SECTION 1. Pursuant to Ordinance No. 2306, set forth in the Arcadia Municipal Code, Article I, Chapter 14 pertaining to community benefit districts, and the California Streets and Highways Code Section 33600 et seq., the City Council hereby approves the formation of the Downtown Arcadia CBD. SECTION 2. The boundaries of the Downtown Arcadia CBD are set forth in the Downtown Arcadia Community Benefit District 2013 Management District Plan (the Management Plan), which is attached hereto as Exhibit "A ". SECTION 3. The improvements and activities proposed for the Downtown Arcadia CBD shall be funded by the levy of assessments on the properties within the Downtown Arcadia CBD boundaries. 2 SECTION 4. The description of the proposed improvements and activities of the Downtown Arcadia CBD are set forth in the Management Plan, and include, but are not limited to, these special benefits: a. Promotion of Downtown Arcadia CBD identify through district identity services and marketing, b. Beautification of public rights of way and maintenance related to public spaces and special events, c. Management of programs and operations. SECTION 5. The City Council authorizes and directs the levy of assessments on properties located within the Downtown Arcadia CBD boundaries, in the amounts shown in the District Assessment Engineer's Report, attached hereto as Exhibit "B ". SECTION 6. Except where funds are otherwise available, an assessment to pay for all specified improvements and activities with the Downtown Arcadia CBD will be levied annually. SECTION 7. After the Downtown Arcadia CBD is formed, new property owners shall not be exempt from the CBD assessment, but shall be assessed the appropriate amount in the prorated format based on the number of whole months remaining in the assessment period. SECTION 8. The properties in the Downtown Arcadia CBD shall be subject to any and all amendments to the Streets and Highways Code pertaining to the establishment of property and business improvement districts. SECTION 9. The levy and assessment which will fund improvements and activities within the Downtown Arcadia CBD will not be used to provide improvements or 3 activities outside of the Downtown Arcadia CBD or for any other purpose other than the purposes specified in this Resolution and the attachments hereto, as modified by the City Council at the public hearing concerning establishment of the Downtown Arcadia :d SECTION 10. The City Council hereby finds that the property within the Downtown Arcadia CBD area will be specifically benefitted by the improvements and activities funded by the assessments that are proposed to be levied. SECTION 11. The adoption of this Resolution and recordation of the notice and map pursuant to the Streets and Highways Code Section 33627 shall constitute the levy of an assessment in each of the fiscal years referred to in the Management Plan. SECTION 12. The City Clerk shall certify to the adoption of this Resolution. Passed, approved and adopted this ATTEST: City erk APPROVED AS TO FORM: Stephen P. Deitsch City Attorney 4 6th day August , 2013. 2 Mayor oft City o Arcadia STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES) SS: CITY OF ARCADIA ) I, GENE GLASCO, City Clerk of the City of Arcadia, hereby certifies that the foregoing Resolution No. 6988 was passed and adopted by the City Council of the City of Arcadia, signed by the Mayor and attested to by the City Clerk at a regular meeting of said Council held on the 6th day of August, 2013 and that said Resolution was adopted by the following vote, to wit: AYES: Council Member Amundson, Kovacic, Harbicht, Wuo and Segal NOES: None ABSENT: None .� �_ 'ty CfEA of th ity of Arcadia 5 A�t�etk Inc. THE DOWNTOWN ARCADIA COMMUNITY BENEFIT DISTRICT 2013 MANAGEMENT DISTRICT PLAN Arcadia, California Formed Under Ordinance # 2306 of Article 1 of the Arcadia Municipal Code, Chapter 14 on Community Benefit Districts Final Plan — April 1St, 2013 Prepared by: New City America, Inc. and the Downtown Arcadia CBD Steering Committee 710 W. Ivy Street ■ San Diego, CA 92101 ■ 888 - 356 -2726 ■ 619 - 233 -5009 ■ Fax 619 - 239 -7105 mail @newcityamerica.com ■ www.newcityamerica.com • Facebook: New City America, Inc. Table of Contents Section Number 1. Management District Plan Summary 2. Downtown Arcadia CBD Boundaries 3. District Improvement and Activity Plan 4. Assessment Methodology 5. District Rules, Regulations and Governance 6. Implementation Timetable 7. Assessment Roll of Properties Included Attachment: A. Engineer's Report 2 El 10 16 26 26 27 Section 1 Management District Plan Summary The name of this Community Benefit District is the Downtown Arcadia Community Benefit District (the "CBD "). The District is being formed pursuant to Ordinance 2306, Article 1, Chapter 14 of the Arcadia Municipal Code as hereinafter referred to as the Ordinance. Developed by the Arcadia Downtown Business Association and the Downtown Arcadia CBD Steering Committee — this Management District Plan is proposed to improve and provide special benefits to individual parcels located within the boundaries of the newly proposed 2013 Downtown Arcadia Community Benefit District. The proposed CBD will provide special benefit district improvements and activities, including marketing and promotions, district identity, beautification, possible transportation related activities and other special benefit programs to parcels within the boundaries of the proposed district. The proposed Downtown Arcadia 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 Arcadia area clean, safe, orderly, attractive, well marketed with special events and programs, and increase commerce within the boundaries. Boundaries: The boundaries shall include approximately 12 whole or partial blocks with 108 parcels. The District is generally bounded by Santa Anita Avenue on the west, on 2nd Avenue on the east, by St. Joseph on the north and by California Street on the south. See Section 2, pages 9 - 10. Budget: The total first year Downtown Arcadia CBD budget based upon assessable individual parcel owners for FY 13/14, will be $ 117,515.00. Please see Section 3 for a breakdown of the categories of special benefit services and their allocation of services by Benefit Zone. Improvements Activities and Services of the Downtown Arcadia CBD Plan: There are five basic categories of special benefit services that will be funded with this Downtown Arcadia CBD. All of these services will confer a special benefit to the individual parcels within the Downtown Arcadia CBD. The categories of special benefits are as follows: 1. District Identity: These services include the branding of the Downtown Arcadia area, marketing and promotions, newsletter, public relations, media relations, social media, publicity, special events, web site development and maintenance, public space development and holiday decorations. These services equal $ 56,000 or 48% of the first year annual budget of the new district. 3 2. Sidewalk Operations, Beautification and Order: This includes all sidewalk and gutter cleaning services, sidewalk steam cleaning services, as well as enhanced services to beautify the district. Sidewalk operations services total $ 25,000 or 21% of the first year annual budget of the new CBD. 3. Enhanced Residential Improvements : These services include, but are not limited to: enhanced beautification in blocks with high density of condos, public space development, implementation of pet related services and administrative costs. These services currently generate no assessments since there are no residential condominiums within the boundaries of the proposed CBD. However, with the opening of the Downtown Arcadia Gold Line Station in 2015, we anticipate rapid growth of this sector in and around the Gold Line Station and throughout the proposed CBD. The largest growth in Downtown is anticipated in the next 15 years to be in market rate multi- family housing, whether it be in the form of apartments or residential condominiums. 4. Program Management and Corporate Operations. These services equal $ 32,000 or 27% of the first year annual budget of the new district. 5. Contingency /Reserve. This fund equals $ 4,515 or 4% of the first year annual budget of the new district. This contingency anticipates a "historic" non - payment rate percentage of around 2 to 4 %, and any City or County collection fees. Table 1 —A Name of Program or Percent of First Year Estimated First Year Costs of CotegM of Service Annual Bud et Special Benefit Services District Identity and Streetscape 48 $ 56,000.00 Improvements Sidewalk Operations, 21% $ 25.000.00 Beautification and Order Enhanced Residential 0% $ 0 Improvements Program Management, 27 % $ 32,000.00 Corporate Operations Contingency 4% $ 4,515.00 Total First Year Budget 10096 $117,SIS.00 Demands for prioritization of one special benefit need over another within the some category above will occur year by year. This plan proposes percentages for groups of services with the intent that they will provide district individual parcels with an understanding of the portion of the budget allocated to fund those services, while simultaneously giving the property owners and businesses an understanding of the proportional benefit they will receive. Actual costs by 4 category may vary from year to year; per service category, so budget line items may vary by up to 10% during the life of this plan. Method of Financine. The financing of the Downtown Arcadia CBD is based upon a 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 • Residential condos within the District The following data represents the foundation of the assessments that will generate the revenue to fund the Downtown Arcadia CBD: (verified as of March 9th, 2013); Building Square Footage: 583,905 sq. feet Gross Lot Size: 1,189,825 sq. feet Gross Linear Frontage: 12,671 linear feet Residential Condos: Currently, there are no residential condo developments within the Downtown Arcadia CBD boundaries. In the future, when development occurs around the Gold Line station, they will be assessed at the rate of $0.20 per square foot for their verifiable building square footage per parcel. Commercial condos will be treated as commercial buildings being assessed for their proportion of linear frontage, lot size and building square footage. For a more detailed explanation of residential assessments and services please see Section 3, pages 11 -16. Benefit Zones: State law and the State constitution, Article XIIID require that special assessments be levied according to the special benefit each individual parcel receives from the improvements. There will be one benefit zone in the Downtown Arcadia CBD. Annual 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 5 footage; PLUS assessable building square footage, and in the case of residential condos, by building square footage for that condo unit only. The residential condo owners are assessed differently since they are, in essence, acquiring air rights with the condos and linear frontage and lot size is not relevant to their parcels. This alternate assessment methodology is created to respond to their special needs as homeowners within this growing Downtown district. All four property variables will be used in the calculation of the annual assessment. The FY 2013 -14 year annual assessments per property variable are as follows: Linear frontage costs: $ 1.973 per linear foot per year Building Square footage costs: $ 0.09679 per square foot per year Lot Size costs: $ 0.030256 per square foot per year Residential Condo costs: $ 0.20 per square foot of parcel unit square footage Assessment District Revenue Generation from each property variable: (rounded off) Linear Frontage: $ 25,000.00 Building Square Footage: $ 56,515.00 Lot Size: $ 36,000.00 Residential Condos S 0 Total: $ 117,515.00 Cap. The Downtown Arcadia CBD budget and assessments may be subject to changes in the Consumer Price Index (CPI) for the Los Angeles /Long Beach Metro Area from February to February, with annual increases not to exceed 5% per year. Increases will be determined by the Owners' Association /District Management Corporation and will vary between 0% and 5% annually. The Owners Association /Management Corporation will be the non - profit corporation comprised of CBD business and property owners, which will oversee the operations of the CBD on a day to day basis, under contract with the City. 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. 2 Bonds The District will not issue any bonds related to any program. District Formation: The 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% or $35,255.00 in assessment contribution to the District, the City Council may adopt a Resolution of Intention to mail out ballots to all affected property owners. The City will hold a public hearing and tabulate the mail ballots. The Downtown Arcadia 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. We anticipate that this process will be completed between July and December of 2013. Duration: The Downtown Arcadia CBD shall have a fifteen -year term which shall commence on January 1, 2014 and expire on December 31, 2028. Governance: Pursuant to the City of Arcadia Community Benefit District Ordinance and Section 36600 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 Arcadia (City) and will oversee the day -to -day implementation of services as defined in the Management District Plan. Section 36614.5 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." 7 Section 2 Downtown Arcadia CBD Boundaries Boundaries: The following text will define the boundaries of the Downtown Arcadia CBD. General Description of the Proposed Boundaries: Parcels in the commercial corridors of the Downtown Arcadia CBD will include as follows: ■ Northern Boundary: Starting at the parcels at the southwestern and southeastern corners of the intersection of St. Joseph Street and 1st Avenue, running south; ■ Southern Boundary: Starting at the parcels at the northwestern and northeastern corners of the intersection of California Street and 1st Avenue, running north; ■ Eastern Boundary: Starting at the parcels at the northwestern and southwestern corners of the intersection of 2nd Avenue and Huntington Drive, running westwa rd; ■ Western Boundary: Starting at the parcels at the southeastern and northeastern corners of the intersection of Huntington Drive and Santa Anita, running eastward; 8 N 5773 006 56 w E 914 911 912 57 5773006 39 Wheeler St. 901 18 17730 12 1 2 3 4 7 8 9 1 11 22 34 291 281 271261 251 241 231 221 211 20 18 17 5773 013 16 15 5773 018 5773 019 .�iJNPJ'lLYJ. Ittt'. St. Joseph St. 31 za 5773007 35 Santa Anita Ave. 48 49 40 5773 011 ry 42 24 23 901 21 20 19 18 900 22 5773 010 4 1 2 301 Huntington Dr. 911% 16 13 33 12 it P39q 25 36 35 34 13 2 1 0 Alta St. 5773 017 Bonita St. 5773 020 California St. a Q F N Section 3 District Improvement and Activity Plan Process to Establish the Improvement and Activity Plan /Outreach Efforts: Since summer of 2012 business and property owners in Downtown Arcadia have met to discuss the advantages of creating this Downtown community benefits district. Commencing in the summer of 2012, a survey was sent to property owners in the proposed CBD area to ascertain their level of support for the establishment of this assessment district. In addition to the survey, a Downtown Arcadia Steering Committee was created and met on the following dates: (Special thanks to Scott Hettrick of the Arcadia Chamber of Commerce for hosting all of the CBD Steering Committee meetings); • July 11th, 2012 CBD effort launched at the Chamber of Commerce office. • August 7th 2012 • September 12th, 2012 • October 10th, 2012 • October 24th, 2012 • November 20th — Presentation on results of the survey to the Arcadia City Council • January 9th 2013 • February 14th 2013 —presented with 5 options for services and costs • March 6th 2013 — selection of the option that would adequately fund the special benefits of the CBD, Management Plan approved. 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 Arcadia CBD, and which 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 CBD boundaries. All benefits derived from the assessments outlined in this Management District Plan fund services directly benefiting the property owners in this community benefit district, inasmuch as all services will be provided to the properties defined as being within the District boundaries and no services will be provided outside the District boundaries. 10 As part of this process, the City will articulate which general benefits are currently being provided to the Downtown Arcadia property owners from the current general fund. 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 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 Arcadia. All services funded by the assessments outlined in the Management District Plan are intended to directly benefit the property, business owners and residents within this area to support increased commerce, business attraction and retention, retained and increased commercial property rentals, enhanced safety and cleanliness in the CBD, improved district identity, and eventually specialized beautification and enhanced programs for the condo residential unit parcels within the District. The total improvement and activity plan budget for 2013 -14, which is funded entirely by property assessments within the CBD boundaries, is projected to be $ 117,515.00. The costs of providing each of the budget components was developed from actual experience obtained in providing these same services in similar districts throughout the State of California. The Downtown Arcadia CBD Steering Committee has prioritized the following categories of special benefit services for the new District. The categories of special benefit services set forth the intent of the budget category, but also gives the District Management Corporation flexibility to allocate the services based upon the changing needs of the District from year -to -year within each budgeted category. Improvements Activities and Services of the Downtown Arcadia CBD Plan: There are five basic categories of special benefit services that will be funded within the Downtown Arcadia CBD. All of these services are designed to confer a special benefit to the individual parcels within the Downtown Arcadia CBD over and above the General Benefits already received. The categories of special benefits are as follows: 1. District Identity: These services include the branding of the Downtown Arcadia area, marketing and promotions, newsletter, public relations, media relations, social media, publicity, special events, web site development and maintenance, public space develop and holiday decorations. These services equal $ 56,000 or 48% of the first year annual budget of the new district. 2. Sidewalk Operations, Beautification and Order: this includes all sidewalk and gutter cleaning services, sidewalk steam cleaning services, as well as enhanced services to beautify the district. Sidewalk operations services total $ 25,000 or 21% of the first year annual budget of the new CBD. 3. Enhanced Residential Improvements : These services include, but are not limited to: enhanced beautification in blocks with high density of condos, public space development, implementation of pet related services and administrative costs. These 11 services currently generate no assessments since there are no residential condominiums within the boundaries of the proposed CBD. However, with the opening of the Downtown Arcadia Gold Line Station in 2015, we anticipated rapid growth of this sector in and around the Gold Line Station and throughout the proposed CBD. The largest growth in Downtown is anticipated over the next 15 years will be in market rate multi- family housing, whether it be in the form of apartments or residential condominiums. 4. Program Management and Corporate Operations. These services equal $ 32,000 or 27% of the first year annual budget of the new district. 5. Contingency /Reserve. This fund equals $ 4,515 or 4% of the first year annual budget of the new district. This contingency anticipates a "historic" non - payment rate percentage of around 2 to 4 %, and any City or County collection fees. Table 3 — A Name of Program or Percent of First Year Estimated first Year Costs of Category of Service Annual Budget Special Benefit Services District Identity and Streetscape Improvements 48% $ 56,000.00 Sidewalk Operations, Beautification and Order 21% $ 25.000.00 Enhanced Residential Improvements 0% $ 0 Program Management, Corporate Operations 27 $ 32,000.00 Contingency 4% $ 4,515.00 Total First Year Budget 100% $ 117,515.00 12 The following categories of special benefit services shall only be provided to parcels within the District. 1. DISTRICT IDENTITY /VISITOR ATTRACTION: $ 56,000.00 48% Examples of these special benefit services and costs include, but are not limited to: ■ Business attraction and expansion ■ Web site development and updating ■ Brochures ■ Tourist related activities ■ Marketing ■ Advertising ■ Special Events ■ Logo development ■ Social media ■ Signage linking the Gold Line station to the rest of the CBD properties- Public relations ■ In the future, with the development of new buildings and residential condos, possible transportation /shuttle service between various stops and the Arcadia Metro Station 13 2. SIDEWALK OPERATIONS, BEAUTIFICATION, AND ORDER: $ 2$,000.00 21% All of these services will not replace or reduce current city services but will rather enhance services above their current general benefit level. Costs may include, but are not limited to: • Regular sidewalk and gutter sweeping • Special event management, security and clean up • Tree and vegetation planting and maintenance • Public space development and maintenance; • Periodic sidewalk steam cleaning 3. ENHANCED RESIDENTIAL IMPROVEMENTS: $ 0 0% Residential condos will be assessed separately due to their unique parcel status and special benefit needs in the district. When they are constructed within the boundaries of the CBD, residential condos blocks will have the following special benefit services conferred on the frontage their parcels. These services include, but are not limited to: • Installation, stocking and upkeep of pet waste distribution stations on the frontage adjacent to the high concentrations of residential condo individually assessed parcels; • 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; • Other services requested by the residents that confer special benefit to the areas directly adjacent to the parcels with high concentrations of residential condos; • Proportional share of the Administrative and Contingency costs to cover the oversight of the Enhanced beautification special benefit services. 4. PROGRAM MANAGEMENT AND CORPORATE OPERATIONS: $ 32,000.00 27% Examples of these special benefit services and costs include, but are not limited to: ■ Staff and administrative costs ■ Directors and Officers and general liability Insurance ■ Office related expenses ■ Rent ■ Financial reporting and accounting ■ Legal work S. CONTINGENCY /RESERVE: $ 4,515.00 4% Examples of these special benefit services and costs include, but are not limited to: ■ Delinquencies ■ Reserves ■ City and county administration costs 14 Fifteen -Year Operating Budget: A projected fifteen -year operating budget for the Downtown Arcadia CBD is provided below. The projections are based upon the following assumptions: • Assessments may be subject to changes in the Los Angeles County Consumer Price Index (CPI), with annual increases not to exceed 5% per year. Increases will be determined by the District Management Corporation and in no case shall annual increases exceed 5% per year. Fifteen -Year Projection of Maximum Assessment for the Downtown Arcadia CBD* Table 3 -8 15 FY1 FY2 FY3 FY4 FYS FY6 FY7 District Identity, $56,000.00 $58,800.00 $61,740.00 $64,827.00 $68,068.35 $71,471.77 $75,045.36 Visitor Attraction $105,847.77 Visitor Attraction Sidewalk Operations, Sidewalk Operations, Beautification $35,17751 $36,936.39 $38,783.21 $40,722.37 Beautification $25,000.00 $26,250.00 $27,562.50 $28,940.63 $30,387.66 $31,907.04 $33,502.39 and Order Program Management, $45,027.21 $47,278.57 Program Management, $32,000.00 $33,600.00 $35,280.00 $37,044.00 $38,896.20 $40,841.01 $42,883.06 Corp. Operations Contingency Contingency $4,515.00 $4,740.75 $4,977.79 $5,226.68 $5,488.01 $5,762.41 $6,05053 Total $117,515.00 $123,390.75 $129,560.29 $136,038.30 $142,840.22 $149,982.23 $157,481.34 15 FY8 FY9 FY10 FY11 FY12 FY13 FY14 FUS District Identity, $78,797.62 $82,737.50 $86,874.38 $91,218.10 $95,779.00 $100,567.95 $105,596.35 $105,847.77 Visitor Attraction Sidewalk Operations, Beautification $35,17751 $36,936.39 $38,783.21 $40,722.37 $42,758.48 $44,896.41 $47,141.23 $47,253.47 and Order Program Management, $45,027.21 $47,278.57 $49,642.50 $52,124.63 $54,730.86 $57,467.40 $60,340.77 $60,484.44 Corp. Operations Contingency $6,353.06 $6,670.71 $7,004.25 $7,354.46 $7,722.18 $8,108.29 $8,513.71 $8,533.98 Total $165,355.41 $173,623.18 $182,304.34 $191,419.55 $200,990.53 $211,040.06 $221,592.06 $222,119.66 15 Section 4 Assessment Methodology The Downtown Arcadia CBD is a property -based benefit assessment district being established pursuant to Ordinance # 2306 of Article 1 of the Arcadia Municipal Code, Chapter 14 on Community Benefit Districts, adopted unanimously by the Arcadia City Council on January 15, 2013(date of second reading and adoption) . Due to the special benefit assessment nature of assessments levied within a CBD, program costs are to be distributed amongst all identified specially benefiting properties based on the proportional amount of special program benefit each property is expected to derive from the assessments collected. The Arcadia CBD Ordinance refers to the concept of relative "benefit" received from CBD funded programs and activities versus amount of assessment paid. Only those properties expected to derive special benefits from CBD funded programs and activities may be assessed and only in an amount proportional to the relative special benefits expected to be received. The method used to determine special benefits derived by each identified property within a CBD begins with the selection of a suitable and tangible basic benefit unit. For property related services, such as those proposed in the Downtown Arcadia CBD, the benefit unit may be measured in terms of in linear feet of primary street frontage or parcel size in square feet or building size in square feet or number of building floors or proximity to major corridors in average linear feet, or any combination of these factors. Based on the factors described above such as geography and nature of programs and activities proposed, an assessment formula is developed which is derived from a singular or composite basic benefit unit factor or factors. Within the assessment formula, different factors may be assigned different "weights" or percentage of values based on their relationship to programs /services to be funded. Next, all program and activity costs, including incidental costs, District administration and other program costs, and benefit zones are estimated. There are two benefit zones in the proposed Downtown Arcadia CBD. Proposition 218 requires that indirect or general benefits not be incorporated into the assessment formula and levied on the District properties in property based assessment Districts; only direct or "special' benefits and costs may be considered. Indirect or general benefit costs, if any, must be identified and, if quantifiable, calculated and factored out of the assessment cost basis to produce a "net" cost figure. In addition, tax exempt, non - profit and other public or government owned properties are not exempt from being assessed and if special benefit is determined to be conferred upon government owned properties, then those properties must be assessed in proportion to the special benefits conferred in a manner similar to privately owned property assessments. 16 Based on the foregoing, the value of a basic benefit unit or "basic net unit cost" can be computed by dividing the total amount of estimated net program costs by the total number of benefit units. Then the amount of assessment for each parcel can be computed by multiplying the Net Unit Cost times the number of Basic Benefit Units per parcel. This is known as "spreading the assessment" or the "assessment spread" in that all costs are allocated proportionally or "spread" amongst all properties within the CBD. The method and basis of spreading program costs varies from one CBD to another based on local geographic conditions, types of programs and activities proposed, and size and development complexity of the District. For example, CBDs may require other benefit zones to be identified to allow for a tiered assessment formula for variable or "stepped- down" benefits derived. Here, program costs spreading variables include benefit zones, linear frontage, lot or parcel size and building square footage, and residential condo parcels. During the first year of operation, approximately: Assessment District Revenue Generation from each property variable: (numbers rounded off) Linear Frontage $ 25,000.00 Building Square Footage: $ 56,515.00 Lot Size: $ 36,000.00 Residential Condos $ 00 Total: $117,515.00 The FY 2013 -14 year annual assessments per property variable are as follows: Linear frontage costs: $ 1.973 per linear foot per year Building Square footage costs: $ 0.09679 per square foot per year Lot Size costs: $0.030256 per square foot per year Residential Condo costs: $0.20 per square foot of parcel unit square footage (future construction) 17 Table 4 -A Special Benefit Services, Funding Source, Costs and Percentage of Annual Budget Assumption on generation of revenues per property variable: Service Funded by Property Variables District Identity and Streetscape Funded by building square footage assessments Improvements Sidewalk Operations Funded by linear frontage assessments Enhanced Residential Improvements Funded by building square footage of residential condos once constructed Admin /Corp Operations Funded by lot size assessments Contingency Funded by lot size assessments Building Square Footage Defined: Building square footage is defined as gross building square footage throughout the CBD. Building square footage assessments will fund the District Identity /Marketing and Promotions component of the CBD. Building square footage is the one property variable that will grow over the course of the life of the CBD since the District as a whole has a less than % to 1 ratio of improvements (building square footage) to lot size. The percentage of building square footage that is dedicated to private or internal tenant parking needs has been 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 CBD will be assessed as a commercial building. Building square footage data was obtained from the County Assessor's property records and reviewed by staff at New City America. The building square footage will fund the costs of all "District Identity and Streetscape Improvement special benefits funded from the CBD. Lot Square Footage Defined: Lot square footage is defined as the total amount of area within the borders of the parcel. Lot size square footage will fund: 1) program and corporate operations services costs and; 2) contingency cost. The borders of a parcel are defined on the County Assessor's parcel maps and were confirmed by New City America staff and City of Arcadia. IN Linear Frontage Defined: Individual parcels will be assessed for all sides that receive benefit from the Sidewalk Operations portion of the budget. Linear frontage is assessed based upon the anticipated frequency of sidewalk operations services that will be required for each benefitting parcel. Linear frontage assessments will fund the costs of Sidewalk Operations services in each respective Benefit Zone. Linear front footage data was obtained from the County Assessor's parcel maps and reviewed by staff at New City America, and finally verified by the City of Arcadia. Commercial Condominium Parcels Defined: Ground floor commercial condominiums will be treated like independent "mini" commercial buildings and assessed based on their divided building area, the footprint of land they cover, and the amount of direct street frontage towards the exterior of the building. Residential Condo Unit Parcels Defined: Condo Residential Unit 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 Arcadia 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. Ground floor commercial condos or office condos would be assessed just as other commercial properties. Residential condo individually assessed parcels are assessed as a separate category. These 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 the new District. The rationale for assessing residential condos only for the building square footage rate is provided below. 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 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 lot. 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 unit owners are as follows: 19 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 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 The assessment methodology has been written to confer special benefits to residential condo individual assessed parcels since 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 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. As redevelopment of various parcels occurs within the boundaries of the CBD in the next 15 years, building square footage may be removed, and then added onto that parcel through the process of redevelopment. The Management Corporation operating the CBD will ensure that the removal or addition of building square footage is reported to the city and county annually through their annual report on any changes to the assessment district. The parcel costs will be lowered, or rise accordingly, based upon the activity within that parcel — from year to year. In future years, the assessments for the special benefits bestowed upon the included CBD parcels may change in accordance with the assessment methodology formula listed in this Management District Plan and Engineer's Report provided the assessment rate does not change. If the assessment formula changes, then a Proposition 218 ballot will be required for approval of the formula changes. 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 Arcadia CBD. Special benefit services will not be provided to any parcels outside of the boundaries of the district. Publicly owned property will be assessed the same as privately owned parcels. Calculation of Assessments The proportionate special benefit derived by each identified parcel shall be determined in a relationship to the entirety of the improvement or the maintenance and operation expenses of 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. 20 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. A general benefit is defined as a benefit to properties in the surrounding community or a benefit to the public in general resulting from improvement, activity or service to be provided by the assessment levied. For example, CBD property owners will derive benefit from District Identity and marketing and promotional activities, sidewalk cleaning and oversight of these services, however the general public will also benefit from the delivery of these special benefit services. The special benefits funded by this new Downtown Arcadia CBD will be over and above existing City of Arcadia baseline service levels in the commercially zoned parcels and will serve to increase tenancies, increase commerce, increase economic viability and fund a system of cleanliness and beautification over and above current service levels. Properties are assessed as defined on the County Assessor's most current parcel maps and the latest property tax rolls. 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 submitted to the City Manager's office using the data obtained from the Los Angeles County Tax Assessors office. • A list of properties to be included within the Downtown Arcadia CBD is provided in Section 7. A detailed explanation of the special benefit assessment rationale is made in the attached Engineer's Report. The Calculation of Assessment for each parcel in the Downtown Arcadia CBD is as follows: CBD Parcel assessment The annual assessment method for all parcels and ground floor commercial condominiums is: Total Street Frontage X $1.973 per linear foot plus Total Lot Square Footage X $0.030256per square foot plus Total Building Square footage X $0.096790 per square foot Equals TOTAL PARCEL ASSESSMENT 21 Residential Condo Assessment: The annual assessment method for a residential condo is: Total Residential Unit Building Square footage X $0.20 per Square Foot Equals TOTAL RESIDENTIAL CONDO UNIT ASSESSMENT Table 4 - B Database for Downtown Arcadia CBD: Assessable property variables as of March 1, 2013 Linear frontage Lot Square Building Square Condo Residents Unit Total Footage Total Footage Total Parcels, Building Square FY4 FY5 Footage to be assessed 12,671 linear feet 1,189,825 sq. ft. 583,905 sq. ft. 0 sq. feet Maximum Assessment Assessments will be subject to changes in the Los Angeles County Consumer Price Index (CPI), for all urban consumers, annual increases not to exceed 5% per year. Increases will be determined by the CBD District Management Corporation and may 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 - C Maximum Assessments by Property Variable Projected Assessment FY1 FY2 FY3 FY4 FY5 Linear Frontage $ 1.9730 $ 2.0717 $ 2.1752 $ 2.2840 $ 2.3982 Building Sq. Ft. $ 0.09679 $ 0.10163 $ 0.10671 $ 0.11205 $ 0.11765 Lot Square Footage $ 0.030256 $ 0.031769 $ 0.033357 $ 0.035025 $ 0.036776 Condo Bldg. Sq. Ft. $ 0.20000 $ 0.21000 $ 0.22050 $ 0.23153 $ 0.24310 Projected Assessment FY6 FY7 FY8 FY9 FY10 Linear Frontage $ 2.5181 $ 2.6440 $ 2.7762 $ 2.9150 $ 3.0608 Building Sq. Ft. $ 0.12353 $ 0.12971 $ 0.13619 $ 0.14300 $ 0.15015 Lot Square Footage $ 0.038615 $ 0.040546 $ 0.042573 $ 0.044702 $ 0.046937 Condo Bldg. Sq. Ft. $ 0.25526 $ 0.26802 $ 0.28142 $ 0.29549 $ 0.31027 22 Projected Assessment FY11 FY12 FY13 FY14 FY15 Linear Frontage $ 3.2138 $ 3.3745 $ 3.5432 $ 3.7204 $ 3.9064 Building Sq. Ft. $ 0.15766 $ 0.16554 $ 0.17382 $ 0.18251 $ 0.19164 Lot Square Footage $ 0.049284 $ 0.051748 $ 0.054335 $ 0.057052 $ 0.059905 Condo Bldg. Sq. Ft. $ 0.32578 $ 0.34207 $ 0.35917 $ 0.37713 $ 0.39599 Budget Adjustments Annual budget surpluses, if any, will be rolled into the following year's budget. Assessments will be set annually, within the constraints of the CPI or 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 renewed 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 The Downtown Arcadia 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. Disestablishment California State Law, Section 36670 provides for the disestablishment of a District. Provisions for annual disestablishment of the CBD are provided for in the local CBD ordinance through referral to Section 36600 of the California Streets and Highway Code. 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: "2) During the operation of the district, there shall be a 30- dayperiod each year in which assessees may request disestablishment of the district. The first such period shall begin one year after the date of establishment of the district and shall continue for 30 days. The next such 30 -day period shall 23 begin two years after the date of the establishment of the district. Each successive year of operation of the district shall have such a 30 -day period. Upon the written petition of the owners of real property or of businesses in the area who pay 50 percent or more of the assessments levied, the city council shall pass a resolution of intention to disestablish the district. The city council shall notice a hearing on disestablishment. (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." Upon the termination of the previous District, any remaining revenues shall be transferred to the renewed District, if one is established, pursuant to Streets and Highways Code Section 36660(b). 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 Arcadia CBD Management Plan assumes that the City of Arcadia, the Successor Agency and other government entities will pay assessments for the public property within the boundaries of the District. Article XIII D, Section 4 of the California Constitution was added in November of 1996 to provide for these payments. Parcels owned by the City of Arcadia, controlled by the Successor agency, the State of California, the Arcadia City Unified School District, and the County of Los Angeles shall receive benefits, commensurate with the assessments paid into the Downtown Arcadia CBD. The publicly owned parcels are presumed to benefit equally to the privately owned parcels for the special benefits provided. Future Development As a result of continued development, the District may experience the addition or subtraction of assessable commercial or residential building footage for parcels included and assessed within the District boundaries. The modification of parcel improvement assessed within the District may then change upwards or downwards the amount of total building square footage assessment for these parcels. In the future years, the assessments for the special benefits bestowed upon the included CBD parcels may change in accordance with the assessment methodology formula listed in the Management District Plan and Engineer's Report provided the assessment rate does not 24 change. If the assessment formula changes, then a Proposition 218 ballot will be required to approve the formula changes. Table 4 -D Government Owned Parcels in the Downtown Arcadia C8D 25 Site Annual APN Legal Owner g Site Street Assessment Percent 5773 010 90( Arcadia City *no Site Address* $957.87 0.8% 5773 010 903 Arcadia City *no Site Address* $681.40 0.6% 5773 012 903 Arcadia City *no Site Address* $2,384.89 2.0% 5773 012 90: Arcadia City *no Site Address* $295.31 0.3% TOTAL $4,319.46 3.7% 5773 006 913 Los Angeles- Pasadena Metro Blue 29 E Santa Clara St $2,226.79 1.9% 5773 006 91: Los Angeles- Pasadena Metro Blue 29 E Santa Clara St $944.02 0.8% 5773 006 91, Los Angeles- Pasadena Metro Blue *no Site Address* $3,000.83 2.6% TOTAL $6,171.65 5.3% 5773 014 913 Redevelopment Agency Of Arcadia *no Site Address* $329.07 0.3% 25 Section 5 District Rules and Regulations and Governance There are no specific rules and regulations prescribed for the proposed Downtown Arcadia Community Benefit District Management Corporation except that it will adhere to the open meeting 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 Arcadia Community Benefit District Ordinance and Section 36600 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 Arcadia (City) and will oversee the day -to -day implementation of services as defined in the Management District Plan. Section 36614.5 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. Section 6 Implementation Timetable The Downtown Arcadia CBD is expected to be established and begin implementation of the Management District Plan on January 1, 2014. Consistent with the local enabling ordinance the Downtown Arcadia CBD will have a fifteen -year term through December 31, 2028. 26 Section 7 Assessment Roll of Properties Included APN Annual 5773 012 006 $348.80 Assessment 5773 012 007 $697.60 5773 006 039 $2,811.36 5773 012 008 $744.93 5773 006 056 $3,830.91 5773 012 009 $721.80 5773 006 057 $5,775.70 5773 012 010 $924.38 5773 006 911 $2,226.79 5773 012 011 $1,129.92 5773 006 912 $944.02 5773 012 012 $378.99 5773 006 914 $3,000.83 5773 012 013 $674.95 5773 007 028 $784.16 5773 012 018 $6,380.01 5773 007 031 $754.29 5773 012 022 $4,276.78 5773 007 035 $2,026.03 5773 012 901 $2,384.89 5773 010 001 $790.64 5773 012 902 $295.31 5773 010 002 $437.34 5773 013 015 $1,007.80 5773 010 003 $639.68 5773 013 016 $840.57 5773 010 004 $857.07 5773 013 017 $810.52 5773 010 005 $351.71 5773 013 018 $4,236.08 5773 010 006 $354.73 5773 013 019 $331.96 5773 010 007 $1,699.69 5773 013 020 $817.31 5773 010 008 $648.37 5773 013 021 $653.44 5773 010 009 $699.24 5773 013 022 $517.94 5773 010 010 $593.52 5773 013 023 $770.56 5773 010 011 $954.69 5773 013 024 $706.68 5773 010 012 $620.57 5773 013 025 $658.28 5773 010 013 $161.24 5773 013 026 $808.31 5773 010 014 $743.88 5773 013 027 $498.48 5773 010 015 $629.09 5773 013 028 $803.47 5773 010 018 $505.36 5773 013 029 $756.72 5773 010 019 $1,078.62 5773 013 034 $2,127.57 5773 010 020 $921.44 5773 014 001 $1,278.61 5773 010 021 $1,115.02 5773 014 002 $2,866.57 5773 010 022 $703.87 5773 014 026 $805.97 5773 010 023 $652.57 5773 014 027 $365.03 5773 010 024 $820.89 5773 014 028 $159.00 5773 010 030 $1,807.51 5773 014 029 $1,264.37 5773 010 031 $345.24 5773 014 034 $95.40 5773 010 900 $957.87 5773 014 037 $2,095.66 5773 010 901 $681.40 5773 014 038 $1,736.88 5773 011040 $339.24 5773 014 051 $2,515.43 5773 011042 $1,846.32 5773 014 052 $888.53 5773 011048 $314.88 5773 014 911 $329.07 5773 011049 $666.24 5773 017 001 $291.50 5773 012 001 $1,285.06 5773 017 002 $449.15 5773 012 002 $665.51 5773 017 003 $355.95 5773 012 003 $697.60 5773 017 004 $296.62 5773 012 004 $692.76 5773 017 033 $333.17 5773 012 005 $658.53 5773 017 034 $1,573.44 27 5773 017 039 $1,053.18 5773 018 011 $1,782.04 5773 018 012 $801.02 5773 018 013 $742.11 5773 018 014 $307.58 5773 018 015 $362.00 5773 018 016 $1,440.06 5773 019 008 $200.17 5773 019 009 $621.21 5773 019 010 $643.67 5773 019 011 $522.78 5773 019 025 $2,272.69 5773 020 001 $1,112.52 5773 020 002 $551.43 5773 020 003 $887.19 5773 020 034 $522.87 5773 020 035 $621.03 5773 020 036 $975.93 TOTAL $117,515.39 W. Downtown Arcadia Community Benefit District CITY OF ARCADIA CALIFORNIA DISTRICT ASSESSMENT ENGINEER'S REPORT Prepared by Edward V. Henning, California Registered Professional Engineer # 26549 Edward Henning & Associates April 5, 2013 DISTRICT ASSESSMENT ENGINEER'S REPORT To Whom It May Concern: I hereby certify to the best of my professional knowledge and experience that each of the identified benefiting properties located within the proposed Downtown Arcadia Community Management District being established for fifteen (15) years will receive a special benefit over and above the benefits conferred on the public at large and that the amount of the proposed assessment is proportional to, and no greater than the benefits conferred on each respective property. Prepared by Edward v Henning, California Registered Professional Engineer # 26549 V HFNtii FC, Uj I C �26�5�4�9 �� M OFCAIIF��� PE #26549 Anril 5.2013 Edward V. Henning Date (NOT VALID WITHOUT SIGNATURE AND CERTIFICATION SEAL HERE) Introduction This report shall serve as the "detailed engineer's report" required by Section 4(b) of Article XIIID of the California Constitution (Proposition 218) to support the special assessments proposed to be levied for a 15 year period on parcels of real property included within the proposed Downtown Arcadia Community Benefit District (Downtown Arcadia CBD) in the City of Arcadia, California. The discussion and analysis contained within this report supports the conclusions that both the required "nexus" and proportionality exist between the assessment amounts proposed to be levied and the special benefits that will be derived by the identified properties included within the proposed Downtown Arcadia CBD. Backeround The Downtown Arcadia Community Benefit District ( "CBD ") is a property-based special assessment district being established in Arcadia pursuant to City of Arcadia Ordinance # 2306 of Article 1 of the Arcadia Municipal Code, Chapter 14 on Community Benefit Districts ( "City Code ") modeled after Section 36600 et seq. of the California Streets and Highways Code, known as the Property and Business Improvement District Law of 1994 (the "Act "). To satisfy the constitutional requirements for assessments on property imposed by Proposition 218, the costs of the services, activities and improvements in the district to be funded by assessments ( "district programs ") are to be distributed amongst all the identified properties based on the proportional benefit each parcel is expected to derive from the district programs. Within the Code, Act, Proposition 218 and Proposition 218 Omnibus Implementation Act, frequent references are made to the relative "special benefit" received from the district programs versus the amount of the assessment levied, which incorporate the concepts of "nexus" and "proportionality" that are required to levy assessments on property within a special assessment district. "Nexus" requires that only those properties expected to derive special benefits from the district programs may be assessed. "Proportionality" requires that, for each assessed property, the assessment be only in an amount proportional to that parcel's share of the reasonable costs of providing the relative special benefits expected to be conferred on that parcel. The method used to determine special benefits derived by each identified property within a CBD begins with the selection of a suitable and tangible basic benefit unit. For property related services, such as those proposed in the Downtown Arcadia CBD, the benefit unit may be measured in linear feet of primary street frontage or parcel size in square feet or building size in square feet or number of building floors or proximity to major corridors in average linear feet, or any combination of these factors. Quantity takeoffs for each parcel are then measured or otherwise ascertained. From these figures, the amount of benefit units to be assigned to each property can be calculated. Special circumstances such as unique geography, land uses, development constraints etc. are carefully reviewed relative to specific programs and improvements to be funded by the CBD in order to determine any levels of diminished benefit which may apply on a parcel -by- parcel or categorical basis. Based on the factors described above such as geography and nature of programs and activities proposed, an assessment formula is developed which is derived from a singular or composite basic benefit unit factor or factors. Within the assessment formula, different factors may be assigned different "weights" or percentage of values based on their relationship to programs /services to be funded. Next, all program and activity costs, including incidental costs, District administration and ancillary program costs, are estimated. It is noted, as stipulated in Proposition 218, and now required of all property based assessment Districts, indirect or general benefits may not be incorporated into the assessment formula and levied on the District properties; only direct or "special" benefits and costs may be considered. Indirect or general benefit costs, if any, 2 must be identified and, if quantifiable, calculated and factored out of the assessment cost basis to produce a "net' cost figure. In addition, Proposition 218 no longer automatically exempts government owned property from being assessed and if special benefit is determined to be conferred upon such properties, they must be assessed in proportion to special benefits conferred in a manner similar to privately owned property assessments. From this, the value of a basic benefit unit or "basic net unit cost" can be computed by dividing the total amount of estimated net program costs by the total number of benefit units. The amount of assessment for each identified parcel can be computed at this time by multiplying the Net Unit Cost times the number of Basic Benefit Units per identified parcel. This is known as "spreading the assessment' or the "assessment spread" in that all costs are allocated proportionally or "spread" amongst all identified properties within the CBD. The method and basis of spreading program costs varies from one CBD to another based on local conditions, types of programs and activities proposed, and size and development complexity of the CBD. Summlemental Promosition 218 Procedures and Requirements Proposition 218, approved by the voters of California in November of 1996, adds a supplemental array of procedures and requirements to be carried out prior to levying a property -based assessment like the Downtown Arcadia CBD. These requirements are in addition to requirements imposed by State and local assessment enabling laws. These requirements were "chaptered" into law as Article XIIID of the California Constitution. Since Prop 218 provisions will affect all subsequent calculations to be made in the final assessment formula for the Downtown Arcadia CBD, Prop 218 requirements will be taken into account. The key provisions of Prop 218 along with a description of how the Downtown Arcadia CBD complies with each of these provisions are delineated below. (Note: All section references below pertain to Article XIII of the California Constitution): Finding 1. From Section 4(a): "Identify all parcels which will have a special benefit conferred upon them and upon which an assessment will be imposed" There are 108 parcels within the proposed Downtown Arcadia CBD that are "identified" individual parcels that will derive special benefit from the proposed District programs and activities. The benefits are special and unique only to the identified properties within the proposed District because programs and services will only be provided directly for the identified properties. All CBD parcels are identified by assessor parcel number and shown on the Boundary Map in the Management District Plan and are listed in Attachment I to this Report. The boundaries of the Downtown Arcadia CBD generally are described as follows: ■ Northern Boundary: Starting at the parcels at the southwestern and southeastern corners of the intersection of St. Joseph Street and 1' Avenue, running south; ■ Southern Boundary: Starting at the parcels at the northwestern and northeastern corners of the intersection of California Street and I' Avenue, running north; ■ Eastern Boundary: Starting at the parcels at the northwestern and southwestern corners of the intersection of 2nd Avenue and Huntington Drive, running westward; ■ Western Boundary: Starting at the parcels at the southeastern and northeastern corners of the intersection of Huntington Drive and Santa Anita, running eastward; There is 1 Benefit Zone within the Downtown Arcadia CBD. All parcels within the above - described boundaries shall be assessed to fund special benefit services, programs and improvements as outlined in this report. CBD funded programs will only be provided to properties inside the District boundaries — none outside. Finding 2. From Section 4(a): "Separate general benefits from the special benefits conferred on parcel(s). Only special benefits are assessable. " The property uses within the boundaries of the Downtown Arcadia CBD are a mix of office, retail, entertainment and parking. Future residential condominium developments are anticipated. Services, programs and improvements provided by the District are primarily designed to provide special benefits to all parcels within the boundaries of the district. Existing City of Arcadia services will be enhanced, not replaced or duplicated, by the new CBD services. In the case of the Downtown Arcadia CBD, the very nature of the purpose of this District is to fund supplemental programs, improvements and services within the CBD boundaries above and beyond what is being currently funded either via normal tax supported methods or other funding sources. These services, programs and improvements, are designed to enhance the commercial core uses, increase tenancy and marketing of the commercial entities in the CBD and improve the aesthetic appearance of the CBD as a whole. If and when residential condominium development occur, these uses will be assessed for enhanced residential type improvements and services. All benefits derived from the assessments to be levied on current parcels within the CBD are for services, programs and improvements directly benefiting the property and business owners within this area and support increased cleanliness, commerce, business attraction and retention, increased property rental income and improved District identity. No services will be provided beyond the CBD boundaries. The proposed services, programs and improvements which will provide special benefit to the properties within the CBD boundaries are described below: 1. DISTRICT IDENTITYNISITOR ATTRACTION: $ 56,000 - 48% 4 Examples of these special benefit services and costs include, but are not limited to: • Business attraction and expansion • Web site development and updating • Brochures • Tourist related activities • Marketing • Advertising • Special Events • Logo development • Social media • Signage linking the Gold Line station to the rest of the CBD properties- • Public relations • In the future, with the development of new buildings and residential condos, possible transportation /shuttle service between various stops and the Arcadia Metro Station 2. SIDEWALK OPERATIONS, BEAUTIFICATION. AND ORDER: $ 25,000 - 21% Programs and services may include, but are not limited to: • Regular sidewalk and gutter sweeping • Special event management, security and clean up • Tree and vegetation planting and maintenance • Public space development and maintenance; • Periodic sidewalk steam cleaning 3. ENHANCED RESIDENTIAL IMPROVEMENTS: $ 0.00 - 0 % (TB D) Residential condos will be assessed separately due to their unique parcel status and special benefit needs in the district. When and if residential condominiums are built within the CBD, these blocks will have the following special benefit services provided adjacent to their parcel frontages. These services include, but are not limited to: • Installation, stocking and upkeep of pet waste distribution stations on the frontage adjacent to the high concentrations of residential condo individually assessed parcels; • 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; 5 • Other services requested by the residents that confer special benefit to the areas directly adjacent to the parcels with high concentrations of residential condos; • Proportional share of the Administrative and Contingency costs to cover the oversight of the Enhanced beautification special benefit services Residential condo individually assessed parcels are assessed as a separate category. These residential condo individually assessed 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 the new District. 4. PROGRAM MANAGEMENT AND CORPORATE OPERATIONS: $ 32,000 - 27 % Examples of these special benefit services and costs include, but are not limited to: • Staff and administrative costs • Directors and Officers Insurance • Office related expenses • Rent • Financial reporting, accounting and legal work 5. CONTINGENCY /RESERVE: $4,515-4% Examples of these special benefit services and costs include, but are not limited to: • Delinquencies • Reserves ■ City and county administration costs Each of these programs and activities work together to create a more pleasing environment within the district that is conducive to strengthening the current and future economic vitality of this area through the attraction and retention of new business and increased commerce. Programs and services for future residential uses will enhance the livability of these unique uses. The programs, improvements and services are designed to specifically benefit identified properties within the CBD boundaries. The proposed CBD assessments will only be levied on identified properties within the CBD boundaries and assessment revenues will be spent to deliver services that provide a direct and special benefit to assessed parcels and to improve the economic vitality of these properties. General vs Special Benefit Analysis As stipulated 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 District properties. For the purposes of this analysis, a "general benefit' is hereby defined as: "A benefit to properties in the area and in the surrounding community or benefit to the public in general resulting from the 6 improvement, activity, or service to be provided by the assessment levied ". "Special benefit' as defined by the California State Constitution means a distinct benefit over and above general benefits conferred on real property located in the District or to the public at large. CBD programs and activities, in accordance with Article 13D Section 4 of the California State Constitution confer a combination of general and special benefits. Only program benefits which are attributed to special benefits conferred on the identified parcels can be funded through assessments. A portion of the program costs are considered attributable to general benefits and must be assigned a value. It is the opinion of this Engineer that because all of the proposed programs and services are supplemental in nature and are limited to identified parcels only within the proposed district boundaries, that a general benefit value will be set at a relatively nominal rate of 5% of the total adjusted costs. Total adjusted costs include actual proposed assessment district program costs plus any additional supplemental or matching program costs as well as applied credits from sources such as start up grants, cash and in -kind service contributions for district formation and owners association Board /Committee member service credits. This leaves a value of 95% attributable to special benefit related costs. Since the total program cost is estimated at $126,915 (see Year 1 Cost list in Step 5 later in this Report), the maximum special benefit portion which can be funded through property assessments is $120,569. Remaining costs which are attributed to general benefits will need to be funded from other sources. (e.g. public /private matching grants, startup grants, in -kind service contributions for district formation, startup volunteer credits or ongoing board member volunteer credits). In the opinion of this Engineer, there are other identified revenue sources /credits that are part of the benefit analysis as delineated in Step 5 and 6 later in this Report. Findine 3. From Section 4(a): "(Determine) the proportionate special benefit derived by each parcel in relationship to the entirety of the.......... cost of public improvement(s) or the maintenance and operation expenses ........... or the cost of the property related service being provided. Each identified parcel within the district will be assessed based on property and development characteristics unique only to that parcel. The calculated assessment rates are applied to the actual measured parameters of each parcel and thereby are proportional to each and every other identified parcel within the district. Larger parcels and buildings are expected to impact the demand for services and programs to a greater extent than smaller ones and thus are assigned a higher proportionate degree of assessment program and service costs. The proportionality is further achieved by setting targeted formula component weights for the respective parcel by parcel identified land and building attributes. The proportionate special benefit cost for each parcel has been calculated based on optimum proportionate formula components and are each listed on Attachment 1 to this Report. The individual percentages (i.e. proportionate 7 relationship to the total special benefit related program and activity costs) are computed by dividing the individual parcel assessment by the total special benefit program costs. Findine 4. From Section 4(a): "No assessment shall be imposed on any parcel which exceeds the reasonable cost of the proportional special benefit conferred on that parcel." Not only are the proposed program costs reasonable due to the benefit of group purchasing and contracting which would be possible through the Downtown Arcadia CBD, they are also considerably less than other options considered by the Downtown Arcadia CBD proponent group. The actual assessment rate for each parcel within the CBD directly relate to the level of service to be provided based on the respective amount of building area, street frontage and parcel size of each parcel. For residential condominiums, the assessment relates to the building pad area of each unit. Findine 5. From Section 4(a): "Parcels ........ that are owned or used by any (public) agency shall not be exempt from assessment.........." Any publicly owned parcels within the CBD would also receive benefits commensurate with the assessments paid into the Downtown Arcadia CBD. There is no compelling evidence that publicly owned parcels do not benefit equally to privately owned parcels and, thus, would be assessed in the same manner and rates as private parcels in the CBD. The publically owned parcels are show in the chart below: APN Legal Owner Site # Site Street Annual Assessment Percent 5773 010 90 Arcadia City *no Site Address* $957.87 0.8% 5773 010 90 Arcadia City *no Site Address* $681.40 0.6% 5773 012 90 Arcadia City *no Site Address* $2,384.89 2,0% 5773 012 90 Arcadia City *no Site Address* $295.31 0.3% TOTAL $4,319.46 3.7% 5773 006 91 Los Angeles- Pasadena Metro Blue 29 E Santa Clara St $2,226.79 1.9% 5773 006 91 Los Angeles- Pasadena Metro Blue 29 E Santa Clara St $944.02 0,8% 577300691. Los Angeles- Pasadena Metro Blue *no Site Address* $3,000.83 2.6% TOTAL $6,171.65 5.3% 5773 014 91 Redevelopment Agency Of Arcadia *no Site Address* $329.07 0.3% Finding 6. From Section 4(b): "All assessments must be supported by a detailed engineer's report prepared by a registered professional engineer certified by the State of California ". This report serves as the "detailed engineer's report" to support the benefit property assessments proposed to be 8 levied within the Downtown Arcadia CBD. Findin¢ 7. From Section 4(c): "The amount of the proposed assessment for each parcel shall be calculated (along with) the total amount thereof chargeable to the entire district, the duration of such payments, the reason for such assessment and the basis upon which the amount of the proposed assessment was calculated." The individual and total parcel assessments attributable to special property benefits are listed on Attachment 1 to this Report. The District and resultant assessment payments will continue for fifteen (15) years and may be renewed again at that time. The reasons for the proposed assessments are outlined in Finding 2 above as well as in the Management District Plan. The calculation basis of the proposed assessment is attributed in part to gross building area, parcel size and street frontage. For residential condominiums, assessment is attributed to the building pad area of each unit. There is one Benefit Zone identified. Assessment Formula Methodology Step 1. Select "Basic Benefit Unit(s)" CBD assessment formulas typically are based on street frontage, parcel size, building size and /or location, all of which relate to the amount of special benefit conferred on a particular parcel and the proportionate assessment to be paid. The formula may base assessments on a single factor or a combination of these factors. Based on the specific needs and corresponding nature of the program activities to be funded by the Downtown Arcadia CBD, it is the opinion of this Assessment Engineer that the assessment factors on which to base assessment rates relate directly to the proportionate amount of building area, street frontage and land area. For residential condominiums, assessment is attributed to the building pad area of each unit. For commercial uses, the interactive application of building area, street frontage and land area quantities are a proven method of fairly and equitably spreading special benefit costs to these primary beneficiaries of CBD funded services, programs and improvements. Each of these factors directly relates to the degree of benefit each parcel will receive from CBD funded activities. Building area (gross) is a direct measure of the static utilization of each parcel and its corresponding impact or draw on CBD funded activities such as district identity. In the opinion of this Assessment Engineer, the targeted weight of this factor, building area, should generate approximately 50% of the total CBD revenues (48.09173% when adjusted). The actual assessment revenue projection of this formula element is $56,515 of which $56,000 will be allocated to district identity and the remainder of $515 to contingency /reserve. V The portion of building square footage that is dedicated to private or internal tenant parking needs has been 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 CBD will be assessed as a commercial building. Street frontage is a direct measure of the static utilization of each parcel and its corresponding impact or draw on CBD funded activities such as sidewalk operations and beautification. In the opinion of this Assessment Engineer, the targeted weight of this factor, street frontage, should generate approximately 20% of the total CBD revenues. (21.27387% when adjusted). The actual assessment revenue projection of this formula element is $25,000, all of which will be allocated to district identity. Land area is a direct measure of the current and future development capacity of each parcel and, again, its corresponding impact or draw on CBD funded activities such as administration /operations and contingency reserve. In the opinion of this Assessment Engineer, the targeted weight of this factor, land area, should generate approximately 30% of the total CBD revenue (30.63438% when adjusted). The actual assessment revenue projection of this formula element is $36,000 of which $32,000 will all be allocated to administration, organization and corporate operations and $4,000 to contingency /reserve. In addition, $515 from building area assessments will be allocated to contingency /reserve for a total allocation of $4,515. For residential condominium uses, the application of building pad area for each unit is a proven method of fairly and equitably spreading special benefit costs to these beneficiaries of CBD funded services, programs and improvements. The unit building pad area factor directly relates to the degree of benefit each residential condominium unit parcel will receive from CBD funded activities. Since there are currently no such units within the CBD, the revenue projection of this factor is $0 and no enhanced residential improvements, services and programs will be initiated or funded by the CBD at this time. It is the finding of this Engineer that there are no land uses or ownership types within the CBD, other than as described above, that will either not benefit or receive diminished benefit from CBD funded programs and services and thus all parcels will be assessed at the same rates and in the same manner. For residential condominiums, the assessment rate relates to the building pad area of each unit. The "Basic Benefit Units" will be expressed as a combined function of building area (Benefit Unit "A "), street frontage (Benefit Unit "B "), parcel size (Benefit Unit "C ") and condominium building pad area (Benefit Unit "D "). Based on the shape of the Downtown Arcadia CBD, as well as the nature of the District program elements, it is 10 determined that all properties will gain a direct and proportionate degree of special benefit based on the respective amount of building area, street frontage and land area within one benefit zone. For residential condominiums (future), the assessment rate will be based on the building pad area of each unit. Step 2. Quantify Total Basic Benefit Units Taking into account all identified benefiting properties and their respective assessable benefit units, there are 108 identified parcels within the CBD, 583,905 Benefit Units A, 12,671 Benefit Units B, 1,189,825 Benefit Units C and 0 Benefit Units D. Step 3. Calculate Benefit Units for Each Property. The number of Benefit Units for each identified benefiting parcel within the Downtown Arcadia CBD was computed from data extracted from City and County Assessor records and maps. These data sources delineate current land uses, property areas and dimensions of record for each tax parcel. While it is understood that this data does not represent legal field survey measurements or detailed title search of recorded land subdivision maps or building records, it does provide an acceptable basis for the purpose of calculating property based assessments. All respective property data being used for assessment computations will be provided to each property owner in the CBD for their review. All known or reported discrepancies, errors or misinformation will be corrected. Step 4. Determine Assessment Formula Based on the nature of the programs to be funded as well as other rationale outlined in Step 1 above, it has been determined that the Downtown Arcadia CBD assessments will be based on the amount of building area, street frontage and land area within one benefit zone. For residential condominiums (future), the assessment rate will be based on the building pad area of each unit. The assessment formula factors described above are set to uniquely fund each CBD program element as follows: - District Identity is funded 100% by building area revenue - Sidewalk Operations are funded 100% by street frontage revenues - Enhanced Residential Improvements will be funded 100% from resid. condo building pad area revenues - Administration is funded 100% by land area revenues - Contingency /Reserve is funded 100% by land area revenues (a minor amount from building area revenue) Assessment Formula Unit Cost Calculations: Building Rate (Benefit Unit "A ") _ $56,515/583,905 SF = $0.09679/SF Street Frontage Rate = (Benefit Unit `B ") _ $25,000/12,671 LF = $1.973/LF Land Area Rate = (Benefit Unit "C ") _ $36,000/1,89,825 sq ft = $0.030256/SF Residential Condominium Building Pad Area Rate = $0.20 /SF Assessment Formula = Bldg Area x Bldg Area Rate, plus Street Frontage x Street Frontage Rate, plus Land Area x Land Area Rate Assessment Formula For Residential Condominiums = Building Pad Area x Bldg pad Area Rate Added notes for special circumstances: 1. Future Residential Condominium Unit Parcels will be assessed based on unit building pad area. 2. All ground floor commercial condos (retail or office) will be assessed based on actual land area covered, condo building pad area and direct street frontage for each unit. Because such uses are typically developed as part of a multi -floor mixed -use complex, special methodologies are needed to address the levy of assessments on such land uses as delineated in 3A and 3B below. 3. Multi -floor mixed -use condominium uses will be assessed in accordance with the following assessment methodology: A. Multi —Floor Commercial Only Condominiums - Building pad area at respective building area rate - Land area at land area rate but pro -rated for each unit based on ratio of unit building area to total building area - Street frontage at respective street frontage rate but pro -rated for each unit based on ratio of unit building area to total building area B. Mixed -Use Commercial Condos and Residential Condominiums - Commercial building pad area at respective commercial building area rate and at residential condominium building rate for residential condominium building pad area - Land area at land area rate (assessed on ground floor commercial condo parcels for actual land area covered) - Street frontage at respective street frontage rate (assessed on ground floor commercial condo parcels for actual street frontage) 4. Parking Structures — the building areas for structured parking that primarily serves specified tenants will not be assessed. The underlying land area and adjacent street frontages for parking structures will be assessed according to the respective assessment rates. 12 5. Future Development As future new development occurs within the District, current property characteristics and parcel configurations may also change. This may occur due new building construction, demolition and /or expansion as well as various land related modifications such as new subdivisions, lot line adjustments, reversions to acreage and parcel consolidations. In turn, individual parcel street frontage measurements, parcel sizes and building areas may also change. Any such modifications will result in recalculation of assessments for new and /or modified buildings and /or parcels based on the assessment rate in affect when such changes occur in accordance with future maximum rates and the assessment methodology delineated in this Report. It is noted that any change in assessment formula methodology or rates other than as stipulated in this Report would require a new Proposition 218 ballot procedure in order to approve any such changes. Stea 5. Estimate Total District Costs The total projected District revenues /expenditures for Year 1 of the CBD are as follow: $ 117,515 = CBD assessment funded programs $ 2,000 = pro -rated initial formation cost credits $ 1,000 = pro -rated initial volunteer cost credits (50% of formation costs) 6,400 = annual Board /Committee volunteer cost credits (20% of admin budget) $ 126,915 = Total Year 1 CBD costs /credits The Year 1 projected assessment revenue budget allocation is as follows: Programs & Activities Year 1 District Identity $56,000.00 Street Operations and Beautification $25,000.00 Admin, Contingency, Reserves $36,515.00 TOTAL $117,515.00 Step 6. Separate General Benefits from Special Benefits and Related Costs (Prop 218) All benefits derived from the assessments outlined in the Management District Plan are for supplemental services, programs and improvements directly benefiting the properties within this area. All CBD funded activities are provided solely to properties within the Downtown Arcadia CBD. All services will be delivered only within the boundaries and designed only for the direct special benefit of the assessed properties in the CBD. No services will be provided to non - assessed parcels outside the CBD boundaries. Total program and activity costs are estimated at $126,915. General benefits are factored at 5% of total (see Finding 2 in this report) with special benefits set at 95 %. Proposition 218 limits the levy of property assessments to costs 13 attributed to special benefits only. The 5% general benefit cost is computed to be $6,346 with a resultant 95% special benefit limit computed at $120,569. This is the maximum amount of revenue that can be derived from property assessments, from the subject district in the first year. This maximum may increase on an annual basis in subsequent years (years 2 through 15) to adjust for inflation by 5% as described in the Management District Plan. The total amount of revenue proposed to be derived from district assessments is $117,515 for Year 1, which does not exceed the special benefit limit of $120,569. Therefore, no Proposition 218 adjustments need to be made to the proposed assessment formula. Remaining costs which are attributed to general benefits will need to be funded from other sources. (e.g. public /private matching grants, startup grants, in -kind service contributions for district formation, startup volunteer credits or ongoing board member volunteer credits). Step 7• Calculate "Basic Unit Cost" With a Year 1 assessment revenue of $117,515 (special benefit only), the Basic Unit Costs are shown above in Step 4. Since the CBD is being established for a fifteen year term, maximum assessments for future years (Years 2 through 15) must be set at the inception of the CBD. An annual flat inflationary rate increase of up to 5% may be imposed for Years 2 -15. Therefore the maximum annual rates may not increase more than 5% of the previous year's rates. The maximum annual assessment revenue for Years 1 -15 is shown below: Fiscal Year Max Annual Assessment FY 1 $117,515.00 FY 2 $123,390.75 FY 3 $129,560.29 FY 4 $136,038.30 FY 5 $142,840.22 FY 6 $149,982.23 FY 7 $157,481.34 FY 8 $165,355.41 FY 9 $173,623.18 FY 10 $182,304.34 FY 11 $191,419.55 FY 12 $200,990.53 FY 13 $211,040.06 FY 14 $221,592.06 FY 15 $232,671.66 14 The projected program cost allocations for Years 1 -15 areas follows: Total 1 $117,515.00 1 $123,390.75 1 $129,560.29 1 $136,038.30 1 $142,840.22 1 $149,982.23 1 $157,481.34 FYI FY2 FY3 I FY4 FY5 FV6 FY7 District Identity, Visitor Attraction $56,00000 $58,800.00 $61,740.00 $64,827.00 $68,068.35 $71,471.77 $75,045.36 Sidewalk Operations, $105,847.77 Sidewalk Operations, FY 3 $2.17523250 $0.10671098 $0.03335724 $0.220500 Beautification $25,000.00 $26,250.00 $27,562.50 $28,940.63 $30.387.66 $31,907.04 $33,502.39 and Order $44,896.41 $47,141.23 $47,253.47 and Order $0.03861517 $0.255256 FY 7 Program Management, Corp. Operations $32,000.00 $33,600.00 $35,28000 $37,044.00 $38,896.20 $40,841.01 $42,883.06 Contingency $4,51500 $4,740.75 $4,977.79 $5,226.68 $5,488.01 $5,762.41 $6,050.53 Total 1 $117,515.00 1 $123,390.75 1 $129,560.29 1 $136,038.30 1 $142,840.22 1 $149,982.23 1 $157,481.34 The maximum annual assessment rates for Years 1 -15 are shown below: FY8 FV9 FY10 FY11 FY12 FY13 FY14 FY15 District Identity, Visitor Attraction $78,797.62 $82,737.50 $86,874.38 $91,218.10 $95,779.00 $100,567.95 $105,596.35 $105,847.77 Sidewalk Operations, FY 3 $2.17523250 $0.10671098 $0.03335724 $0.220500 FY 4 $2.28399413 $0.11204652 Beautification $35,177.51 $36,936.39 $38,78321 $40,722.37 $42,758.48 $44,896.41 $47,141.23 $47,253.47 and Order $0.03861517 $0.255256 FY 7 $2.64400870 $0.12970786 $0.04054593 $0.268019 FY 8 Program Management, Corp. Operations $45,027.21 $47,278.57 $49,64250 $52,124.63 $54,730.86 $57,467.40 $60,34077 $60,484.44 Contingency $6,353.06 $6,670.71 $7,004.25 $7,354.46 $7,722.18 $8,108.29 $8,513 71 $8,533.98 Total $165,355,41 $173,623.18 $182,304.34 $191,419.55 $200,990.53 $2119040.06 $221,592.06 $222,119.66 The maximum annual assessment rates for Years 1 -15 are shown below: 15 MAX ASSESSMENT RATES Fiscal Year Max Street Frontage Rate $ /LF Max Bldg Area Rate ($/SF Bld Max Land Area Rate ($/SF land Max Resid Condo Rate ($/SF Bldg) FY 1 $1.97300000 $0.09679000 $0.03025600 $0.200000 FY 2 $2.07165000 $0.10162950 $0.03176880 $0.210000 FY 3 $2.17523250 $0.10671098 $0.03335724 $0.220500 FY 4 $2.28399413 $0.11204652 $0.03502510 $0.231525 FY 5 $2.39819383 $0.11764885 $0.03677636 $0.243101 FY 6 $2.51810352 $0.12353129 $0.03861517 $0.255256 FY 7 $2.64400870 $0.12970786 $0.04054593 $0.268019 FY 8 $2.77620913 $0.13619325 $0.04257323 $0.281420 15 FY 9 $2.91501959 $0.14300291 $0.04470189 $0.295491 FY 10 $3.06077057 $0.15015306 $0.04693699 $0.310266 FY 11 $3.21380910 $0.15766071 $0.04928384 $0.325779 FY 12 $3.37449955 $0.16554375 $0.05174803 $0.342068 FY 13 $3.54322453 $0.17382093 $0.05433543 $0.359171 FY 14 $3.72038576 $0.18251198 $0.05705220 $0.377130 FY 15 $3.90640505 $0.19163758 $0.05990481 $0.395986 Sten 8. Spread the Assessments The resultant assessment spread calculation results for each parcel within the CBD are shown in Attachment 1 attached hereto and were determined by applying the District assessment formula to each identified benefiting property. 16 ATTACHMENT 1 Downtown Arcadia CBD Year 1 Assessments APN Annual Assessment 5773 006 039 $2,811.36 5773 006 056 $3,830.91 5773 006 057 $5,775.70 5773 006 911 $2,226.79 5773 006 912 $944.02 5773 006 914 $3,000.83 5773 007 028 $784.16 5773 007 031 $754.29 5773 007 035 $2,026.03 5773 010 001 $790.64 5773 010 002 $437.34 5773 010 003 $639.68 5773 010 004 $857.07 5773 010 005 $351.71 5773 010 006 $354.73 5773 010 007 $1,699.69 5773 010 008 $648.37 5773 010 009 $699.24 5773 010 010 $593.52 5773 010 011 $954.69 5773 010 012 $620.57 5773 010 013 $161.24 5773 010 014 $743.88 5773 010 015 $629.09 5773 010 018 $505.36 5773 010 019 $1,078.62 5773 010 020 $921.44 5773 010 021 $1,115.02 5773 010 022 $703.87 5773 010 023 $652.57 5773 010 024 $820.89 5773 010 030 $1,807.51 5773 010 031 $345.24 5773 010 900 $957.87 5773 010 901 $681.40 5773 011 040 $339.24 5773 011 042 $1,846.32 5773 011 048 $314.88 5773 011 049 $666.24 5773 012 001 $1,285.06 5773 012 002 $665.51 17 5773 012 003 $697.60 5773 012 004 $692.76 5773 012 005 $658.53 5773 012 006 $348.80 5773 012 007 $697.60 5773 012 008 $744.93 5773 012 009 $721.80 5773 012 010 $924.38 5773 012 011 $1,129.92 5773 012 012 $378.99 5773 012 013 $674.95 5773 012 018 $6,380.01 5773 012 022 $4,276.78 5773 012 901 $2,384.89 5773 012 902 $295.31 5773 013 015 $1,007.80 5773 013 016 $840.57 5773 013 017 $810.52 5773 013 018 $4,236.08 5773 013 019 $331.96 5773 013 020 $817.31 5773 013 021 $653.44 5773 013 022 $517.94 5773 013 023 $770.56 5773 013 024 $706.68 5773 013 025 $658.28 5773 013 026 $808.31 5773 013 027 $498.48 5773 013 028 $803.47 5773 013 029 $756.72 5773 013 034 $2,127.57 5773 014 001 $1,278.61 5773 014 002 $2,866.57 5773 014 026 $805.97 5773 014 027 $365.03 5773 014 028 $159.00 5773 014 029 $1,264.37 5773 014 034 $95.40 5773 014 037 $2,095.66 5773 014 038 $1,736.88 5773 014 051 $2,515.43 5773 014 052 $888.53 5773 014 911 $329.07 5773 017 001 $291.50 5773 017 002 $449.15 5773 017 003 $355.95 5773 017 004 $296.62 5773 017 033 $333.17 5773 017 034 $1,573.44 5773 017 039 $1,053.18 5773 018 011 $1,782.04 5773 018 012 $801.02 5773 018 013 $742.11 5773 018 014 $307.58 5773 018 015 $362.00 5773 018 016 $1,440.06 18 5773 019 008 $200.17 5773 019 009 $621.21 5773 019 010 $643.67 5773 019 011 $522.78 5773 019 025 $2,272.69 5773 020 001 $1,112.52 5773 020 002 $551.43 5773 020 003 $887.19 5773 020 034 $522.87 5773 020 035 $621.03 5773 020 036 $975.93 TOTAL 2117 515.39