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BACKGROUND The Parking and Business Improvement Area Law of 1989 (Streets Highways Code 36350, et seq.) requires the City Council to approve a three -step process in order to levy the annual assessment for the PDA Business Improvement District. At the October 6, 2009 City Council meeting, an advisory board was appointed to prepare the attached annual PDA report and budget for 2010. The attached report contains the following required information: 1. Any proposed changes in the boundaries of the district. (For 2010 there are no proposed boundary changes.) 2. The improvements and activities to be provided for the year. 3. An estimate of the cost of providing the improvements and activities. 4. The method of levying the assessment in sufficient detail to allow each business owner to estimate the amount to be levied against the business for the year. (The method of levying the assessment is unchanged from the prior year. It employs a tiered structure based on proximity to Main Street, with a minimum of $50 and a maximum of $350.) 5. The amount of any surplus or deficit revenues carried over from a previous year. 6. Contributions to be made from sources other than the assessments levied. DISCUSSION Attached are the Advisory Board's 2010 report and the proposed budget for the PDA assessments and other revenues for the year. The PDA annual assessment revenue is budgeted at $60,000, equal to the revenue generated in 2009. The assessment formula is based on the annual business license payment: businesses located curbside and downstairs on Main Street are assessed at two times (2X) their business license; businesses with a Main Street address located upstairs, or not curbside, are assessed at a rate of one and a half times (1 and 1/2X) their business license; all other businesses (those located off Main Street) pay an amount equal to (1X) their business license. The minimum assessment is $50 and the maximum is $350. Non profit businesses within the downtown are not assessed. The City and the PDA recently renewed a five -year funding contract, whereby the City contributes funds to match the annual assessment revenue. This $120,000 combined assessment revenue and the City match is projected to account for approximately 36% of the total 2010 funding sources. Also addressed in the new agreement is the PDA's primary role in marketing and promoting the downtown district to enhance the vitality of the District for the benefit of the member businesses and the community. Through its budget, the PDA is to focus a majority of its resources on efforts that are intended to draw patrons to the downtown. Page 2 of 3