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BACKGROUND The Parking and Business Improvement Area Law of 1989 (Streets &. Highways Code 36500, et seq.) requires the City Council to use a three-step process to levy the annual assessment for the PDA Business Improvement District (District). The three steps are as follows: • Ratify an advisory board to prepare the annual PDA report and budget (completed on October 16, 2012). • Accept the report and budget and set a public hearing to levy the assessments (completed on November 20, 2012). • Open and close the public hearing and adopt by resolution the assessments (to be completed on December 4, 2012). On November 20, 2012 the City Council approved the PDA report and budget for 2013. A copy of the adopted report and budget is attached (Attachments 2, 3 and 4). DISCUSSION The PDA annual assessment revenue is budgeted at $65,500, which is similar to the revenue generated in 2012. The assessment formula is based on a business' annual business license tax and is calculated as follows: • businesses located curbside and downstairs on Main Street are assessed at two times (2X) their business license tax; • businesses with a Main Street address located upstairs, or not curbside, are assessed at a rate of one and a half times (VAX) their business license tax; • all other businesses (those located off Main Street) pay an amount equal to one times (1X) their business license tax. The minimum assessment is $50 and the maximum is $350. Non-profit businesses located within the Downtown area are not assessed. The PDA budget includes a full-time Executive Director, and a part-time Office Manager. The Events Coordinator is a full-time position and is responsible for the First Wednesday Street Parties and all other events planned throughout the year. At the November 3, 2009 City Council meeting, the City and the PDA renewed a five- year funding contract whereby the City contributes funds to match the annual assessment revenue. This $131,000 consisting of the District's assessment revenue and the City's matching funds are projected to account for approximately 32% of the total 2013 funding sources. Associate memberships and corporate sponsorships account for 10% of the total 2013 funding sources. Page 2 of 3