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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. The three steps are as follows: • Ratify an advisory board to prepare the annual PDA report and budget (completed on October 15, 2013). • Accept the report and budget and set a public hearing to levy the assessments (completed on November 19, 2013). • Open and close a public hearing and adopt by resolution the assessments (to be completed on December 3, 2013). DISCUSSION The 2014 PDA annual assessment revenue is budgeted at $65,500, which is similar to the revenue generated in 2013. As previously noted, there is no recommended change in the District boundary for 2014 and no change in the method of levying the assessment for 2014. The assessment formula will continue to be based on a business' annual business license tax and 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 (1%X) 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. 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, is projected to account for approximately 31% of the total 2014 funding sources. Events planned during the year are projected to account for approximately 57% of the total 2014 revenue, while associate memberships and corporate sponsorships account for the remaining 12% of the 2014 funding sources. As the first two steps in the process have been successfully completed, the Council is asked to approve and levy the Downtown Business Improvement District assessment for 2014. Page 2 of 3