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This year there is no proposed change in the formula. The proposed change that is being recommended by the PDA advisory board and is supported by staff is the elimination of the new business exemption. Chapter 5.28.040 of the Municipal Code waives payment of the BID assessment during a business's first year of operation within the district. What staff has realized is that this is when a new business gets a significant amount of time and energy from the PDA in helping them get promoted, up and running and get a foothold in the downtown. Therefore, it seems in conflict that they would not pay the assessment. At the same time, staff has a separate discussion regarding business license assesses because when the assessment has been waved for the first year, even though people are told they are in an assessment district and not charged their first year, many of them are very surprised when they must pay the assessment. For those two primary reasons, the recommendation was made to eliminate the new business exemption. Therefore, those businesses would pay the assessment like everybody else does. Councilmember Pentin asked for the process and whether the assessment is pro-rated. Ms. Ott said the business license is based on gross receipts for the year. For a new business, the operator would come in, pay for their business license and depending on gross receipts, they would pay $25, $50, $75, or if over $250, it is based on a percentage of $1,000 of revenue. If they were in the Downtown District, they would indicate where they are located and staff would apply the one time, 1 1/2 or two time, but there is a minimum of $50 PDA assessment. By and large, the majority of those in the district that pay the assessment pay $50 each year. Councilmember Olson said he noticed on the profit and loss overview that the farmer's market shows zero for 2015 and then revenue for 2016 and he asked what occurred. Laura Olson, Executive Director, PDA, said the Pacific Coast Farmer's Market Association started and they have the original contract with them where they do not pay the PDA anything and the PDA supports their efforts. They recognize other participants pay a promoter's fee to the PDA to offset their time and energy to help them make a lot of money in downtown. This year, they will be talking to the Pacific Coast Farmer's Market Association to pay a small $5,000 promoter's fee which is significantly less than what other promoters pay the PDA in the Downtown. Mayor Thorne said he noticed there are City contracts amounting to $131,000 and he asked what this is besides the matching fee. Ms. Olson said this is the assessment and the 100% match. Mayor Thorne said the plan is to expand the number of people allowed at the wine strolls and said revenues will go up. Ms. Olson said they have made some strategic changes in how they are selling their tickets to maximize revenues without increasing attendance significantly. They think they are at maximum capacity and they have shrunk the early bird pricing window and increased the full price window and have been able to make an additional $10,000 for events so they do not want to burden businesses anymore. They try to sell 40 tickets per pouring location and they feel comfortable with this formula. Ms. Ott concluded stating that in the packet she also included what the proposal would look like if they did eliminate the new business exemption and it is just removing that section of the Municipal Code. Staffs recommendation as recommended by the PDA advisory board is to adopt a resolution accepting and approving the Pleasanton Downtown BID Advisory Board 2015 annual report and 2016 budget and declaring the intention to levy the assessment for 2016, setting the public hearing date for December 1, 2015; and start the process by introducing an ordinance amending Chapter 5.28 to remove the new business exemption and modify the BID boundaries to include those commercially zoned properties on Old Bernal Avenue and to exclude those identified residential properties along Ray Street and Walnut Drive. City Council Minutes Page 15 of 16 November 3,2015