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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 athree-step process in order to levy the annual assessment for the PDA Business Improvement District. At the October 2, 2007 City Council meeting, an advisory board was appointed to prepare the attached annual PDA report and budget for 2008. The attached report contains the following required information: Any proposed changes in the boundaries of the district. (For 2008 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 years. 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 2008 report and the proposed budget for the PDA assessments and other revenues for the year. The PDA annual assessment revenue is budgeted at $62,000, slightly more than the revenue generated in 2007. 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 have afive-year funding contract, whereby the City contributes funds to match the annual assessment revenue. This $124,000 combined assessment revenue and the City match is projected to account for approximately 24% of the total 2008 funding sources (annual revenue plus reserves and appropriated funds). The budget includes afull-time Executive Director, and apart-time Office Manager. The Events Coordinator is a full-time position to facilitate the First Wednesday Street Parties and all other events throughout the year. Page 2 of 3