Modesto Municipal Code Ch. 9 Community Benefit Districts

The purpose of this ordinance is to enhance the ability of the City and property owners to establish property and business improvement districts pursuant to the Property and Business Improvement District Law of 1994 (Streets & Highways Code §§ 36600 et seq.) by: (1) reducing the percentage of property owners whose signatures are required to initiate formation of, or petition for disestablishment of, a Property and Business Improvement District ("Property BID") from fifty (50) percent of the weighted property owners, as authorized by the Property and Business Improvement District Law of 1994, to thirty (30) percent of the weighted property owners; (2) extending the period for which a Property BID may exist from five (5) years, as authorized by the Property and Business Improvement District Law of 1994, to twenty (20) years; and (3) authorizing the reimbursement of formation costs.

(Ord. No. 3616-C.S., § 1, effective 6-5-15)

(a) The procedures established in this chapter shall be additional or alternative to any other procedure established by ordinance or state law, and are intended to supplement those procedures.

(b) In forming assessment districts to fund activities and improvements that confer a special benefit on property, the City Council may elect to use the procedures set forth in the Property and Business Improvement District Law of 1994 (Streets & Highways Code §§ 36600 et seq.) (the "PBID Law"), as modified by this chapter. The City Council shall be bound by, and comply with, applicable state law governing the establishment and operation of property and business improvement districts in all respects not inconsistent with this chapter.

(c) An assessment district established pursuant to this chapter shall be denominated as a "Community Benefit District" or "District" and the assessment levied in connection with such a district shall be denominated as a "Community Benefit Assessment."

(d) Except where otherwise provided in this chapter, "Community Benefit District" shall have the meaning given to "Property and Business Improvement District" by Section 36614.5 of the PBID Law and each reference in the PBID Law to a "Property and Business Improvement District" or a "District" shall be deemed also a reference to a "Community Benefit District."

(e) Except where otherwise provided in this chapter, "Community Benefit Assessment" shall have the meaning given to "Assessment" by Section 36606.5 of the PBID Law and each reference in the PBID Law to an "Assessment" shall be deemed also a reference to a "Community Benefit Assessment."

(f) A "Community Benefit District" shall be formed pursuant to a resolution of formation adopted by the City Council as set forth in Section 36625 of the PBID Law.

(g) All properties or businesses subject to an "Assessment" in a "Community Benefit District" shall not be subject to an assessment that exceeds the reasonable cost of the proportional special benefit conferred on that parcel and no properties or businesses shall be exempt from the "Assessment" consistent Section 36622(k) of the PBID Law.

(h) Consistent with Section 36633 of the PBID Law, the validity of a "Community Benefit Assessment" levied shall not be contested in any action or proceeding unless the action or proceeding is commenced within thirty (30) days after the resolution levying the "Assessment" is adopted.

(Ord. No. 3616-C.S., § 1, effective 6-5-15)

Upon the written petition, signed and acknowledged, of the property owners in the proposed district who will pay more than thirty (30) percent of the assessments proposed to be levied, the City Council may initiate proceedings to form a Community Benefit District by adopting a resolution expressing its intention to form a Community Benefit District. The amount of assessment attributable to property owned by the same property owner that is in excess of twenty (20) percent of the amount of all assessments proposed to be levied shall not be included in determining whether the petition is signed by property owners who will pay more than thirty (30) percent of the total amount of assessments proposed to be levied.

(Ord. No. 3616-C.S., § 1, effective 6-5-15)

(a) The City Council may authorize a District formed pursuant to this chapter to recover through assessments the costs incurred in forming the District, including:

(1) The costs of preparation of the management plan and engineer's report required by state law;

(2) The cost of circulating and submitting the petition to the City Council seeking establishment of the District;

(3) The costs of printing, advertising and the giving of published, posted or mailed notices;

(4) Compensation of any engineer or attorney employed to render services in proceedings under this chapter or the PBID Law; and

(5) Costs associated with any ballot proceedings required by law for approval of a new or increased assessment. If the District will be authorized to recover these costs, the management plan required pursuant to Streets and Highways Code Section 36622 shall specify the formation costs eligible for recovery through assessments, the schedule for recovery of those costs, and the basis for determining the amount of the additional assessment for recovery of costs, including the maximum amount of the additional assessment, expressed either as a dollar amount, or as a percentage of the underlying assessment.

(b) The City may advance funds for the first year of a District so that the District can commence work prior to the initial collection of the assessments. The funds advanced will not exceed the total assessment for the first year. The funds advanced shall be repaid, with interest, within five (5) years of the collection of the first annual assessment.

(Ord. No. 3616-C.S., § 1, effective 6-5-15)

A Community Benefit District established pursuant to this chapter may have a duration of up to twenty (20) years, if so specified in the resolution of intention.

(Ord. No. 3616-C.S., § 1, effective 6-5-15)

(a) Any Community Benefit District established or extended pursuant to the provisions of this chapter, where there is no indebtedness, outstanding and unpaid, incurred to accomplish any of the purposes of the district, may be disestablished by resolution by the City Council in either of the following circumstances:

(1) If the City Council finds there has been misappropriation of funds, malfeasance, or a violation of law in connection with the management of the district, it shall notice a hearing on disestablishment.

(2) During the operation of the district, there shall be a thirty (30)-day period each year in which assessees may request disestablishment of the district. The first such period shall begin one (1) year after the date of establishment of the district and shall continue for thirty (30) days. The next such thirty (30)-day period shall begin two (2) years after the date of the establishment of the district. Each successive year of operation of the district shall have such a thirty (30)-day period. Upon the written petition of the owners of real property or of businesses in the area who pay thirty (30) percent or more of the assessments levied, the City Council shall pass a resolution of intention to disestablish the district. The City Council shall notice a hearing on disestablishment.

(b) The City Council shall adopt a resolution of intention to disestablish the district prior to the public hearing required by this section. The resolution shall state the reason for the disestablishment, shall state the time and place of the public hearing, and shall contain a proposal to dispose of any assets acquired with the revenues of the assessments levied within the property and business improvement district. The notice of the hearing on disestablishment required by this section shall be given by mail to the property owner of each parcel subject to assessment in the district, as appropriate. The city shall conduct the public hearing not less than thirty (30) days after mailing the notice to the property or business owners. The public hearing shall be held not more than sixty (60) days after the adoption of the resolution of intention.

(c) Upon the disestablishment of the Community Benefit District, any remaining revenues, after all outstanding debts are paid, derived from the levy of assessments, or derived from the sale of assets acquired with the revenues, or from bond reserve or construction funds, shall be refunded to the owners of the property or businesses then located and operating within the district in which assessments were levied by applying the same method and basis that was used to calculate the assessments levied in the fiscal year in which the district is disestablished or expires. All outstanding assessment revenue collected after disestablishment shall be spent on improvements and activities specified in the management district plan.

(d) If the disestablishment occurs before an assessment is levied for the fiscal year, the method and basis that was used to calculate the assessments levied in the immediate prior fiscal year shall be used to calculate the amount of any refund.

(Ord. No. 3616-C.S., § 1, effective 6-5-15)

(a) A Citizen's Transportation Sales Tax Commission, hereinafter "Commission," is hereby established for the purpose of providing oversight of the collection and spending of tax revenue from any local transportation sales tax. For purposes of this chapter, a "local transportation sales tax" is defined as a sales tax imposed on City residents for purposes of generating funds to specifically fund the City's transportation plan; any local tax used to fund general services in the City is not a "local transportation sales tax." The first such Commission shall be appointed by the Council no later than ninety (90) days from the effective date of the passage of any local dedicated tax imposed for transportation purposes. The Commission shall regularly meet and make recommendations to the Council to provide oversight of any transportation tax then in effect.

(b) The duties of the Commission shall include, but not be limited to, the following:

(1) Reviewing the annual work plan and priorities for revenue derived from any transportation sales tax then in effect;

(2) Analyzing and commenting on any proposed items in the City budget that would lessen the City's its commitment to road and street funding from sources of revenue other than any transportation sales tax then in effect;

(3) Reviewing any policies, standards or similar measures that the City uses to set priorities for where revenues from any transportation sales tax then in effect are to be spent;

(4) Reviewing any proposals for the City to use bond or similar financing secured by revenues from any transportation sales tax then in effect;

(5) Reviewing any policies, standards or similar measures that the City uses to determine whether work funded by the tax shall be done "in-house" or through outside contracts; and,

(6) Reviewing any other matter the Council deems appropriate related to any local transportation sales tax. The Council shall appropriate adequate funds for the work of the Commission.

(Ord. 3656-C.S., § 1, effective 11-11-16)

The Commission shall consist of nine (9) qualified electors residing within the City and shall be appointed by the City Council by resolution pursuant to the provisions below:

(a) Be a citizen of Modesto:

(i) One (1) citizen from each City Council District;

(ii) Three (3) at large citizens from anywhere within the city limits.

(b) Strong consideration shall be given to composing the Commission of:

(i) A bona fide local taxpayer's association with tax-exempt status under the relevant provisions of the Internal Revenue Code;

(ii) A bona fide local nonpartisan political organization, with tax-exempt status under Section 501(c)(3) of the Internal Revenue Code, dedicated to encouraging informed and active participation in government;

(iii) A bona fide Modesto Neighborhood Associations or organizations with similar purposes with tax-exempt status under Section 501(c)(3) of the Internal Revenue Code;

(iv) A bona fide association representing business such as a chamber of commerce;

(v) A member from a large business located in the City;

(vi) A member from a small business located in the City; and

(vii) A member from a bona fide labor union with members residing in the City.

(c) No member of the Commission shall be a relative by blood or marriage within the second degree of the Mayor, a member of the Council, any Charter officer, or any department head or deputy department head.

(d) No member of the Commission shall be an employee of the City nor any bargaining unit for employees of the City, nor be a person who receives compensation from the City or from bargaining units of the City in any manner, except retirement benefits.

(e) No member of the Commission shall be a lobbyist or other person with business before the City that represents an economic interest in excess of the limit for material financial effect as established by state law.

(f) Members of the Commission shall serve without compensation.

(g) Each Commissioner shall be appointed to a four-year term unless the appointment is to fill a vacancy.

(Ord. 3656-C.S., § 1, effective 11-11-16; Ord. No. 3796-C.S, § 1, effective 6-10-25)