Chapter 2-20 — COMMUNITY BENEFIT DISTRICTS

(Legislative History: Ordinance No. 2012-014, 12/3/12 (Sections 2-20-010—2-20-060))

The purpose of this Chapter 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 and Highways Code Section 36600 et seq.) by: (a) 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 50% of the weighted property owners, as authorized by the Property and Business Improvement District Law of 1994, to 30% of the weighted property owners; (b) extending the period for which a property BID may exist from five years, as authorized by the Property and Business Improvement District Law of 1994, to 20 years; and (c) authorizing the reimbursement of formation costs.

(a) The procedures established in this Chapter shall be additional 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 and Highways Code Section 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 36611 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 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."

Upon the written petition, signed and acknowledged, of the property owners in the proposed district who will pay more than 30% 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 20% 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 30% of the total amount of assessments proposed to be levied.

(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 years of the collection of the first annual assessment.

A community benefit district established pursuant to this Chapter may have a duration of up to 20 years, if so specified in the resolution of intention.

(a) Any community benefit district established or extended pursuant to the provisions of this part, 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 30 day period each year in which
assessees may request disestablishment of the district. The first such period shall begin one year after the date of establishment of the district and shall continue for
30 days. The next such 30 day period shall begin two years after the date of the
establishment of the district. Each successive year of operation of the district shall
have such a 30 day period. Upon the written petition of the owners of real property
or of businesses in the area who pay 30% 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 30 days after mailing the notice to the property or business
owners. The public hearing shall be held not more than 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. 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.