REPORT TO COUNCIL
SUBJECT
Title
Approve the Downtown Sunnyvale Business Improvement District (BID) Annual Report for Fiscal Year 2024/25 and Adopt Resolution of Intention to Levy and Collect and Annual Assessment to Reauthorize BID for Fiscal Year 2025/26
Report
BACKGROUND
A Business Improvement District (BID) is a funding tool that allows participating businesses to pool their resources to fund specific activities in support of their business district. It must be authorized yearly by the City Council at the request of the BID Board (Board). Pursuant to Sunnyvale Municipal Code Section 3.60.050 (Establishment of benefit assessments), the formula for calculating the BID assessment amount is determined by the Board and enacted by the City. Business assessments are levied based on relative benefit from the activities to be funded. The City collects the assessments and forwards the collected funds to the BID, minus an administrative fee.
The BID assessment is used to pay for marketing and special events to collectively promote the downtown area which would not be possible on an individual basis.
Approximately 250 businesses are located within the Downtown Sunnyvale BID area, which is divided into three zones: Zone A, Zone B and Zone C. The current boundaries are Sunnyvale, Iowa, Mathilda and Evelyn Avenues (Attachment 1, Page 11).
The current Board members are:
Amit Rajgarhia, Chair, Dishdash
Justin Breining, Vice Chair, Whole Foods Market
Leigh Odum, Secretary, Leigh’s Favorite Books and Bookasaurus
Dr. Gary Gold, Dr. Gary Gold & Associates
Amal Allan, City National Bank
Kim Kilpatrick, Cityline Sunnyvale
Heather Stuart, YogaSix Sunnyvale
EXISTING POLICY
Sunnyvale Municipal Code Sections - Downtown Sunnyvale Business Improvement District
3.060.050. Establishment of benefit assessments.
3.060.060. Purpose of use of benefit assessments.
3.60.110. Annual budget process.
3.60.120. Decisions regarding expenditure of funds.
ENVIRONMENTAL REVIEW
The action being considered is not a “project” within the meaning of the California Environmental Quality Act because it is a government funding mechanism that will not result in a potentially significant physical impact on the environment. (CEQA Guidelines, Section 15378(b)(4).)
DISCUSSION
The BID renewal process requires the Board to submit the BID’s annual report (Attachment 1) for Fiscal Year 2024/25 and the proposed budget for Fiscal Year 2025/26 to the City Council for approval. In addition, the Board is requesting that Council adopt a Resolution of Intention (ROI) (Attachment 2) to begin the BID renewal process for Fiscal Year 2025/26.
As of February 2025, the BID collected about $35,000 in assessments for Fiscal Year 2024/25. Including revenue from special events, total revenue for the current year is anticipated to be about $320,500 and expenditures are approximately $355,550. The annual report did not account for pending sponsorships expected by the end of April, which could increase the revenue by at least $15,000. It also did not include an additional $13,000 annual funding from subleasing office space. Since these commitments were made in March, the BID director did not include this additional funding in the report. If the sponsorships do not come through, the SDA is prepared to reduce the number of planned events.
The proposed budget for fiscal year 2025/26 (Attachment 1, Page 8 and 9), as approved by the Board, is $385,000. This proposed budget includes $43,500 from BID assessments; $219,500 revenue from special events, such as the Summer Music Series and Jazz & Beyond Series; and, $100,000 from corporate grants and sponsorships, City funding and other miscellaneous revenues. The level of City funding projected for FY 2025/26 assumes Council approval of increased funding through the budget process, which will not be completed until June 2025. Also, since most sponsorships are received between April and May each year, the BID director does not include those revenues in the budget estimates.
During Fiscal Year 2024/25, the BID produced events that included the Summer Music Services, Jazz & Beyond Series and the Taste of the World Wine Stroll. The events attract visitors to the downtown area and provides about 46% of the BID’s annual revenue. The BID promotes BID businesses with social media and on their website (Sunnyvaledowntown.com). The website is also available to businesses to help them promote special activities and promotions and provides a downtown business map and directory making it easy for visitors to find what they are looking for.
For the BID to be reauthorized for fiscal year 2025/26, Council must approve the BID’s Annual Report and adopt the Resolution of Intention. Pursuant to Sunnyvale Municipal Code Section 3.60.110, the Resolution of Intention sets a public hearing for May 6, 2025, for the Council to consider oral and written protest received on or before that ate regarding the levy and collection or the assessment and reauthorization of the BID for fiscal year 2025-26. Notice of the BID’s public hearing will be published in a local newspaper and mailed to all BID businesses.
FISCAL IMPACT
An estimated administration cost of $4,500 will be charged to the BID to administer and collect the BID assessment. Since the BID pays the administrative cost, there is no fiscal impact to the City for providing the administrative service.
The level of City funding assumed in the BID’s proposed FY 2025/26 budget increases from $60,000 to $100,000. This proposed BID budget assumes City Council approval of a City contribution increase, which will come before Council for consideration as part of the citywide budget in June 2025.
PUBLIC CONTACT
Public contact was made by posting the Council meeting agenda on the City's official-notice bulletin board at City Hall, at the Sunnyvale Public Library and in the Department of Public Safety Lobby. In addition, the agenda and this report are available at the City Hall reception desk located on the first floor of City Hall at 456 W. Olive Avenue (during normal business hours), and on the City's website.
RECOMMENDATION
Recommendation
Approve the Fiscal Year 2024/25 BID Annual Report, adopt a Resolution of Intention to Levy and Collect and Assessment and Reauthorize the Business Improvement District for Fiscal Year 2025/26, and schedule the public hearing for May 6, 2025.
Levine Act
LEVINE ACT
The Levine Act (Gov. Code Section 84308) prohibits city officials from participating in certain decisions regarding licenses, permits, and other entitlements for use if the official has received a campaign contribution of more than $500 from a party, participant, or agent of a party or participant in the previous 12 months. The Levine Act is intended to prevent financial influence on decisions that affect specific, identifiable persons or participants. For more information see the Fair Political Practices Commission website: www.fppc.ca.gov/learn/pay-to-play-limits-and-prohibitions.html
An “X” in the checklist below indicates that the action being considered falls under a Levine Act category or exemption:
SUBJECT TO THE LEVINE ACT
___ Land development entitlements
___ Other permit, license, or entitlement for use
___ Contract or franchise
EXEMPT FROM THE LEVINE ACT
___ Competitively bid contract*
___ Labor or personal employment contract
___ Contract under $50,000 or non-fiscal
___ Contract between public agencies
_X_ General policy and legislative actions
* "Competitively bid" means a contract that must be awarded to the lowest responsive and responsible bidder.
Staff
Prepared by: Maria Rodriguez, Economic Development Specialist
Reviewed by: Christine Velasquez, Economic Development Manager
Reviewed by: Connie Verceles Deputy City Manager
Reviewed by: Sarah Johnson-Rios, Assistant City Manager
Approved by: Tim Kirby, City Manager
ATTACHMENTS
1. BID Annual Report
2. Resolution