§ 15A.2.

AUGMENTATION AND MODIFICATION OF STATE LAW REQUIREMENTS GOVERNING PROPERTY AND BUSINESS IMPROVEMENT DISTRICTS

The Board of Supervisors may elect to use the procedures set forth in California Streets and Highways Code Sections 36600 et seq . as augmented and modified by this Article 15A for the formation of property and business improvement districts and the levy of assessments on real property to fund services, improvements and activities that confer benefits on property, including parcels zoned solely for residential use, by focusing on landscaping, improvements and maintenance of Public Realm areas.

a.

Definitions.

1.

“Public Realm areas.” As used in this Article 15A , Public Realm areas are outdoor spaces open to the public that include but are not limited to parks, plazas, parklets, sidewalks, unimproved areas, landscaped areas and gardens. Public Realm areas may be owned by public and/or private entities or persons.

2.

“Ecological system.” As used in this Article 15A , “ecological system” means a system of living organisms and the physical environment those organisms inhabit. An ecological system includes elements such as soil, geology, wildlife, vegetation, and watersheds.

3.

“Recreational Improvements.” As used in this Article 15A , “recreational improvements” means improvements that will encourage recreational use, either by improving current conditions (e.g., repairing a grass soccer field) or installation of new facilities (e.g., playground equipment).

b.

Petitions. Notwithstanding California Streets and Highways Code Section 36621(a) or any other provision of state law to the contrary, the Board of Supervisors may initiate proceedings to establish a property and business improvement district upon receipt of a petition signed by property owners in the proposed district who will pay at least 30 percent of the assessments proposed to be levied.

The amount of assessments attributable to properties owned by the same owner that is in excess of 25 percent of all assessments proposed to be levied, shall not be included in determining whether the petition is signed by the property owners who will pay the requisite 30 percent or more of the total amount of assessments proposed to be levied.

c.

Term. Notwithstanding California Streets and Highways Code Section 36622(h) or any other provision of state law to the contrary, the Board of Supervisors may form a district and levy assessments:

1.

For a maximum term of up to 15 years, or such longer term as is authorized by state law; or,

2.

For a maximum term of up to 40 years, if all or a portion of the assessments will be pledged or applied to pay any bond, financing lease (including any certificates of participation therein), or other similar obligations of the City. Such assessments may be pledged or applied to pay such obligations commencing when the assessments are levied, or such later date as the Board of Supervisors shall determine.

d.

Property Zoned Solely Residential. Notwithstanding California Streets and Highways Code Section 36632(c) or any other provision of state law to the contrary, the Board of Supervisors may:

1.

Establish a district pursuant to this Article 15A that encompasses properties zoned solely for residential use;

2.

Levy assessments upon such properties; and

3.

Authorize utilization of the assessments to fund services, improvements and activities that benefit such properties.

e.

Under this Article 15A the Board of Supervisors may authorize:

1.

Assessment district services, improvements and activities consistent with California Streets and Highways Code Sections 36600 et seq . that are focused on landscaping, improvements and maintenance of Public Realm areas, notwithstanding any other provisions in Sections 36606, 36610, or 36613 or any other provision of state law to the contrary. Such services, improvements and activities may include, but are not limited to, involvement with ecological systems, water and energy systems, pedestrian and bicycle amenities, and recreational improvements.

2.

Use of assessment funds to purchase real property, in whole or in part, within or contiguous to the District, where that property will be a Public Realm area and the district will provide landscaping, improvements and/or maintenance of the area.

f.

Formation Cost Recovery. Notwithstanding any provision of state law to the contrary, the Board of Supervisors may authorize a district formed pursuant to this Article 15A to recover through assessments the costs incurred in forming the district, whether costs are generated by the City or by others, including but not limited to:

1.

The costs of preparation of the management district plan and engineer’s report required by state law;

2.

The costs of circulating and submitting the petition to the Board of Supervisors seeking establishment of the district;

3.

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

4.

The costs of engineering, consulting, legal or other professional services provided in proceedings under this Article 15A or California Streets and Highways Code Sections 36600 et seq. ; and

5.

The costs of any ballot proceedings required by this Article 15A or other law for approval of a new or increased assessment.

To recover these costs, the management district plan required pursuant to California 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 such costs, including the maximum amount of the additional assessment, expressed either as a dollar amount, or as a percentage of the underlying assessment.

g.

Disestablishment by Board of Supervisors Supermajority. Notwithstanding California Streets and Highways Code Section 36670 or any other provision of state law to the contrary, the Board of Supervisors may, by a supermajority vote of eight or more of its 11 members, notice a hearing and initiate proceedings to disestablish a district for any reason. Where the Board of Supervisors seeks to disestablish a district in circumstances not authorized under California Streets and Highways Code Section 36670, both the resolution of intention to disestablish the district and any final resolution to disestablish the district shall require a supermajority vote of no fewer than eight of its 11 members.

h.

Disestablishment Limitation. Notwithstanding Section 15A.2(g) of this Article, California Streets and Highways Code Section 36670, or any other provision of law, the Board of Supervisors may not disestablish a district where there are any outstanding bond, financing lease (including any certificates of participation therein), or other similar obligations of the City, payable from or secured by assessments levied within the district.

i.

Public Financing. Notwithstanding California Streets and Highways Code Section 36640 or any other provision of state law to the contrary:

1.

The Board of Supervisors may, in the resolution to establish the district, determine and declare that any bond, financing lease (including any certificates of participation therein), or other similar obligations of the City, shall be issued to finance the estimated costs of some or all of the proposed improvements or activities described in such resolution, pursuant to the City Charter, City ordinances or state law, as the Board may determine; and

2.

The amount (including interest) of any City bond, financing lease (including any certificates of participation therein) or other similar obligations, may not exceed the estimated total of (A) revenues to be raised from the assessments over the term of the district, plus (B) such other monies, if any, to be available for such purpose, in each case determined as of the date such obligations are issued or incurred.

j.

Management of District.

1.

Management by Owners’ Nonprofit Corporation. If so provided by the management district plan, the Board of Supervisors may contract with an existing or new owners’ nonprofit corporation (California Streets and Highways Code Section 36614.5) to administer or implement services, improvements and activities specified in the management district plan (“Management Contract”). If so, the management district plan shall ensure that on the governing body of the owners’ nonprofit corporation:

i.

a majority (over 50%) are district assessees; and,

ii.

there is adequate representation of district stakeholders who do not own or have an ownership interest in property located in the district, including residents, businesses, and neighborhood organizations. Where warranted by the circumstances in a proposed district, the Board of Supervisors in its discretion may require that the management district plan provide particular levels of such business owner or other district stakeholder representation.

2.

Management by the City. Alternatively, if so provided by the management district plan, the Board of Supervisors may authorize the City to administer or implement services, improvements and activities specified in the management district plan by utilizing existing City departments, including but not limited to the Department of Public Works and the Recreation and Park Department, and/or by contracting out.

3.

Change of Management During Term of District. If so provided by the management district plan, management may change during the term of the district from an owners’ nonprofit association to the City, or from the City to an owners’ nonprofit association. Procedures for such a change shall be specified in the management district plan, and may be further detailed in any Management Contract.

4.

This subsection (j) shall not limit the authority of the Board of Supervisors to require the incorporation of any other item or matter into the management district plan under California Streets and Highways Code Section 36622(l) or other applicable law.

k.

Notice to Businesses in Three Languages. No fewer than 30 days after the Clerk of the Board receives a complete petition seeking formation of a district pursuant to this Article 15A , the Clerk shall mail notice to all businesses located within the proposed district holding a current registration certificate issued by the Tax Collector. The notice shall be in English, Spanish and Cantonese, and shall inform the recipients:

1.

That a petition for formation of a property and business improvement district has been received;

2.

That if the district is formed, assessments will be levied against property in the district;

3.

That formation of the district is subject to the approval of the Board of Supervisors following public hearings and a ballot proceeding by owners of the property subject to the assessment; and,

4.

How recipients may obtain further information about the petition and proposed district.

History

(Added by Ord. 14-14 , File No. 130462, App. 2/14/2014, Eff. 3/16/2014)

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