HomeMy WebLinkAboutResolution 2023-169 N.C.S. 11/06/2023 DocuSign Envelope ID:5CFD8B2A-543E-427A-965A-CE33BA83269F
Resolution No. 2023-169 N.C.S.
of the City of Petaluma, California
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PETALUMA
DECLARING RESULTS OF MAJORITY PROTEST PROCEEDINGS AND
RENEWING THE PETALUMA TOURISM IMPROVEMENT DISTRICT (PTID)
WHEREAS,the Property and Business Improvement District Law of 1994 (Streets and Highways Code
§36600 et. seq.) authorizes the City of Petaluma to renew business improvement districts upon petition by a
weighted majority of the business owners located within the boundaries of the district; and
WHEREAS, lodging business owners who will pay more than fifty percent(50%) of the proposed
assessment, as weighted according to the amount of the assessment to be paid by the petitioner, within the
boundaries of the PTID have petitioned the City Council to renew the PTID; and
WHEREAS,the renewed PTID includes all lodging businesses, existing and in the future, available for
public occupancy located within the boundaries of the City of Petaluma; and
WHEREAS, included with the petitions was a Management District Plan(Plan) summary that describes
the proposed assessment to be levied on lodging businesses within the PTID to pay for marketing, sales,
communications, and destination development programs, and other improvements and activities set forth in the
Plan; and
WHEREAS,the assessed lodging businesses within the PTID will receive a specific benefit from the
activities and improvements set forth in the Plan; and
WHEREAS, on September 11, 2023 at 6:45 PM at the Council Chambers located at 11 English Street,
Petaluma, CA 94952, the City Council adopted a Resolution of Intention, Resolution No. 2023-140 N.C.S.; and
WHEREAS,the public meeting and public hearing to consider the renewal of the PTID have been
properly noticed in accordance with Streets and Highways Code §36623; and
WHEREAS, on October 2, 2023 at 6:45 PM at the Council Chambers located at 11 English Street,
Petaluma, CA 94952, the City Council held a public meeting and introduced and conducted a first reading of the
Ordinance regarding the renewal of the PTID, and the City Council heard and received objections and protests,
if any, to the renewal of the PTID and the levy of the proposed assessment; and
WHEREAS, on November 6, 2023 at 6:45 PM at the Council Chambers located at 11 English Street,
Petaluma, CA 94952, the City Council held a public hearing regarding the renewal of the PTID, and the City
Council heard and received all objections and protests, if any, to the renewal of the PTID and the levy of the
proposed assessment; and
Resolution No. 2023-169 N.C.S. Page 1
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WHEREAS,the City Clerk has determined that there was no majority protest. A majority protest is
defined as written protests received from owners of lodging businesses in the renewed PTID which would pay
fifty percent(50%) or more of the assessments proposed to be levied. Protests are weighted based on the
assessment proposed to be levied on each lodging business; and
WHEREAS, following the public hearing, at the same City Council meeting on November 6, 2023,
held at the Council Chambers located at 11 English Street, Petaluma, CA 94952, the City Council may conduct
a second reading of the Ordinance to renew the PTID and to continue the levy of assessments. At the conclusion
of the second reading of the Ordinance, the City Council may adopt the Ordinance, renewing the PTID and
continue levying the assessments; and
WHEREAS,Adoption of this Resolution does not diminish the legal effect of the adoption of the
Ordinance to be adopted at the final hearing; and
WHEREAS,the City bears the burden of proving by a preponderance of the evidence that an
assessment imposed for a specific benefit or specific government service is not a tax, that the amount is no more
than necessary to cover the costs to the City in providing the specific benefit or specific government service,
and that the manner in which those costs are allocated to a payor bear a fair or reasonable relationship to the
specific benefits or specific government services received by the payor.
NOW, THEREFORE,BE IT RESOLVED,by the City Council of the City of Petaluma as follows:
1. The recitals set forth herein are adopted by the City Council as findings and they are true and correct.
2. Finds that the proposed action is statutorily exempt from the requirements of the California
Environmental Quality Act(CEQA) in accordance with CEQA Guidelines Section 15273 (Rates, Tolls,
Fares, and Charges) as the renewal of the District involves the establishment, modification,
restructuring, or approval of rates and charges, as identified and analyzed in the Plan, including rates and
charges to obtain funds for meeting operating expenses,purchasing or leasing supplies, equipment or
materials, meeting financial reserve needs and requirements and/or obtaining funds for capital projects
necessary to maintain service within existing service areas. Additionally, renewing the District is
categorically exempt pursuant to CEQA Guidelines Section 15061(b)(3)because there is no possibility
that their adoption will have a significant effect on the environment.
3. The PTID is hereby renewed for a ten (10) year term, beginning January 1, 2024, or as soon as possible,
and ending ten (10) years from its start date unless renewed pursuant to Streets and Highways Code §
36660.
4. The Plan dated November 6, 2023, attached to the staff report as attachment A, is hereby adopted and
approved.
5. The activities to be provided to benefit lodging businesses in the PTID will be funded by the levy of the
assessment. The revenue from the assessment levy shall not be used: to provide activities that directly
benefit businesses outside the PTID; to provide activities or improvements outside the PTID; or for any
Resolution No. 2023-169 N.C.S. Page 2
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purpose other than the purposes specified in this Resolution, the Resolution of Intention, the Ordinance,
and the Plan. Notwithstanding the foregoing, improvements and activities that must be provided outside
the PTID boundaries to create a specific benefit to the assessed lodging businesses may be provided, but
shall be limited to marketing or signage pointing to the PTID.
6. The City Council finds as follows:
a) The activities funded by the assessment will provide a specific benefit to assessed businesses
within the PTID that is not provided to those not paying the assessment.
b) The assessment is a charge imposed for a specific benefit conferred or privilege granted directly
to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to
the local government of conferring the benefit or granting the privilege.
c) The assessment is a charge imposed for a specific government service or product provided directly
to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to
the local government of providing the service or product.
d) Assessments imposed pursuant to the PTID are levied solely upon the assessed lodging business,
and the lodging business owner is solely responsible for payment of the assessment when due. If the
lodging business owner chooses to collect any portion of the assessment from a transient,that portion shall
be specifically called out and identified for the transient in any and all communications from the lodging
business owner as the "PTID Assessment" or"Tourism Assessment" as specified in the Plan.
6. The assessments levied for the PTID shall be applied towards marketing, sales, communications, and
destination development programs to market Petaluma lodging businesses as tourist, meeting and event
destinations, and other improvements and activities as set forth in the Plan.
7. Assessments levied on lodging businesses pursuant to this resolution shall be levied on the basis of
benefit. Because the services provided are intended to increase sleeping room rentals, an assessment
based on gross short-term sleeping room rental revenue is the best measure of benefit.
8. The assessments for the entire PTID will total approximately $680,000 in year one (1).
9. Bonds shall not be issued to fund the PTID.
10. The PTID shall include all lodging businesses, existing and in the future, available for public occupancy
located within the boundaries of the City of Petaluma. A boundary map is attached hereto and
incorporated herein by reference.
11. The assessments shall be used for the purposes set forth above and any funds remaining at the end of
any year may be used in subsequent years in which the PTID assessment is levied as long as they are
used consistent with the requirements set forth herein.
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12. The Petaluma Lodging Association (PLA)will be responsible for contracting with a service for
collecting the assessment on a monthly basis (including any delinquencies, penalties and interest) from
each lodging business, and in accordance with Streets and Highways Code §36631. The service shall
take all reasonable efforts to collect the assessments from each lodging business. The service shall
forward the assessments collected to the PLA.
13. The City Council, through adoption of this Resolution and the Plan, has the right pursuant to Streets and
Highways Code §36651, to identify the body that shall implement the proposed program, which shall be
the Owners' Association of the PTID as defined in Streets and Highways Code §36612. The City
Council has determined that the PLA shall continue to be the PTID Owners' Association.
14. The PLA, pursuant to Streets and Highways Code §36650, shall cause to be prepared a report for each
fiscal year, except the first year, for which assessments are to be levied and collected to pay the costs of
the improvement and activities described in the report. The first report shall be due after the first year of
operation of the renewed PTID.
15. The PTID renewed pursuant to this resolution will be subject to any amendments to the Property and
Business Improvement District Law of 1994 (California Streets and Highways Code §36600 et. seq.).
16. The City Clerk, or their designee, is directed to take all necessary actions to complete the renewal of the
PTID and to levy the assessments.
17. This Resolution shall take effect immediately upon its adoption by the City Council
Under the power and authority conferred upon this Council by the Charter of said City.
REFERENCE: I hereby certify the foregoing Resolution was introduced and adopted by the Approved as to
Council of the City of Petaluma at a Regular meeting on the 61h day of November form:
DocuSigned by:
2023,by the following vote: n n
�w�Jl ity Attorney
AYES: McDonnell,Barnacle,Cader Thompson,Healy,Nau,Pocekay,Shribbs
NOES: None
ABSENT: None
RECUSED: None
DocuSigned by: DocuSigned by:
ATTEST: 11" L�--- ......
City Clerk Mayor
Resolution No. 2023-169 N.C.S. Page 4
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EXHIBIT A
MANAGEMENT PLAN
Resolution No. 2023-169 N.C.S. Page 5
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ROMMEL ANN
PETALUMA TOURISM IMPROVEMENT DISTRICT
MANAGEMENT DISTRICT PLAN
Prepared pursuant to the Property and Business Improvement District Law of September
1994, Streets and Highways Code section 36600 et seq.
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Contents
I. OVERVIEW..........................................................................................................................................3
II. BACKGROUND .................................................................................................................................5
III. BOUNDARY........................................................................................................................................6
IV. ASSESSMENT BUDGET AND SERVICES.................................................................................7
A. Annual Service Plan ............................................................................................................7
B. Annual Budget.....................................................................................................................9
C. California Constitutional Compliance...............................................................................10
D. Assessment ........................................................................................................................12
E. Penalties and Interest.........................................................................................................13
F. Time and Manner for Collecting Assessments..................................................................13
V. GOVERNANCE................................................................................................................................14
A. Owners' Association..........................................................................................................14
B. Brown Act and California Public Records Act Compliance.............................................14
C. Annual Report....................................................................................................................14
APPENDIX1 —LAW.....................................................................................................................................15
APPENDIX 2—ASSESSED BUSINESSES..............................................................................................26
Prepared by
Civitas
♦ 0
CIVITAS
PARTNERSHIPS• PROGRESS• PROSPERITY
(800)999-7781
www.civitasadvisors.com
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I. OVERVIEW
Developed by the Petaluma Lodging Association (PLA), and Petaluma lodging businesses, the
Petaluma Tourism Improvement District (PTID) is an assessment district proposed to continue to
provide specific benefits to payors, by funding marketing and sales promotion efforts for assessed
lodging businesses. This approach has been used successfully in other destination areas throughout
the country to provide the benefit of additional room night sales directly to payors. The PTID was
initially created 2019 for a five (5)year term.PLA and Petaluma lodging businesses now wish to renew
the PTID for a ten (10) year term.
Location: The renewed PTID includes all lodging businesses, existing and in the future,located
within the boundaries of the City of Petaluma, as shown on the map in Section IV.
Services: The PTID is designed to provide specific benefits directly to payors by increasing
awareness and demand for room night sales. Marketing, sales, communications, and
destination development programs will increase demand for overnight tourism and
market payors as tourist, meeting and event destinations, thereby increasing demand
for room night sales.
Budget: The total PTID annual assessment budget for the initial year of its ten (10) year
operation is anticipated to be approximately$680,000.A similar budget is expected to
apply to subsequent years,but this budget is expected to fluctuate as room sales do, as
lodging businesses open and close, and if the assessment rate increases or decreases,
as detailed in Section V.
Cost: The annual assessment rate is two percent (2%) of gross short-term sleeping room
rental revenue. Based on the benefit received, assessments will not be collected on:
stays of more than thirty (30) consecutive days; stays by any officer or employee of a
Federal, state, or foreign government who is exempt by reason of express provision
of federal or state law or international treaty.
Collection: The Petaluma Lodging Association will be responsible for contracting with a service
for collecting the assessment on a monthly basis (including any delinquencies,penalties
and interest) from each lodging business located in the boundaries of the PTID. The
service shall take all reasonable efforts to collect the assessments from each assessed
lodging business.
Duration: The PTID will have a ten (10) year life, beginning January 1, 2024 or as soon as
possible thereafter, and ending ten (10) years from its start date. After ten (10) years,
the PTID may be renewed pursuant to the Property and Business Improvement
District Law of 1994, Streets and Highways Code section 36600 et seq. (94 Law) if
lodging business owners support continuing the PTID programs. Once per year,
beginning on the anniversary of PTID renewal, there is a thirty (30) day period in
which lodging business owners paying fifty percent (50%) or more of the assessment
may protest and initiate a City Council hearing on PTID termination.
Management: The PLA shall continue to serve as the PTID's Owners' Association. The Owners'
Association is charged with managing funds and implementing programs in
PTID Management District Plan 3
September 11,2023
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accordance with this Plan, and in accordance with the 94 Law. The PLA is also
required to enter into an agreement or agreements with the City governing the
administration of the PTID, and the activities specified in this Management District
Plan, including administration of the Petaluma Visitors Center. The PLA must also
provide annual reports to the City Council concerning the PTID in accordance with
the Streets and Highways Code.
PTID Management District Plan 4
September 11,2023
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II. BACKGROUND
TIDs are an evolution of the traditional Business Improvement District. The first TID was formed
in West Hollywood, California in 1989. Since then, over 100 California destinations have followed
suit. In recent years, other states have begun adopting the California model — Massachusetts,
Montana, South Dakota, Washington, Colorado, Texas and Louisiana have
adopted TID laws. Several other states are in the process of adopting their own legislation. The cities
of Wichita, Kansas and Newark, New Jersey used an existing business improvement district law to
form a TID. Additionally, some cities, like Portland, Oregon and Memphis,Tennessee have utilized
their home rule powers to create TIDs without a state law.
Number of Districts Operating in California California's TIDs collectively
raise over $300 million
120 109114 annually for local destination
100 95 101 marketing. With competitors
raising their budgets, and
80 75 increasing rivalry for visitor
61 64 dollars, it is important
60
46 that Petaluma lodging
38 businesses continue to invest
40 19 25 29 32
in stable, commerce-specific
20 12 marketingprograms.
0 p �
5 o N ti a �, o ti 3 �, ti TIDs utilize the efficiencies of
yoo yoo yoo tioo ticP ticP ti� ti� yo° yo° yoti yoti yoti yoti yoti yoti yoti private sector operation in the
market-based promotion of
tourism districts. TIDs allow tourism business owners to organize their efforts to increase
commerce. Tourism business owners within the TID pay an assessment and those funds are used to
provide services that increase commerce.
In California, most TIDs are formed pursuant to the Property and Business Improvement District
Law of 1994. This law allows for the creation of a benefit assessment district to raise funds within a
specific geographic area. The key do'erence between TIDs and other benefit assessment districts is that unds raised
are returned to the-Private non-profit corborationgoverning the district.
There are many benefits to TIDs:
• Funds must be spent on services and improvements that provide a specific benefit only to those
who pay;
• Funds cannot be diverted to general government programs;
• They are customized to fit the needs of payors in each destination;
• They allow for a wide range of services;
• They are designed, created andgoverned by those who wi11 pay the assessment; and
• They provide a stable,long-term funding source for tourism promotion.
PTID Management District Plan 5
September 11,2023
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III. BOUNDARY
The PTID will include all lodging businesses,existing and in the future,available for public occupancy
within the boundaries of the City of Petaluma, as shown in the map below.
Lodging business means: any structure or any portion of any structure which is occupied or intended
or designed for occupancy by transients for dwelling, lodging or sleeping purposes and includes any
hotel,inn,motel with ten (10) or more sleeping rooms.Lodging business also includes areas or places
used for a camp, for camping or for a camp meeting, or other similar structure or portion thereof.
A complete listing of lodging businesses within the PTID can be found in Appendix 2.
Petaluma TO
City
Petaiuma
Petaluma TID Boundaries C �/ TA►S
PTID Management District Plan 6
September 11,2023
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IV. ASSESSMENT BUDGET AND SERVICES
A. Annual Service Plan
Assessment funds will be spent to provide specific benefits conferred or privileges granted directly to
the payors that are not provided to those not charged, and which do not exceed the reasonable cost
to the City of conferring the benefits or granting the privileges. The privileges and services provided
with the PTID funds are marketing, sales, communications, and destination development programs
available only to assessed lodging businesses.
A service plan assessment budget has been developed to deliver services that benefit the assessed
lodging businesses. A detailed annual assessment budget will be developed and approved by PLA.
The table below illustrates the initial annual assessment budget allocations. These activities and
allocations will also apply in subsequent years. The total initial assessment budget is $680,000.
InitialcAnnual Assessmen cKudVte- $680,000
Reserve,$27,200, $20,400, 3%
4% - —
Administration &�
Advocacy,
$108,800, 16%
Marketing,
Research &
Destination Communications,
Development, $408,000, 60%
$115,600, 17%
Although actual revenues will fluctuate due to market conditions, the proportional allocations of the
budget shall remain the same. However,the City and the PLA board shall have the authority to adjust
budget allocations between the categories by no more than fifteen percent (15%) of the total budget
per year. A description of the proposed improvements and activities for the initial year of operation
is below. The same activities are proposed for subsequent years. In the event of a legal challenge
against the PTID, any and all assessment funds may be used for the costs of defending the PTID.
Each budget category includes all costs related to providing that service. For example, the marketing,
research and communications budget includes the cost of staff time dedicated to overseeing and
implementing the marketing, research and communications program. Staff time dedicated purely to
administrative tasks is allocated to the administrative portion of the budget.The costs of an individual
staff member may be allocated to multiple budget categories. The staffing levels necessary to provide
the services below will be determined by the PLA on an as-needed basis.
Marketing, Research, & Communications
A marketing,research&communications program will promote assessed lodging businesses as tourist,
meeting, and event destinations. The marketing, research and communications program will have a
PTID Management District Plan 7
September 11,2023
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central theme of promoting Petaluma as a desirable place for overnight visits. The program will have
the goal of increasing demand for overnight visitation and room night sales at assessed lodging
businesses, and may include the following activities:
• Conduct research to understand the Petaluma visitor experience,brand,primary motivators for
visiting and most importantly, to develop an overall strategic marketing plan that solidifies the
Petaluma brand in Sonoma County;
• Develop Return on Investment (ROI) analysis on effectiveness of TID funds to improve
effectiveness and increase overnight visitation at assessed lodging businesses;
• Develop internet marketing efforts (including website and social media) to increase awareness
and optimize internet presence to drive overnight visitation and room sales to assessed lodging
businesses;
• Proactively work with travel writers, social media influencers, bloggers and pursue other public
relations opportunities;
• Work closely with local businesses, organizations, associations and sports group to attract events
and meetings that drive overnight stays;
• Promoting downtown and Citywide events that attract visitors to drive overnight visitation;
• Showcase Petaluma as a film and photography location with the goal of generating overnight
stays;
• Conduct familiarization tours of assessed lodging businesses and visitor-related businesses;
• Expand our overnight demand from foreign and domestic inbound visitors from SFO
(recognizing SFO as the gateway for leisure and business travel), Oakland and Santa Rosa
airports;
• Work closely with other DMOs including Visit California, Sonoma County Tourism and SF
Travel to expand the reach of our brand message;
• Create television / radio ads targeted at potential visitors to drive overnight visitation and room
sales to assessed lodging businesses;
• Create print ads in selected magazines and newspapers targeted at potential visitors to drive
overnight visitation and room sales to assessed lodging businesses;
• Preparation and production of collateral promotional materials such as brochures, flyers and
maps featuring assessed lodging businesses;
• Attendance of professional industry conferences and affiliation events to promote assessed
lodging businesses;
• Lead generation activities designed to attract tourists and group events to assessed lodging
businesses;
• Director of Sales and General Manager meetings to plan and coordinate tourism promotion
efforts for assessed lodging businesses;
• Development and implementation of a public relations and communications strategy,inclusive
of social media outlets and press release distribution designed to increase overnight visitation at
assessed lodging businesses;
• Training and support of Visitors Center staff and volunteers;
• Workforce development strategies, research and/or programs designed to improve the visitor
experience and increase demand for overnight visitation and room sales to assessed businesses;
• Hospitality education and training support aimed at improving the visitor experience leading to
increased demand for overnight visitation and room sales to assessed businesses;
• Fund operations and tenant improvements directly related to the operations of the Visitors
Center in accordance with the license agreement; and
• Attendance of trade shows to promote assessed lodging businesses and the Petaluma brand.
PTID Management District Plan 8
September 11,2023
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Destination Development
Seventeen percent (17%) of the PTID budget will be dedicated to Destination Development (DD)
projects will be designed to improve the visitor experience in an effort to increase overnight visitation
at assessed lodging businesses. These funds will be directed to the City of Petaluma to provide
activities,projects, and improvements that benefit lodging businesses,promote tourism, and increase
room rentals, consistent with the 94 Law. The City and PLA will in partnership to collaborate on the
use of these monies. As the total number of rooms sold and room prices increase over time, the
amount of available funds for DD projects will increase. DD projects may include:
• Destination product development programs and improvements designed to drive overnight
visitation and room sales to assessed lodging businesses;
• Services designed to improve the visitors experience such as but not limited to,beautification,
and/or creation of new Arts, Cultural and Educational activities;
• Other activities that increase the profile and notoriety of Petaluma as an overnight travel
destination and promote greater room night sales for assessed lodging businesses.
Administration/Advocacy
The administration/advocacy portion of the budget shall be utilized for administrative staffing costs,
office costs, advocacy, and other general administrative costs such as insurance,legal, and accounting
fees.
City Administration Fee
The City of Petaluma shall be paid a fee equal to three percent (3%) of the amount of assessment
collected to cover its costs of administration related to the agreement with the PLA for administering
the PTID and agreements governing operation of the Visitors Center and other administrative
activities related to the PTID.
Contingency/Reserve
The budget includes a contingency line item to account for uncollected assessments, if any. If there
are contingency funds collected, they may be held in a reserve fund or utilized for other program,
administration or renewal costs at the discretion of the PLA Board. Policies relating to contributions
to the reserve fund,the target amount of the reserve fund,and expenditure of monies from the reserve
fund shall be set by the PLA Board. Contingency/reserve funds may be spent on District programs
or administrative and renewal costs in such proportions as determined by the PLA Board. The reserve
fund may be used for the costs of renewing the PTID.
B. Annual Budget
The total ten (10) year assessment budget is projected at approximately $680,000 annually, or
approximately $6,800,000 through 2033. A similar budget is expected to apply to subsequent years,
but this budget is expected to fluctuate as room sales do, as lodging businesses open and close,and if
the assessment rate is increased or decreased pursuant to this Plan.
PTID Management District Plan 9
September 11,2023
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The table below demonstrates the annual improvement and service plan budget.
Estimated Annual Bud et
Marketing, Destination Administration Contingency/ City Admin Total
Year Research & Development &Advocacy Reserve Fee
Communications
2024 $510,000 $115,600 $108,800 $27,200 $20,400 $680,000
2025 $510,000 $115,600 $108,800 $27,200 $20,400 $680,000
2026 $510,000 $115,600 $108,800 $27,200 $20,400 $680,000
2027 $510,000 $115,600 $108,800 $27,200 $20,400 $680,000
2028 $510,000 $115,600 $108,800 $27,200 $20,400 $680,000
2029 $510,000 $115,600 $108,800 $27,200 $20,400 $680,000
2030 $510,000 $115,600 $108,800 $27,200 $20,400 $680,000
2031 $510,000 $115,600 $108,800 $27,200 $20,400 $680,000
2032 $510,000 $115,600 $108,800 $27,200 $20,400 $680,000
2033 $510,000 $115,600 $108,800 $27,200 $20,400 $680,000
Total $5,100,000 $1,156,000 $1,088,000 $272,000 $204,000 $6,800,000
C. California Constitutional Compliance
The PTID assessment is not a property-based assessment subject to the requirements of Proposition
218. Courts have found Proposition 218 limited the term `assessments' to levies on real property.l
Rather, the PTID assessment is a business-based assessment, and is subject to Proposition 26.
Pursuant to Proposition 26 all levies are a tax unless they fit one of seven exceptions. Two of these
exceptions apply to the PTID, a "specific benefit" and a "specific government service."Both require
that the costs of benefits or services do not exceed the reasonable costs to the City of conferring the
benefits or providing the services.
1. Specific Benefit
Proposition 26 requires that assessment funds be expended on, "a specific benefit conferred or
privilege granted directly to the payor that is not provided to those not charged, and which does not
exceed the reasonable costs to the local government of conferring the benefit or granting the
privilege."2 The services in this Plan are designed to provide targeted benefits directly to assessed
lodging businesses, and are intended only to provide benefits and services directly to those lodging
businesses paying the assessment. These services are tailored not to serve the general public,
businesses in general, or parcels of land,but rather to serve the specific lodging businesses within the
PTID.The activities described in this Plan are specifically targeted to increase demand for room night
sales for assessed lodging businesses within the boundaries of the PTID, and are narrowly tailored.
PTID funds will be used exclusively to provide the specific benefit of increased demand for room
night sales directly to the assessees. Assessment funds shall not be used to feature non-assessed
lodging businesses in PTID programs, or to directly generate sales for non-assessed businesses. The
activities paid for from assessment revenues are lodging business services constituting and providing
specific benefits to the assessed lodging businesses. Nothing in this Plan limits the ability of the
Owners' Association to enter into private contracts with non-assessed lodging businesses for the
provision of services to those businesses.
1 Jarvis v. the City of San Diego 72 Cal App.41h 230
2 Cal.Const. art XIII C § 1(e)(1)
PTID Management District Plan 10
September 11,2023
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The assessment imposed by this PTID is for a specific benefit conferred directly to the payors that is
not provided to those not charged. The specific benefit conferred directly to the payors is an increase
in demand for room night sales. The specific benefit of an increase in demand for room night sales
for assessed lodging businesses will be provided only to lodging businesses paying the district
assessment, with marketing, research and communications, and destination development programs
promoting lodging businesses paying the PTID assessment. The marketing, research and
communications,and destination development programs will be designed to increase room night sales
at each assessed lodging businesses. Because they are necessary to provide the marketing, research
and communications, and destination development programs that specifically benefit the assessed
lodging businesses, the administration and contingency services also provide the specific benefit of
increased demand for room night sales to the assessed lodging businesses.
Although the PTID,in providing specific benefits to payors,may produce incidental benefits to non-
paying businesses, the incidental benefit does not preclude the services from being considered a
specific benefit. The legislature has found that, "A specific benefit is not excluded from classification
as a`specific benefit'merely because an indirect benefit to a nonpayor occurs incidentally and without
cost to the payor as a consequence of providing the specific benefit to the payor."3
2. Specific Government Service
The assessment may also be utilized to provide, "a specific government service or product provided
directly to the payor that is not provided to those not charged, and which does not exceed the
reasonable costs to the local government of providing the service or product."4 The legislature has
recognized that marketing and promotions services like those to be provided by the PTID are
government services within the meaning of Proposition 265. Further, the legislature has determined
that "a specific government service is not excluded from classification as a `specific government
service' merely because an indirect benefit to a nonpayor occurs incidentally and without cost to the
payor as a consequence of providing the specific government service to the payor."6
3. Reasonable Cost
PTID services will be implemented carefully to ensure they do not exceed the reasonable cost of such
services. The full amount assessed will be used to provide the services described herein. Funds will
be managed by the PLA, and reports submitted on an annual basis to the City. Only assessed lodging
businesses will be featured in marketing materials, receive sales leads generated from PTID-funded
activities, be featured in advertising campaigns, and benefit from other PTID-funded services. Non-
assessed lodging businesses will not receive these,nor any other,PTID-funded services and benefits.
The PTID-funded programs are all targeted directly at and feature only assessed lodging businesses.
It is, however, possible that there will be a spill over benefit to non-assessed businesses. If non-
assessed lodging businesses receive incremental room nights, that portion of the promotion or
program generating those room nights shall be paid with non-PTID funds. PTID funds shall only be
spent to benefit the assessed lodging businesses,and shall not be spent on that portion of any program
which directly generates incidental room nights for non-assessed businesses.
3 Government Code§ 53758(a)
4 Cal.Const. art XIII C § I(e)(2)
5 Government Code§ 53758(b)
6 Government Code§ 53758(b)
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D. Assessment
The annual assessment rate is two percent (2%) of gross short-term sleeping room rental revenue.
Based on the benefit received, assessments will not be collected on: stays of more than thirty (30)
consecutive days; stays by any officer or employee of a Federal, state, or foreign government who is
exempt by reason of express provision of federal or state law or international treaty.
The assessment was calculated based on the total cost of the activities to be provided for the benefit
of the lodging businesses within the PTID with costs allocated based on the proportional benefit
conferred to each lodging business. Activities funded by the PTID are specifically targeted to increase
room nights at assessed lodging businesses.All room night sales do not represent the same benefit to
the payors. For example, a higher priced room night is of greater benefit than a lower priced room
night because the assessee derives greater revenue. To account for this benefit differential and to
make sure the benefits are proportional,an assessment formula based on a percentage of revenue has
been selected. The proposed formula accurately reflects greater benefit to assessed lodging businesses
with higher priced room nights.
The term "gross sleeping room rental revenue" as used herein means: the consideration charged,
whether or not received,for the occupancy of a space in a lodging business,valued in money,whether
to be received in money, goods, labor or otherwise, including all receipts, cash, credits and property
and services of any kind or nature,without any deduction therefrom whatsoever. Gross room rental
revenue shall not include any federal, state or local taxes collected, including but not limited to
transient occupancy taxes.
The assessment is levied upon and a direct obligation of the assessed lodging business. However,the
assessed lodging business may, at its discretion,pass the assessment on to transients. The amount of
assessment,if passed on to each transient,shall be disclosed in advance and separately stated from the
amount of rent charged and any other applicable taxes, and each transient shall receive a receipt for
payment from the business. If the PTID assessment is identified separately it shall be disclosed as the
"PTID Assessment." As an alternative, the disclosure may include the amount of the PTID
assessment and the amount of the assessment imposed pursuant to the California Tourism Marketing
Act, Government Code §13995 et seq. and shall be disclosed as the "Tourism Assessment." The
assessment is imposed solely upon, and is the sole obligation of the assessed lodging business even if
it is passed on to transients. The assessment shall not be considered revenue for calculation of
transient occupancy taxes.
Bonds shall not be issued.
E. Penalties and Interest
The PTID shall reimburse the City of Petaluma for any costs associated with collecting unpaid
assessments. If sums in excess of the delinquent PTID assessment are sought to be recovered in the
same collection action by the City, the PTID shall bear its pro rata share of such collection costs.
Assessed lodging businesses which are delinquent in paying the assessment shall be responsible for
paying:
1. Original Delinquency
Any lodging business that fails to remit any assessment imposed within the time required shall
pay a penalty of ten percent (10%) of the amount of the assessment in addition to the amount
of the assessment.
2. Continued Delinquency
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Any lodging business that fails to remit any delinquent assessment on or before a period of
thirty (30) days following the date on which the assessment first became delinquent shall pay
a second delinquency penalty of ten percent(10%) of the amount of the assessment in addition
to the amount of the assessment and the ten percent (10%) penalty first imposed.
3. Fraud
If PLA determines that the nonpayment of any assessment is due to fraud,a penalty of twenty-
five percent (25%) of the amount of the assessment shall be added thereto in addition to the
penalties stated above.
4. Interest
In addition to the penalties imposed, any lodging business that fails to remit any assessment
imposed shall pay interest at the rate of one-half of one percent (0.5%) per month or fraction
thereof on the amount of the assessment, exclusive of penalties, from the date on which the
assessment first became delinquent until paid.
5. Penalties Merged with Assessment
Every penalty imposed and such interest as accrues under the provisions of subparagraphs 1-
4 of this subsection E, shall become a part of the assessment required to be paid.
F. Time and Manner for Collecting Assessments
The PTID assessment will be implemented beginning January 1,2024 or as soon as possible thereafter,
and will continue for ten (10) years from its start date. PLA will be responsible for contracting with a
service for collecting the assessment on a monthly basis (including any delinquencies, penalties and
interest) from each lodging business. The service shall take all reasonable efforts to collect the
assessments from each lodging business. The service shall forward the assessments collected to the
Owners'Association.
V. GOVERNANCE
A. Owners' Association
The City Council, through adoption of this Management District Plan, has the right, pursuant to
Streets and Highways Code §36651,to identify the body that shall implement the proposed program,
which shall be the Owners'Association of the PTID as defined in Streets and Highways Code §36612.
The City Council has determined that the PLA will serve as the Owners' Association for the PTID.
The PLA as Owners Association shall continue to contract with the City regarding the administration
of the PTID and the Visitors Center.
B. Brown Act and California Public Records Act Compliance
An Owners'Association is a private entity and may not be considered a public entity for any purpose,
nor may its board members or staff be considered to be public officials for any purpose.The Owners'
Association is,however, subject to government regulations relating to transparency,namely the Ralph
M. Brown Act and the California Public Records Act. These regulations are designed to promote
public accountability. The Owners'Association acts as a legislative body under the Ralph M. Brown
Act (Government Code §54950 et seq.).Thus,meetings of the Board and certain committees must be
held in compliance with the public notice and other requirements of the Brown Act.Accordingly,the
Owners'Association shall publicly report any action taken and the vote or abstention on that action
of each member present for the action.The Owners'Association is also subject to the record keeping
and disclosure requirements of the California Public Records Act.
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C. Annual Report
The PLA shall present an annual report at the end of each year of operation to the City Council
pursuant to Streets and Highways Code 536650 (see Appendix 1). The annual report shall include:
• Any proposed changes in the boundaries of the improvement district or in any benefit zones
or classification of businesses within the district.
• The improvements and activities to be provided for that fiscal year.
• An estimate of the cost of providing the improvements and the activities for that fiscal year.
• The method and basis of levying the assessment in sufficient detail to allow each lodging
business owner to estimate the amount of the assessment to be levied against his or her lodging
business for that fiscal year.
• The estimated amount of any surplus or deficit revenues to be carried over from a previous
fiscal year.
• The estimated amount of any contributions to be made from sources other than assessments
levied pursuant to this part.
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APPENDIX 1 - LAW
***THIS DOCUMENT IS CURRENT THROUGH THE 2023 SUPPLEMENT***
(ALL 2022 LEGISLATION)
STREETS AND HIGHWAYS CODE
DIVISION 18.PARKING
PART 7.PROPERTY AND BUSINESS IMPROVEMENT DISTRICT LAW OF 1994
CHAPTER 1.General Provisions
ARTICLE 1.Declarations
36600.Citation of part
This part shall be known and may be cited as the"Property and Business Improvement District Law of 1994."
36601.Legislative findings and declarations;Legislative guidance
The Legislature finds and declares all of the following:
(a) Businesses located and operating within business districts in some of this state's communities are
economically disadvantaged, are underutilized, and are unable to attract customers due to inadequate
facilities,services,and activities in the business districts.
(b)It is in the public interest to promote the economic revitalization and physical maintenance of business
districts in order to create jobs,attract new businesses,and prevent the erosion of the business districts.
(c) It is of particular local benefit to allow business districts to fund business related improvements,
maintenance,and activities through the levy of assessments upon the businesses or real property that receive
benefits from those improvements.
(d) Assessments levied for the purpose of conferring special benefit upon the real property or a specific
benefit upon the businesses in a business district are not taxes for the general benefit of a city,even if property,
businesses,or persons not assessed receive incidental or collateral effects that benefit them.
(e)Property and business improvement districts formed throughout this state have conferred special benefits
upon properties and businesses within their districts and have made those properties and businesses more
useful by providing the following benefits:
(1)Crime reduction.A study by the Rand Corporation has confirmed a 12-percent reduction in the
incidence of robbery and an 8-percent reduction in the total incidence of violent crimes within the
30 districts studied.
(2)Job creation.
(3)Business attraction.
(4)Business retention.
(5)Economic growth.
(6)New investments.
(f)With the dissolution of redevelopment agencies throughout the state,property and business improvement
districts have become even more important tools with which communities can combat blight, promote
economic opportunities,and create a clean and safe environment.
(g) Since the enactment of this act, the people of California have adopted Proposition 218, which added
Article XIII D to the Constitution in order to place certain requirements and restrictions on the formation of,
and activities, expenditures, and assessments by property-based districts.Article XIII D of the Constitution
provides that property-based districts may only levy assessments for special benefits.
(h)The act amending this section is intended to provide the Legislature's guidance with regard to this act,its
interaction with the provisions of Article XIII D of the Constitution,and the determination of special benefits
in property-based districts.
(1)The lack of legislative guidance has resulted in uncertainty and inconsistent application of this
act, which discourages the use of assessments to fund needed improvements, maintenance, and
activities in property-based districts,contributing to blight and other underutilization of property.
(2)Activities undertaken for the purpose of conferring special benefits upon property to be assessed
inherently produce incidental or collateral effects that benefit property or persons not assessed.
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Therefore,for special benefits to exist as a separate and distinct category from general benefits,the
incidental or collateral effects of those special benefits are inherently part of those special benefits.
The mere fact that special benefits produce incidental or collateral effects that benefit property or
persons not assessed does not convert any portion of those special benefits or their incidental or
collateral effects into general benefits.
(3) It is of the utmost importance that property-based districts created under this act have clarity
regarding restrictions on assessments they may levy and the proper determination of special benefits.
Legislative clarity with regard to this act will provide districts with clear instructions and courts with
legislative intent regarding restrictions on property-based assessments, and the manner in which
special benefits should be determined.
36602.Purpose of part
The purpose of this part is to supplement previously enacted provisions of law that authorize cities to levy assessments
within property and business improvement districts, to ensure that those assessments conform to all constitutional
requirements and are determined and assessed in accordance with the guidance set forth in this act.This part does not
affect or limit any other provisions of law authorizing or providing for the furnishing of improvements or activities or
the raising of revenue for these purposes.
36603.Preemption of authority or charter city to adopt ordinances levying assessments
Nothing in this part is intended to preempt the authority of a charter city to adopt ordinances providing for a different
method of levying assessments for similar or additional purposes from those set forth in this part. A property and
business improvement district created pursuant to this part is expressly exempt from the provisions of the Special
Assessment Investigation,Limitation and Majority Protest Act of 1931 (Division 4(commencing with Section 2800)).
36603.5. Part prevails over conflicting provisions
Any provision of this part that conflicts with any other provision of law shall prevail over the other provision of law,
as to districts created under this part.
36604.Severability
This part is intended to be construed liberally and, if any provision is held invalid, the remaining provisions shall
remain in full force and effect.Assessments levied under this part are not special taxes.
ARTICLE 2.Definitions
36606."Activities"
"Activities"means,but is not limited to,all of the following that benefit businesses or real property in the district:
(a)Promotion of public events.
(b)Furnishing of music in any public place.
(c)Promotion of tourism within the district.
(d)Marketing and economic development,including retail retention and recruitment.
(e)Providing security,sanitation,graffiti removal,street and sidewalk cleaning,and other municipal services
supplemental to those normally provided by the municipality.
(f) Other services provided for the purpose of conferring special benefit upon assessed real property or
specific benefits upon assessed businesses located in the district.
36606.5."Assessment"
"Assessment"means a levy for the purpose of acquiring, constructing, installing, or maintaining improvements and
providing activities that will provide certain benefits to properties or businesses located within a property and business
improvement district.
36607."Business"
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"Business"means all types of businesses and includes financial institutions and professions.
36608."City"
"City"means a city, county,city and county,or an agency or entity created pursuant to Article 1 (commencing with
Section 6500) of Chapter 5 of Division 7 of Title 1 of the Government Code,the public member agencies of which
includes only cities,counties,or a city and county,or the State of California.
36609."City council"
"City council"means the city council of a city or the board of supervisors of a county,or the agency,commission,or
board created pursuant to a joint powers agreement and which is a city within the meaning of this part.
36609.4."Clerk"
"Clerk"means the clerk of the legislative body.
36609.5."General benefit"
"General benefit"means,for purposes of a property-based district,any benefit that is not a"special benefit"as defined
in Section 36615.5.
36610."Improvement"
"Improvement" means the acquisition, construction, installation, or maintenance of any tangible property with an
estimated useful life of five years or more including,but not limited to,the following:
(a)Parking facilities.
(b)Benches,booths,kiosks,display cases,pedestrian shelters and signs.
(c)Trash receptacles and public restrooms.
(d)Lighting and heating facilities.
(e)Decorations.
(f)Parks.
(g)Fountains.
(h)Planting areas.
(i)Closing,opening,widening,or narrowing of existing streets.
0)Facilities or equipment,or both,to enhance security of persons and property within the district.
(k)Ramps,sidewalks,plazas,and pedestrian malls.
(1)Rehabilitation or removal of existing structures.
36611."Management district plan"; "Plan"
"Management district plan"or"plan"means a proposal as defined in Section 36622.
36612."Owners' association"
"Owners' association"means a private nonprofit entity that is under contract with a city to administer or implement
improvements,maintenance,and activities specified in the management district plan.An owners' association may be
an existing nonprofit entity or a newly formed nonprofit entity.An owners'association is a private entity and may not
be considered a public entity for any purpose,nor may its board members or staff be considered to be public officials
for any purpose. Notwithstanding this section, an owners' association shall comply with the Ralph M. Brown Act
(Chapter 9(commencing with Section 54950)of Part 1 of Division 2 of Title 5 of the Government Code),at all times
when matters within the subject matter of the district are heard, discussed, or deliberated, and with the California
Public Records Act(Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code), for all
records relating to activities of the district.
36614."Property"
"Property"means real property situated within a district.
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36614.5."Property and business improvement district"; "District"
"Property and business improvement district," or "district," means a property and business improvement district
established pursuant to this part.
36614.6."Property-based assessment"
"Property-based assessment"means any assessment made pursuant to this part upon real property.
36614.7."Property-based district"
"Property-based district"means any district in which a city levies a property-based assessment.
36615."Property owner";"Business owner";"Owner"
"Property owner"means any person shown as the owner of land on the last equalized assessment roll or otherwise
known to be the owner of land by the city council."Business owner"means any person recognized by the city as the
owner of the business."Owner"means either a business owner or a property owner.The city council has no obligation
to obtain other information as to the ownership of land or businesses,and its determination of ownership shall be final
and conclusive for the purposes of this part. Wherever this part requires the signature of the property owner, the
signature of the authorized agent of the property owner shall be sufficient.Wherever this part requires the signature
of the business owner,the signature of the authorized agent of the business owner shall be sufficient.
36615.5."Special benefit"
(a)"Special benefit"means,for purposes of a property-based district,a particular and distinct benefit over and above
general benefits conferred on real property located in a district or to the public at large. Special benefit includes
incidental or collateral effects that arise from the improvements,maintenance,or activities of property-based districts
even if those incidental or collateral effects benefit property or persons not assessed. Special benefit excludes general
enhancement of property value.
(b)"Special benefit"also includes,for purposes of a property-based district,a particular and distinct benefit provided
directly to each assessed parcel within the district.Merely because parcels throughout an assessment district share the
same special benefits does not make the benefits general.
36616."Tenant"
"Tenant"means an occupant pursuant to a lease of commercial space or a dwelling unit,other than an owner.
ARTICLE 3.Prior Law
36617.Alternate method of financing certain improvements and activities;Effect on other provisions
This part provides an alternative method of financing certain improvements and activities.The provisions of this part
shall not affect or limit any other provisions of law authorizing or providing for the furnishing of improvements or
activities or the raising of revenue for these purposes. Every improvement area established pursuant to the Parking
and Business Improvement Area Law of 1989(Part 6(commencing with Section 36500)of this division)is valid and
effective and is unaffected by this part.
CHAPTER 2.Establishment
36620.Establishment of property and business improvement district
A property and business improvement district may be established as provided in this chapter.
36620.5.Requirement of consent of city council
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A county may not form a district within the territorial jurisdiction of a city without the consent of the city council of
that city.A city may not form a district within the unincorporated territory of a county without the consent of the board
of supervisors of that county.A city may not form a district within the territorial jurisdiction of another city without
the consent of the city council of the other city.
36621.Initiation of proceedings;Petition of property or business owners in proposed district
(a) Upon the submission of a written petition, signed by the property or business owners in the proposed
district who will pay more than 50 percent of the assessments proposed to be levied, the city council may
initiate proceedings to form a district by the adoption of a resolution expressing its intention to form a district.
The amount of assessment attributable to property or a business owned by the same property or business
owner that is in excess of 40 percent of the amount of all assessments proposed to be levied, shall not be
included in determining whether the petition is signed by property or business owners who will pay more
than 50 percent of the total amount of assessments proposed to be levied.
(b) The petition of property or business owners required under subdivision(a) shall include a summary of
the management district plan.That summary shall include all of the following:
(1)A map showing the boundaries of the district.
(2)Information specifying where the complete management district plan can be obtained.
(3) Information specifying that the complete management district plan shall be furnished upon
request.
(c)The resolution of intention described in subdivision(a)shall contain all of the following:
(1)A brief description of the proposed improvements, maintenance, and activities, the amount of
the proposed assessment, a statement as to whether the assessment will be levied on property or
businesses within the district, a statement as to whether bonds will be issued, and a description of
the exterior boundaries of the proposed district,which may be made by reference to any plan or map
that is on file with the clerk.The descriptions and statements do not need to be detailed and shall be
sufficient if they enable an owner to generally identify the nature and extent of the improvements,
maintenance,and activities,and the location and extent of the proposed district.
(2) A time and place for a public hearing on the establishment of the property and business
improvement district and the levy of assessments,which shall be consistent with the requirements
of Section 36623.
36622.Contents of management district plan
The management district plan shall include,but is not limited to,all of the following:
(a)If the assessment will be levied on property,a map of the district in sufficient detail to locate each parcel
of property and, if businesses are to be assessed,each business within the district. If the assessment will be
levied on businesses,a map that identifies the district boundaries in sufficient detail to allow a business owner
to reasonably determine whether a business is located within the district boundaries. If the assessment will
be levied on property and businesses,a map of the district in sufficient detail to locate each parcel of property
and to allow a business owner to reasonably determine whether a business is located within the district
boundaries.
(b)The name of the proposed district.
(c) A description of the boundaries of the district, including the boundaries of benefit zones, proposed for
establishment or extension in a manner sufficient to identify the affected property and businesses included,
which may be made by reference to any plan or map that is on file with the clerk. The boundaries of a
proposed property assessment district shall not overlap with the boundaries of another existing property
assessment district created pursuant to this part.This part does not prohibit the boundaries of a district created
pursuant to this part to overlap with other assessment districts established pursuant to other provisions of law,
including,but not limited to,the Parking and Business Improvement Area Law of 1989(Part 6(commencing
with Section 36500)). This part does not prohibit the boundaries of a business assessment district created
pursuant to this part to overlap with another business assessment district created pursuant to this part. This
part does not prohibit the boundaries of a business assessment district created pursuant to this part to overlap
with a property assessment district created pursuant to this part.
(d)The improvements,maintenance,and activities proposed for each year of operation of the district and the
estimated cost thereof.If the improvements,maintenance,and activities proposed for each year of operation
are the same, a description of the first year's proposed improvements, maintenance, and activities and a
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statement that the same improvements, maintenance, and activities are proposed for subsequent years shall
satisfy the requirements of this subdivision.
(e)The total annual amount proposed to be expended for improvements,maintenance,or activities,and debt
service in each year of operation of the district. If the assessment is levied on businesses,this amount may
be estimated based upon the assessment rate.If the total annual amount proposed to be expended in each year
of operation of the district is not significantly different, the amount proposed to be expended in the initial
year and a statement that a similar amount applies to subsequent years shall satisfy the requirements of this
subdivision.
(f) The proposed source or sources of financing, including the proposed method and basis of levying the
assessment in sufficient detail to allow each property or business owner to calculate the amount of the
assessment to be levied against their property or business. The plan also shall state whether bonds will be
issued to finance improvements.
(g)The time and manner of collecting the assessments.
(h)The specific number of years in which assessments will be levied.In a new district,the maximum number
of years shall be five. Upon renewal, a district shall have a term not to exceed 10 years. Notwithstanding
these limitations,a district created pursuant to this part to finance capital improvements with bonds may levy
assessments until the maximum maturity of the bonds. The management district plan may set forth specific
increases in assessments for each year of operation of the district.
(i)The proposed time for implementation and completion of the management district plan.
0)Any proposed rules and regulations to be applicable to the district.
(k)
(1)A list of the properties or businesses to be assessed,including the assessor's parcel numbers for
properties to be assessed, and a statement of the method or methods by which the expenses of a
district will be imposed upon benefited real property or businesses, in proportion to the benefit
received by the property or business,to defray the cost thereof.
(2)In a property-based district, the proportionate special benefit derived by each identified parcel
shall be determined exclusively in relationship to the entirety of the capital cost of a public
improvement,the maintenance and operation expenses of a public improvement, or the cost of the
activities.An assessment shall not be imposed on any parcel that exceeds the reasonable cost of the
proportional special benefit conferred on that parcel. Only special benefits are assessable, and a
property-based district shall separate the general benefits,if any,from the special benefits conferred
on a parcel. Parcels within a property-based district that are owned or used by any city, public
agency,the State of California,or the United States shall not be exempt from assessment unless the
governmental entity can demonstrate by clear and convincing evidence that those publicly owned
parcels in fact receive no special benefit.The value of any incidental,secondary,or collateral effects
that arise from the improvements, maintenance, or activities of a property-based district and that
benefit property or persons not assessed shall not be deducted from the entirety of the cost of any
special benefit or affect the proportionate special benefit derived by each identified parcel.
(3) In a property-based district, properties throughout the district may share the same special
benefits. In a district with boundaries that define which parcels are to receive improvements,
maintenance, or activities over and above those services provided by the city, the improvements,
maintenance, or activities themselves may constitute a special benefit. The city may impose
assessments that are less than the proportional special benefit conferred, but shall not impose
assessments that exceed the reasonable costs of the proportional special benefit conferred.Because
one or more parcels pay less than the special benefit conferred does not necessarily mean that other
parcels are assessed more than the reasonable cost of their special benefit.
(1) In a property-based district, a detailed engineer's report prepared by a registered professional engineer
certified by the State of California supporting all assessments contemplated by the management district plan.
(m)Any other item or matter required to be incorporated therein by the city council.
36623.Procedure to levy assessment
(a) If a city council proposes to levy a new or increased property assessment, the notice and protest and
hearing procedure shall comply with Section 53753 of the Government Code.
(b) If a city council proposes to levy a new or increased business assessment, the notice and protest and
hearing procedure shall comply with Section 54954.6 of the Government Code, except that notice shall be
mailed to the owners of the businesses proposed to be assessed.A protest may be made orally or in writing
by any interested person.Every written protest shall be filed with the clerk at or before the time fixed for the
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public hearing. The city council may waive any irregularity in the form or content of any written protest. A
written protest may be withdrawn in writing at any time before the conclusion of the public hearing. Each
written protest shall contain a description of the business in which the person subscribing the protest is
interested sufficient to identify the business and,if a person subscribing is not shown on the official records
of the city as the owner of the business,the protest shall contain or be accompanied by written evidence that
the person subscribing is the owner of the business or the authorized representative. A written protest that
does not comply with this section shall not be counted in determining a majority protest. If written protests
are received from the owners or authorized representatives of businesses in the proposed district that will pay
50 percent or more of the assessments proposed to be levied and protests are not withdrawn so as to reduce
the protests to less than 50 percent, no further proceedings to levy the proposed assessment against such
businesses, as contained in the resolution of intention, shall be taken for a period of one year from the date
of the finding of a majority protest by the city council.
(c) If a city council proposes to conduct a single proceeding to levy both a new or increased property
assessment and a new or increased business assessment,the notice and protest and hearing procedure for the
property assessment shall comply with subdivision(a),and the notice and protest and hearing procedure for
the business assessment shall comply with subdivision(b). If a majority protest is received from either the
property or business owners, that respective portion of the assessment shall not be levied. The remaining
portion of the assessment may be levied unless the improvement or other special benefit was proposed to be
funded by assessing both property and business owners.
36624.Changes to proposed assessments
At the conclusion of the public hearing to establish the district,the city council may adopt,revise,change,reduce,or
modify the proposed assessment or the type or types of improvements,maintenance,and activities to be funded with
the revenues from the assessments.Proposed assessments may only be revised by reducing any or all of them.At the
public hearing,the city council may only make changes in,to, or from the boundaries of the proposed property and
business improvement district that will exclude territory that will not benefit from the proposed improvements,
maintenance,and activities.Any modifications,revisions,reductions,or changes to the proposed assessment district
shall be reflected in the notice and map recorded pursuant to Section 36627.
36625.Resolution of formation
(a) If the city council, following the public hearing, decides to establish a proposed property and business
improvement district,the city council shall adopt a resolution of formation that shall include,but is not limited
to,all of the following:
(1)A brief description of the proposed improvements, maintenance, and activities, the amount of
the proposed assessment, a statement as to whether the assessment will be levied on property,
businesses,or both within the district,a statement on whether bonds will be issued,and a description
of the exterior boundaries of the proposed district,which may be made by reference to any plan or
map that is on file with the clerk.The descriptions and statements need not be detailed and shall be
sufficient if they enable an owner to generally identify the nature and extent of the improvements,
maintenance,and activities and the location and extent of the proposed district.
(2)The number,date of adoption,and title of the resolution of intention.
(3) The time and place where the public hearing was held concerning the establishment of the
district.
(4)A determination regarding any protests received. The city shall not establish the district or levy
assessments if a majority protest was received.
(5)A statement that the properties,businesses,or properties and businesses in the district established
by the resolution shall be subject to any amendments to this part.
(6)A statement that the improvements, maintenance, and activities to be conferred on businesses
and properties in the district will be funded by the levy of the assessments. The revenue from the
levy of assessments within a district shall not be used to provide improvements, maintenance, or
activities outside the district or for any purpose other than the purposes specified in the resolution
of intention,as modified by the city council at the hearing concerning establishment of the district.
Notwithstanding the foregoing, improvements and activities that must be provided outside the
district boundaries to create a special or specific benefit to the assessed parcels or businesses may
be provided,but shall be limited to marketing or signage pointing to the district.
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(7) A finding that the property or businesses within the area of the property and business
improvement district will be benefited by the improvements,maintenance,and activities funded by
the proposed assessments, and, for a property-based district, that property within the district will
receive a special benefit.
(8) In a property-based district, the total amount of all special benefits to be conferred on the
properties within the property-based district.
(b)The adoption of the resolution of formation and,if required,recordation of the notice and map pursuant
to Section 36627 shall constitute the levy of an assessment in each of the fiscal years referred to in the
management district plan.
36627.Notice and assessment diagram
Following adoption of the resolution establishing district assessments on properties pursuant to Section 36625, the
clerk shall record a notice and an assessment diagram pursuant to Section 3114.No other provision of Division 4.5
(commencing with Section 3100)applies to an assessment district created pursuant to this part.
36628.Establishment of separate benefit zones within district;Categories of businesses
The city council may establish one or more separate benefit zones within the district based upon the degree of benefit
derived from the improvements or activities to be provided within the benefit zone and may impose a different
assessment within each benefit zone.If the assessment is to be levied on businesses,the city council may also define
categories of businesses based upon the degree of benefit that each will derive from the improvements or activities to
be provided within the district and may impose a different assessment or rate of assessment on each category of
business,or on each category of business within each zone.
36628.5.Assessments on businesses or property owners
The city council may levy assessments on businesses or on property owners,or a combination of the two,pursuant to
this part. The city council shall structure the assessments in whatever manner it determines corresponds with the
distribution of benefits from the proposed improvements, maintenance, and activities, provided that any property-
based assessment conforms with the requirements set forth in paragraph(2)of subdivision(k)of Section 36622.
36629.Provisions and procedures applicable to benefit zones and business categories
All provisions of this part applicable to the establishment,modification,or disestablishment of a property and business
improvement district apply to the establishment, modification, or disestablishment of benefit zones or categories of
business.The city council shall,to establish,modify,or disestablish a benefit zone or category of business,follow the
procedure to establish,modify,or disestablish a property and business improvement district.
36630.Expiration of district;Creation of new district
If a property and business improvement district expires due to the time limit set pursuant to subdivision(h)of
Section 36622,a new management district plan may be created and the district may be renewed pursuant to this part.
CHAPTER 3.Assessments
36631.Time and manner of collection of assessments;Delinquent payments
The collection of the assessments levied pursuant to this part shall be made at the time and in the manner set forth by
the city council in the resolution levying the assessment.Assessments levied on real property may be collected at the
same time and in the same manner as for the ad valorem property tax,and may provide for the same lien priority and
penalties for delinquent payment.All delinquent payments for assessments levied pursuant to this part may be charged
interest and penalties.
36632.Assessments to be based on estimated benefit; Classification of real property and businesses;Exclusion
of residential and agricultural property
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(a)The assessments levied on real property pursuant to this part shall be levied on the basis of the estimated
benefit to the real property within the property and business improvement district. The city council may
classify properties for purposes of determining the benefit to property of the improvements and activities
provided pursuant to this part.
(b)Assessments levied on businesses pursuant to this part shall be levied on the basis of the estimated benefit
to the businesses within the property and business improvement district. The city council may classify
businesses for purposes of determining the benefit to the businesses of the improvements and activities
provided pursuant to this part.
(c)Properties zoned solely for residential use, or that are zoned for agricultural use, are conclusively
presumed not to benefit from the improvements and service funded through these assessments,and shall not
be subject to any assessment pursuant to this part.
36633.Time for contesting validity of assessment
The validity of an assessment levied under this part shall not be contested in an action or proceeding unless the action
or proceeding is commenced within 30 days after the resolution levying the assessment is adopted pursuant to Section
36625.An appeal from a final judgment in an action or proceeding shall be perfected within 30 days after the entry of
judgment.
36634.Service contracts authorized to establish levels of city services
The city council may execute baseline service contracts that would establish levels of city services that would continue
after a property and business improvement district has been formed.
36635.Request to modify management district plan
The owners' association may, at any time, request that the city council modify the management district plan. Any
modification of the management district plan shall be made pursuant to this chapter.
36636.Modification of plan by resolution after public hearing;Adoption of resolution of intention
(a)Upon the written request of the owners'association,the city council may modify the management district
plan after conducting one public hearing on the proposed modifications. The city council may modify the
improvements and activities to be funded with the revenue derived from the levy of the assessments by
adopting a resolution determining to make the modifications after holding a public hearing on the proposed
modifications. If the modification includes the levy of a new or increased assessment,the city council shall
comply with Section 36623. Notice of all other public hearings pursuant to this section shall comply with
both of the following:
(1)The resolution of intention shall be published in a newspaper of general circulation in the city
once at least seven days before the public hearing.
(2)A complete copy of the resolution of intention shall be mailed by first class mail,at least 10 days
before the public hearing, to each business owner or property owner affected by the proposed
modification.
(b)The city council shall adopt a resolution of intention which states the proposed modification prior to the
public hearing required by this section. The public hearing shall be held not more than 90 days after the
adoption of the resolution of intention.
36637.Reflection of modification in notices recorded and maps
Any subsequent modification of the resolution shall be reflected in subsequent notices and maps recorded pursuant to
Division 4.5(commencing with Section 3100),in a manner consistent with the provisions of Section 36627.
CHAPTER 3.5.Financing
36640. Bonds authorized; Procedure;Restriction on reduction or termination of assessments
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(a)The city council may, by resolution, determine and declare that bonds shall be issued to finance the
estimated cost of some or all of the proposed improvements described in the resolution of formation adopted
pursuant to Section 36625, if the resolution of formation adopted pursuant to that section provides for the
issuance of bonds,under the Improvement Bond Act of 1915(Division 10(commencing with Section 8500))
or in conjunction with Marks-Roos Local Bond Pooling Act of 1985 (Article 4 (commencing with Section
6584) of Chapter 5 of Division 7 of Title 1 of the Government Code). Either act, as the case may be, shall
govern the proceedings relating to the issuance of bonds,although proceedings under the Bond Act of 1915
may be modified by the city council as necessary to accommodate assessments levied upon business pursuant
to this part.
(b)The resolution adopted pursuant to subdivision(a) shall generally describe the proposed improvements
specified in the resolution of formation adopted pursuant to Section 36625, set forth the estimated cost of
those improvements,specify the number of annual installments and the fiscal years during which they are to
be collected.The amount of debt service to retire the bonds shall not exceed the amount of revenue estimated
to be raised from assessments over 30 years.
(c)Notwithstanding any other provision of this part,assessments levied to pay the principal and interest on
any bond issued pursuant to this section shall not be reduced or terminated if doing so would interfere with
the timely retirement of the debt.
CHAPTER 4.Governance
36650.Report by owners' association;Approval or modification by city council
(a)The owners' association shall cause to be prepared a report for each fiscal year, except the first year,for
which assessments are to be levied and collected to pay the costs of the improvements, maintenance, and
activities described in the report. The owners' association's first report shall be due after the first year of
operation of the district.The report may propose changes,including,but not limited to,the boundaries of the
property and business improvement district or any benefit zones within the district,the basis and method of
levying the assessments, and any changes in the classification of property, including any categories of
business,if a classification is used.
(b)The report shall be filed with the clerk and shall refer to the property and business improvement district
by name,specify the fiscal year to which the report applies,and,with respect to that fiscal year,shall contain
all of the following information:
(1)Any proposed changes in the boundaries of the property and business improvement district or in
any benefit zones or classification of property or businesses within the district.
(2)The improvements,maintenance,and activities to be provided for that fiscal year.
(3)An estimate of the cost of providing the improvements,maintenance,and activities for that fiscal
year.
(4)The method and basis of levying the assessment in sufficient detail to allow each real property
or business owner,as appropriate,to estimate the amount of the assessment to be levied against his
or her property or business for that fiscal year.
(5)The estimated amount of any surplus or deficit revenues to be carried over from a previous fiscal
year.
(6) The estimated amount of any contributions to be made from sources other than assessments
levied pursuant to this part.
(c)The city council may approve the report as filed by the owners' association or may modify any particular
contained in the report and approve it as modified. Any modification shall be made pursuant to Sections
36635 and 36636.
The city council shall not approve a change in the basis and method of levying assessments that would impair
an authorized or executed contract to be paid from the revenues derived from the levy of assessments,
including any commitment to pay principal and interest on any bonds issued on behalf of the district.
36651.Designation of owners' association to provide improvements,maintenance,and activities
The management district plan may, but is not required to, state that an owners' association will provide the
improvements,maintenance,and activities described in the management district plan.If the management district plan
designates an owners'association,the city shall contract with the designated nonprofit corporation to provide services.
CHAPTER 5.Renewal
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36660.Renewal of district; Transfer or refund of remaining revenues;District term limit
(a)Any district previously established whose term has expired,or will expire,may be renewed by following
the procedures for establishment as provided in this chapter.
(b)Upon renewal, any remaining revenues derived from the levy of assessments, or any revenues derived
from the sale of assets acquired with the revenues,shall be transferred to the renewed district.If the renewed
district includes additional parcels or businesses not included in the prior district, the remaining revenues
shall be spent to benefit only the parcels or businesses in the prior district. If the renewed district does not
include parcels or businesses included in the prior district,the remaining revenues attributable to these parcels
shall be refunded to the owners of these parcels or businesses.
(c)Upon renewal, a district shall have a term not to exceed 10 years, or,if the district is authorized to issue
bonds,until the maximum maturity of those bonds.There is no requirement that the boundaries,assessments,
improvements,or activities of a renewed district be the same as the original or prior district.
CHAPTER 6.Disestablishment
36670.Circumstances permitting disestablishment of district;Procedure
(a)Any 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 or authorized
representatives of real property or the owners or authorized representatives of businesses in the
district who pay 50 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 or to
the owner of each business 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.
36671. Refund of remaining revenues upon disestablishment or expiration without renewal of district;
Calculation of refund;Use of outstanding revenue collected after disestablishment of district
(a)Upon the disestablishment or expiration without renewal of a 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.
(b)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.
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APPENDIX 2 —ASSESSED BUSINESSES
Business Name Business Address City, State ZIP
Best Western Petaluma Inn 200 S. McDowell Blvd. Petaluma, CA 94954
Hotel Petaluma 205 Kentucky St. Petaluma, CA 94952
Hampton Inn 450 Jefferson St. Petaluma, CA 94952
San Francisco 20 Rainsville Rd. Petaluma, CA 94952
North/Petaluma KOA
Metro Hotel 508 Petaluma Blvd. S. Petaluma, CA 94952
Motel 6 1368 N. McDowell Blvd. Petaluma, CA 94954
Quality Inn 5100 Montero Way Petaluma, CA 94954
Sheraton Sonoma County— 745 Baywood Dr. Petaluma, CA 94954
Petaluma
Courtyard by Marriott 700 Caulfield Lane Petaluma, CA.94954
Home 2 Suites 1205 Redwood Way Petaluma, CA 94954
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