District Management Plan

Downtown Bakersfield Property-Based Business Improvement District District Management Plan February 2018 Developed By Downtown PBID Steering Committee February 2018

Table of Contents Downtown Property-Based Business Improvement District Bakersfield, California Table of Contents Section 1. Executive Summary... 2 Section 2. District Boundary... 5 PBID Boundary Map... 6 Section 3. District Improvement and Activity Plan... 7 Section 4. PBID Assessment Budget... 10 Section 5. Assessment Methodology... 11 Section 6. Public Sector Participation... 17 Section 7. District Governance... 19 Section 8: Implementation of District Management Plan... 21 1

Section 1. Executive Summary Purpose A Property-Based Business Improvement District, or PBID, is an innovative revitalization tool for commercial neighborhoods such as shopping malls and regional business districts. Established by law in the late 1980 s and early 1990 s, BIDs are public/private sector partnerships that perform a variety of services to improve the image of their cities and promote individual business districts. They also carry out economic development services by working to attract, retain and expand businesses. Location In 2017, Downtown Bakersfield Stakeholders launched an effort to propose a property-based business improvement (PBID), named the Downtown Bakersfield Property-Based Business Improvement District. The district encompasses the commercial core of Downtown, see map on page 6. Authority The District is proposed pursuant to Section 36600 et seq. of the California Streets and Highways Code, the Property and Business Improvement District Law of 1994 as amended, hereinafter referred to as State Law. The initial PBID term is 5 years. District Management Plan This District Management Plan was developed by the Downtown Bakersfield PBID Steering Committee to ensure that the District will provide new improvements and activities, including maintenance and special programs beyond those currently provided by the City of Bakersfield. Services & Activities Downtown Ambassador Program. Support the police department, property owners and tenants in crime prevention efforts and reduction in urban neighborhood street disorder, while providing customer services to downtown visitors and customers. Clean Team. The Clean Team will sweep, scrub and wash sidewalks and related public spaces, remove litter and trash, provide/maintain landscaping throughout the District as well as install beautification and place making improvements. Economic Dev/Marketing. Provide information and services aimed to assist property owners in destination marketing programs such as business directories and web site as well as marketing research and economic development activities to improve business retention and recruiting new businesses to the District. Administration/Advocacy. Provide daily management and carry out the day-to-day PBID operations. Advocate on downtown policy issues that will improve the downtown business environment and address the interests of property owners. Budget: The total District operating budget for year 2019 is $850,000. The $850,000 budget is composed of the following activity categories: 2

EXPENDITURES BUDGET % OF BUDGET Ambassador Program/Clean Team $602,720 71% Economic Dev/Marketing $ 87,280 10% Administration/Advocacy $110,000 13% Reserve $ 50,000 6% Total Expenditures $850,000 100% REVENUES Assessment Revenues $828,631.09 97.5% Other Revenues $21,368.91 2.5% Total Revenues $850,000 100% Method of Financing A levy of special assessments upon real property that receives special benefits from the improvements and activities within the PBID boundary (See Section 5 for assessment methodology and calculation of each parcel s assessment). Collected PBID assessments appear as a separate line item on annual Kern County property tax bills. Assessments The State Law and State Constitution Article XIIID required that special assessments be levied according to the special benefit each parcel receives from the improvements. In order to match assessment rates to benefits, three benefit Zones have been created within the District. Annual Assessments are based upon an allocation of program costs by benefit zone and a calculation of total assessable square footage (bldg. + lot) and linear front footage. The following table illustrates the first year s maximum annual assessment per parcel assessable square foot per each zone. Assessment Rates Zone One Zone Two Zone Three Commercial (Lot + Bldg Sq. Ft.) $0.052 $0.041 $0.031 Commercial (Linear Frontage) $3.621 $2.414 $1.207 All Other Land Uses (Lot + Bldg Sq.Ft.) $0.044 $0.034 $0.023 All Other Land Uses (Linear Frontage) $3.621 $2.414 $1.207 Cap Annual assessments may increase no more than 5% per year, consistent with the increase in consumer price index (CPI) and increases in program costs. The determination of annual adjustments in assessment rates will be subject to the review and approval of the PBID Owners Association. District Formation California law for PBID district formation requires the submission of petitions signed by property owners in the proposed district who will pay more than 50% of the total assessments (i.e. petitions must represent more than 50% of the $850,000 to be assessed). Petitions are submitted to the Bakersfield City Council, and the City will mail ballots to all affected property owners. The majority of ballots 3

returned, as weighted by assessments to be paid, must be in favor of the PBID in order for the City Council to consider approval. City Services The City of Bakersfield has established and documented the base level of preexisting City services. The PBID will not replace any pre-existing general City services, see Section 6. District Governance The PBID will be managed by a nonprofit organization that will act as the PBID Owners Association. The non-profit association will be governed by a board of directors elected from the general membership of property owners, business owners and one resident within the district boundaries. The board will be comprised of thirteen members, each Zone represented by three property owner seats, two business owner seats, one resident and one seat for the City of Bakersfield to be appointed by the Bakersfield City Manager. The Board will review District budgets and policies annually within the limitations of the Management District Plan. Annual and Quarterly reports will be filed with the City. Duration The District will have a 5-year life beginning January 1, 2019 and ending December 31, 2023. Any major modifications or new or increased assessments during the term of the district that are not consistent with the provisions of original Management District Plan will require a new mail ballot process. 4

Section 2. District Boundary The proposed Downtown Bakersfield PBID will deliver its services to the downtown commercial core roughly bounded by F Street to the west, 29 th Street to the north, R Street to the east and 17 th Street to the south. Benefit Zones Within the PBID boundary there are three benefit zones that account for the varying service frequencies, as follows: Zone One: Zone one contains a high density of retail and commercial businesses as well as office buildings. The western boundary of the Zone one district abuts the Westchester neighborhood, making it important to provide accessible, clean, and safe paths of travel for visitors. This zone has the highest pedestrian activity in the PBID which creates the conditions requiring a greater amount of clean and safe services within the PBID, such as dirty sidewalks, the presence of graffiti, and the need to provide ambassador assistance. The service plan anticipates that service deployment frequencies within this zone will be higher than those in the other two benefit zones from the number of ambassadors and safety patrols to the frequency of sidewalk cleaning. Zone Two: Zone Two also has retail and commercial uses but less concentrated than Zone One and therefore, less pedestrian activity. Accordingly, the lower level of pedestrian activity results in a reduced need for clean and safe services. Service frequencies within this zone are in direct correlation to reduced pedestrian traffic and service needs and are expected to be about two-thirds the frequency of services as those in Zone One. Zone Three: Zone Three has the least concentrated commercial use of downtown which results in a lower level of service frequency needs than either Zone One or Zone Two. Zone Three is expected to receive about one-third the frequency of services as those in Zone One. The PBID boundary and benefit zones are illustrated on the map on the following page. 5

PBID Boundary Map 6

Section 3. District Improvement and Activity Plan Background Interest and support for property-owner funding of enhanced services in Downtown Bakersfield dates back several years, and has been largely driven by sharp increases in transient activity, aggressive panhandling, and petty crime. These problems and their effects (dirty sidewalks, intimidating street behaviors, etc.) drew concerns from downtown merchants, customers, clients and visitors. Local business owners and charitable foundations stepped in with resources needed to establish the Downtown Street Ambassadors program. The ambassadors program includes sidewalk sweeping, litter removal, landscape maintenance and pedestrian guidance. Funding for these activities and services over that past few years has mainly been provided by charitable foundations and downtown property owners. It has become clear that a sustainable funding source is needed to adequately provide a consistently clean and attractive downtown. In the spring of 2017, the Downtown Bakersfield Development Corporation hosted community meetings and met with downtown property owners to gage interest in establishing a PBID. A survey was also mailed out to downtown properties asking about their concerns and what additional services are needed in the downtown. These outreach efforts resulted in the creation of the Downtown PBID Steering Committee composed of property owners within the proposed PBID area. The Downtown PBID Steering Committee guided the development of the PBID boundary and this Management Plan for the PBID that would levy assessments to fund enhanced services, such as safety patrols, cleaning and maintenance teams, stewardship ambassadors, marketing, capital improvements, district identity, etc. The key findings were that a significant majority of property owners contacted rated safety and sidewalk maintenance as the two top service categories they would be willing to pay for through an assessment. The next two service categories in order of importance were homelessness, parking and pedestrian mobility, economic development and marketing. Based upon these findings, the following service and activity categories are proposed to be funded by the PBID. The corresponding narrative provides recommendations for the PBID s first year of operation. District activities may be amended in subsequent years within the following general categories. Clean and Safe Programs All of the improvements and activities detailed below are provided only within the boundaries of the District and provide special benefit to the property owners within the proposed District. No District improvements or activities of any kind are provided outside of the District boundaries. The total improvement and activity plan budget for 2019, which is funded by property assessments and other fund-raising activities is projected at $850,000 and made up of the following components: Downtown Ambassador Program (Safety Patrols/Street Guides/Homeless Intervention) The Downtown Ambassador Program will support the efforts to prevent crime and reduce street disorder, while offering a customer service orientation to pedestrians and can act as ambassadors helping visitors find their dining, shopping and parking destinations. Ambassadors can provide highly visible neighborhood security and are intended to be additional eyes on the street and supplement, not supplant individual building security and the Bakersfield Police Department. The Ambassador Program will support the police department, property owners and tenants in crime prevention efforts and 7

reduction in urban neighborhood street disorder, while providing customer services to downtown visitors and customers. Key program activities will include: The Ambassadors will provide highly visible neighborhood security, supplementing individual building and police services. The Ambassadors also deter aggressive pan-handling and other unsuitable sidewalk social behavior. Ambassadors will work with other local human service agencies to refer chronic street vagrants to proper assistance centers. Ambassadors handle a myriad of quality of life and safety issues including deterring drinking in the public streets and sidewalks, urinating in public, indecent exposure, trespassing, and observe and report criminal behavior. Ambassadors will also deter and report graffiti and maintain communication with the Bakersfield Police. These Ambassador activities will be provided at varying degrees within the three established assessment Zones inside the District boundaries. Zones requiring higher service levels have been assessed accordingly and pay appropriate fair share amounts in proportion to the level of services received. Reducing homelessness and containing disruptive behaviors from street populations is another top priority among downtown property and business owners, citing concerns with nuisance crimes, compounding maintenance issues, and creating an intimidating street atmosphere. To reduce homelessness in Downtown Bakersfield, a multi-faceted approach that combines resources from the business community, city and social service agencies is proposed. Elements of this initiative that could be supported by PBID assessments include ambassadors who connect homeless individuals with local community service programs and facilitates with access to care, social services and housing. Ambassadors, described above, are expected to be trained in concert with social service providers to assist in connecting street populations to appropriate services. Downtown Clean Team (Cleaning/Maintenance/Beautification) The Downtown Clean Team will sweep, scrub and wash sidewalks and public spaces, remove litter and trash, and provide/maintain landscaping throughout the District. Uniformed, radio-equipped personnel sweep litter, debris, and refuse from sidewalks and gutters, and clean sidewalk hardscape such as trash receptacles and benches. Public landscape areas, tree wells, and planters will be maintained and kept free of litter and weeds. Beautification and place making improvements that are defined as cosmetic enhancements that improve the appearance and walkability within the PBID, in turn encouraging customer traffic and improved quality of life for residents. Examples of beautification improvements might include: Additional lighting Directional/wayfinding signage or themed signage Street furniture and amenities, such as benches and kiosks Design and installation of art and decorative elements Bicycle racks and other hardware Urban design and/or planning services to advance beautification efforts Other cosmetic enhancements that improve the PBID s appearance. 8

Economic Development and Marketing The District s Economic Development will include activities such as working with existing businesses to improve their businesses and recruiting new businesses to the District. Also marketing the District and creating a downtown identity that will bring in more visitors. Provide information and services aimed to assist property owners in recruitment and retention of tenants/businesses and destination marketing programs that may include the following: Design and production of investor marketing packages to assist real estate brokers, developers and property owners in business recruitment efforts. Market research and market-based planning to target private investment to strengthen the downtown marketplace. Trouble-shooting and permitting liaison services to assist property and business owners to invest and operate in the district. Enhanced research and development of the downtown website. Business retention efforts to encourage existing businesses to grow. Advertising, including branding, coordinated campaigns and increased placement and frequency in mass media venues. Public relations efforts to promote a positive image and overall experience. Increased distribution and enhanced quality of publications, including the downtown map and directory and future activity guides. Installation and maintenance of a new downtown directional signage system. Media relations activities to project a creative and exciting business image. Administration/Management/Advocacy Provide daily management to carry out the day-to-day PBID operations and serve as advocate on behalf of the Downtown district. The PBID allows downtown property owners to project a unified voice and elevate their influence in policies and issues that affect downtown. Advocate on downtown policy issues that will improve the downtown business environment and address the interests of property owners. A District Manager may be employed or a professional management firm selected for this responsibility. PBID renewal costs may also be included in the Administrative Budget. Reserves Programs and activities may arise that the District Board may choose to engage in. A healthy reserve is being established to handle unexpected liabilities and undertake opportunities that may present themselves that will benefit the District. A 5.0% operating reserve is also budgeted as a contingency for any payment of delinquencies and/or unforeseen budget adjustments. 9

Section 4. PBID Assessment Budget Five Year Operating Budget A projected five-year budget for the District is provided below. The projections are based upon the following assumptions. Assessments will be subject to changes in the Consumer Price Index (CPI), for all urban consumers, annual increases not to exceed 5% per year. Increases will be determined by the PBID Board and will vary between 0 and 5% in any given year. Increases may not exceed the CPI increase in any given year. The projections illustrate a 5% annual increase. Revenues for specific programs may be reallocated from year to year, among District activities. However, the overall budget shall remain consistent with this Management Plan. Five Year Projections The following table illustrates the PBID s maximum annual budget for the 5-year life term, adjusting it by the maximum 5% inflation factor. EXPENDITURES 2019 2020 2021 2022 2023 Clean & Safe Downtown Ambassador Program (Safety Patrols/Street Guides/Homeless Intervention) Downtown Clean Team (Cleaning/Maintenance/Beautification) $602,720 $632,856 $664,498 $697,722 $732,609 ED & Marketing $87,280 $91,644 $96,226 $101,037 $106,089 Admin $110,000 $115,500 $121,275 $127,339 $133,706 Reserves $50,000 $52,500 $55,125 $57,881 $60,775 Total $850,000 $892,500 $937,124 $983,979 $1,033,179 REVENUES 2019 2020 2021 2022 2023 Assessment Revenues $828,631 $870,063 $913,565 $959,242 $1,007,205 Other Revenues (1) $21,369 $22,437 $23,559 $24,737 $25,974 Total $850,000 $892,500 $937,124 $983,979 $1,033,179 (1) Other non-assessment funding to cover the cost associated with general benefit. 10

Section 5. Assessment Methodology Assessment Factors Downtown Bakersfield property owners and business owners have emphasized that the assessment formula for the PBID be fair, balanced, and have a direct relationship to special benefits received. The State enabling legislation also states in relevant part that "Assessments levied on real property shall be levied on the basis of the estimated benefit to the real property within the district." The method used to determine proportional special benefits are measured by each parcel s lot square footage, building square footage, plus linear street frontage. Each parcel s proportional lot size, building square footage and linear street frontage represents each parcel s proportional special benefit compared to other parcels within in respective benefit zone. Lot square footage is relevant to the best use of a property and will reflect the long term special benefit implications of the improvement district. Building square footage is relevant to the interim use of a property and is utilized to measure short and mid-term special benefit. Linear street frontage is relevant to the amount of benefit each assessed parcel receives from the PBID that are delivered at the street level. This reflects the fact that services on the street will have the greatest benefit to properties in relationship to their exposure on the streets. That is to say that the more linear frontage a parcel has, the more benefit it will receive from the services. Lot Square Footage Defined. Lot square footage is defined as the total amount of area within the borders of the parcel. The borders of a parcel are defined on the County Assessor parcel maps. Building Square Footage Defined. Building square footage defined as the total building square footage as determined by the outside measurements of a building. Linear Street Frontage Defined. Linear street frontage is defined as the number of linear feet of each parcel that directly fronts on a street that will receive the PBID activities. Special Benefit Analysis All special benefits derived from the assessments outlined in this report are for property related activities directly benefiting each individual assessed parcel in the PBID. The special benefit must affect the individual assessable parcel in a way that is particular and distinct from its effect on other parcels, and that real property in general and the public at large do not share. No parcel s assessment shall be greater than the special benefits received. Streets and Highways Code Section 36601(e) states that 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. The PBID s goal is to fund activities and improvements that provide a cleaner, safer, and more attractive and economically vibrant environment as outlined in Section 3. The goal of improving the economic vitality is achieved by improving the safety, cleanliness, marketing, and appearance of each specially benefitted parcel in an effort to increase commerce, to increase building occupancy and lease rates, and to attract more customers, employees, tenants and investors. 11

Each parcel will specially benefit from: Cleaner and safer sidewalks, streets, alleyways, and common areas Real and perceived public safety improvements Greater pedestrian traffic Enhanced rental incomes Improved business climate New business and investment Well managed programs and services Specifically, each parcel benefits from each of the PBID activities as defined below. Safety and Maintenance The enhanced safety activities make the area safer which attracts more businesses, customers, and residents, and ultimately private investment. When business location decisions are made, lower levels of public safety lead to increased uncertainty in decision making and can be perceived as a signal of a socio-institutional environment unfavorable for investment. Uncertainty affects the investment environment in general. But in particular, it increases the fear of physical damage to investment assets (or to people) or their returns Almost universally, places with lower crime rates are perceived as more desirable. 1 Once economic investment occurs within the district, pedestrian traffic and commercial activity will increase. The special benefit to assessed parcels from these services is the likelihood of increased lease rates and tenant occupancy due to the increase of commercial activity and an increase in customers that follow from having a safer environment. The cleaning activities benefit each assessed parcel within the PBID by providing a clean and aesthetically appealing environment. This is achieved through sidewalk sweeping and power washing, removing litter and graffiti, and trash removal. These activities create the environment needed to achieve the PBID goals. Sidewalks that are dirty and unclean, particularly from homeless activities, deter pedestrians and commercial activity. Marketing and Economic Development These activities are tied to and will specially benefit each individual parcel by encouraging business development and investment that generates customer traffic, which directly relates to increases in commercial activity, filling of vacant storefronts and offices and ultimately, increased lease rates for retail and office space. This is a benefit to the District because it works to improve the positive perception of the District. Decisions on where to shop, eat or attend events are largely based on a perception of the place. If these activities were not communicated it would be a deterrent to pedestrian traffic, business and commerce. Special Benefit Conclusion Based on the special benefits each assessed parcel receives from the PBID activities, we concluded that each of the proposed activities provides special benefits to the real property within the district, and that each parcel s assessment is in direct relationship to and no greater than the special benefits received. The special benefit to parcels from the proposed PBID activities and improvements described in this report is equal to or exceeds the total amount of the proposed assessment. Each individual assessed 1 Accelerating economic growth and vitality through smarter public safety management IBM Global Business Services Executive Report, September 2012, pg. 2 12

parcel s assessment is no greater than the special benefit it receives from the PBID activities. General Benefit Analysis As required by the State Constitution Article XIIID Section 4(a), the general benefits of an assessment district must be quantified and separated out so that the cost of the activities that are attributed to general benefit are deducted from the cost assessed against each specially benefitted parcel. General benefits are benefits from the PBID activities and improvements that are not special in nature, are not particular and distinct, and are not over and above the benefits that other parcels receive. This analysis will evaluate and determine the level of general benefits that (1) parcels outside of the PBID, and (2) the public at large, may receive. General Benefit to Parcels Outside of the PBID All the PBID activities and improvements are provided solely to each of the individual assessed parcels in the PBID boundary. Each of the PBID activities is provided to the public right-of-ways (streets, alleys, sidewalks) adjacent to all specially benefitted parcels or tenants in the PBID. None of the surrounding parcels will directly receive any of the PBID activities. Any benefits these parcels may receive are incidental to providing special benefits to the assessed parcels, and thus any cost associated to the incidental benefits are not reduced from the cost of providing special benefit. General Benefit to the Public At Large In addition to general benefit analysis to the parcels outside of the PBID boundary, there may be general benefits to the public at large, i.e., those people that are either in the PBID boundary and not specially benefitted from the activities, or people outside of the PBID boundary that may benefit from the PBID activities. In the case of the Downtown Bakersfield PBID, the public at large are those people that are within the PBID boundary that do not pay an assessment and do not specially benefit from the PBID activities. In other words, the public at large will benefit from the clean and safe environment provided by the PBID activities. To calculate the general benefit the public at large may receive we determine the percentage of each PBID activity budget that may benefit the general public. In this case, the Clean and Safe activities may generally benefit the public as the general public may appreciate the enhanced level of maintenance, security and beautification as it passes through the District. If there are any public benefits, they are incidental and collateral to providing special benefits to the assessed parcels. Then a Relative Benefit factor is applied to the Clean and Safe activities accounting for the potential benefit the general public may receive. The relative benefit factor is a basic unit of measure that compares the benefit the general public receives compared to the public that specially benefits from this activity. Since the specially benefitted public receives 100% of the activities and special benefit it is assigned a relative benefit factor of 1.0 for this activity. The general public does not directly receive any District activity and thus, is assigned a relative benefit factor less than 1.0. There is no scientific method to determine the relative benefit factors, however the PBID consultant with several years professional experience as a Registered Civil Engineer and the results of previous studies conducted to determine a relative benefit factor for the general public in San Francisco, Los Angeles and other jurisdictions the general public receives a relative benefit factor of 0.05 for the Clean and Safe activities. Based on experience of other established BIDs or PBIDs and the results of previous studies, it is reasonable to conclude that this relative benefit factor properly accounts for the general public that is not specially benefitted. 13

The relative benefit factor is then multiplied by the District activity s budget percentage to determine the overall benefit factor. The following table illustrates this calculation: A B C D E Activity Budget Amount % of Budget General Benefit Factor General Benefit Percent (B x C) General Benefit Allocation (A x D) Clean and Safe $602,720 70.91% 5.00% 3.55% $21,369 This analysis indicates that $21,369 of the Clean and Safe activities may be attributed to general benefit to the public at large, and must be raised from sources other than special assessments. General Benefit Conclusion Using the sum of the two measures of general benefit described above we find that $21,369 or 2.51% of the total budget may be general in nature and will be funded from sources other than special assessments. Calculation of Assessments The proportionate special benefit derived by each identified parcel shall be determined in relationship to the entirety of the capital cost of an improvement or the maintenance and operation expenses of an improvement or for the cost of the property service being provided. No assessment shall be imposed on any parcel which exceeds the reasonable cost of the proportional special benefits conferred upon that parcel. Only special benefits are assessable and these benefits must be separated from any general benefits. Because of the desire to maintain a comparable level of safety and cleanliness throughout the District, three benefit Zones with differing assessment rates have been established. The differing assessment rates directly reflect the additional benefit provided to properties in Zone One and Zone Two, is because of the additional services provided to Zone One and Zone Two properties. The need for additional services in Zone One and Zone Two is directly related to the higher level of usage in these areas. Calculation Formula The proportionate special benefit derived by each identified parcel shall be determined in relationship to the entirety of the capital cost of an improvement or the cleaning and operation expenses of an improvement or the cost of the property service being provided. Due to the proportionate special benefits received by these individual parcels from the District services, these parcels will be assessed a rate which is proportionate to the amount of special benefits received. As previously discussed in Section B, the PBID is segregated into three benefit zones based upon each zone s demand for services and improvements and the benefits received. The table below summarizes the assessable footage within each benefit zone: Assessable Footage Benefit Zone Lot Sq.Ft Building Sq.Ft. Linear Frontage Zone One 3,107,806 2,411,950 45,424 Zone Two 2,811,898 1,143,823 39,913 Zone Three 2,087,212 1,157,682 24,717 14

Based on the demand for services and the special benefits to each parcel, the budget for the Clean and Safe activities is split equally between the lot + building square footage and the linear street frontage. In addition, the Economic Development and Marketing activities are designed to benefit the commercial use parcels, thus the budget for this activity will be assessed solely against commercial use parcels. The following table illustrates the first year s maximum annual assessment per parcel assessable square foot per each zone. Assessment Rates Zone One Zone Two Zone Three Commercial (Lot + Bldg Sq. Ft.) $0.052 $0.041 $0.031 Commercial (Linear Frontage) $3.621 $2.414 $1.207 All Other Land Uses (Lot + Bldg Sq.Ft.) $0.044 $0.034 $0.023 All Other Land Uses (Linear Frontage) $3.621 $2.414 $1.207 Maximum Annual Assessment Adjustments Assessments will be subject to changes in the Consumer Price Index (CPI), for all urban consumers, annual increases not to exceed 5% per year. Increases will be determined by the PBID governing board and will vary between 0 and 5% in any given year. Increases may not exceed the actual CPI increase in any given year. The projections illustrate a 5% annual increase. Budget Adjustments Upon the termination of this District any remaining revenues shall be transferred to the renewed District, if one is established, pursuant to Streets and Highways Code Section 36660 (b). Unexpended funds will rollover one year to the next and will be returned to property owners if the District is not renewed. Time and Manner for Collecting Assessments As provided by state law, the Downtown Bakersfield PBID assessment will appear as a separate line item on the annual Kern County property tax bills, or by a special manual bill prepared by the District and either paid in one lump sum or in two equal installments. Laws for enforcement and collection of property taxes also apply to the PBID assessment. Disestablishment California State Law Section 36670 provides for the disestablishment of a District. The 30-day period begins each year on the anniversary day that the City Council first establishes the District. Within this annual 30-day period, if the owners of real property who pay more than 50 percent of the assessments levied submit a written petition for disestablishment, the PBID may be dissolved by the City Council. The C i t y C o u n c i l m u s t h o l d a public hearing on the proposed disestablishment before voting on whether or not to disestablish the district. Government Assessments The District Management Plan assumes that the City of Bakersfield and other government entities will pay assessments for property owned within the boundaries of the PBID, pursuant to Article XIII D of the California Constitution. Within each benefit zone all assessable parcels within the District, including government owned parcels, receive the same level of benefit as all other assessable properties in the District from the proposed 15

improvements and activities. Therefore, the government owned parcels are apportioned their fair share of the project costs, based on the same assessment formula applied to all other assessable parcels in the District. Future Development As a result of continued development, the District may experience the addition or subtraction of assessable footage for parcels included and assessed within the District boundaries. The modification of parcel improvements assessed within the District may then change upwards or downwards the amount of total footage assessment for these parcels, pursuant to Government Code 53750, will be prorated to the date they receive the temporary and/or permanent certificate of occupancy. In future years, the assessments for the special benefits bestowed upon the included PBID parcels may change in accordance with the assessment methodology formula identified in the Management District Plan and Engineer s Report provided the assessment rate does not change. If the assessment formula changes and causes an increase in assessments, then a Proposition 218 ballot process will be required for approval of the formula changes. 16

Section 6. Public Sector Participation Existing City Services The City Council, by adopting this plan, will confirm its intention to ensure an existing level of services in the district equivalent to the level that is being provided elsewhere in the City. Assessment funds will pay for services that are above and beyond those services provided by the City. City Departments provide the following services within the proposed PBID boundaries: Street Sweeping: The City provides street sweeping service two days per week. The City does not include alleys. Street Trees: The City trims street trees as needed. Refuse Service: The City provides refuse service for single family residences and multifamily residences of 6 units or less. The City also competes for refuse service for commercial businesses and multifamily residences greater than 6 units. Illegal dumping: The City maintains a program to pick up illegally dumped items. Parking Enforcement: The City enforces parking regulations, services and maintains parking meters and issues related parking citations. Parking Facilities: The City maintains the parking structure at 18th and Eye Street. Graffiti Abatement: The City abates graffiti and slap tags on public property and on private property accessible from the public right of way. City Streets: The City maintains and repairs public streets, including alleys, on an as-needed basis depending upon the level of funding for any given year. City Sidewalks: The City maintains and replaces sidewalks on an as-needed basis depending upon the level of funding for any given year. Storm Drains: The City maintains the storm drain, catch basin and pump station system. Pothole repairs: The City repairs potholes as-needed. Curb Painting: The City provides periodic repainting of curbs on an as-needed basis Signage: The City installs and replaces signs in the public right of way on an as-needed basis. Street Lights: The City maintains and pays electrical costs for lights. Traffic Signals: The City operates and maintains the traffic signals. Code Enforcement: The City provides code enforcement as needed. Garbage Collection: The City collects garbage daily for many businesses. Sidewalk Trash Receptacles: The City empties and maintains existing garbage cans three times a week on sidewalks. Landscape and Medians: The City provides irrigation to trees within the public right-of-way. Rational for Public Property Assessments Proposition 218 states that no parcel is exempt from assessments if that parcel receives benefit from the improvements and activities. This includes government and public use parcels. The City of Bakersfield and any other government owned parcels within the PBID boundary will pay their assessment based on the special benefits conferred to those parcels. All publicly owned parcels specially benefit from the PBID activities as they make each assessed parcel cleaner, safer, more attractive, and economically vibrant. Specifically, these parcels specially benefit from: ambassadors patrolling their sidewalks, connecting the homeless to available resources, cleaning up any debris or trash, powerwashing the sidewalks and public spaces, beautifying the public right-of-ways, and increased business development. 17

Therefore, government uses are assessed for the special benefits they receive from the PBID activities. The assessment methodology to allocate the cost of these improvements is consistent with all other land uses in the district: parcel square footage, building square footage plus street frontage. Please see Section 5: Assessment Methodology for further discussion. The publicly owned parcels within the PBID boundary and their respective assessments are indicated below. APN Owner Name Site_Address Benefit_Zone Parcel Assmt 00323101 CITY OF BAKERSFIELD H ST 1 $3,410.52 00323102 CITY OF BAKERSFIELD G ST 1 $3,632.42 00547208 CITY OF BAKERSFIELD 1212 19TH ST 2 $405.78 00601105 CITY OF BAKERSFIELD 1600 18TH ST 1 $1,538.12 00601106 CITY OF BAKERSFIELD 1600 18TH ST 1 $561.79 00618204 CITY OF BAKERSFIELD 1715 CHESTER AVE 1 $2,892.26 00618205 CITY OF BAKERSFIELD 1715 17TH ST 1 $3,394.65 00619104 CITY OF BAKERSFIELD 1619 17TH ST 1 $265.00 00619105 CITY OF BAKERSFIELD 1615 17TH ST 1 $298.63 00619106 CITY OF BAKERSFIELD None -Parking Lot 1 $974.45 Total: $17,373.63 18

Section 7. District Governance City Council Following the submission of petitions from property owners representing more than 50% of the assessments to be paid, the City Council, upon holding a public hearing on the proposed District, may elect to form the PBID. The PBID is formed by a City Council resolution, including the levy of an assessment on property, if the assessment is first approved by parcel owners in a balloting process. PBID Governance Consistent with business improvement district legislation throughout the nation, California s Property and Business Improvement District Law of 1994 establishes a PBID governance framework that allows property owners who pay assessments to determine how the assessments are used. This District Management Plan may be subject to changes if required by the state of California or the City of Bakersfield. Downtown Bakersfield Property-Based Improvement District The Downtown Bakersfield PBID shall contract with a nonprofit organization that may act as the Owner s Association and governing board for the PBID described in the Streets and Highways Code 36651. The role of the Owner s Association is consistent with similar PBIDs and management organizations throughout California and the nation. The Owner s Association determines budgets, assessment adjustments and monitor service delivery. As part of the Management Plan, the nonprofit organization oversees the delivery of day-to-day PBID services and programs. The Association may contract with another professional organization, a company or may hire staff to manage the day to day operations of the District. The PBID Owners Association Board of Directors will represent a cross section of property owners found throughout the district. The goal and spirit of the board s composition is to have a majority of property owners, but also must represent a variety of interests within the PBID including representatives from businesses, government, and educational institutions that pay PBID assessments. The non-profit association will be governed by a board of directors elected from the general membership of property owners, business owners and one resident within the district boundaries. The board will be comprised of thirteen members, each Zone represented by three property owner seats, two business owner seats, one resident and one seat for the City of Bakersfield to be appointed by the Bakersfield City Manager. Board members are selected through a nominating process that invites all stakeholders to participate. A nominating committee develops an annual slate of board nominations, and nominations are voted on at an annual meeting of PBID ratepayers. Pursuant to the Property and Business Improvement Law of 1994, as amended; a business improvement district may establish rules and regulations that uniquely apply to the district. The District has adopted the following rules: Competitive Procurement Process The District Board shall develop a policy for competitive bidding when purchasing substantial amounts of services, products and/or equipment. The policy will aim to maximize service, quality, efficiency and cost effectiveness. 19

Treatment of Residential Housing In accordance with Section 36632(C) of the California Streets and Highways Code, properties zoned solely for residential or agriculture use are conclusively presumed not to benefit from the improvements, activities and services funded through the assessments of the District and are not subject to any assessment pursuant to Section 36632(C). Therefore, properties zoned solely for residential or agricultural use within the boundaries of the District, if any will not be assessed. Bonds The District will not issue bonds. Brown Act & Public Records Act Compliance Pursuant to the State of California PBID legislation the Owners Association Board of Directors when conducting PBID business, is subject to disclosure and notification guidelines set by the Ralph M. Brown Act and California Public Records Act. 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 is considered a legislative body under the Ralph M. Brown Act (Government Code 54950 et seq.). Thus, meetings of the Downtown Bakersfield Property-Based Improvement District board of directors and certain committees must be held in compliance with the public notice and other requirements of the Brown Act. The Owners Association is also subject to the record keeping and disclosure requirements of the California Public Records Act. Annual Report The Downtown Bakersfield PBID shall present an annual report at the end of each year of operation to the City Council pursuant to Streets and Highways Code 36650. The annual report is a prospective report for the upcoming year and must include: 1. Any proposed changes in the boundaries of the DFPBID or in any benefit zones or classification of property within the district; 2. The improvements and activities to be provided for that fiscal year; 3. An estimate of the cost of providing the improvements and activities for that fiscal year; 4. The method and basis of levying the assessment in sufficient detail to allow each real property owner to estimate the amount of the assessment to be levied against his or her property for that fiscal year; 5. The amount of any surplus or deficit revenues to be carried over from a previous fiscal year; and 6. The amount of any contributions to be made from sources other than assessments levied pursuant to this Plan. 20

Section 8: Implementation of District Management Plan The District is expected to be established and begin implementation of the management district plan on January 1, 2019. Consistent with State Law, the Downtown Bakersfield Property-based Business Improvement District will initially have a five-year life through the end of December 31, 2023. In order for the PBID to meet the start-up date of January 1, 2018, the formation needs to adhere to the following schedule: PBID Formation Schedule Petitions distributed to property owners Dates March Marketing campaign to obtain signed petitions: presentations, neighborhood meetings, 50% weighted vote targeting City Council adopts Resolution of Intention March - April Early May Assessment ballots mailed to property owners Mid May City Council holds public hearing and tabulates ballots Late June PBID Assessments & Services Begin January 2019 21