Title
2022 Downtown Enhanced Municipal Services District Work Plan and Budget
Description
This report requests the Economic Development and Equity Subcommittee recommend City Council approval of the 2022 Downtown Enhanced Municipal Services District work plan and budget, as outlined in this report.
THIS ITEM IS FOR CONSENT ACTION.
Report
Summary
The City Council authorized the formation of the Downtown Enhanced Municipal Services District (EMSD) in 1990 to provide enhanced public services, above and beyond the level of services provided in the remainder of the City. The Downtown EMSD is generally bounded by Fillmore Street, 7th Street, 3rd Avenue and the railroad tracks south of Jackson Street. The costs for the Downtown EMSD's services are paid through assessments on property owners within the Downtown EMSD boundaries, representing approximately 785 parcels.
Arizona state law requires that the City Council take action annually to approve an estimate of expenses and a diagram showing the corresponding assessments upon individual properties within the Downtown EMSD. Once the property assessments have been determined, the City Council must hold a public hearing and pass a Resolution, declaring the final assessment amount.
The City contracts directly with Downtown Phoenix, Inc. (DPI) to implement the work plan via the Downtown Phoenix Partnership, as described in Attachment A, for the Downtown EMSD, as approved by City Council on June 17, 2020. The work plan and budget for Calendar Year (CY) 2022 provides a variety of service enhancements in the downtown core, including business improvement services and overall business development.
This action is the first of three City Council actions required annually to approve the Downtown EMSD budget, work plan and assessments. Subject to the EDE Subcommittee recommendation, the City Council will be asked to tentatively adopt the CY 2022 Downtown EMSD budget and assessment diagram, and to provide notice of a public hearing to also be held this fall at a future Formal City Council meeting. Once the City Council tentatively adopts the CY 2022 EMSD budget and assessment diagram, City staff will distribute letters to all private-property owners notifying them of their proposed assessments, and the date of the public hearing. At that hearing, the City Council can receive public comment and then consider final approval of the 2022 Downtown EMSD assessments.
Financial Impact
In July 2021, the Downtown EMSD Board of Directors, which includes representatives of the City and other Downtown EMSD property owners, approved the CY 2022 proposed Downtown EMSD budget of $4,380,935. This includes $4,230,935 in assessment revenue and $150,000 in non-assessment revenue. Non-assessment revenue sources include, but are not limited to, banners, fee for service and landscape fees. Included in the budget is $162,509 for streetscape maintenance expenses, which are paid only by property owners and tenants adjacent to the Streetscape Improvement District (SID).
This proposed budget represents a 19.2 percent increase over the CY 2021 budget, or approximately $704,610. However, the CY 2022 proposed budget only represents a 5.89 percent increase over the CY 2020 budget. CY 2021 saw a 10 percent decrease in the budget over 2020, in large part because of the impacts of the COVID-19 pandemic. In addition, the proposed total CY 2022 EMSD assessment revenue of $4,230,935 represents a 15.5 percent increase over the total CY 2021 EMSD assessments, or approximately $568,230 and only a 3.96 percent increase over the CY 2020 assessments.
The proposed CY 2022 work plan shows increases in business improvement services, general office expenses, admin salaries, business development and the SID. CY 2022 also includes anticipated preparation expenses for the 2023 Super Bowl LVII, in the amount of $45,910. See Attachment B for a breakdown of the expense categories.
The City’s proposed CY 2022 General Fund assessments total approximately $392,407, representing an increase of approximately $52,916 from CY 2021. Assessments for the Phoenix Biomedical Campus (PBC) land the City is responsible for, the Phoenix Convention Center (PCC) and Footprint Center (Arena) total approximately $731,371, an increase of approximately $98,626 from CY 2021. This brings the total City contribution to $1,123,778, an overall increase of approximately $151,542 over CY 2021.
Should the City finalize the sale of the Wells Fargo parcels prior to City Council approval of the EMSD Budget and Assessments, the City’s responsibility would change as follows:
Total City Contribution: Increase to $1,181,036;
General Fund: Increase to $449,664; and
Pass-through (PBC, PCC, Arena): Stay the same at $731,371.
Location
The Downtown EMSD is generally bounded by Fillmore Street, 7th Street, 3rd Avenue and the railroad tracks south of Jackson Street.
Council Districts: 7 and 8
Department
Responsible Department
This item is submitted by Deputy City Managers Ginger Spencer and Mario Paniagua, and the Community and Economic Development and Street Transportation Departments.