Title
2027 Downtown Enhanced Municipal Services District Work Plan and Budget - Districts 7 and 8
Description
This report requests that the Economic Development and the Arts Subcommittee recommend City Council approval of the 2027 Downtown Enhanced Municipal Services District (EMSD) 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 EMSD in 1990 to provide enhanced public services above and beyond those offered in the rest of the city. The Downtown EMSD is generally bounded by 7th Street to 3rd Avenue and Fillmore Street to the railroad tracks south of Jackson Street. The costs for the Downtown EMSD's services are paid through assessments on property owners within these boundaries, representing approximately 746 parcels.
Arizona state law requires annual City Council approval of 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 with Downtown Phoenix, Inc. (DPI) to implement the work plan described in Attachment A for the Downtown EMSD. The work plan and budget (Attachment B) for Calendar Year (CY) 2027 provides a variety of service enhancements in the downtown core, including business improvement services and overall business development.
This is the first of three City Council actions required annually to approve the Downtown EMSD budget, work plan, and assessments. Subject to this Subcommittee's recommendation, the City Council will be asked to tentatively adopt the CY 2027 Downtown EMSD budget and assessment diagram and to provide notice of a public hearing to be held this fall at a future Formal City Council meeting. Once the City Council tentatively adopts the CY 2027 EMSD budget and assessment diagram, City staff will distribute letters to all private property owners notifying them of their proposed assessment diagram and the date of the public hearing. At that hearing, the City Council can receive public comment and then consider final approval of the 2027 Downtown EMSD assessments.
Financial Impact
In June 2026, the Downtown EMSD Board of Directors, which includes representatives of the City and other Downtown EMSD property owners, approved the CY 2027 proposed Downtown EMSD budget of $5,115,863. This includes $5,040,863 in assessment revenue and $75,000 in non-assessment revenue. Non-assessment revenue sources include banners, fees for service, and landscape fees. The budget includes $183,915 for streetscape maintenance expenses, which are paid only by property owners and tenants adjacent to the Streetscape Improvement District.
This proposed budget reflects a 2.39 percent decrease from the CY 2026 budget to accommodate increasing costs while reducing the non-assessment budget by 70 percent to better align with actual non-assessment revenue.
The City’s proposed CY 2027 General Fund assessments total approximately $456,977, representing an increase of approximately $4,960 from 2026 due to the increased budget. Assessments for the Phoenix Biomedical Core (PBC) land for which the City is responsible, as well as the Phoenix Convention Center (PCC) and PHX Arena (Arena), total approximately $901,030, an increase of approximately $9,437 from CY 2026. The City also invoices certain tenants on City-owned properties for assessments they are responsible for through their leases and treats these funds as an external pass-through to the district. These funds total approximately $1,750,580. The remaining assessment revenue will be funded through assessment funds billed through Maricopa County property tax bills.
The total EMSD assessment revenue of $5,040,863 is funded through the following sources:
- General fund: $456,977;
- Internal pass-through (PBC, PCC, Arena): $901,030;
- External billings: $1,750,580; and
- Maricopa County property tax billings: $1,932,276.
Location
The Downtown EMSD is generally bounded by Fillmore to Garfield streets, 7th Street to 3rd Avenue, and the railroad tracks south of Jackson Street.
Council Districts: 7 and 8
Department
Responsible Department
This item is submitted by Assistant City Manager Ginger Spencer, Deputy City Manager Frank McCune, and the Community and Economic Development and Street Transportation departments.