Title
2023 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 2023 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 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 759 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, 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) 2023 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, in fall 2022, the City Council will be asked to tentatively adopt the CY 2023 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 2023 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 2023 Downtown EMSD assessments.
Financial Impact
In July 2022, the Downtown EMSD Board of Directors, which includes representatives of the City and other Downtown EMSD property owners, approved the CY 2023 proposed Downtown EMSD budget of $4,706,256 (Attachment B). This includes $4,556,256 in assessment revenue and $150,000 in non-assessment revenue. Non-assessment revenue sources include, but are not limited to, banners, fee for services and landscape fees. Included in the budget is $167,222 for streetscape maintenance expenses, which are paid only by property owners and tenants adjacent to the Streetscape Improvement District.
This proposed budget represents a 7.69% increase over the CY 2022 budget, or approximately $325,321.
The proposed CY 2023 work plan shows increases in business improvement services, general office expenses, administrative salaries, business development and the streets improvement district. CY 2023 also includes anticipated expenses in preparation for the 2023 Super Bowl LVII of $150,000.
The City’s proposed CY 2023 General Fund assessments total approximately $439,108, representing a decrease of approximately $10,556 from 2022 due to the Public Transit owned Central Station project beginning construction. Assessments for the Phoenix Biomedical Campus (PBC) land the City is responsible for, the Phoenix Convention Center (PCC) and Footprint Center (Arena) total approximately $787,162, an increase of approximately $55,791 from 2022. The City also invoices certain tenants on City-owned properties for assessments they are responsible for through their lease. These funds total $271,614 and are treated as an external pass-through to the district. This brings the total City contribution to $1,497,884, an overall increase of approximately $65,085 over 2022.
The following figures would represent the City’s responsibility:
Total City Contribution: $1,497,884
General Fund: $439,108
External Pass-through: $271,614
Internal Pass-through (PBC, PCC, Arena): $787,162
Location
The Downtown EMSD is generally bounded by Fillmore Street, 7th Street, 3rd Avenue and the railroad tracks south of Jackson Street.
Council District(s): 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.