Title
2025 Downtown Enhanced Municipal Services District Work Plan and Budget
Description
This report requests the Economic Development and Housing Subcommittee recommend City Council approval of the 2025 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 742 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 directly with Downtown Phoenix, Inc. (DPI) to implement the work plan described in Attachment A for the Downtown EMSD, as approved by City Council on June 17, 2020. The work plan and budget (Attachment B) for calendar year (CY) 2025 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 2025 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 2025 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 2025 Downtown EMSD assessments.
Financial Impact
In June 2024, the Downtown EMSD Board of Directors, which includes representatives of the City and other Downtown EMSD property owners, approved the CY 2025 proposed Downtown EMSD budget of $4,990,256. This includes $4,740,256 in assessment revenue and $250,000 in non-assessment revenue. Non-assessment revenue sources include banners, fees for service, 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 6 percent change over the CY 2024 budget to accommodate the recent EMSD boundaries expansion.
The City’s proposed CY 2025 General Fund assessments total approximately $443,389, representing an increase of approximately $4,266 from 2024 due to a decrease of privately owned square footage within the district. Assessments for the Phoenix Biomedical Campus (PBC) land for which the City is responsible, as well as the Phoenix Convention Center (PCC) and Footprint Center (Arena) total approximately $847,002, an increase of approximately $59,813.46 from 2024; an increase primarily due to the addition of PBC land resulting from the boundary expansion. 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 $1,854,752. The remaining assessment revenue will be funded through assessment funds billed through Maricopa County Property Tax Bills.
The total EMSD assessment revenue of $4,740,256 is funded through the following sources:
- General Fund: $443,389
- Internal Pass-through (PBC, PCC, Arena): $847,002
- External Billings: $1,854,752
- Maricopa County Property Tax Billings: $1,595,113
Location
The Downtown EMSD is generally bounded by Fillmore and Garfield streets, 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 John Chan and Inger Erickson, and the Community and Economic Development and Street Transportation departments.