TO:
Honorable Mayor and Members of the City Council
THROUGH:
Talyn Mirzakhanian, City Manager
FROM:
Libby Bretthauer, Finance Director
Emy-Rose Hanna, Financial Services Manager
SUBJECT:Title
Consideration of: a) Resolutions Regarding Renewal of North Manhattan Beach Business Improvement District (BID) for Fiscal Year 2026-2027, Including Authorization to Collect Assessments, and Agreement with the North Manhattan Beach Business and Professional Association; and b) Appropriation of $90,000 from the Parking Fund to Disburse Reserved BID Funds (Unbudgeted) (Finance Director Bretthauer) (Estimated Time: 15 Min.)
A) CONDUCT PUBLIC HEARING
B) ADOPT RESOLUTION NOS. 26-0095 AND 26-0096
C) APPROPRIATE FUNDS AND AUTHORIZE THE DISBURSEMENT OF RESERVED BID FUNDS
Body
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RECOMMENDATION:
The North Manhattan Beach Business Improvement District Advisory Board and City staff recommend that the City Council: a) conduct a public hearing; b) adopt Resolution No. 26-0095 authorizing the collection of assessments; c) adopt Resolution No. 26-0096 authorizing the City Manager to enter into an agreement with the North Manhattan Beach Business & Professional Association (Association) to provide services to the Business Improvement District; and d) appropriate $90,000 from the Parking Fund to disburse Reserved BID Funds.
FISCAL IMPLICATIONS:
The North Manhattan Beach Business Improvement District (NMBBID) is funded through an 80% surcharge on the annual business license tax for its members, up to a maximum of $500 per business. The assessment is typically collected during the annual business license tax filing period that begins February 1 and continues through April 30. Assessments are retained in a separate reserve account until requested by the BID.
The Association submitted the attached proposed operating budget for FY 2026-2027. To support these expenditures, an appropriation of $90,000 is needed from the Parking Fund, which will be drawn from accumulated NMBBID reserve funds. The City disbursed $76,210 to the Association in FY 2025-2026, resulting in an estimated fiscal year-end balance of $329,709 after accounting for FY 2026 Assessments of $29,791 and interest earnings.
If the recommended disbursement of $90,000 is approved for FY 2026-2027, the estimated balance at the end of the fiscal year is conservatively estimated at $279,709.
|
NMBBID Reserve Balance as of June 30, 2025 |
$364,627.89 |
|
FY 2026 Assessments (Actual) |
29,791.31 |
|
FY 2026 Interest (Estimated) |
11,500.00 |
|
FY 2026 Disbursement (Actual) |
(76,210.00) |
|
Projected Ending Balance on June 30, 2026 |
$329,709.20 |
|
|
|
|
FY 2027 Assessments (Estimated) |
30,000.00 |
|
FY 2027 Interest (Estimated) |
10,000.00 |
|
FY 2027 Disbursement (Recommended) |
(90,000.00) |
|
Projected Ending Balance on June 30, 2027 |
$279,709.20 |
Remaining reserves will continue to be held by the City until the funds are requested and the City Council approves their disbursement to the Association. If the Association identifies a need for additional funding that would benefit the BID outside of the approved budget, these requests can be brought to the City Council for consideration at a future City Council meeting during the year or as part of the annual public hearing and activity plan/budget approval process.
BACKGROUND:
From 1969 to 2004, a North MB BID existed (then called North End BID) for commercial properties located along the northern portion of Highland Avenue and a few businesses located along Rosecrans Avenue just east of Highland. This Business Improvement District, formed under the Parking and Business Improvement District Law of 1965, was fairly limited in scope and was used mainly to address parking acquisition and construction.
In December 2004, the City Council approved revamping the North MB BID because it was apparent that opportunities for increased parking were limited. Business owners in this area were interested in using the accumulated funds for promotional purposes and to create an identity for North Manhattan Beach. As a result, this BID was dissolved to form a new BID pursuant to the Parking and Business Improvement Area Law of 1989 (Streets and Highway Code Section 36500), which permits the use of funds for broad purposes such as marketing, promotions, capital improvements, and special events. Districts and the associated assessments are also required to be renewed annually.
Councilmember Howorth currently serves as the BID’s City Council representative with Councilmember Lesser as the alternate.
In 2025, the North Manhattan Beach Business & Professional Association was established as a nonprofit corporation, and the management of the NMBBID was transitioned to the newly formed Association.
DISCUSSION:
Assessments
The North Manhattan Beach Business Improvement District and the associated Assessment must be renewed annually. As required by law, the City Council adopted Resolution No. 26-0077 at its July 21, 2026, meeting, declaring its intention and setting the public hearing date of August 18, 2026, to hear testimony regarding the proposed assessment and district renewal. To complete the required notice of tonight’s public hearing, the resolution of intention was mailed to all business district members and published in The Beach Reporter.
If adopted, Resolution No. 26-0095 will take effect immediately and maintain the assessment at an 80% surcharge on the business license tax for business members in the district, up to a maximum of $500 per licensing year.
Advisory Board
The 1989 Business Improvement District Act requires that the City Council select a BID Advisory Board. Advisory Board duties include recommendations to the City Council on expenditure of revenues derived from the assessments, as well as the method and basis of levying the assessments.
BID members held a meeting on December 11, 2024, to elect up to five Advisory Board Members for a two-year term from January 1, 2025, through December 31, 2026. The following Advisory Board members were elected by the membership in attendance at the meeting and subsequently appointed by the City Council to the Advisory Board. Titles and business representations are as follows:
Chair Steven Delk - OB’s Grill & Bar
Vice-chair Peter Kim - Sloopy’s Beach Cafe
Recording Secretary Mike Simms - Nick and Sons
James (i.e. Jim) Murphy - The Sea View Inn at the Beach
Lawrence Getzoff - Beach Pizza
With the transition of activities to the Association last year, the BID Advisory Board is expected to meet less frequently than in prior years. The NMBBID currently has Bylaws that require an election process to nominate Board members, which are then appointed by the City Council as required by State law. Staff is exploring alternative Advisory Board nomination processes that may be more efficient and cost-effective than an election. A BID Advisory Board meeting will be held in the coming months to discuss potential revisions to the governing documents, which would then need approval by the City Council at a future meeting.
2026 Annual Budget and Activity Plan 2026
As part of the annual process required for BIDs, the Business Improvement District Advisory Board reviews and approves the operating plan for the District. The Advisory Board met on July 7, 2026, to review the FY 2025-2026 year-end progress report and approve the 2026 Annual Budget and Activity Plan. The Board voted affirmatively to recommend that the City Council enter into an Agreement with the Association.
The 2026 Annual Budget and Activity Plan attached to the Agreement contains information related to projected revenues and expenses and outlines the services and programs to be funded by the Business Improvement District. This year, the operating plan identifies the following programs:
A. Marketing
B. Beautification
C. Public Works/Community Development
D. Build Business Community
E. Events - Revenue Generation
The Business Improvement District, associated assessments, and collaboration with the Association will remain in place for FY 2026-2027 upon approval of the recommended actions listed below:
1. Conduct the Public Hearing to renew the annual BID;
2. Adopt Resolution No. 26-0095 authorizing the collection of assessments;
3. Adopt Resolution No. 26-0096 approving an agreement between the City of Manhattan Beach and North Manhattan Beach Business and Professional Association to provide the services and implement the programs identified in the 2026 North Manhattan Beach Business Improvement District Business Improvement Activity Plan & Budget; and
4. Appropriate $90,000 from the Parking Fund to disburse Reserved BID Funds to the Association.
PUBLIC OUTREACH:
This public hearing has been properly noticed in accordance with State law. The Resolution of Intention was circulated to all North Manhattan Beach businesses and published in The Beach Reporter.
ENVIRONMENTAL REVIEW:
The City has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity is not a “Project” as defined under Section 15378 of the State CEQA Guidelines because it consists of an administrative activity of government that will not result in direct or indirect physical changes in the environment. Therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines, the activity is not subject to CEQA. Thus, no environmental review is necessary.
LEGAL REVIEW:
The City Attorney has reviewed this report and approved the agreement as to form.
ATTACHMENTS:
1. Resolution No. 26-0095
2. Resolution No. 26-0096
3. Agreement - North Manhattan Beach Business & Professional Association (FY 2026-2027)