City Commission Considers Salina BID Considers 2024 Service Fees
At the latest City Commission meeting held on Monday, the Commissioners deliberated over an ordinance concerning the service fees for Salina Business Improvement District No. 1 in the upcoming year, 2024.
Background: The procedure for creating and financing Business Improvement Districts (BID) within cities is governed by Kansas State Law (K.S.A. 12-1781 et seq.). These districts aim to provide extended services to businesses within their boundaries to revitalize or enhance economic activity. The BID's financing is primarily derived from service fees applicable to all businesses located within the district. Salina City Commission had initially approved the establishment of BID No. 1 in specific downtown areas back in 1983. Cities can either offer BID services directly or via a contract with a not-for-profit corporation. From 1983 to 1987, the City itself managed BID programs and services. However, since 1987, these responsibilities have been delegated to Salina Downtown, Inc. (SDI), a not-for-profit organization engaged in advocacy and marketing efforts.
According to state law, each BID is required to have a board of advisors appointed by the City, and these individuals may also serve as the board for the not-for-profit corporation. In Salina, both the BID and SDI boards consist of the same members serving in a dual capacity. SDI conducts annual elections to choose its board members. The City Ordinance specifies that "There shall be thirteen (13) members of the Board of Advisors of Salina Business Improvement District Number 1 who shall be appointed by the Mayor with the consent of the Governing Body. The Mayor shall make appointments from individuals recommended by the Board of Directors of Downtown Salina, Inc.; provided, however, that the Mayor may reject any recommendations and request new recommendations".
Service fees required to fund BID programs are levied on businesses (as per state law) within the district. Annually, the BID Board makes recommendations for these service fees, which are then levied by ordinance by the governing body, applicable exclusively to businesses located within the district. These annual service fees are obligatory payments as defined by city ordinance. Sections 10 and 11 of the ordinance outline the enforcement mechanisms for non-payment of fees. These fees, as a part of the City of Salina's charges, are billed and collected by the City's Finance Department and subsequently allocated to the BID for program administration.
For the year 2024, the BID/SDI Board has recommended a 30% increase in these fees.
Business Improvement District Fees for 2024: Santa Fe District
- Base fee per business: $317.20
- Plus frontage rate per front footage abutting Santa Fe Avenue: $13.52
- Combined maximum fee per business: $1,885
Employment District
- Base fee per business: $188.50
- Plus fee per worker based on total workers per worker (worker 2 through 10): $65
- Per worker (additional workers): $32.50
- Maximum fee per business (2 to 10 workers): $629.20
- (11 to 50 workers): $1,261
- (50 or more workers): $1,881.10
Hospital/Mill District
- Base fee per business: $124.80
- Plus fee per worker based on total workers per worker (worker 2 through 10): $41.60
- Per worker (additional workers): $23.40
- Maximum fee per business (2 to 10 workers): $410.80
- (11 to 50 workers): $851.50
- (50 or more workers): $1,290.90
Not-for-profit organizations within the district do not incur fees but may choose to contribute to the SDI partner program.
Fiscal Note: The decision to implement a 30% increase in BID fees was discussed during study sessions held on May 22, 2023, in preparation for the 2024 budget. The revised rates outlined in Ordinance 23-11169 will be integrated into the 2024 Comprehensive Fee Schedule.
During the discussion, Commissioner Longbine inquired about the potential burden these fees might impose on downtown businesses. Leslie Bishop, Executive Director of Salina Downtown Inc., responded by explaining that the substantial 30% increase was necessitated by the fact that Salina Downtown BID dues had not been adjusted in four years. Bishop, along with her board, conducted a thorough analysis, concluding that the increase, though it might seem significant at 30%, averaged out to be only $10-14 more, depending on the nature of the business. Regarding Commissioner Longbine's concern, Bishop mentioned that it was indeed a topic under consideration by her board of directors but stressed that the fee hike was deemed necessary at this juncture.
Mayor Hoppock, who operates a business downtown, voiced support for the increase. He highlighted the tangible improvements, such as hanging baskets and cleanliness initiatives, spearheaded by SDI, suggesting that downtown businesses were receiving value for their investment.
Ultimately, the motion to approve the first reading of the ordinance levying Salina's BDI #1 service fees for 2024 was carried with unanimous support, with a 5-0 vote.