September 14, 2004

SUBJECT: Acceptance of Contributions from Property Owners in the Amount of $2,000 for Murphy Avenue Tree Lights Maintenance and Budget Modification No. 4

REPORT IN BRIEF

In accordance with direction from City Council on July 27, 2004, staff worked with downtown businesses and property owners to identify funding for the power and maintenance costs for the tree lights on Murphy Avenue. Four property owners have contributed a total of $2,000 to maintain the lights through FY 2004/2005. The funds will be appropriated to a special project for this purpose only.  The project will be administered by the Public Works Department. Staff recommends acceptance of the contributions from property owners and approval of Budget Modification No. 4 to appropriate the funds for   Murphy Avenue tree lights maintenance for one year.

BACKGROUND

At the Council Meeting on July 27, 2004, the City Council directed staff to work with the businesses and property owners of the 100 block of South Murphy Avenue to develop a way to keep the tree lights lit on Murphy. The City no longer has funds budgeted for this purpose.  The City agreed to keep the lights on while staff worked with the businesses and property owners to develop a plan and identify funding to pay for the power and maintenance of the lights.

EXISTING POLICY

Community Design Sub-Element

Policy 2.5A.3 Support measures which enhance the identity of special districts and residential neighborhoods to create more variety in the physical environment.

Policy 2.5A.3e. Encourage new landmarks and features to distinguish districts and neighborhoods.

Policy 2.5A.3f. Strengthen the downtown as the visual as well as functional focus of Sunnyvale.

Socio-Economic Sub-Element

Policy 5.1C.3 Maintain an attractive business community.

DISCUSSION

Over the past few years, the City of Sunnyvale has maintained lights on the trees on Murphy Avenue. This has been important because they contribute to the ambiance along the street that makes it inviting to the general public and therefore, is a benefit to the businesses and to the community. As part of the budget discussions for FY 2004/2005, the City Council decided they could no longer continue paying for the lights beyond June 30, 2004, given the budget difficulties of the City. The FY 2004/2005 budget transmittal letter recommended future maintenance beyond this time be funded by the businesses in the downtown area through a Business Improvement District. The City continued to keep the lights on for a few weeks into this fiscal year to allow the downtown property owners and businesses to come up with a plan to pay for the power and the maintenance of the lights. 

Representatives of the Sunnyvale Downtown Association, Sunnyvale Chamber of Commerce and Murphy Avenue property owners met on August 6, 2004, and discussed options to pay for the power and maintenance of the lights in the trees on Murphy Avenue. The group felt that the lights were important to create the atmosphere that is desired on Murphy Ave.

The cost to maintain the lights is approximately $2,000 per year. The consensus of the group was that the property owners would be contacted and asked to pay for the two-year cost of $4,000. A group of property owners took the lead and contacted other property owners in the downtown to raise funds to support the lighting on Murphy Avenue. Four property owners in the downtown have contributed $500 each for a total of $2,000 to maintain the lights for one year. The property owners who are contributing are Fred Hill, Nick Gera, Dick Smith and Wendell Whitfield. The funds will be provided to the City of Sunnyvale and placed in a special project established for the purpose of paying power and maintenance only. No City funding will be used to pay these costs. By setting up a special project, the funds can be placed into this project to ensure they are used for the intended purpose and that no City funds are used to pay these costs.

Over the next one-to-two years, staff will work with the downtown businesses and property owners to explore the feasibility of a Business or Property Improvement District (BID/PID). A BID/PID must be developed by the businesses and property owners and have their support for implementation. It cannot be imposed on the businesses without the approval of a majority of the businesses and/or property owners. If the creation of a BID/PID is not resolved by the end of the current fiscal year, it will be necessary to ask the downtown businesses and property owners to again review their options for operation and maintenance of the lights in the trees on Murphy Avenue or the lights will be turned off. 

FISCAL IMPACT

PUBLIC CONTACT

Public contact was made through posting of the Council agenda in public places, on the City’s web page, and the publication of the general business/public hearing items in the San Jose Mercury News.

ALTERNATIVES

1. Accept the contribution of $2,000 from downtown property owners and approve Budget Modification No. 4 to appropriate the funds to Murphy Avenue Tree Lights Maintenance project for one year.

2. Do not accept the contribution from downtown property owners and do not approve Budget Modification No. 4 to appropriate the funds to Murphy Avenue Tree Lights Maintenance project for one year.

RECOMMENDATION

Staff recommends Alternative #1.

This recommendation meets the Council direction to obtain funding from the downtown businesses and/or business owners to pay for operation and maintenance of the tree lights on Murphy Avenue.

Prepared by:

Karen L. Davis

Economic Development Manager

Reviewed by:

Robert Paternoster

Director, Community Development

Approved by:

Mary Bradley

Finance Director

Approved by:

Amy Chan

City Manager