REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO: Honorable Mayor and City Council Members
SUBMITTED BY: Travis Hopkins, City Manager
VIA: Jennifer Villasenor, Director of Community Development
PREPARED BY: Christopher Kennedy, Economic Development Project Manager
Subject:
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Public Hearing to Adopt Resolution No. 2026-27 Approving the Annual Assessment for the Huntington Beach Downtown Business Improvement District for Fiscal Year (FY) 2026-27
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Statement of Issue:
On September 1, 2026, the City Council adopted Resolution No. 2026-26 declaring its intention to levy an annual assessment for the Huntington Beach Downtown Business Improvement District (District) and scheduled a public hearing for October 6, 2026. Each business within the District is charged an annual fee, which the City collects and distributes to fund services that go beyond the City’s standard baseline services for this area. The City Council is now requested to conduct the public hearing and consider adopting Resolution No. 2026-27 to approve the FY 2026-2027 assessment.
Financial Impact:
The District’s FY 2026-27 budget, submitted by Downtown HB, includes projected revenues of
$1,044,500 of which $115,000 is expected from business assessments. The remainder will come from other revenue sources such as events and sponsorships.
The City’s FY 2026-27 Operating Budget (Fund 710: Huntington Beach Downtown Business
Improvement District Fund), includes $128,000 in revenue and matching expenditures related to
District activities.
Recommended Action:
recommendation
A) Conduct the Public Hearing; and,
B) If written protests from businesses representing 50% or more of the total assessment are not received, adopt Resolution No. 2026-27, “A Resolution of the City Council of the City of Huntington Beach Approving an Annual Assessment within the Huntington Beach Downtown Business Improvement District for Fiscal Year 2026-27.”
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Alternative Action(s):
The City Council may amend elements of the Annual Report, such as fees, activities, improvements,
or district boundaries and update the Resolution accordingly. However, the City Council may not
increase assessments or expand district boundaries as part of this action.
If written protests are received from business owners representing more than 50% of the total
assessment value, the City Council may not approve the Resolution.
Analysis:
Background
The Huntington Beach Downtown Business Improvement District (District) was created in 2004 to
support services that enhance the downtown area, such as safety, marketing, and maintenance,
beyond the City’s baseline levels.
In 2008, the City Council appointed Downtown HB, a nonprofit formed by local businesses, as the
District’s Advisory Board. The Advisory Board makes annual recommendations regarding the use of District funds and any proposed changes to assessment amounts or District boundaries. The City Council reviews and considers these recommendations through a public meeting.
The City and Downtown HB operate under a formal agreement that outlines their roles in managing
the District. Downtown HB is responsible for managing collected funds and ensuring they are used
exclusively to benefit the businesses in the District.
Annual Report & FY 2026-27 Assessment Budget
For the upcoming fiscal year, Downtown HB’s goals include reestablishing and restructuring the nonprofit, strengthening member communication and engagement through monthly newsletters and welcome packets, creating quarterly opportunities to connect with the Board of Directors, and developing a donation package to support Downtown HB and special events. Together, these efforts are intended to strengthen Downtown HB’s organizational capacity, increase business engagement, and support a vibrant and welcoming Downtown for businesses, residents, and visitors.
The Annual Report outlines the Advisory Board’s recommendations for the use of $115,000 in proposed assessment revenue, which is allocated to programs and services that directly benefit businesses within the District. Additional Downtown HB activities and expenses are supported by non-assessment revenue sources.
The Advisory Board recommends the following allocation of $115,000 in assessment revenue:
• Ambassador Security Program - $35,000 (30%) - Assessment funds will support a portion of the Downtown ambassador program, with additional contributions from Visit Huntington Beach (VHB) and Downtown HB. The program provides a visible presence in the Downtown area, supports early reporting of issues to the Huntington Beach Police Department, and assists with visitor and business needs.
• Holiday Beautification - $25,800 (22%) - Assessment funds will support holiday décor and enhancements, including aerial displays, themed lighting, and a decorated tree on Main Street. Plans for the upcoming holiday season include a beach-themed design and expanded decorations through the fourth block and onto 5th Street.
• Enhanced Maintenance - $21,000 (18%) - Assessment funds will support enhanced maintenance services, including daily porter coverage, expanded steam cleaning during high-traffic periods, and additional porter services during holidays and major events. These services supplement City-funded maintenance services.
• Community Events - $18,000 (16%) - Assessment funds will support community events such as the Halloween celebration, Tree Lighting, July 4th Block Party sponsorship, and a new off-season community event. These activities provide opportunities for community engagement and exposure for Downtown businesses.
• Marketing - $10,000 (9%) - Assessment funds will support a portion of social media consultant costs and other marketing efforts focused on promoting Downtown HB and communicating with stakeholders.
• CRM Software - $3,000 (3%) - Funding will support the organization's customer relationship management system, which centralizes stakeholder information and facilitates communication and outreach.
• Financial Services - $2,200 (2%) - Funding will support third-party accounting services, including monthly financial reporting and bank management.
The proposed FY 2026-27 budget totals $1,044,500, representing an increase of $72,055 from the prior fiscal year (Annual Report, Page 19). This overall organizational budget includes the $115,000 in proposed business assessment revenue, as well as revenue from other sources, including the Surf City Artisan Fair, Surf City Nights, and the City's contribution toward maintenance services. Downtown HB's Board of Directors manages the organization's overall budget, including non-assessment revenue and related expenses.
The organization previously maintained unallocated reserves to provide flexibility for future needs. During the current year, a significant portion of these reserves was allocated toward outstanding financial obligations, including the U.S. Small Business Administration (SBA) Economic Injury Disaster Loan (EIDL) and certain Employment Development Department (EDD) and Internal Revenue Service (IRS) fees, substantially reducing the organization's outstanding debt.
District Renewal
The submitted Annual Report includes the following information:
1. No changes to the District's boundaries or benefit zones;
2. A list of planned improvements and estimated costs;
3. The method used to calculate each business's assessment;
4. Any surplus or deficit from the prior fiscal year; and
5. Revenue sources beyond business assessments.
Approximately 255 businesses currently pay annual assessments ranging from $80 to $1,404, plus a $12 processing fee. There are no proposed changes to the assessment formula or District boundaries for FY 2026-27.
Business owners may submit written protests if they oppose the proposed assessment. Protests must be submitted by the business owner or their designated agent as shown in City records. Protests may be withdrawn at any time before the close of the public hearing.
If written protests representing 50 percent or more of the total assessments are received, the City Council may not proceed with the levy of assessments for FY 2026-27. If protests pertain only to a specific service or activity, such as holiday decorations, that activity must be removed from the budget. The City Council may also disestablish the District by ordinance following a public hearing, provided that a resolution of intention to disestablish is adopted prior to the hearing.
Environmental Status:
Pursuant to CEQA Guidelines Section 15378(b)(5), administrative activities of governments that will not result in direct or indirect physical changes in the environment do not constitute a project.
Strategic Plan Goal:
Goal 1 - Economic Development, Strategy A - Develop an updated economic development strategy to ensure business retention, local investments and job growth.
For details, visit www.huntingtonbeachca.gov/strategicplan.
Attachment(s):
1. Resolution No. 2026-27
Exhibit A: Annual Report and Proposed Budget for FY 2026-2027
Exhibit B: Boundary Map, Business List and Assessment Schedule
Exhibit C: Improvements and Activities Proposed to be Funded
2. PowerPoint Presentation