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Qualification Statement New City America has been the only company in the state to be creative in the formation of special assessment districts, based upon the provision of Prop 218 of the State Constitution. San Leandro has a tremendous advantage in being a charter city. Your RFP mentions that many residential units could be included in the potential district, and I am sure many tax exempt properties would be included in the new PBID or CBD. We would strongly advise that you NOT use the Streets and Highway Code PBID law due to some fundamental flaws in the law. Those flaws include the following: 1. Your district will include many different land uses, however the PBID law is called the "Business Improvement District" Act of 1994. This makes many tax exempt, social service, residential and other land uses wonder why they would be paying into a special benefit district that is established to promote "business improvement ". Business improvement is a key component of the district, but not the only component of the district. 2. The PBID law has a maximum first year term of 5 years. That amount of time is hardly long enough to make an impact in the district. CBDs can be formed for as long a property owners think is necessary to start the "re- invention" process of the district. 3. The petition triggers the balloting for the district formation. The petition does NOT create the district, the balloting does. However, the petition threshold is higher than the vote needed to establish the district. This is backwards and the extremely high petition threshold prevents many districts from ever being formed. The CBD ordinance could make the petition threshold more reasonable and allow property owners to get to the balloting phase quicker. 4. The PBID law, NOT the state constitution, allows for exemption of tax exempt parcels, even though they will be receiving benefit. The CBD ordinance would have no such clause and would be consistent with Prop 218 in that it would allow for ALL parcels to be assessed as long as they were receiving benefit. The relevant clause in the PBID law is as follows: 36622. The management district plan shall contain all of the following: (k) A list of the properties or businesses to be assessed, including the assessor's parcel numbers for properties to be assessed, and a statement of the method or methods by which the expenses of a district will be imposed upon benefited real property or businesses, in proportion to the benefit received by the property or business, to defray the cost thereof; including operation and maintenance. The plan may provide that all or any class or category of real property which is e wempt by law from real property taxation may nevertheless be included within the boundaries of the district but shall not be subject to assessment on real property. 5. Furthermore, residentially zoned parcels, even if found within, a commercial area, are specifically exempt from paying into the assessment district. The CBD ordinance would have no 4