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CONDUCT A PUBLIC HEARING FOR THE FORMATION OF THE DOWNTOWN STOCKTON COMMUNITY IMPROVEMENT DISTRICT (DSCID)
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RECOMMENDATION
It is recommended that the City Council conduct a Public Hearing to consider public comment and testimony regarding the approval and adoption for the formation of the Downtown Stockton Community Improvement District (DSCID). At the conclusion of the public input portion of the public hearing, it is recommended that the City Clerk re-share the results of the ballots that were previously tabulated on October 14, 2025. The ballots returned were 76% in favor of formation of DSCID. It is recommended that the City Council adopt a resolution to:
1. Approve the formation of the Downtown Stockton Community Improvement District authorized under the City of Stockton’s Community Improvement District Ordinance 2022-03-22-1211 (Attachment A - SMC Ordinance) and designated as the “Downtown Stockton Community Improvement District,” with a benefit zone designated “Zone 1” the boundary of which is shown in the Boundary Map (Exhibit 1 to the Resolution).
2. Approve the assessment formula and levying of the assessments;
3. Declare the assessment is lawfully authorized and direct the Clerk to cause the Boundary Map to be filed in the Office of the San Joaquin County Recorder and, concurrently therewith, to record a Notice of Assessment with respect to the properties in the Office of the County Recorder of the County of San Joaquin;
4. Approve and adopt the final Management District Plan and Engineer’s Report (Exhibit 2 to the Resolution); and
5. Authorize the City Manager, or designee, to take necessary and appropriate actions to carry out the purpose and intent of the resolution.
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Summary
A Community Improvement District (CID) is a flexible financing tool to allow Stockton business districts new mechanisms to establish innovative ways of attracting, retaining, and expanding their businesses to remain competitive with other areas of the region. The formation of a CID is authorized under the City of Stockton’s Community Improvement District Ordinance 2022-03-22-1211 (Attachment A - SMC Ordinance #2022-03-22-1211). The levy of assessments on real property within the proposed District will support activities and improvements for the assessed properties, including enhanced security and maintenance, landscape beautification, advocacy services, marketing, events, and administration throughout the district. The Downtown Stockton Improvement District Owner’s Association has requested that the City of Stockton consider the formation of the Downtown Stockton Community Improvement District (DSCID) for a 20-year term, beginning January 1, 2027.
On October 14, 2025, the Council held a hearing, allowing citizens and property owners to express their considerations. Upon completion of public comment and further discussion by Council, the Clerk announced the results of the property owner ballots, which voted overwhelmingly in favor of the redistricting plan, assessment and border with 76% of ballots returned in favor. Despite the property owners’ affirmative vote, Council, as the final approving authority, voted against formation of the district as petitioned, balloted and presented. Absent an approval of the district boundary map, service plan and assessment formula, the district, which is currently operating as the Downtown Stockton Property and Business Improvement District (DSPBID), is set to expire and dissolve on December 31, 2026.
At the Council meeting of November 18, 2025, the Mayor made a motion to suspend Rosenberg’s Rules of Order, which require reconsideration of an item to occur within the same meeting the item was first voted upon. The motion was seconded, and Council voted 7-0 to suspend the rule on reconsideration. Council then moved and voted in favor of reconsidering their vote on formation of DSCID, and the approval of the assessment formula and service plan. Council requested for the original item (public hearing and formation of DSCID) to be brought back at the next Council meeting following a 45-day notice to property owners informing them that the public hearing would be reopened and Council would vote again on formation of DSCID. The item before Council on the February 3, 2026 agenda allows for the Council to re-vote on formation of DSCID following notice to property owners in the proposed district.
DISCUSSION
Background
On July 29, 2025, the City Council adopted Resolution No. 2025-07-29-1503 (Attachment B - Resolution 2025-07-29-1503), stating its intention to form the DSCID, accepting petitions of property owners, preliminarily approving the Management District Plan and Engineer’s Report, approving a proposed boundary map, setting a date for a public hearing of protests, providing for property owner ballots, and authorizing the City Manager, or designee, to sign the ballot for all City-owned property which is proposed to be assessed in favor of the formation of the DSCID. Assessment ballots and the notice of public hearing were mailed to property owners within the district on August 4, 2025.
A Community Improvement District (CID) is a catalyst for creating private-sector, self-governed management districts. These districts provide the resources for enhanced maintenance, safety, marketing, management, and advocacy services through property assessments. Property owners pay these assessments directly as part of their annual tax bill. Funds raised through a CID cannot be diverted to government programs. Currently, the Downtown Stockton Property and Business Improvement District (DSPBID) is the only existing Property and Business Improvement District within the City of Stockton.
The proposed formation of DSCID will continue to operate similarly to the DSPBID. It will provide supplemental services to Downtown Stockton, including enhanced security and maintenance, landscape beautification, marketing, and events.
Present Situation
On October 14, 2025, a public hearing was held in compliance with the requirements of Government Code Section 53753(d), which requires that the City Council conduct a public hearing for protests and tabulation of property owners’ assessment ballots prior to the formation of an improvement district. During the hearing, the City Council heard testimony from property owners predominantly in protest of the district’s expanded boundaries or components of the district’s proposed operations.
After receiving public comment during the public hearing, ballots were tabulated, weighted by the amount each owner will pay. A majority of the ballots received (76%) were in favor of the formation; however, the City Council chose not to adopt the resolution approving the formation of the DSCID, the boundary map, the assessment formula and levying of the assessments, the Management District Plan, and Engineer’s Report. City Council subsequently voted to suspend Roseberg’s Rules of Order, and then voted in favor of reconsideration of the original item.
Since the weighted majority of ballots received voted in favor of formation of DSCID, Council may take one of the following actions:
1. Approve formation of the district as shown in the Boundary Map (Exhibit 1 to the Resolution) with the proposed assessment formula; or
2. Modify the proposed assessment district boundaries to exclude territory, and/or reduce or modify the proposed assessment or activities to be funded with the revenue from the assessment; or
a. If the City Council decides to modify the district boundaries to exclude territory, the modification must be supported by a finding that the excluded territory will not benefit from the proposed improvements, maintenance and activities.
b. Proposed assessments may only be revised by reducing any or all of them.
3. Disapprove formation of the district. If Council does not approve formation of the district, DSPBID will expire and dissolve on December 31, 2026.
Public Notice
Legal notice for the DSCID public hearing is required to be published at least ten days in advance. The notice for this hearing was posted in advance and was published in The Record on January 22, 2026.
MANAGEMENT DISTRICT PLAN
The Management District Plan (Exhibit 2 to the Resolution) includes the proposed boundary map of the DSCID, district improvement and activity plan, assessment methodology, district rules, regulations and governance, implementation timetable, assessment roll of properties included, and other provisions required by law. The DSCID comprises approximately 150 blocks consisting of 841 parcels, as identified in the Management District Plan (MDP).
The DSCID will provide services funded by the assessments to specifically benefit the properties within the district that are above and beyond those provided by the City and other government agencies, including:
• Clean, Safe, and Beautiful Downtown
• Business Development
• Advocacy and Administration
DSCID’s MDP gives property owners flexibility in determining the type and frequency of special benefit services that the district will allocate yearly. As DSCID evolves, services needed one year may not be required the next. Therefore, “bundles” or categories of special benefit funding have been created and divided into four broad categories. Each bundle is allocated funding percentages with the flexibility to prioritize or minimize a service within each bundle. The following bundles of services and allocations are included in the MDP:
1. Clean, Safe, and Beautiful - 77%
2. Business Development - 10%
3. Advocacy, Administration, Reserve - 13%
The proposed assessments are a sum of the building square footage, lot size, and linear frontage costs per parcel per benefit zone. The initial annual rate for each zone is shown in the table below. Assessment rates may be subject to yearly increases not to exceed 5 percent per year and shall not exceed the actual increases in costs and services.
|
Assessment Rates: |
Lot + Building Sq. Ft. |
|
Commercial/Govt/Multi Family |
$0.07881 |
|
Res 1-3 Units/ Non-Profit |
$0.04728 |
As provided by state law, the DSCID assessment will appear as a separate line item on the annual San Joaquin County property tax bill. The assessment will be implemented beginning January 1, 2027, and the district will have a 20-year term. The County will collect the assessments annually from each assessed property owner and forward them directly to the DSCID. The projected annual budget for operations in year one for the DSCID is $1,862,000, funded by property assessments.
FINANCIAL SUMMARY
The MDP requires local governmental agencies, including the City of Stockton, to pay assessments for special benefits conferred to their property within the boundaries of the DSCID, pursuant to Article XIIID of the State of California Constitution.
There are approximately 150 blocks in the downtown central core of DSCID. Total assessments for the first calendar year of operations are estimated at $486,152.64, paid from multiple funds: General Fund, Parking Fund, Successor Agency Fund, and Venues Fund. This assessment will continue for a period of 20 years.
The Resolution of Intention, adopted on July 29, 2025, authorized the City Manager to execute the property owner’s assessment ballot for all property owned by the City and proposed to be assessed in favor of the formation of the DSCID and the assessment.
Should the Council amend the boundary through one of the actions outlined above, the overall budget and service plan will be amended to reflect a reduced DSCID budget based on the remaining properties within the district, using the approved assessment formula.
Attachment A - SMC Ordinance #2022-03-22-1211
Attachment B - Resolution 2025-07-29-1503