The Fayetteville City Council received an update regarding the Downtown Municipal Service District Rate and future contract award at their work session held on April 3. 

Economic and Community Development Director Christopher Cauley, MPA, presented a brief presentation on the history, progress, and current tax rate of the current Municipal Service District for the downtown area. 

The Municipal Service District was created in 1978 to finance and support downtown services and activities that are in addition to or to a greater extent than those activities financed, provided, or maintained for the entire city.

Currently the tax rate is .10 cents per $100 value, and has been since 1978. 

According to Cauly, in 1983 the City Council opted to renew that tax rate for a period of five years. The current tax rate is set to expire in June and Cauly appeared before the Council asking them to renew the tax rate for another five year period. 

Cualy provided a summary of the Central Business Tax District Fund to breakdown where the money is going and what has been produced under the current rate for the last five years and a gradual, but slow, increase in revenue for 2022-23, including a $51,918 surplus accrued over time going to fund the CSDD Ambassador program. 

“That sets us at about $139,000 annually. So when you add that tax rate plus that general fund transfer and that gives us close to $300,000 that we then spend on a couple of different things, one being the downtown management contract, utilities for the parking decks, and then debt service for both parking decks. So this gives you an idea of what the actuals have looked like over time. Some years we've added money to the savings account. Some years we've taken money out,” said Cauly. 

Cauly then moved on to the Downtown Management Contract currently being executed by the Cool Spring Downtown District. The Contract was established on June 22, 2020 for a three year term and “Provides enhanced services for an arts and entertainment focused downtown municipal service district.” 

The contract also includes services such as: 

• Economic Vitality and Development;

• Art and Design Enhancements;

• Promotion and Marketing;

• Special Events and Programming; and Partnership,

• Organizational Support and Conflict Resolution.

“They provide economic vitality, Arts and Design promotion and marketing special events and then working with the downtown merchants and property owners to deal with any conflicts or things like that. Their contract, that three year contract will expire. In June of 2023 as well. And so staff is recommending a five year term, which is the maximum amount allowed in state law so that these two items can coincide in the future moving forward,” said Cauly. 

The Economic and Community Development staff are in the middle of the process for awarding the new contract. 

In compliance with state law, a survey of downtown property owners was conducted throughout February to collect appropriate feedback from business owners about what services and needs they have. 

Currently there is a request for proposal (RFP) currently out until April 14. 

Next, a City Council Public Hearing and Adoption of the tax rate and the Downtown Management Contract will take place on June 12 and go into effect on July 1. 

You can see the full presentation here: file:///C:/Users/GFBJ/Downloads/MSD%20Renewal%20Presentation%202023.pdf

And watch the Meeting playback here: https://www.youtube.com/watch?v=iX8yeF_EtF0

This Item 4.01 starts at 9:00