HomeMy WebLinkAbout2006-08-20; Carlsbad Tourism Business Improvement District; 0206-3; Repayment of Loans to CTBIDCARLSBAD TOURISM BUSINESS IMPROVEMENT DISTRICT
AGENDA BILL
AB# 0206-3
MTG. 2-8-06
TITLE:
REPAYMENT OF LOANS TO THE
CARLSBAD TOURISM BUSINESS IMPROVEMENT
DISTRICT (CTBID)
DEPT. ADMIN
SERVICES
ORIGINATOR
CITY ATTY.
RECOMMENDED ACTION:
Adopt Resolution No. 2006-1 authorizing the repayment of funds advanced by the City
Council of the City of Carlsbad to the Carlsbad Convention and Visitors Bureau for costs
related to the formation of the Carlsbad Tourism Business Improvement District.
ITEM EXPLANATION:
On April 5, 2005 the City Council approved a loan of $33,500 to the Carlsbad Convention
and Visitors Bureau (CCVB) to fund the formation of a tourism business improvement
district. The terms of this loan called for the repayment of this loan from the revenues of
the resulting business improvement district, should one be formed.
In November 2005 Kurt Burkhart contacted the City and asked that the loan be amortized
over a six-month period, allowing the CTBID to use the majority of the revenue in the early
months to implement the proposed marketing plan. On November 23, 2005 the City
Manager agreed to a six-month repayment schedule and directed the Administrative
Services Director to develop a repayment plan.
The CTBID was formed by the tourism industry on November 8, 2005, and will begin to
receive money from assessments beginning in March 2006. Although there is no indication
yet of the total monthly revenue the CTBID will receive, a gross estimate can be created by
taking the number of rooms available and assuming an occupancy rate.
The City has roughly 3,600 hotel rooms subject to the $1 per night assessment. If an
occupancy rate of 66% is assumed, monthly revenue can be assumed to be about $70,000.
Initial revenues may be lower if hotels have had difficulty implementing the CTBID
assessment, or if occupancy rates are lower than expected.
Assuming a six-month repayment schedule for the funds advanced by the City Council, the
monthly repayment to the City would be $5,583.33. No interest will be assessed on the
outstanding amount of the advance.
The recommended action is that the CTBID Board approves the attached resolution which
would authorize the repayment of $5,833.33 per month for six months, beginning March
2006.
FISCAL IMPACT:
Although the CTBID will have to wait until all Transient Occupancy Tax returns are filed for
the month of January 2006 for an actual count of CTBID revenues, monthly revenues for
the CTBID should be approximately $70,000. The repayment of $5,833.33 to the City of
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Carlsbad will reduce revenues about 8% each month, leaving about $64,000 to support
CTBID marketing activities.
EXHIBITS:
1. Resolution No. 2006-1 Authorizing the repayment of funds advanced by the City
Council of the City of Carlsbad to the Carlsbad Convention and Visitors Bureau for costs
related to the formation of the Carlsbad Tourism Business Improvement District
2. Agenda Bill # 18,048, dated April 5, 2005 - Approval of Funding Requests from
Carlsbad Convention and Visitors Bureau for the Formation of A Tourist Business
Improvement District
DEPARTMENT CONTACT: Jim Elliott, 760-602-2409, e-mail: ielli@ci.carlsbad.ca.us
1 RESOLUTION NO. 2006-1
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A RESOLUTION OF THE CARLSBAD TOURISM BUSINESS IMPROVEMENT
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DISTRICT (CTBID) BOARD OF DIRECTORS AUTHORIZING THE REPAYMENT OF
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FUNDS ADVANCED BY THE CITY COUNCIL OF THE CITY OF CARLSBAD TO THE
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CARLSBAD CONVENTION AND VISITORS BUREAU FOR COSTS RELATED TO
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THE FORMATION OF THE CARLSBAD TOURISM BUSINESS IMPROVEMENT
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DISTRICT
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WHEREAS, in early 2005 the tourism industry, represented by the Carlsbad
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Convention and Visitors Bureau (CCVB), approached the City Council with a request to
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form a tourism business improvement district under the "Parking and Business
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Improvement Area Law of 1989"; and
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WHEREAS, the creation of a tourism business improvement district required the
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assistance of legal counsel and the development of a marketing program describing the
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activities of such a district; and
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WHEREAS, on April 5, 2005, at the request of CCVB, the City Council of the City
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of Carlsbad approved the loan of $33,500 from the City's general fund to CCVB to fund
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both legal and marketing services; and
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WHEREAS, said loan of funds would be made by the City of Carlsbad as
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invoices for services were received from legal counsel and marketing consultants; and
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WHEREAS, the Finance Director of the City of Carlsbad has paid the full amount
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of $33,500 to legal counsel and marketing consultants for services received, with the
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approval of CCVB; and
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WHEREAS, in March 2006 the CTBID will begin to receive revenue from
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assessments; and
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WHEREAS, the City Manager of the City of Carlsbad, in a letter to CCVB dated
November 23, 2005, has authorized the repayment of the loan over a six month period;
and
WHEREAS, the CTBID now has the financial ability to repay the funds advanced
by the City Council,
NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the CTBID
as follows:
1 . That the above is true and correct.
2. That the amount of $33,500 shall be repaid to the City of Carlsbad over a
six-month period beginning in March 2006, with equal amounts being
repaid in each month, except that any additional amount due resulting
from rounding error shall be included in the final payment.
3. That no interest shall accrue or be paid on the outstanding balance due.
PASSED, APPROVED AND ADOPTED at a regular meeting of the CTBID
Board of Directors held on the % _ day of ^ <^< ^^ S . 2006 by the
following roll call vote, to wit:
AYES:
NOES:
ABSENT: 0
Chairperson
ATTEST
Secretary
CITY OF CARLSBAD-AGENDA BILL
AB* 18.048
MTG. 4/5/05
DEPT. CA
TITLE;
APPROVAL OF FUNDING REQUEST FROM CARLSBAD
CONVENTION AND VISITOR'S BUREAU FOR THE
FORMATION OF A TOURIST BUSINESS IMPROVEMENT
DISTRICT
DEPT. HD.
CITY ATTY.
CITY
1
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O
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RECOMMENDED ACTION:
Adopt Resolution No. 2005 -094 approving a loan of $33,500 to the Carlsbad
Convention and Visitor's Bureau to form a proposed Tourism Business Improvement District
to be repaid by the District after formation.
ITEM EXPLANATION:
The City Council received a presentation from the Carlsbad Convention and Visitor's
Bureau for the formation of a proposed Tourism Business Improvement District at its regular
meeting of March 22, 2005. The Council approved the request in concept and directed the
City Attorney to prepare documents authorizing the funding in the form of a loan to be
repaid from the District after formation. The Council should satisfy itself that the attached
documents express its intent in this matter.
FISCAL IMPACT:
Carlsbad Convention and Visitor's Bureau's proposal estimates the cost to provide
consultant services for establishing the Tourism Business Improvement District for Carlsbad
at $33,500 which will be repaid from the District after formation.
EXHIBITS:
Resolution No. 2005-094
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I DEPARTMENT CONTACT: Ronald R. Ball, 434-2891o
CO00•HCO