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Home My WebLink About2020-08-14; Carlsbad Tourism Business Improvement District; ; Approve the Modified Annual Report of the Carlsbad Tourism Business Improvement District for Fiscal year 2020-21Approve the Modified Annual Report of the Carlsbad Tourism Business Improvement District for Fiscal year 2020-21 AB# 08-20-195 MTG. 8-14-20 CTBID STAFF GENERAL COUNSEL CARLSBAD TOURISM BUSINESS IMPROVEMENT DISTRICT AGENDA BILL RECOMMENDED ACTION: Adopt a resolution approving the Modified Annual Report of the Carlsbad Tourism Business Improvement District (CTBID) for Fiscal Year 2020-21 and submit the report to the City Council for approval at its Aug 25, 2020 meeting. ITEM EXPLANATION: In accordance with Section 36533 of the California Streets and Highways Code, the CTBID Advisory Board is required to present an annual report for City Council's review and approval for each fiscal year for which assessments are to be levied and collected to pay the costs for the improvements and activities described in the report. This report is to contain: • Any proposed changes to the boundaries of the CTBID. • The activities to be provided for that fiscal year. • Estimate of the cost of providing those activities (ie budget) • The method and basis of levying the assessment. • The amount of any surplus or deficiency revenues to be carried over from the previous year. • The amount of any other contributions The annual report for Fiscal Year 2020-21 was approved by the City Council at the June 23, 2020 City Council meeting. The City Council may modify the CTBID assessment rate by following the process in California Streets and Highway Code Sections 36540-36542. At the July 14, 2020 City Council meeting, the City Council adopted a Resolution of Intention to modify the CTBID's assessment rate from $1.00 "per occupied room per night for all transient occupancies." to 2% "of gross short-term room rental revenue for all transient occupancies". Staff has modified the attached annual report (included as an attachment to Exhibit 1) to reflect the assessment rate. Staff recommends that the Board approve the attached report for presentation to the City Council at its August 25 City Council meeting. FISCAL IMPACT: None. ENVIRONMENTAL IMPACT: This action does not qualify as a project under the California Environment Quality Act ("CEQA") and will not have a physical adverse effect on the environment. (CEQA Guidelines 15378(b)(5).) EXHIBITS: 1. Resolution approving annual report DEPARTMENT CONTACT: Cheryl Gerhardt, 760-602-2468, cheryl.gerhardt @carlsbadca.gov DocuSign Envelope ID: ABA33B3D-DD89-479E-BF07-3C6705C0A7AF EXHIBIT 1 RESOLUTION NO. 2020-4 RESOLUTION OF THE BOARD OF DIRECTORS OF THE CARLSBAD TOURISM BUSINESS IMPROVEMENT DISTRICT (CTBID), APPROVING THE MODIFIED ANNUAL REPORT WHEREAS, the Carlsbad Tourism Business Improvement District (CTBID) was formed in accordance with the Parking and Business Improvement Area Law of 1989 (California Streets and Highway Code § 36500 et seq.) (the "Act"); and WHEREAS, Section 36533 of the Code requires the CTBID Advisory Board to present a report to the City Council for their review and approval for each fiscal year for which assessments are to be levied and collected to pay the cost for the improvements and activities described in the report; and WHEREAS, an Annual Report has been submitted to the City Council for Fiscal Year 2020-21, and was approved by City Council at a public hearing on June 23, 2020; and WHEREAS, the Annual Report has been modified for the 2020-21 fiscal year; and WHEREAS, the Board of Directors of the CTBID wishes to approve the modified Annual Report; and WHEREAS, the Board of Directors of the CTBID wishes to submit the report to the City Council for approval; and NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Carlsbad Tourism Business Improvement District, as follows: 1. The recitals set forth herein are true and correct. 2. The modified Annual Report (Attachment A) is approved as submitted by the CTBID Advisory Board by the City Council, modifying the CTBID assessment rate. 3. That for Fiscal Year 2020-21, the modified assessment rate is two percent (2%) of gross short-term room rental revenue for all transient occupancies. 4. The modified assessment rate would go into effect Nov. 1, 2020. 5. The the approved modified Annual Report of the CTBID will be presented to the City Council for their approval at the Aug. 25, 2020 meeting. DocuSign Envelope ID: ABA33B3D-DD89-479E-BF07-3C6705C0A7AF EXHIBIT 1 PASSED, APPROVED AND ADOPTED at a Meeting of the Board of Directors of the Carlsbad Tourism Business Improvement District on the 14 day of August, 2020, by the following vote, to wit: AYES: Stripe, Gray, Hughes, Chapin NAYS: None ABSENT: Rauch, Canepa Tim Stripe Stripe Chair ATTEST: PeC-foi Gome27 40 BARBARA ENGLESON Pro Tern Clerk of the Carlsbad Tourism Business Improvement District Attachment A Carlsbad Tourism and Business Improvement District (CTBID) 2020-2021 Modified Annual Report Method of Assessment: The CTBID includes all hotel businesses located within the CTBID boundaries. The assessment shall be levied on all hotel businesses, existing and future, within the City of Carlsbad based upon 2% of gross short-term room rental revenue for all transient occupancies as defined in section 3.12.020(7) of the Carlsbad Municipal Code. The amount of assessment shall be separately stated from the amount of the rent and other taxes charged, and each transient shall receive a receipt for payment from the operator. The assessment will be remitted monthly, based on 2% of gross short-term room rental revenue for the previous month. Assessment Funding Purpose: To administer marketing and visitor programs to promote the City of Carlsbad as a tourism visitor destination and to fund projects, programs, and activities, including appropriate administrative charges that benefit hotels within the boundaries of the District. 2019-20 Work Plan: Last fiscal year, the CTBID contracted with Carlsbad Convention and Visitors Bureau (dba Visit Carlsbad) to provide tourism marketing services for Carlsbad. In addition, $20,000 in grants were awarded to fund events to increase the overnight stays in Carlsbad hotels. The previously adopted CTBID 2020-21 budget included a reduced funding level of $800,000 for Visit Carlsbad. This reduced funding level is the result of reduction in assessment revenue due to Covid-19. The services provided will focus primarily on post Covid-19 marketing recovery efforts. The majority of this will be done by interactive marketing and group sales. Funding also includes managing the visitor center and publications. The increase in the assessment from $1 per room night to 2% of gross revenue will result in an estimated budget of $1,200,000, and goes into effect November 1. This increased revenue will provide additional funding for marketing during the recovery. Due to the uncertainty of the tourism economy at this time, the CTBID Board will revisit the budget mid-year as well as the Visit Carlsbad contract to make adjustments based on the needs at that time. Detail of the modified 2020-21 budget is shown on the following page. 2020-21 CTBID Budget Program Areas Description 2016-17 Actuals 2017-18 Actuals 2018-19 Actual 2019-20 Actual 2020-21 Adopted Budget 2020-21 Modified Budget Carryover Fund Balance $655,774 $722,331 $696,716 $640,318 617,131 617,131 Revenues: CTBID Assessment $1 per room night 1,205,851 1,246,944 1,333,001 1,088,859 800,000 1,200,000 Interest Earnings 1,658 2,535 26,920 21,385 Total Estimated Revenues 1,207,509 1,249,479 1,359,921 1,110,244 800,000 1,200,000 Expenditures: 2% Admin. Fee - City 2% of CTBID assessment revenue, for collection of CTBID assessment and accounting for CTBID 24,116 24,896 26,644 21,045 16,000 24,000 CCVB Payment To operate visitor center, market and promote Carlsbad 978,612 1,130,216 1,244,575 1,040,326 800,000 800,000 Staff support Staff support to the CTBID - 2% of revenues 19,224 16,972 15,649 20,446 16,000 24,000 Professional Services Civitas Contract 32,960 12,000 CTBID Grants Grant program established by CTBID Board 119,000 103,011 129,451 18,654 75,000 35,000 Total Expenses 1,140,952 1,275,095 1,416,319 1,133,431 907,000 895,000 Ending Fund Balance Contingency for Revenue shortfall $722,331 $696,716 $640,318 $617,131 510,131 922,131