HomeMy WebLinkAbout2006-09-19; City Council; 18733; Carlsbad Tourism Business Improvement DistrictCITY OF CARLSBAD - AGENDA BILL
AB#
MTG.
DEPT.
18,733
9-19-06
Admin.
Services
Approve the Annual Report of the
Carlsbad Tourism Business
Improvement District and Set A Public
Hearing to Consider Levy of Proposed
Assessment
DEPT. HE^T
CITYATTY.
CITY MGR.
RECOMMENDED ACTION:
1. Approve the Carlsbad Tourism Business Improvement District (CTBID) 2006-07 annual
report as submitted by the CTBID Board of Directors.
2. Adopt Resolution 2006-279 of intention to levy an annual assessment for that fiscal
year.
3. Set public hearing for October 3, 2006 to consider the levy of the proposed assessment.
ITEM EXPLANATION:
On November 15, 2005 the City Council adopted Ordinance No. NS-778 forming the Carlsbad
Tourism Business Improvement District (CTBID) pursuant to the Parking and Business
Improvement Law of 1989. The ordinance authorized the levying of $1 per-night assessment of
each occupied room within the City effective January 1, 2006. The CTBID 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 (Exhibit 1) was approved by the CTBID Board at their
August 31, 2006 meeting.
In addition to approving the annual report, Council must adopt a Resolution of Intention to Levy
and Collect Assessments for the 2006-2007 fiscal year. This resolution (Exhibit 2) calls for the
$1 per-night assessment of each occupied room within the City during fiscal year 2006-2007.
Following adoption of the Resolution of Intent, the Council will hold a public hearing at a later
meeting and adopt the Resolution for Levy of the Annual Assessment.
FISCAL IMPACT:
The CTBID generated approximately $283,000 in revenue during its initial period of operation
(January - June 2006). It is estimated that it will generate approximately $790,000 in 2006-
2007. The costs incurred by the district during the initial period of operation were approximately
$209,000 and the budget for 2006-2007 is $707,000. The projected fund balance at the end of
2006-2007 is $158,000.
ENVIRONMENTAL IMPACT:
This action does not approve any projects that will have a physical adverse affect on the
environment so it falls within the general rule under CEQA that this is not a project (CEQA
Regulation 153789(b)).
EXHIBITS:
1. CTBID Annual Report
2. Resolution 2006-279 Intention to Levy Assessment for Fiscal Year 2006-2007
3. Letter from April Shute, CTBID Board Chair, regarding CTBID Board staff support
DEPARTMENT CONTACT: Cheryl Gerhardt, 760-602-2409 cqerh@ci.carlsbad.ca.us
FOR CITY CLERKS USE ONLY.
COUNCIL ACTION: APPROVED
DENIED
CONTINUED
WITHDRAWN
AMENDED
H'
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CONTINUED TO DATE SPECIFIC
CONTINUED TO DATE UNKNOWN
RETURNED TO STAFF
OTHER -SEE MINUTES
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EXHIBIT 2
RESOLUTION NO. 2006-279
1
2 A RESOLUTION OF THE CITY OF CARLSBAD APPROVING THE
CARLSBAD TOURISM BUSINESS IMPROVEMENT DISTRICT (CTBID)
3 ANNUAL REPORT, DECLARING ITS INTENTION TO LEVY AN ANNUAL
4 ASSESSEMENT AND SETTING THE PUBLIC HEARING DATE
5
6 WHEREAS, the CTBID was formed in accordance with the California
7 Government Code Parking and Business Improvement Area Law of 1989 (Sections
8 36500, et. Seq. of the Streets and Highways Code), and
9 WHEREAS, Section 36533 of the Code requires the CTBID Advisory
Board to present an annual 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
12
for the improvements and activities described in the report; and
13
WHEREAS, an Annual Report has been submitted to the City Council for
14
the 2006-07 fiscal year; and
16 WHEREAS, the City Council must adopt a new resolution each year in
17 order to levy an assessment for the fiscal year 2006-2007; and
18 NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of
19 Carlsbad, California, as follows:
20 1. That the above recitations are true and correct.
21
2. That the Annual Report is approved as submitted as the first report of
22
the Board of Directors of the Carlsbad Tourism Business Improvement District. (Report
24 on file with City Clerk)
25 3. That the City Council intends to adopt a Resolution of Levy of the
26 Annual Assessment and to collect the assessments in the CTBID for the fiscal year
27 2006-2007, beginning July 1, 2006 through June 30, 2007.
28
1 4. That the City Council will hold a public hearing on October 3, 2006, on
2 the levying of the annual assessment, prior to the adoption of the Resolution for Levy of
3 the Annual Assessment; the purpose of said hearing being to hear any protest to the
4 levying of the assessment as required by Streets and Highway code section 36534.
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PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council
of the City of Carlsbad on the 19th day of September, 2006, by the following vote:
AYES: Council Members Lewis, Hall, Kulchin, Packard
NOES: None
ABSENT: Sigafoose
ATTEST:
/\tf I \ 1 it VA A>,\ ( ) >y L«i_/t jLA-jr V .
<ORF^AINE M. WOOD, City Clerlf
<SEAL)
EXHIBIT 1
Carlsbad Tourism and Business Improvement District (CTBID)
Annual Report
2006-2007
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 a flat fee of $1.00 per occupied room per night 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 collected monthly, based on $1.00 per occupied room per night in revenues 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.
2005-06 Fiscal Year Activity: The CTBID Board contracted with Carlsbad Convention and
Visitors Bureau and San Diego North Convention and Visitors Bureau for tourism promotion
services for the period March 1, 2006 through June 30, 2006 at the same level that they were
being provided under their contracts with the City. In addition, the Board authorized the
repayment of funds advanced by the City of Carlsbad for the costs related to the formation of
the CTBID. These costs totaled $33,500 and were to be paid in equal installments over a 6-
month period. This loan was paid off as of June 30, 2006.
2006-07 Work Plan: In June 2006, the CTBID Board approved extension of agreements with
Carlsbad Convention and Visitors Bureau and San Diego North Convention and Visitors
Bureau for tourism promotion services for the period July 1, 2006 through December 31, 2006.
These agreements require that these agencies continue to provide the services they have
provided in the past as detailed below:
Carlsbad Convention and Visitors Bureau (CCVB): Manage and coordinate marketing
programs that position Carlsbad as a year-round leisure visitor destination in Southern
California.
• Increase brand awareness
• Operate Visitor Information Center in the Historic Santa Fe Train Depot seven days per
week.
• Initiate familiarization tours by inviting the media to Carlsbad.
• Promote local; community events.
• Develop private funding sources for the purpose of supplementing funds.
• Support a full-time marketing campaign.
• Provide semi-annual reports of the activity and expenses of the CCVB to the City.
San Diego North Convention and Visitors Bureau (SDNCVB): Increase measurable visitor
spending through the generation of group business leads from room night bookings and group
events. Tactics include:
• Phone solicitation/prospecting
• Personal sales calls to targeted national and international businesses
• Buyer site inspections 3
EXHIBIT 1
• Meeting planner familiarization tours
• Tour planner familiarization tours
• Trade and travel show attendance
• Direct mail campaigns
• Product launches from wholesale and airline vacation companies
• Email solicitation and promotions
• Reservation center educationals
• E-commerce development
Semi-annual reports are also to be provided with performance measures.
Since the above contracts only cover through December 31, 2006, the CTBID Board will need
to determine before the end of 2006 how they want to allocate funding for contractual services
for the second half of the fiscal year (the period 1/1/2007 though 6/30/2007). At this time the
budget only includes a lump sum for contractual services which the board will further identify at
a later date.
2006-07 CTBID Budget
Program Areas Description Budget
Carryover Fund Balance 7/01/06
2006-07 Revenues:
CTBID Assessment
Interest Earnings
Total Estimated Revenues
2006-07 Expenditures:
2% Administrative Fee - City
CCVB Payment
SDNCVB Payment
Staff support
Contractual Services
Total Expenses
$1 per room night, projected 3600 hotel
rooms at average 60% occupancy
$ 74,005
790,000
1,000
2% of CTBID assessment revenue, for
collection of CTBID assessment and
accounting for CTBID
$34,000 per month for 6 months, to operate
visitor center, market and promote
Carlsbad
$8,333 per month for 6 months, to provide
group sales
Staff support to the CTBID
To be determined by the CTBID Board
791,000
15,800
204,000
50,000
7,500
429,705
707,005
rejected Fund Balance 6/30/07 20% Contingency for Revenue shortfall $ 158,000
EXHIBIT 3
City of Carlsbad
Administrative Services
September 5, 2006
Honorable Mayor Lewis
City of Carlsbad City Council Members
1200 Carlsbad Village Drive
Carlsbad, CA 92008
RE: STAFF SUPPORT FOR THE CARLSBAD TOURISM BUSINESS IMPROVEMENT
DISTRICT
Honorable Mayor and Council Members:
On July 1, 2006 the Carlsbad Tourism Business Improvement District (CTBID) entered its first full
year of operation. As the Council will see from the annual report being presented to the Council
on September 19, 2006, the first few months have been successful. Revenues from the $1 per
room-night assessment were $282,642, while expenditures for services provided by Carlsbad
Convention and Visitors Bureau (CCVB) and San Diego North Convention and Visitors Bureau
(SDNCVB) were $208,637. The expenditure amount also includes the payoff of the City loan and
the 2% administrative fee paid to the City. This will leave the CTBID with a fund balance entering
the new year of about $74,000.
During the first few months of operation the CTBID board has devoted a considerable amount of
time to the question of how to use the CTBID revenue to achieve the best result for the tourism
industry. The original plan called for the board to distribute a Request for Proposal (RFP)
seeking the assistance of an organization to provide marketing, group sales and staff support to
the board. An RFP was distributed in April; however, after reviewing proposals received from
CCVB and SDNCVB, the board has elected to continue the existing contracts with CCVB and
SDNCVB into this new fiscal year, and to devote more time to the question of how to invest the
CTBID revenue in programs that will yield measurable results for Carlsbad's tourism industry.
The contracts with CCVB and SDNCVB will allow the CTBID to continue to support tourism
related activities at the same level as previously provided by the contracts with the City of
Carlsbad. However, these contracts do not provide any staff support to the CTBID board at a
very important time in the CTBID's life - a time when quality staff support will help the board
make better decisions about the future of the CTBID.
Therefore, the City Council will notice that the proposed budget for the CTBID includes the
funding of a staff position. What may not be evident from the budget is that the board is asking
the City to hire the part-time staff person, and to dedicate this person to supporting the CTBID.
1635 Faraday Avenue • Carlsbad, CA 92008-7314 • (760) 602-2409 • FAX (760) 602-8553
MAYOR AND CITY COUNCIL MEMBERS
September 5, 2006
Page 2
The cost of this staff person would be directly funded by the CTBID; however the part-time
employee would be a City staff member.
This arrangement allows the CTBID to work with a well-qualified, independent person who can do
research, provide reports and recommendations to the board, and monitor the financial activities
of the CTBID, while assuring that the full cost of the staff person is funded by the CTBID.
The board is asking that the Council allow this arrangement into the foreseeable future, and
support the board during this formative period in the life of the CTBID.
If you have any questions, I would be happy to provide additional background.
Sincerely,
April Snute
CTBID Chair
cc: CTBID Board
Ray Patchett, City Manager
Lisa Hildabrand, Assistant City Manager
Ron Ball, CTBID General Counsel
Cheryl Gerhardt, CTBID Staff Liaison