HomeMy WebLinkAbout2019-06-11; City Council; ; Fiscal Year 2019-20 report of the Carlsbad Golf Lodging Business Improvement District and the continuation of the programs and assessments.CA Review wC,.,
~ CITY COUNCIL
~ StaffReport
Meeting Date:
To:
From:
Staff Contact:
Subject:
June 11, 2019
Mayor and City Council
Scott Chadwick, City Manager
Cheryl Gerhardt, Finance
cheryl.gerhardt@carlsbadca.gov or 760-602-2468
Fiscal Year 2019-20 report of t he Carlsbad Golf Lodging Business
Improvement District and t he continuation of the programs and
assessments.
Recommended Action
Adopt a Resolution approving the report of the Carlsbad Golf Lodging Business Improvement
District (CGLBID), and continuing the programs and assessments for Fiscal Year 2019-20.
Executive Summary
The CGLBID Board is required to present a 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. Staff has prepared the report and it has
been approved by the CGLBID Board. City Council is being asked to approve the report and
continue the assessment into the next fiscal year. In addition, per the request of the City Council
at the April 16, 2019 City Council meeting, we are including a copy of Ordinance CS-194 which
created the district.(Exhibit 2) Staff will return to City Council later this summer to present a
comprehensive financial report for Fiscal Year 2018-19 once the books have been closed for the
year.
Discussion
On November 27, 2012 the City Council adopted Ordinance No. CS-194 forming the Carlsbad Golf
Lodging Business Improvement District (CGLBID) pursuant to the Parking and Business
Improvement Law of 1989. (Exhibit 2) The ordinance authorized the levying of $2 per room night
· assessment of each occupied room, of the properties within the city that have elected to be part
of the district, effective January 1, 2013. The CGLBID Board is required to present a 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 was approved by the CGLBID Board at their May 8, 2019 meeting. (Attachment A to Exhibit
1)
Section 36535 (d) of the Streets and Highways Code of the State of California, allows the City
Council to "adopt a resolution confirming the report submitted by the advisory [board]", or to
"adopt a resolution continuing the program and assessments as levied in the then current year
without change, and that resolution shall constitute the levy of an assessment for the fiscal year
June 11, 2019 Item #15 Page 1 of 11
referred to in the report." If the City Council approves the report and programs as recommended,
no public hearing is necessary.
The CGLBID Board is not recommending any changes to the programs and assessments of the
CGLBID. If the City Council wishes to make changes to the report, programs or proposed
assessments, a public hearing is necessary, and would be scheduled for the next available City
Council meeting following the necessary notice period.
The six hotels that have opted into the District for Fiscal Year 2019-20 are Sheraton Carlsbad
Resort and Spa, Grand Pacific Palisades Hotel, Park Hyatt Aviara, Omni La Costa Resort, Carlsbad
by the Sea Resort, and Westin Carlsbad Resort & Spa.
Staff is recommending that the City Council approve the report, and continue the existing
programs and assessments of the CGLBID by adopting the attached resolution (Exhibit 1).
Fiscal Analysis
The CGLBID will generate approximately $721,000 in revenue in Fiscal Year 2018-19. The costs
incurred by the District during this same period are approximately $790,000. The projected fund
balance at the end of Fiscal Year 2018-19 is $275,000. For Fiscal Year 2019-20, the CGLBID has
estimated revenues of $733,000 and a budget of $733,000 with a projected fund balance of
$275,000 at June 30, 2020.
Next Steps
Continue the programs and assessments for Fiscal Year 2019-20. Staff will return to City
Council later this summer to present a comprehensive financial report for Fiscal Year 2018-19
once the books have been closed for the year.
Environmental Evaluation (CEQA)
Pursuant to Public Resources Code section 21065, this action does not constitute a "project"
within the meaning of the CEQA in that it has no potential to cause either a direct physical change
in the environment, or a reasonably foreseeable indirect physical change in the environment, and
therefore does not require environmental review.
Public Notification
This item was noticed in accordance with the Ralph M. Brown Act and was available for public
viewing and review at least 72 hours prior to the scheduled meeting date.
Exhibits
1. City Council Resolution.
2. Ordinance No. CS-194.
June 11, 2019 Item #15 Page 2 of 11
RESOLUTION NO. 2019-086
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA, APPROVING THE REPORT OF THE CARLSBAD GOLF LODGING
BUSINESS IMPROVEMENT DISTRICT (CGLBID) , AND CONTINUING THE
CGLBID PROGRAMS AND ASSESSMENTS FOR FISCAL YEAR 2019-20
EXHIBIT 1
WHEREAS, the CGLBID was formed in accordance with the California Government Code Parking
and Business Improvement Area Law of 1989 (Sections 36500, et. Seq. of the Streets and Highways
Code); and
WHEREAS, Section 36533 of the Code requires the CGLBID 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 report has been submitted to the City Council for Fiscal Year 2019-20; and
WHEREAS, Section 36535 (d) of the Streets and Highways Code of the State of California, allows
the City Council to " ... adopt a resolution continuing the program and assessments as levied in the then
current year without change, and that resolution shall constitute the levy of an assessment for the
fiscal year referred to in the report"; and
WHEREAS, the City Council must adopt a new resolution each year in order to levy an
assessment for that fiscal year.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as
follows:
1. That the above recitations are true and correct.
2. That the report is approved as submitted by the Board of Directors for the Carlsbad Golf
Lodging Business Improvement District. (Attachment A)
3. That the program and assessment as levied in the current fiscal year (2018-19) shall
continue without change.
June 11, 2019 Item #15 Page 3 of 11
EXHIBIT 1
PASSED, APPROVED AND ADOPTED at a Special Meeting of the City Council of the City of
Carlsbad on the 11th day of June, 2019, by the following vote, to wit:
AYES:
NAYS:
ABSENT:
Hall, Blackburn, Bhat-Patel, Schumacher, Hamilton.
None.
None.
MATT HALL, Mayor
~~ ..ft-BARBARA ENGLESON, City Clerk
(SEAL)
June 11, 2019 Item #15 Page 4 of 11
ATTACHMENT A
Carlsbad Golf Lodging Business Improvement District (CGLBID)
2019-2020 Report
Method of Assessment: The CGLBID includes all hotel businesses in the City of Carlsbad that have
elected to participate in the district. The assessment shall be levied on all hotel businesses, that
have elected to participate in the district, within the City of Carlsbad based upon a flat fee of $2.00
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 remitted monthly, based on $2.00 per occupied room per
night in revenues for the previous month.
Assessment Funding Purpose: The proceeds of the CGLBI D assessment shall be spent to promote
golf-related tourism within the boundaries of the CGLBID, as well as marketing related capital
improvements such as golf-related signage, golf related equipment and to pay for related
administrative costs.
2018-19 Work Plan: The CGLBID was established in January 1, 2013. For the initial period the
district, Fiscal Year 2012-2013 (1/1/13-6/30/13) and the next fiscal year 2013-14, three hotels;
the Sheraton Carlsbad, the Park Hyatt Aviara and the Grand Pacific Palisades Hotel, opted into the
district. In 2014-15 the Carlsbad by the Sea Resort opted into the district, in 2017-18 Omni La
Costa Resort opted into the district, and in 2018~19 the Westin Carlsbad Resort opted into the
district. These six hotels are expected to collect a total of $712,000 in CGLBID Assessments in
Fiscal Year 2018-19. Each assessed business determines how to spend the funds collected by their
respective property provided the expenditures are for an approved golf related expense.
Reimbursement of these expenses are made quarterly upon approval from the advisory board up
to the amount collected per property minus administrative fees. The administrative fees pay for
the collection of assessments and administration of the district. Monies not spent by the end of
the fiscal year will carry forward to the next fiscal year.
For Fiscal Year 2019-20, the district will have six hotels. It is estimated that these six hotels will
collect a total of $733,000 in CGLBID assessments. Based on this revenue estimate, the budgeted
amount for reimbursement to the hotels is $704,000. This amount plus any carry forwards from
the previous fiscal year will be available to the assessed hotels for reimbursement. Administrative
fees for Fiscal Year 2019-20 are budgeted at $29,000, which is 4% of the revenues.
Detail of the 2019-20 budget is shown on the following page.
June 11, 2019 Item #15 Page 5 of 11
2019-20 CGLBID Budget
2016-17 2016-17 2017-18 2018-19 Actuals as of Projected Recommended
Program Areas Description Actuals Actuals Actuals Budget 4/30/2019 2018-19 Actuals 2019-20 Budget
Carryover Fund Balance $169,707 $136,587 $344,804 $344,804 344,804 344,804 275,673
Revenues:
CGLBID Assessment * $2 per room night 428,949 681,703 826,000 558,388 712,000 733,000
Interest Earnings 786 -805 0 8,777 9,000 0
Total Estimated Revenues 429,735 680,.898 826,000 567,165 721,000 733,000
Ex12enditures:
2% Admin. Fee -City For collection of CGLBID assessment and accounting
for CGLBID -2% of CGLBID assessment revenue 8,579 13,633 16,500 10,841 14,240 14,500
Reimbursements Reimbursement to member hotels for golf related
expenditures 445,516 451,341 793,000 761,651 761,651 704,000
Staff support Staff support to the CGLBID -2% of CGtBID
assessment revenue 8,759 7,707 16,500 5,450 14,240 14,500
Total Expenses 462,854 472,681 826,000 777,942 790,131 733,000
Ending Fund Balance Contingency for Revenue shortfall $136,587 $344,804 $344,804 $134,027 275,673 275,673
Member hotels:
* FY2014-15 thru FY 2016-17 -Sheraton Carlsbad, Park Hyatt Aviara, Grand Pacific Palisades, and Carlsbad by the Sea Resort.
* FY2017-18 -Sheraton Carlsbad, Park Hyatt Aviara, Grand Pacific Palisades, Carlsbad by the.Sea Resort, and Omni La Costa Resort.
* FY2018-19 -Sheraton Carlsbad., Park Hyatt Aviara, Grand Pacific Palisades, Carlsbad by the.Sea Resort, Omni La Costa Resort and Westin Carlsbad.
* FY2019-20 -Sheraton Carlsbad, Park Hyatt Aviara, Grand Pacific Palisades, Carlsbad by the ·sea Resort, Omni La Costa Resort and Westin Carlsbad.
June 11, 2019 Item #15 Page 6 of 11
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EXHIBIT 2
ORDINANCE NO. CS-194
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY
OF CARLSBAD, CALIFORNIA, ENACTING CHAPTER
3.38 · OF THE CARLSBAD MUNICIPAL CODE
ESTABLISHING THE CARLSBAD GOLF LODGING
BUSINESS IMPROVEMENT DISTRICT (CGLBID),
FIXING THE BOUNDARIES THEREOF, PROVIDING
FOR THE LEVY OF A BUSINESS ASSESSMENT TO
BE PAID BY HOTEL BUSINESSES IN SUCH DISTRICT
AND ESTABLISHING AN ADVrSORY BOARD
The City Council of the City of Carlsbad ordains as follows:
SECTION I: That Title 3 of the Carlsbad Municipal Code is hereby
amended by the addition of Chapter 3.38 that shall be .kriown as the Carlsbad Golf
12 Lodging Business Improvement District Ordinance of the City of Carlsbad to read as
13 follows:
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CHAPTER 3.38
CARLSBAD GOLF LODGING
BUSINESS IMPROVEMENT DISTRICT
Sections:
3.38.010 -Definitions.
3.38.020 -Procedure and Findings'.
3.38.030 -Establishing the Carlsbad Golf Lodging Business
Improvement District. .
3.38.040 -Boundaries. ·
3.38.050 -Lew and Collection of Assessments.
3.38.055 -Refund of Assessments
3.38.060 -Ordering the Collection of Assessments.
3.38.070 -Use of Proceeds from Assessments.
3.38.080 -Penalty for Nonpayment of Assessment.
3.38.090 -Assessments to be Used Within the District.
3.38. 100 -Advisory Board.·
3.38.110 ..: Severability.
3.38.010 -Definitions.
"Hotel" shall have the meaning defined in Section 3.12.020(1) of the Carlsbad
27 Municipal Code. ·
28
June 11, 2019 Item #15 Page 7 of 11
1 3.38.020 -Procedure and findings.
2 This chapter is made and enacted pursuant to the provisions of the Parking and
3 Business Improvement Area Law of 1989 (Sections 36500, et. seq., of the Streets
and Highways Code) (the "law'').
4 (a) On September 11, 2012, the City Council of the City of Carlsbad adopted
Resolution No. 2012-221 entitled, "A Resolution of Intention of the City Council of
s the City of Carlsbad, California, Declaring the Intention of the City Council to
Establish the Carlsbad Golf Lodging Business Improvement District (CTBID), 6 Fixing the _Time and Place of a Public Meeting and Public Hearing Thereon and
7 Giving Notice Thereof." _
(b) . Said Resolution No. 2012-221 was published and copies thereof were duly
a mailed and posted, all as provided by said law and said Resolution No. 2012-221 .
(cl Pursuant to said Resolution No. 2012-221, a public meeting concerning the
9 formation of said district was held before the City Council of the City of Carlsbad
on September 25, 2012 at six p.m. in the Council Chambers of the City Hall of the
· 1 ° City of Carlsbad. . _ .
11 (d) Pursuant to said Resolution No. 2012-221, a public hearing concerning the
formation of said district was held before the City Council of the City of Carlsbad
12 on November 6, 2012 at six p.m. in the Council Chambers of the City Hall of the
City of Carlsbad.
13 (e) All written and oral protests made or filed were duly heard; evidence for and
against the proposed action was received; a full, fair and complete hearing was 14 granted and held.
15 (f) The City Council determined that there was no· majority protest within the
meaning of Section 36525 of the law.
16 (g) Following such hearing, the City Council hereby finds that the Carlsbad
hotels opting in to the district, in the opinion of the City Council, will be benefited
17 by the expenditures of funds raised by the assessment or charges proposed to be
levied hereunder. 18
19 3.38.030 -Establishing the Carlsbad Golf Lodging Business Improvement
20 District
21 Pursuant to said law, the Carlsbad Golf Lodging Business Improvement District
(CGLBID) is hereby established in the City of Carlsbad as herein set forth and
22 · hotel businesses that elect to be part of the district established by this chapter
shall be subject to any amendments made hereafter to said law or to other 23 applicable laws. The initial members of the advisory board shall be set forth in a
_ 24 separate resolution adopted by the City Council.
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3.38.040 -Boundaries.
26 The boundaries of the CGLBID shall be the boundaries of the City of Carlsbad as
27 shown on the attached map labeled Exhibit A and found on file in the City clerk's
office.
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June 11, 2019 Item #15 Page 8 of 11
1 3.38.050 -Levy and Collection of Assessments.
2 The CGLBID members will include all lodging businesses within the City of
Carlsbad that have elected to be part of the district. Businesses may elect to
3 participate in the district by submitting a written letter to the City requesting
inclusion no later than May 1 for the following fiscal year. Once a lodging business 4 has submitted a signed request to be included, the assessment shall be
5 · mandatory. Participating businesses will be listed in the annual report submitted
to the City. The assessment shall be levied on these hotel busine~ses that have
a elected to be part of the district for that fiscal year, within the City of Carlsbad
based upon a flat fee of two dollars per occupied room per night for all transient
7 occupancies as defined in Section 3.12.020(7) of the Carlsbad Municipal Code.
The amount of the assessment shall be separately stat~d from the amount of the 8 rent and other taxes charged, and each transient shall receive a receipt for
9 payment from the operator. The assessment will be collected monthly, based on
two dollars per occupied room per night in revenues for the previous month. New
10 hotel businesses within the boundaries of the district opening during the term of
the district will receive notice of the opportu.nity to be included at least 30 days
11 prior to the annual hearing. Assessments pursuant to the CGLBID shall not be
12 included in gross room rental revenue for purpose of determining the amount of
the transient occupancy tax. No assessment shall be imposed upon occupancies
13 . of any federal or state of California officer or employee when on official business
nor on occupancies of any officer or employee of a foreign government who is
14 exempt by reason of express provision of federal law or international treaty.
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3.38.055 .... Refund of Assessments.
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(a) · When not otherwise prohibited by law, the CGLBID Advisory Board may
17 authorize a refund in any amount for assessment monies that were erroneously
paid to or collected by, but not actually due to the CTBID at the time ·the funds 18 were received, such.as overpayments or duplicate payments1•
19 (b). A written request for refund, signed QY the person paying the fee shall be
20 filed with the City of Carlsbad Finance Director (Finance Director) setting forth the
facts and reasons which justify the request.
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(c) The Finance Director shall investigate the request and forward the request
and his/her recommendation to the CGLBID Advisory Board.
24 (d) The CGLBID Advisory Board shall make written findings that supports the
25 authorization for refund and shall send to the City of Carlsbad City Manager
regular reports of assessments refunds exceeding ten thousand dollars.
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(e) . Upon receipt of proper authorization, the Finance Director shall make the
27 assessment refund.
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June 11, 2019 Item #15 Page 9 of 11
1 · (f) All requests for refund of assessments fees paid in error shall be made
within one (1) year of the date in which the assessment payment made in error 2 was posted to the CGLBID account.
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4 3.38.060 -Ordering the collection of assessments.
The City Council hereby levies and imposes and orders the collection of an .
5 additional assessment to be imposed upon persons occupying hotel business
6 premises in the proposed district described above, which shall be calculated
pursuant to Section 3.38.050 above. Such levy shall begin on January 1, 2013.
7
a 3.38.070 -Use of proceeds from assessments.
9 rhe proceeds of the additional hotel business assessment shall be used to
promote golf .. related tourism within the boundaries of the CGLBID, as well as
10 marketing related capital improvements such as golf-related signage, golf related
equipment and to pay for related administrative costs. Funds remaining at the end .
11 of any CGLBID term may be used in. subsequent years in which CGLBID ·
assessments are levied as long as they are used consistent with the requirements 12 of this section. The City Council of the City of Carlsbad shall consider
13 recommendations as to the use of said revenue made by the advisory board.
created by Section 3.38.1 0Q of this chapter.
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15 3.38.080 -Penalty for nonpayment of assessment.
16 Any hotel business that fails to remit any assessment imposed by this chapter
within the time required shall pay a penalty of ten percent of the amount of the
17 assessment in addition to the amount of the assessment. Any hotel business that
fails to remit any delinquent remittance on or before a period of thirty days
18 following the date on which the remittance first became delinquent shall pay a
second delinquency penalty of ten percent of the amount of the assessment and
19 the ten-percent penalty first imposed. In addition to the penalties imposed, any
20 hotel business that fails to remit any assessment imposed by this chapter shall pay
inte.rest at the rate of one and one-:half percent per month or fraction thereof on the
21 amount of the assessment, exclusive of penalties, from the date on which the
remittance first became delinquent until paid.
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23 3.38.090 -Assessments to be used within the district. ·
24 The improvements and activities to be provided in the CGLBID will be funded by
the levy of the assessments. The revenue from the levy of assessments within the
25 CTBID shall not be used to provide improvements or activities outside the CGLBID
or for any purpose other than the purposes specified in the resolution of intention.
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27 3.38.100 -Advisory board.
28 The advisory board for the district is hereby created pursuant to Section 36530 of
the law. The initial members and the powers and duties of the advisory board shall
June 11, 2019 Item #15 Page 10 of 11
1 be set forth in a. separate resolution. adopte_d by the City . Council. It shall be the
purpose of the advisory board to make recommendations to the City Council on 2 expenditures for the programs and activities of the CGLBID, to make
3 recommendations for its annual budget to be approved by the City Council, and to .
provide end-of-year financial reports of the-CGLBID operations as required by the
4 City Council. The city attorney shall serve as the general counsel of the advisory
board. ·
6 3.38.1 to -Severability.
7 If any section, subsection, sentence, clau~e or phrase of this chapter is for any
reason held to be invalid or unconstitutional by the .decision of any court of
8 competent jurisdiction, such decision shall not affect the validity of the remaining
portions of the c_hapter. The City Council hereby declares that it would have
9 passed this chapter and each section, subsection, sentence, clause and phrase
hereof, irrespective of the fact that any one or more of the sections, subsections, 10 -sentences, clauses or phrases hereof be declared invalid or unconstitutional.
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June 11, 2019 Item #15 Page 11 of 11
REPORT OF THE CARLSBAD GOLF
LODGING BUSINESS
IMPROVEMENT DISTRICT AND
CONTINUATION OF PROGRAMS
AND ASSESSMENTS
Laura Rocha, Deputy City Manager, Administrative Services
Cheryl Gerhardt, Finance Manager
June 11, 2019
Purpose
•To consider approving the report of the Carlsbad
Golf Lodging Business Improvement District
(CGLBID) and continuation of the programs and
assessments for fiscal year 2019-20.
GLBID Report
Purpose of Report:
–Ordinance CS-194 was adopted by the City Council on November 27, 2012 forming CGLBID pursuant to Parking and Business Improvement Law of 1989 authorizing a $2 per room night assessment on each occupied room of the properties within the city that have elected to be part of the district .
–Proceeds from the assessment shall be used to promote golf-related tourism within the boundaries of the CGLBID as well as
marketing related capital improvements such as golf-related
signage, golf-related equipment and to pay for related
administrative costs.
–CGLBID Report includes estimated assessments, budgeted expenditures and projected fund balance for fiscal year 2019-20.
Council Action
•Adopt a Resolution approving the report of the
CGLBID, and continuing the CGLBID programs
and assessments for fiscal year 2019-20.
Thank you