HomeMy WebLinkAbout2019-06-11; City Council; ; Fiscal Year 2019-20 report of the Carlsbad Tourism Business Improvement District, and continuation of the programs and assessments.~ CITY COUNCIL
~ Staff Report
Meeting Date:
To:
From:
Staff Contact:
June 11, 2019
Mayor and City Council
Scott Chadwick, City Manager
Cheryl Gerhardt, Finance
cheryl.gerhardt@carlsbadca.gov or 760-602-2468
CA Review we,,
Subject: Fiscal Year 2019-20 report ofthe Carlsbad Tourism Business Improvement
District, and continuation of the programs and assessments.
Recommended Action
Adopt a Resolution approving the report of the Carlsbad Tourism Business Improvement District
(CTBID), and continuing the programs and assessments for Fiscal Year 2019-20.
Executive Summary
The CTBID 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 ii} the report. Staff has prepared the report and it has
been approved by the CTBID 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 NS-778 which
created the district. 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 15, 2005 the City Council adopted Ordinance No. NS-778 forming the CTBID
pursuant to the Parking and Business Improvement Law of 1989. (Exhibit 2) The ordinance
authorized the levying of $1 per room-night assessment of each occupied room within the city
effective January 1, 2006. The CTBID 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 CTBID 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
referred to in the report." If the City Council approves the report and programs as recommended,
no public hearing is necessary.
The CTBID Board is not recommending any changes to the programs and assessments of the
CTBID. However, ifthe City Council wishes to make changes to the report, programs or proposed
June 11, 2019 Item #14 Page 1 of 13
assessments, a public hearing is necessary, and would be scheduled for the next available City
Council meeting following the necessary notice period.
Staff is recommending that the City Council approve the report and continue the existing
programs and assessments of the CTBID by adopting the attached resolution (Exhibit 1).
Fiscal Analysis
The CTBID will generate approximately $1,339,000 in revenue in Fiscal Year 2018-19. The costs
incurred by the District during this same period are approximately $1,554,000. The projected
fund balance at the end of Fiscal Year 2018-19 is $481,000. For Fiscal Year 2019-20, the CTBID
has estimated revenues of $1,360,000 and a budget of $1,342,400 with a projected fund balance
of $499,000 at June 30, 2020.
Next Steps
Adopt Resolution approving the report of the CTBID and continuing 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. NS-778.
June 11, 2019 Item #14 Page 2 of 13
RESOLUTION NO. 2019-085
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA, APPROVING THE REPORT OF THE CARLSBAD TOURISM
BUSINESS IMPROVEMENT DISTRICT (CTBID), AND CONTINUING THE CTBID
PROGRAMS AND ASSESSMENTS FOR FISCAL YEAR 2019-20
EXHIBIT 1
WHEREAS, the CTBID 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 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, a report has been submitted to the City Council for Fiscal Year 2019-20; and
WHEREAS, Section 36535 (d) ofthe 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
Tourism 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 #14 Page 3 of 13
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.
~ ,(t.f BARBARA ENGLESON, City Clerk
(SEAL)
June 11, 2019 Item #14 Page 4 of 13
Attachment A
Carlsbad Tourism and Business Improvement District (CTBID)
2019-2020 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 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 remitted 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.
2018-19 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, $110,000 in grants were awarded to fund
projects and events to increase the overnight stays in Carlsbad hotels.
The CTBID 2019-20 budget includes $1,213,000 in funding for Visit Carlsbad. The
services provided will focus primarily on driving demand in the leisure market
during the off peak season. The majority of this will be done by interactive
marketing and group sales. Visit Carlsbad will also contract with a public relations
firm to continue branding Carlsbad. Funding also includes managing the visitor
center and publications. The Visit Carlsbad Board will review the CTBID grant
applicants and make the funding recommendations, for which there is $75,000
allocated this year, to the CTBID Board.
Detail of the 2019-20 budget is shown on the following page.
June 11, 2019 Item #14 Page 5 of 13
2019-20 Recommended CTBID Budget
2016-17 2017-18 2018-19 2018-19 Actuals Projected Recommended
Program Areas Description Ac.tuals Actuals Budget as of 3/18/19 2018-19 Actuals 2019-20 Budget
Carryover Fund Balance $655,774 $722,331 $696,716 696,716 696,716 481 ,816
Revenues:
CTBID Assessment $1 per room night 1,205,851 1,246,944 1,320,000 892,642 1,320,000 1,360,000
Interest Earnings 1,658 2,535 19,377 19,500
Total Estimated Revenues 1,207,509 1,249,479 1,320,000 912,019 1,339,500 1,360,000
Exi;1enditures:
2% Admin. Fee -City 2% of CTBID assessment revenue, for collection of CTBID
assessment and accounting for CTBID 24,116 24,896 26,400 15,893 26,400 27,200
CCVB Payment To operate visitor center, market and promote Carlsbad 978,612 1,130,216 1,391,600 828,374 1,391 ,600 1,213,000
Staff support Staff support to the CTBID - 2% of revenues 19,224 16,972 26,400 9,367 26,400 27,200
CTBID Grants Grant program established by CTBID Board 119,000 103,011 200,000 15,000 110,000 75,000
Total Expenses 1,140,952 1,275,095 1,644,400 868,634 1,554,400 1,342,400
Ending Fund Balance Contingency for Revenue shortfall $722,331 $696,716 $372,316 $740,101 481 ,816 499,416
June 11, 2019 Item #14 Page 6 of 13
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EXHI.BIT 2
ORDINANCE NO. NS-778
AN ORPINANCE OF THE CITY COUNCIL OF THE CITY OF CARL&BAD,
CALIFORNIA ENACTING CHAPTER 3.37 OF THE CARLSBAD MUNICIPAL CODE
!ESTABLISHING THE CARLSBAD TOURISM BUS.INESS IMPROVEMENT DISTRICT
(CTBID), FIXING THE BOUNDARIES THEREOFs PROVIDING FOR THE LEVY Of A
BUmNESS ASSESSMENT TO BE PAID BY HOTEL BUSINESSES IN SUCH
DISTRICT AND ESTABUSHING AN ADVISORY BOARD
The City Council of the City of Carlsbad does ordain as follows:
SECTION 1. That Title 3 of the Carlsbad Municipal Code is hereby
amended by the addition of Chapter 3.37, that shall be known as the Carlsbad Tourism ·
Business Improvement District Ordinance of the City of Carlsbad to read as follows:
"CHAPTER 3.37
CARLSBAD TOURISM
BUSINESS IMPROVEMENT DISTRICT"
3.37.010 Definitions
3.37.020 Procedure And Findings
3.37.030 Establishing the Carlsbad Tourism and Business
Improvement District
3.37.040 Boundaries
3.37.050 Levy And Collection Of Assessments
3.37.060 Ordering The Collection Of Assessments
3.37.070 Use Of Proceeds From Assessments
3.37.080 Penalty For Non-Payment Of Assessment
3.37.090 Assessments To Be Used Within The District
3.37.100 Advisory Board
3.37.110 Severability
3.37.010 DEFINITIONS.
"Hotel" shall have the meaning defined in section 3.12.020(1) of the
Carlsbad Municipal Code.
3.37.020 PROCEDURE AND FINDINGS
This ordinance is made and enacted pursuant to the provisions of the
Parking and Business Improvement Area Law of 1989 (Sections 36500, et. seq., of the
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Streets and Highways Code) (the "law").
(a) On September 13, 2005, the City Council of the City of
Carlsbad adopted Resolution No. 2005-281 entitled, "A Resolution of Intention of the
City Council of the City of Carlsbad, California, Declaring the Intention of the City
Council to Establish the Carlsbad Tourism Business Improvement Distri.ct (CTBID),
Fixing the Time and Place of a Public Meeting and Public Hearing Thereon and
Giving Notice Thereof'.
(b) Said Resolution No. 2005-281 was published and copies
thereof were duly mailed and posted, all as provided by said law and said Resolution
No. 2005-281.
(c) Pursuant to said Resolution No. 2005-281, a public meeting
concerning the formation of said district was held before the City Council of the City of
Carlsbad on October 11, 2005 at 6:00 p.m. in the Council Chambers of the City Hall of
the City of Carlsbad.
(d) Pursuant to said Resolution No. 2005-281, a public hearing
concerning the formation of said district was held before the City Council of the City of
Carlsbad on November 8, 2005 at 6:00 p.m. in the Council Chambers of the City Hall of
the City of Carlsbad.
(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 granted and held.
(f) The City Council determined that there was no majority protest
within the meaning of Section 36525 of the law.
(g) That following such hearing, the City Council hereby finds that
the hotel businesses lying within the district herein creat.ed, in the opinion of the City
Council, will be benefited by the expenditures of funds raised by the assessment or
charges proposed to be levied hereunder.
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June 11, 2019 Item #14 Page 8 of 13
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3.37.030 ESTABLISHING THE CARLSBAD TOURISM AND BUSINESS
IMPROVEMENT DISTRICT
That pursuant to said law, the Carlsbad Tourism Business Improvement
District (CTBID) is hereby established in the City of Carlsbad as herein set forth and that
all hotel businesses in the district established by this ordinance shall be subject to any
amendments made hereafter to said law or to other applicable laws.
3.37.040 BOUNDARIES
The boundaries of the CTBID shall be the boundaries of the City of
Carlsbad as shown on the attached map (Exhibit A).
3.37.050 LEVY AND COLLECTION OF ASSESSMENTS
The CTBID will include 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 the 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. New hotel
businesses within the boundaries will not be exempt from the levy of assessment
authorized by Section 36531. Assessments pursuant to the CTBID shall not be
included in gross room rental revenue for purpose of determining the amount of the
transient occupancy tax. No assessment shall be imposed upon occupancies 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 exempt by
reason of express provision of federal law or international treaty.
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3.37.060 ORDERING THE COLLECTION OF ASSESSMENTS
The City Council hereby levies and imposes and orders the collection of
an additional assess'Tlent to be imposed upon persons occupying hotel business
premises in the proposed district described above, which shall be calculated pursuant to
Section 3.37.050 above. Such levy shall begin on January 1, 2006.
3.37.070 USE OF PROCEEDS FROM ASSESSMENTS
That the proceeds of the additional hotel business assessment shall be
spent 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. Funds remaining at the end of any CTBID term may be used in subsequent
years in which CTBID assessments are levied as long as they are used consistent with
the requirements of this Section. The City Council of the City of Carlsbad shall consider
recommendations as to the use of said revenue made by the Advisory Board created by
Section 3.37 .100 of this ordinance.
3.37.080 PENAL TY FOR NON-PAYMENT OF ASSESSMENT
Any hotel business that fails to remit any assessment imposed by this
ordinance within the time required shall pay a penalty of 10% of the amount of the
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 (30) days following the
date on which the remittance first became delinquent shall pay a second delinquency
penalty of 10% of the amount of the assessment and the 10% penalty first imposed. In
addition to the penalties imposed, any hotel business that fails to remit any assessment
imposed by this ordinance shall pay interest at the rate of one and one-half of 1.5% per
month or fraction thereof on the amount of the assessment, exclusive of penalties, from
the date on which the remittance first became delinquent until paid.
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3.37.090 ASSESSMENTS TO BE USED WITHIN THE DISTRICT
The improvements and activities to be provided in the CTBID will be
funded by the levy of the assessments. The revenue from the levy of assessments
within the CTBID shall not be used to provide improvements or activities outside the
CTBID or for any purpose other than the purposes specified in the resolution of
intention.
3.37.100 ADVISORY BOARD
The Advisory Board for the district is hereby appointed pursuant to Section
36530 of the law. The initial members and the powers and duties of the Advisory Board
shall be set forth in a separate resolution adopted by City Council. It shall be the
purpose of the Advisory Board to make recommendations to the City Council on
expenditures for the programs and activities of the CTBID, to make recommendations
for its annual budget to be approved by the City Council, and to provide end of year
financial reports of the CTBID operations as required by the City Council. The powers
and duties of the Advisory board shall be specified by resolution of the City Council.
The City Attorney shall serve as the general counsel of the Advisory Board.
3.37.110 SEVERABILITY
If any section, subsection, sentence, clause or phrase of this ordinance is
for any reason held to be invalid or unconstitutional by the decision of any court of
competent jurisdiction, such decision shall not affect the validity of the remaining
portions of the ordinance. The City Council hereby declares that it would have passed
this ordinance and each section, subsection, sentence, clause and phrase hereof,
irrespective of the fact that any one or more of the sections, subsections, sentences,
clauses or phrases hereof be declared invalid or unconstitutional."
EFFECTIVE DATE: This ordinance shall be effective thirty days after its
adoption, and the City Clerk shall certify to the adoption of this ordinance and cause it to
June 11, 2019 Item #14 Page 11 of 13
REPORT OF THE CARLSBAD
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
Tourism Business Improvement District (CTBID)
and continuation of the programs and
assessments for fiscal year 2019-20.
CTBID Report
Purpose of Report:
–Ordinance NS-778 was adopted by the City Council on November
15, 2005 forming CTBID pursuant to Parking and Business
Improvement Law of 1989 authorizing $1 per room night
assessment on each occupied room in Carlsbad .
–Proceeds from the assessment shall be spent to administer
marketing and visitor programs and promote the City of Carlsbad as
a tourism visitor destination.
–CTBID 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
CTBID, and continuing the CTBID programs and
assessments for fiscal year 2019-20.
Thank you