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Home My WebLink About2020-06-02; City Council; ; Fiscal Year 2020-21 Annual Report of the Carlsbad Golf Lodging Business Improvement District and Resolution of Intention to Levy an Annual Assessment into the Next FiscalCA Review CKM ~ CITY COUNCIL ~ Staff Report Meeting Date: To: From: Staff Contact: Subject: June 2, 2020 Mayor and City Council Scott Chadwick, City Manager Cheryl Gerhardt, Finance Manager cheryl.gerhardt@carlsbadca.gov, 760-602-2468 Fiscal Year 2020-21 Annual Report of the Carlsbad Golf Lodging Business Improvement District and Resolution of Intention to Levy an Annual Assessment into the Next Fiscal Year Recommended Action Adopt a resolution approving the Fiscal Year 2020-21 Annual Report of the Carlsbad Golf Lodging Business Improvement District, declaring an intention to levy and collect annual assessments and setting a public hearing on the levying of the proposed assessments for 3 p.m. on June 23, 2020. Executive Summary The Carlsbad Golf Lodging Business Improvement District Advisory Board is required to present an annual report for the 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 district's advisory board. The City Council is being asked to approve the report, declare its intention to levy and collect annual assessments in fiscal year 2020-21, and set a public hearing on the levying of the proposed assessments. Discussion The City Council formed the Carlsbad Golf Lodging Business Improvement District in 2012 when it adopted Ordinance No. CS-194 (Carlsbad Municipal Code Chapter 3.38).1 The ordinance authorized the levying of $2 per occupied room per night for all transient occupancies of the properties of the businesses electing to participate in the district, effective Jan. 1, 2013. As noted above, the district's advisory board is required to present an annual report for the 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 district's advisory board at its May 6, 2020 meeting (Exhibit 1, Attachment A). 1 The city formed the district under the Parking and Business Improvement Law of 1989, California Streets & Highways Code, § 36500 et seq. June 2, 2020 Item #4 Page 1 of 7 The eight hotels that have opted to participate in the Carlsbad Golf Lodging Business Improvement District for fiscal year 2020-21 are: • Sheraton Carlsbad Resort & Spa • Grand Pacific Palisades Resort • Park Hyatt Aviara Resort Golf Club & Spa • Omni La Costa Resort & Spa • Carlsbad by the Sea Hotel, • The Westin Carlsbad Resort & Spa • Hilton Garden Inn Carlsbad Beach • Cape Rey Carlsbad Beach In addition to approving the annual report, the City Council is required to adopt a resolution of intention to levy and collect assessments for the 2020-21 fiscal year. The proposed resolution (Exhibit 1) calls for a continued assessment of $2 per occupied room per night for all transient occupancies of the properties of the businesses participating in the improvement district during fiscalyear2020-21 The City Council must also set the time and place for a public hearing on the levy of the proposed assessments. The public hearing must occur at least 10 days after the City Council adopts the resolution of intention. Staff recommends the City Council set the public hearing for June 23, 2020, at 3 p.m. At the public hearing, the City Council must consider any oral or written protests. Written protests must be submitted to the city clerk at or before the time set for the public hearing. Written protests must contain enough information to identify the affected business and to show the person submitting the protest is the business owner or is speaking on the business owner's behalf. If there are written protests from affected business owners that will pay 50 percent or more of the assessments proposed to be levied, the City Council may not take any further action to levy the proposed assessments for one year. Fiscal Analysis Projected Carlsbad Golf Lodging Business Improvement District finances: fy 2019-20 fy 2020-21 Revenue (approx.) $552,000 $500,000 Costs $658,000 $520,000 Projected fund balance (as of June 30) $185,000 $165,000 Next Steps The city clerk will publish the resolution of intention in a newspaper of general circulation in the city at least seven days before the public hearing. If the council approves staff's June 2, 2020 Item #4 Page 2 of 7 recommendation, the public hearing on the renewal of the assessment will be held at 3 p.m. on June 23, 2020. Environmental Evaluation (CEQA) In keeping with Public Resources Code section 21065, this action does not constitute a "project" within the meaning of the California Environmental Quality Act 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 June 2, 2020 Item #4 Page 3 of 7 RESOLUTION NO. 2020-094 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, APPROVING THE CARLSBAD GOLF LODGING BUSINESS IMPROVEMENT DISTRICT (CGLBID) ANNUAL REPORT, DECLARING AN INTENTION TO LEVY AND COLLECT AN ANNUAL ASSESSMENT AND SETTING A PUBLIC HEARING DATE EXHIBIT 1 WHEREAS, the CGLBID was formed in accordance with the Parking and Business Improvement Area Law of 1989 (California Streets and Highways Code, § 36500 et seq.); and WHEREAS, the CGLBID boundaries are the boundaries of the City of Carlsbad; and WHEREAS, the CGLBID Advisory Board must present an annual report to the City Council for 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, the CGLBID Advisory Board submitted an annual report (Attachment A) to the City Council for fiscal year 2020-21; and WHEREAS, after the City Council approves the annual report, the City Council must adopt a resolution declaring its intention to levy and collect assessments for fiscal year 2020-21; and WHEREAS, the assessments will generally be spent to promote golf-related tourism within the CTLBID boundaries, for marketing related capital improvements, such as golf-related signage and equipment, and to pay related administrative costs; and WHEREAS, the amount of the proposed assessment and a full and detailed description of the activities to be conducted and funded in fiscal year 2020-21 are included in Attachment A. 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 annual report (Attachment A) is approved as submitted by the CGLBID Advisory Board. 3. That for fiscal year 2020-21, the City Council intends to levy and collect from participating businesses in the CGLBID an assessment of $2 per occupied room per night for all transient occupancies. 4. That the City Council will hold a public hearing at 3 p.m. on June 23, 2020 on the levying of the annual assessments. June 2, 2020 Item #4 Page 4 of 7 EXHIBIT 1 5. That at the public hearing, the City Council will consider any oral or written protests to the levying of the assessments. Written protests must be submitted to the city clerk at or before the time set for the public hearing. Written protests must contain sufficient information to identify the affected business and to show the person submitting the protest is the business owner or is speaking on the business owner's behalf. If, following the public hearing, there are written protests from affected business owners that will pay 50 percent or more of the proposed assessments, the City Council will not take any further action to levy the proposed assessments for one year. That the city clerk is directed to give notice of the public hearing by causing this resolution of intention to be published once in a newspaper of general circulation in the city not less than seven days before the public hearing. PASSED, APPROVED AND ADOPTED at a Special Meeting of the City Council of the City of Carlsbad on the 2nd day of June 2020, by the following vote, to wit: AYES: NAYS: ABSENT: Hall, Blackburn, Bhat-Patel, Schumacher. None. None. MATT HALL, Mayor (SEAL) June 2, 2020 Item #4 Page 5 of 7 ATTACHMENT A Carlsbad Golf Lodging Business Improvement District (CGLBID) 2020-2021 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 CGLBID 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. 2019-20 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 $550,000 in CGLBID Assessments in Fiscal Year 2019-20. 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 2020-21, the Hilton Garden Inn and the Cape Rey Carlsbad Beach Hilton Resort have elected to participate in the district so the district will have eight hotels. It is estimated that these eight hotels will collect a total of $500,000 in CGLBID assessments. Based on this revenue estimate, the budgeted amount for reimbursement to the hotels is $500,000. 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 2020-21 are budgeted at $20,000, which is 4% of the revenues. Detail of the 2020-21 budget is shown on the following page. June 2, 2020 Item #4 Page 6 of 7 2020-21 CGLBID 8_u_d9fil 2016-17 2017-18 2018-19 2019-20 Actuals as of Projected Recommended Program Areas Description Actuals Actuals Actuals Budget 4/30/2020 2019-20 Actuals 2020-21 Budget Carryover Fund Balance $169,707 $136,587 $344,804 $291,861 291,861 291 ,861 185,979 Revenues: CGLBID Assessment * $2 per room night 428,949 681 ,703 719,740 733,000 494,961 550,000 500,000 Interest Earnings 786 -805 11 ,142 2,127 2,500 0 Total Estimated Revenues 429,735 680,898 730,882 733,000 497,088 552,500 500,000 Ex12enditures: 2% Admin. Fee -City For collection of CGLBID assessment and accounting for CGLBID -2% of CGLBID assessment revenue 8,579 13,633 14,394 14,500 8,733 11,000 10,000 Reimbursements Reimbursement to member hotels for golf related expenditures 445,516 451 ,341 761,651 704,000 641 ,382 641 ,382 500,000 Staff support Staff support to the CGLBID -2% of CGLBID assessment revenue 8,759 7,707 7,780 14,500 5,015 6,000 10,000 Total Expenses 462,854 472,681 783,825 733,000 655,130 658,382 520,000 Ending Fund Balance Contingency for Revenue shortfall $136,587 $344,804 $291,861 $291 ,861 $133,819 185,979 165,979 Member Hotels opting into the District: * FY2014-15 -Sheraton Carlsbad, Park Hyatt Aviara, Grand Pacific Palisades, and Carlsbad by the Sea Resort. * FY2017-18 -Omni La Costa Resort. * FY2018-19 -Westin Carlsbad Resort. * FY2020-21 -Hilton Garden Inn, arid Cape Rey Beach Hilton Resort. June 2, 2020 Item #4 Page 7 of 7