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HomeMy WebLinkAbout2020-06-02; City Council; ; Fiscal Year 2020-21 Annual Report of the Carlsbad Tourism Business Improvement District and Resolution of Intention to Levy an Annual Assessment into the Next Fiscal Year~ CITY COUNCIL ~ Staff Report Meeting Date: To: vFrom: Staff Contact: June 2, 2020 Mayor and City Council Scott Chadwick, City Manager_ ·Cheryl Gerhardt, Finance Manager cheryl.gerhardt@carlsbadca.gov, 760-602-2468 CA Review CKM Subject: Fiscal Year 2020-21 Annual Report of the Carlsbad Tourism 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 Tourism 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 Tourism 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 an annual assessment in fisca_l year 2020-21, and schedule a public hearing on the levying of the proposed assessments. Discussion The city founded the district in 2005, when the City Council adopted Ordinance No. NS-778 (Carlsbad Municipal Code Chapter 3.37).1 This ordinance authorized the levying of an assessment of $1 per room-night for each transient occupancy within the city, effective Jan. 1, 2006. 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). 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 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 #3 Page 1 of 6 (Exhibit 1) calls for a continued assessment of $1 per room-night for each transient occupancy within the city during fiscal year 2020-21. The City Council must also set the time and place for a public hearing on the levy of the proposed assessment. 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 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 assessment for one year Fiscal Analysis Projected Carlsbad Tourism Business Improvement District finances: fy 2019-20 fy 2020-21 Revenue (approx.) $1,040,000 $800,000 Costs $1,150,000 $907,000 Projected fund balance (as of June 30} $529,000 $422,000 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 City Council approves staff's 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 #3 Page 2 of 6 RESOLUTION NO. 2020-093 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, APPROVING THE CARLSBAD TOURISM BUSINESS IMPROVEMENT DISTRICT (CTBID) ANNUAL REPORT, DECLARING AN INTENTION TO LEVY AND COLLECT AN ANNUAL ASSESSMENT AND SETTING A PUBLIC HEARING DATE EXHIBIT 1 WHEREAS, the CTBID was formed in accordance with the Parking and Business Improvement Area Law of 1989 (Cal. Streets and Highways Code, § 36500 et seq.); and WHEREAS, the CTBID boundaries are the boundaries ofthe City of Carlsbad; and WHEREAS, the CTBID 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 CTBID 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 of resolution declaring its intention to levy and collect assessments for fiscal year 2020-21; and WHEREAS, the assessments will generally 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 CTBID boundaries; 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 CTBID Advisory Board. 3. That for fiscal year 2020-21, the City Council intends to levy and collect an assessment of $1 per room-night for each transient occupancy in the city. 4. That the City Council will hold a public hearing at 3 p.m. on June 23, 2020 on the levying of the annual assessment. June 2, 2020 Item #3 Page 3 of 6 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 behalf of the business owner. 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 assessment 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 #3 Page 4 of 6 Attachment A Carlsbad Tourism and Business Improvement District (CTBID) 2020-2021 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 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. 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 CTBID 2020-21 budget includes a reduced funding level of $800,000 for Visit Carlsbad. This reduced funding level is the result of reduction in estimated assessment revenue due to Covid-19. The services provided will focus primarily on post COVID-19 marketing efforts. The majority of this will be done by interactive marketing and group sales. 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 2020-21 budget is shown on the following page. June 2, 2020 Item #3 Page 5 of 6 2020-21 Recommended CTBID Budget 2016-17 2017-18 2018-19 2019-20 2019-20 Actuals Projected Recommended Program Areas Description Actuals Actuals Actual Budget as of 4/22/19 2019-20 Actuals 2020-21 Budget Carryover Fund Balance $655,774 $722,331 $696,716 $640,318 640,318 529,918 Revenues: CTBID Assessment $1 per room night 1,205,851 1,246,944 1,333,001 1,360,000 892,642 1,020,000 800,000 Interest Earnings 1,658 2,535 26,920 19,377 20,000 Total Estimated Revenues 1,207,509 1,249,479 1,359,921 1,360,000 912,019 1,040,000 800,000 Ex12enditures: 2% Admin. Fee -City 2% of CTBID assessment revenue, for collection of CTBID assessment and accounting for CTBID 24,116 24,896 26,644 27,200 18,987 20,400 16,000 CCVB Payment To operate visitor center, market and promote Carlsbad 978,612 1,130,216 1,244;575 1,213,000 995,326 1,050,000 800,000 Staff support Staff support to the CTBID -2% of revenues 19,224 16,972 15,649 27,200 13,938 20,000 16,000 Civitas Contract 40,000 22 ,720 40,000 CTBID Grants Grant program established by CTBID Board 119,000 103,011 129,451 75,000 10,008 20,000 75,000 Total Expenses 1,140,952 1,275,095 1,416,319 1,382,400 1,060,979 1,150,400 907,000 ' Ending Fund Balance Contingency for Revenue shortfall $722,331 $696,716 $640,318 $617,918 529,918 422,918 June 2, 2020 Item #3 Page 6 of 6