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Home My WebLink About2020-07-14; City Council; ; Resolution of Intention to Modify the Carlsbad Tourism Business Improvement District’s Assessment RateCA Review CKM Meeting Date: July 14, 2020 To: Mayor and City Council From: Scott Chadwick, City Manager Staff Contact: Cheryl Gerhardt, Finance Manager cheryl.gerhardt@carlsbadca.gov, 760‐602‐2468 Subject: Resolution of Intention to Modify the Carlsbad Tourism Business Improvement District’s Assessment Rate Recommended Action Adopt a resolution declaring an intention to modify the Carlsbad Tourism Business Improvement District’s assessment rate. Executive Summary/Discussion The Carlsbad Tourism Business Improvement District1 generates funds for marketing and visitor programs to promote Carlsbad as a tourism visitor destination and to fund projects, programs and activities, including appropriate administrative charges, that benefit hotels within the District’s boundaries. The District’s advisory board implements the planned activities. The City Council may modify the District’s assessment rate by following the process in California Streets and Highway Code Sections 36540‐36542. As the first step in the process, the District’s advisory board has submited a written recommendation that the City Council modify the District’s assessment rate (Exihbit 2). The current assessment rate, which is specified in Carlsbad Municipal Code Section 3.37.050, is $1 “per occupied room per night for all transient occupancies.” The District’s advisory board is proposing the City Council modify the assessment rate to be 2% “of gross short‐term room rental revenue for all transient occupancies” (Exhibit 3). The modified assessment will generate increased revenue for the District, which will enable the District to provide improved services and activities to the assessed businesses within the District. The City Council may make the recommended modification by introducing and adopting an ordinance amending Carlsbad Municipal Code Section 3.37.050. Before doing so, the City Council must first adopt a resolution of intention to make the recommended modification, provide notice to affected business owners, hold both a public meeting and a public hearing on the proposed modification, and determine there is no majority protest that would prevent the modification. 1 The City of Carlsbad established the district in 2005 under the Parking and Business Improvement Area Law of 1989, California Streets and Highway Code Section 36500 et seq. July 14, 2020 Item #2 Page 1 of 8 Fiscal Analysis The $1 per room night assessment rate is estimated to generate $800,000 in revenues in fiscal year 2020‐21 for the District’s activities. Modifying the assessment to 2% of the gross short‐ term room rental revenue would generate an estimated $3.5 million in annual revenue for the District’s activities. Next Steps With the City Council’s approval, staff will mail a copy of a public meeting/public hearing notice (Exhibit 4) and the resolution of intention to modify the District’s assessment rate to the business owners within the District. Mailing the notice begins a mandatory 45‐day period during which the owners may protest the modification. As indicated in the notice, a public meeting on the proposed modification will be scheduled for August 25, 2020 at 3 p.m., at which the City Council will hear public comments and testimony on the modification and may choose to introduce an ordinance amending Carlsbad Municipal Code Section 3.37.050. A public hearing on the proposed modification will then be scheduled for September 1, 2020 at 3 p.m., at which the City Council will determine if there is a majority protest and, if there is not, the City Council may adopt the ordinance amending Carlsbad Municipal Code Section 3.37.050. The ordinance would become effective 30 days after adoption, but would provide for the modified assessment to become effective Nov. 1, 2020. Environmental Evaluation (CEQA) This action does not constitute a “project” within the meaning of the California Environmental Quality Act under California Public Resources Code Section 21065 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 Public notice of this item was posted in accordance with the Ralph M. Brown Act and it was available for public viewing and review at least 72 hours prior to the scheduled meeting date. Exhibits 1. City Council resolution 2. Letter from Carlsbad Tourism Business improvement District Advisory Board 3. Redline of proposed revision to Carlsbad Municipal Code Section 3.37.050 4. Notice of public meeting and public hearing July 14, 2020 Item #2 Page 2 of 8 EXHIBIT 1 RESOLUTION NO. 2020-134 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, DECLARING ITS INTENTION TO MODIFY THE ASSESSMENT RATE FOR THE CARLSBAD TOURISM BUSINESS IMPROVEMENT DISTRICT, FIXING THE TIME AND PLACE OF A PUBLIC MEETING AND PUBLIC HEARING ON THE MODIFICATION, AND GIVING NOTICE OF THE PUBLIC MEETING AND PUBLIC HEARING WHEREAS, pursuant to the Parking and Business Improvement Area Law of 1989 (California Streets and Highway Code § 36500 et seq.) (the "89 Law"), the City Council has established the Carlsbad Tourism Business Improvement District ("District"); and WHEREAS, the 89 Law authorizes the District's advisory board at any time to recommend the City Council modify the basis and method of levying the assessment rate of the District; and WHEREAS, the District's advisory board submitted a written recommendation that the City Council modify the District assessment rate from $1 per occupied room night for all transient occupancies to 2% of gross short-term room rental for all transient occupancies; and WHEREAS, the 89 Law establishes the procedure to modify the assessment rate which includes adopting a Resolution of Intention, providing notice to affected business owners, holding a public meeting, holding a public hearing, and adopting an ordinance modifying the assessment rate. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as follows: 1. The above recitations are true and correct. 2. The City Council declares its intention to modify the District assessment rate from $1 per occupied-room per night for all transient occupancies to 2% of gross short-term room rental revenue for all transient occupancies. 3. As with the current assessment, the modified assessment would be levied on all hotel businesses, existing and in the future, within the District boundaries. 4. The District boundaries continue to be consistent with the boundaries of the City of Carlsbad. 5. The modified assessment rate would go into effect on November 1, 2020. 6. The improvements and activities proposed for the District that shall be funded by the levy of assessments on businesses within the District boundaries include: a. General promotion of business activities within the District; b. Promotion of public events which benefit businesses in the District and which take place on or in public places within the District; c. Decoration of any public place within the District; and July 14, 2020 Item #2 Page 3 of 8 EXHIBIT 1 d. Acquisition, construction, installation or maintenance of improvements identified in Section 36510 of the 89 Law. 7. Funds remaining at the end of any District term may be used in subsequent years in which the District assessments are levied as long as they are used consistent with the requirements of Carlsbad Municipal Code Section 3.27.070. 8. The CTBID Advisory Board will continue to serve as the advisory board of the District. 9. The District advisory board shall submit an annual report, which shall include a budget for operations and activities to be undertaken by the District for the ensuing calendar year, to the City Council pursuant to Section 36533 of the 89 Law. 10. The time and place for a public meeting for comments on the modification of the District assessment rate is set for 3 p.m. on Aug. 25, 2020 at City Hall, 1200 Carlsbad Village Drive, Carlsbad, CA 92008. 11. The time and place for the public hearing on the modification of the District assessment rate is set for 3 p.m. on Sept. 1, 2020 at City Hall, 1200 Carlsbad Village Drive, Carlsbad, CA 92008. 12. At the public meeting and public hearing, the testimony of all interested persons for or against modifying the District will be heard. 13. A protest against modifying the District, as provided in Section 36524 of the 89 Law, must be made in writing. A written protest may be withdrawn, in writing, at any time before the conclusion of the public hearing. Each written protest shall contain a description of the business in which the person signing the protest is interested, sufficient to identify the business and its address. If the person signing the protest is not shown on the official records of the City of Carlsbad as the owner of the business, then the protest shall contain or be accompanied by written evidence that the person is the owner of the business, or the authorized representative. Any protest as to the regularity or evidence of the proceedings shall be in writing and clearly state the irregularity or defect to which objection is made. Written protests must be received by the City Clerk's Office before the close of the public hearing, and may be delivered to the City Clerk Office at 1200 Carlsbad Village Drive, Carlsbad, CA 92008. 14. If, at the conclusion of the public hearing, there are of record written protests by the owners of businesses within the District that will collectively pay 50% or more of the proposed modified District assessment rate, no further proceedings to modify the assessment rate shall occur for a period of one year from the date of the finding of a majority protest. 15. Further information regarding the proposed modified District assessment rate may be obtained from the City Clerk, at 1200 Carlsbad Village Drive, Carlsbad, CA 92008 or by contacting Cheryl Gerhardt, staff for the Carlsbad Tourism Business Improvement District, at (760) 602-2468. July 14, 2020 Item #2 Page 4 of 8 NAYS: None. ABSENT: None. MATT HALL, Mayor City rk (SEAL) - .0\11111111111/1/11/4 x,•\\"' C... Ark ........ ... .. \V'' • 0/H11111 1M 010 BARBICR ENGLES EXHIBIT 1 16. The City Clerk is instructed to provide notice of the public meeting and public hearing by mailing notice and a complete copy of this Resolution of Intention to each and every business owner in the District on or before July 17, 2020. PASSED, APPROVED AND ADOPTED at a Meeting of the City Council of the City of Carlsbad on the 14th day of July 2020, by the following vote, to wit: AYES: Hall, Blackburn, Bhat-Patel, Schumacher. July 14, 2020 Item #2 Page 5 of 8 Exhibit 2 July 14, 2020 Item #2 Page 6 of 8 EXHIBIT 3 REDLINE OF PROPOSED AMENDMENTS TO CARLSBAD MUNICIPAL CODE SECTION 3.37.050 3.37.050 Levy and collection of assessments. The CTBID will include all hotel businesses located within the CTBID boundaries. The An assessment shall be levied on all hotel businesses, existing and future, within the City of Carlsbad based upon a flat fee of two percent (2%) of gross short‐term room rental revenue one dollar per occupied room per night for all transient occupancies as defined in Section 3.12.020 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 two percent (2%) of gross short‐term room rental revenue on one dollar 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. (Ord. NS‐778 § 1, 2005) July 14, 2020 Item #2 Page 7 of 8 EXHIBIT 4 NOTICE OF PUBLIC MEETING AND PUBLIC HEARING CONCERNING THE MODIFICATION OF THE CARLSBAD TOURISM BUSINESS IMPROVEMENT DISTRICT ASSESSMENT RATE NOTICE IS HEREBY GIVEN that on July 14, 2020, the City Council of the City of Carlsbad adopted a Resolution of Intention to modify the Carlsbad Tourism Business Improvement District (the “CTBID”) assessment rate as set forth in the Resolution of Intention. NOTICE IS HEREBY FURTHER GIVEN that at 3:00 PM on August 25, 2020, at City Hall, 1200 Carlsbad Village Drive, Carlsbad, CA 92008, a public meeting shall be held to allow public testimony regarding the modification of the CTBID assessment rate as set forth in the Resolution of Intention. NOTICE IS HEREBY FURTHER GIVEN that 3:00 PM on September 1, 2020, at City Hall, 1200 Carlsbad Village Drive, Carlsbad, CA 92008, has been set as the time and place for a public hearing at which time the City Council proposes to modify the CTBID assessment rate as set forth in the Resolution of Intention. Location: The CTBID includes all hotel businesses located within the boundaries of the City of Carlsbad. Services: The CTBID is designed to provide specific benefits to payors by increasing demand for overnight visitation to hotels within the CTBID boundaries. Revenues collected shall be used for the following: General promotion of business activities within the CTBID; Promotion of public events which benefit businesses in the CTBID and which take place on or in public places within the CTBID; Decoration of any public place within the CTBID; and Acquisition, construction, installation or maintenance of improvements identified in California Streets and Highways Code Section 36510. Cost: The proposed assessment modification would increase the current assessment rate of $1 per occupied room per night for all transient occupancies to 2% of gross short‐term room rental revenue for all transient occupancies. Protest: Any owner of a lodging business within the CTBID that will be subject to the assessment may protest the modification of the CTBID assessment rate. Written protests must be received by the City Clerk of the City of Carlsbad before the close of the scheduled public hearing. If written protests are received from the owners of lodging businesses in the CTBID who 50% or more of the estimated annual assessments to be levied, the CTBID assessment rate shall not be modified. You may mail a written protest to: Office of the City Clerk, City of Carlsbad, 1200 Carlsbad Village Drive, Carlsbad, CA 92008 COVID‐19 pandemic related public health orders may prevent your personal appearance at the public meeting or the public hearing. If your personal appearance is permitted, you may appear at the public meeting or the public hearing and submit a written protest at that time. Information: Should you desire additional information about the proposed CTBID assessment rate modification contact: Cheryl Gerhardt, Carlsbad Tourism Business Improvement District Staff, 1635 Faraday Ave., Carlsbad, CA 92008 July 14, 2020 Item #2 Page 8 of 8