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Home My WebLink About2018-06-26; City Council; ; The annual report of the Carlsbad Golf Lodging Business Improvement@ CITY COUNCIL Staff Report Meeting Date: To: From: Staff Contact: CAReview � Subject: June 26, 2018 Mayor and City Council Kevin Crawford, City Manager Cheryl Gerhardt, Finance cheryl.gerhardt@carlsbadca.gov or 760-602-2468 The annual report of the Carlsbad Golf Lodging Business Improvement District Recommended Action Adopt a Resolution approving the annual report of the Carlsbad Golf Lodging Business Improvement District (CGLBID), and continuing the programs and assessments for Fiscal Year 2018-19. Executive Summary The CGLBID Board is required to present an annual 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. The City Council is being asked to approve the report and continue the assessment into the next fiscal year. Discussion On November 27, 2012 the City Council adopted Ordinance No. CS-194 forming the CGLBID pursuant to the Parking and Business Improvement Law of 1989. 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 an annual 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 (Attachment A to Exhibit 1) was approved by the CGLBID Board at their May 23, 2018 meeting. 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 Council makes no changes to the report or programs, no public hearing is necessary. The CGLBID Board is not recommending any changes to the programs and assessments of the CGLBID, however one additional property, the Westin Carlsbad Resort & Spa, has elected to be part of the district in Fiscal Year 2018-19. If the Council wishes to make changes to the report, June 26, 2018 Item #3 Page 1 of 6 programs or proposed assessments, a public hearing is necessary, and would be scheduled for the next available Council meeting following the necessary notice period. The six hotels that have opted into the District for Fiscal year 2018-19 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 Council approve the annual 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 $704,000 in revenue 2017-18. The costs incurred by the district during this same period are approximately $479,000. The projected fund balance at the end of Fiscal Year 2017-18 is $361,000. For Fiscal Year 2018-19, the CGLBID has estimated revenues of $826,000 and a budget of $826,000 with a projected fund balance of $361,000 at June 30, 2019. I Next Steps Continue the programs and assessments for Fiscal Year 2018-19. 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. June 26, 2018 Item #3 Page 2 of 6 RESOLUTION NO. 2018-103 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, APPROVING THE CARLSBAD GOLF LODGING BUSINESS IMPROVEMENT DISTRICT (CGLBID) ANNUAL REPORT, AND CONTINUING THE CGLBID PROGRAMS AND ASSESSMENTS FOR FISCAL YEAR 2018-19 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 an annual 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 Annual Report has been submitted to the City council for Fiscal Year 2018-19; 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 Annual Report (Attachment A) is approved as submitted by the Board of Directors for the Carlsbad Golf Lodging Business Improvement District. June 26, 2018 Item #3 Page 3 of 6 3. That the program and assessment as levied in the current fiscal year (2017-18) shall continue without change. PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of Carlsbad on the 26th day of June, 2018, by the following vote, to wit: AYES: NOES: ABSENT: M. Hall, K. Blackburn, M. Schumacher, C. Schumacher, M. Packard. None. None. June 26, 2018 Item #3 Page 4 of 6 ATIACHMENTA Carlsbad Golf Lodging Business Improvement District (CGLBID) Annual Report 2018-2019 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. 2017-18 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, and in 2017-18 Omni La Costa Resort Opted into the district. These five hotels are expected to collect a total of $427,000 in CGLBID Assessments in Fiscal Year 2017-18. 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 2018-19, Omni La Costa Resort has elected to participate in the district so the district will have six hotels as Fiscal Year 2018-19. It is estimated that these six hotels will collect a total of$700,000 in CGLBID assessments. Based on this revenue estimate, the budgeted amount for reimbursement to the hotels is $672,000. 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 2018-19 are budgeted at $28,000, which is 4% of the revenues. Detail of the 2018-19 budget is shown on the following page. June 26, 2018 Item #3 Page 5 of 6 2018-19 CGLBID Budget 2015-16 2016-17 2017-18 Actuals as of Projected Recommended Program Areas Description Actuals Actuals Budget 4/30/2017 2017-18 Actuals 2018-19 Budget Carryover Fund Balance $149,264 $169,707 $136,587 136,587 136,587 361 ,247 Revenues: CGLBID Assessment * $2 per room night 428,675 428,949 700,000 566,074 700,000 826,000 Interest Earnings 2,283 786 0 3,441 4,000 0 Total Estimated Revenues 430,958 429,735 700,000 569,515 704,000 826,000 Expenditures: 2% Admin. Fee -City For collection of CGLBID assessment and accounting for CGLBID -2% of CGLBID assessment revenue 8,574 8,579 14,000 8,576 14,000 16,500 Reimbursements Reimbursement to member hotels for golf related expenditures 392,354 445,516 672,000 451 ,340 451 ,340 793,000 Staff support Staff support to the CGLBID -2% of CGLBID assessment revenue 9,587 8,759 14,000 6,965 14,000 16,500 Total Expenses 410,515 462,854 700,000 466,881 479,340 826,000 Ending Fund Balance Contingency for Revenue shortfall $169,707 $136,587 $136,587 $239,222 361,247 361 ,247 * Member hotels for FY2014-15 thru FY 2016-17 include Sheraton Carlsbad, Park Hyatt Aviara, Grand Pacific Palisades, and Carlsbad by the Sea Resort. * Member hotels for FY2017-18 include Sheraton Carlsbad, Park Hyatt Aviara, Grand Pacific Palisades, Carlsbad by the Sea Resort, and Omni La Costa Resort. * Member hotels for FY2018-19 include Sheraton Carlsbad, Park Hyatt Aviara, Grand Pacific Palisades, Carlsbad by the Sea Resort, Omni La Costa Resort and Westin Carlsbad. June 26, 2018 Item #3 Page 6 of 6