HomeMy WebLinkAbout2021-06-08; City Council; ; Fiscal Year 2021-22 Annual Report of the Carlsbad Golf Lodging Business Improvement District, and Resolution of Intention to Levy and Collect Annual Assessments in the Ne Meeting Date: June 8, 2021
To: Mayor and City Council
From: Scott Chadwick, City Manager
Staff Contact: Cheryl Gerhardt, Finance
cheryl.gerhardt@carlsbadca.gov, 760-602-2468
Subject: Fiscal Year 2021-22 Annual Report of the Carlsbad Golf Lodging Business
Improvement District, and Resolution of Intention to Levy and Collect
Annual Assessments in the Next Fiscal Year
District: All
Recommended Action
Adopt a resolution approving the fiscal year 2021-22 Annual Report of the Carlsbad Golf
Lodging Business Improvement District, declaring an intention to levy and collect annual
assessments and setting a majority-protest public hearing date on the levying of the proposed
assessments for 3 p.m. on June 22, 2021.
Executive Summary
The Carlsbad Golf Lodging Business Improvement District Advisory 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 have prepared the report and it has been approved by the
district’s advisory board.
The report shows that expected revenue for the district for fiscal year 2020-21 is $325,000 and
projected expenditures are $202,260. It also shows that for fiscal year 2021-22 expected
revenue is $650,000 and the recommended budget is $826,000.
The City Council is being asked to approve the report, declare its intention to levy and collect
annual assessments for fiscal year 2021-22, and set a majority-protest public hearing on the
levying of the proposed assessments for 3 p.m. on June 22, 2021.
Discussion
The district was formed in 2012 under the Parking and Business Improvement Law of 1989
(California Streets and Highways Code Section 36500 et seq.). It is funded by the levying and
collection of an assessment of $2 per occupied room per night for all transient occupancies of
the properties within the city that have elected to be part of the district. The assessment
proceeds are used to promote golf-related tourism within the district, for marketing related
capital improvements such as golf-related signage and equipment and to pay for related
June 8, 2021 Item #4 Page 1 of 7
administrative costs. (Carlsbad Municipal Code Section 3.38.070.) 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. The report for the 2021-22 fiscal
year was approved by the district’s advisory board at its meeting on May 19, 2021 (Attachment
A to Exhibit 1).
The eight hotels that have opted into the district for fiscal year 2021-22 are Sheraton Carlsbad
Resort & Spa, Grand Pacific Palisades Resort, Park Hyatt Aviara Resort, Omni La Costa Resort &
Spa, Carlsbad by the Sea Hotel, Westin Carlsbad Resort & Spa, Hilton Garden Inn Carlsbad, and
Cape Rey Carlsbad Beach.
If the City Council approves the annual report, the City Council must adopt a resolution of
intention to levy and collect assessments for the 2021-22 fiscal year for the assessments to
continue. The proposed resolution (Exhibit 1) calls for a continued assessment of $2 per
occupied room per night for all transient occupancies of the participating properties within the
city during fiscal year 2021-22.
The City Council must also set the time and place for a public hearing on the levying 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 22, 2021 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 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 assessments proposed to be levied, the
City Council may not take any further action to levy the proposed assessments for one year. If
the majority protest is only against specified activities or improvements, those activities and
improvements must be eliminated for fiscal year 2021-22.
Options
For the assessments to continue, the City Council is required to adopt a resolution of intention
to levy and collect assessments for the 2021-22 fiscal year for the assessments to be collected.
The City Council can either:
1) Adopt a resolution of intention. This will allow the city to levy and collect assessments in
fiscal year 2021-22.
2) Not approve the resolution of intention. The levying and collection of the assessments
will not continue into fiscal year 2021-22.
Fiscal Analysis
The district will generate approximately $325,000 in revenue in fiscal year 2020-21. The costs
incurred by the district during this same period are approximately $202,000. The projected fund
balance at the end of fiscal year 2020-21 is $295,000. For fiscal year 2021-22, the district has
estimated revenues of $650,000 and a budget of $826,000, with a projected fund balance of
$119,000 at June 30, 2022.
June 8, 2021 Item #4 Page 2 of 7
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. The public hearing on the renewal of the
assessment will be held at the City Council meeting on June 22, 2021 at 3 p.m.
Environmental Evaluation (CEQA)
This action does not constitute a “project” within the meaning of the California Environmental
Quality Act under 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 keeping with the Ralph M. Brown Act and it was
available for public viewing and review at least 72 hours before the scheduled meeting date.
Exhibits
1. City Council resolution
June 8, 2021 Item #4 Page 3 of 7
RESOLUTION NO. 2021-126
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 MAJORITY-PROTEST PUBLIC HEARING DATE
WHEREAS, the CGLBID 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 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 of 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 2021-22; 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 2021-22; 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 2021-22 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 2021-22, 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 22, 2021 on the levying
of the annual assessment.
June 8, 2021 Item #4 Page 4 of 7
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. If the majority protest is
only against specified activities or improvements, those activities and improvements will
be eliminated for fiscal year 2021-22.
6.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 Regular Meeting of the City Council of the City of
Carlsbad on the 8th day of June, 2021, by the following vote, to wit:
AYES: Hall, Blackburn, Acosta, Bhat-Patel, Schumacher.
NAYS: None.
ABSENT: None.
MATT HALL, Mayor
9f1--h
BARBARA ENGLESON, Ci y Clerk
(SEAL)
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June 8, 2021 Item #4 Page 5 of 7
ATTACHMENT A
Carlsbad Golf Lodging Business Improvement District (CGLBID)
2021-2022 Annual 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
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.
2020-21 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 fiscal year 2014-15, the Carlsbad by the Sea Resort opted into the district, in
fiscal year 2017-18, Omni La Costa Resort opted into the district, in fiscal year 2018-19, the
Westin Carlsbad Resort opted into the district, and in fiscal year 2020-21, the Cape Rey Beach
Hilton Resort and the Hilton Garden Inn opted into the district. These eight hotels are expected
to collect a total of $325,000 in CGLBID Assessments in fiscal year 2020-21. Due to the closure
of many of the hotels during fiscal year 2020-21 due to COVID, expenditures for fiscal year
2020-21 are only estimated to be $202,000.
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 2021-22, it is estimated that these eight hotels will collect a total of $650,000 in
CGLBID assessments. Based on this revenue estimate and the carryforward amounts from
the previous fiscal year, the budgeted amount for reimbursement to the hotels is $800,000.
This amount will be available to the assessed hotels for reimbursement. Administrative fees
and staff support for fiscal year 2021-22 are budgeted at $26,000, which is 4% of the revenues.
Detail of the fiscal year 2021-22 budget is shown on the following page.
June 8, 2021 Item #4 Page 6 of 7
2021-22 CGLBID Budget
2017-18 2018-19 2019-20 2020-21 Actuals as of Projected Recommended
Program Areas Description Actuals Actuals Actual Budget 4/30/2021 2020-21 2021-22 Budget
Carryover Fund Balance $136,587 $344,804 $291,861 $172,432 172,432 172,432 295,272
Revenues:
CGLBID Assessment *$2 per room night 681,703 719,740 534,264 500,000 237,545 325,000 650,000
Interest Earnings -805 11,142 6,154 -1,151 0
Total Estimated Revenues 680,898 730,882 540,418 500,000 236,394 325,000 650,000
Expenditures:
2% Admin. Fee - City For collection of CGLBID assessment and accounting
for CGLBID - 2% of CGLBID assessment revenue 13,633 14,394 10,684 10,000 4,071 6,500 13,000
Reimbursements Reimbursement to member hotels for golf related
expenditures 451,341 761,651 641,382 500,000 189,660 189,660 800,000
Staff support Staff support to the CGLBID - 2% of CGLBID
assessment revenue 7,707 7,780 7,781 10,000 4,106 6,000 13,000
Total Expenses 472,681 783,825 659,847 520,000 197,837 202,160 826,000
Ending Fund Balance Contingency for Revenue shortfall $344,804 $291,861 $172,432 $152,432 $210,989 295,272 119,272
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, and Cape Rey Beach Hilton Resort.
June 8, 2021 Item #4 Page 7 of 7