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HomeMy WebLinkAbout2022-06-07; City Council; ; Fiscal Year 2022-23 Annual Report of the Carlsbad Golf Lodging Business Improvement District, and Resolution of Intention to Levy an Annual Assessment Into the Next FiscaCA Review CKM Meeting Date: June 7, 2022 To: Mayor and City Council From: Scott Chadwick, City Manager Staff Contact: Matt Sanford, Economic Development matt.sanford@carlsbadca.gov, 442-339-5987 Subject: Fiscal Year 2022-23 Annual Report of the Carlsbad Golf Lodging Business Improvement District, and Resolution of Intention to Levy an Annual Assessment Into the Next Fiscal Year Districts: All Recommended Action Adopt a Resolution approving the fiscal year 2022-23 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 5 p.m. on June 21, 2022. Executive Summary The Carlsbad Golf Lodging Business Improvement District Advisor 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 assessments in fiscal year 2022-23, and set a public hearing on the levying of the proposed assessments. Discussion In 2012, the City Council adopted Ordinance No. CS-194 (Carlsbad Municipal Code Chapter 3.38) forming the Carlsbad Golf Lodging Business Improvement District under the Parking and Business Improvement Law of 1989 (Cal. Streets & Highways Code, § 36500 et seq.). The ordinance authorized the levying of an assessment of $2 per night for each occupied room for transient occupancies at the hotel properties within the city that have elected to be part of the district. 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 18, 2022, meeting (Attachment A to Exhibit 1). The eight hotels that have opted into the district for FY 2022-23 are Sheraton Carlsbad Resort and Spa, Grand Pacific Palisades Hotel, Park Hyatt Aviara, Omni La Costa Resort & Spa, Carlsbad June 7, 2022 Item #2 Page 1 of 8 by the Sea Resort, Westin Carlsbad Resort & Spa, Hilton Garden Inn, and Cape Rey Beach Hilton Resort. In addition to approving the annual report, the City Council must adopt a resolution of intention to levy and collect assessments for the upcoming fiscal year. The proposed resolution (Exhibit 1) calls for a continued assessment of $2 per night for each occupied room for transient occupancies at the hotel properties within the city that have elected to be part of the district during fiscal year 2022-23. The City Council must also set the time and place for a public hearing on the levying 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 5 p.m. on June 21, 2022. 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. Following the public hearing, if there are written protests from affected business owners that will pay 50% 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 The District will generate approximately $764,000 in revenue in fiscal year 2021-22. The costs incurred by the District during this same period are approximately $475,280. The projected fund balance at the end of fiscal year 2021-22 is $597,411. For fiscal year 2022-23, the District has estimated revenues of $770,000 and a budget of $830,800, with a projected fund balance of $536,611 on June 30, 2023. Next Steps The City Clerk’s Office 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 5 p.m. at the City Council meeting on June 21, 2022. 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 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 7, 2022 Item #2 Page 2 of 8 RESOLUTION NO. 2022-123 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, APPROVING THE CARLSBAD GOLF LODGING BUSINESS IMPROVEMENT DISTRICT ANNUAL REPORT, DECLARING AN INTENTION TO LEVY AND COLLECT AN ANNUAL ASSESSMENT AND SETTING A PUBLIC HEARING FOR 5 P.M. ON JUNE 21, 2022 EXHIBIT 1 WHEREAS, the Carlsbad L�dging Business Improvement District (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 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 2022-23; 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 2022-23; 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 assessments and a full and detailed description of the activities to be conducted and funded in fiscal year 2022-23 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 2022-23, 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. June 7, 2022 Item #2 Page 3 of 8 4.Notice is hereby given that a public hearing is scheduled for 5 p.m. at the City Council Chambers located at 1200 Carlsbad Village Drive in Carlsbad, California on the following date: Tuesday, June 21, 2022 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's Office 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. Following the public hearing, if there are written protests from affected business owners that will pay SO percent or more of the proposed assessments, the City Council will not take any further action to levy the proposed assessment for one year. 6.That the City Clerk's Office 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 7th day of June, 2022, by the following vote, to wit: AYES: NAYS: ABSENT: Hall, Blackburn, Bhat-Patel, Acosta, Norby. None. None. � FAVIOLA MEDINA, City Clerk Services �er (SEAL) June 7, 2022 Item #2 Page 4 of 8 ATTACHMENT A Carlsbad Golf Lodging Business Improvement District (CGLBID) 2022-2023 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(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. 2022-23 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 – Sheraton Carlsbad, Park Hyatt Aviara and Grand Pacific Palisades Hotel – opted into the district. In fiscal year 2014-15 Carlsbad by the Sea Resort opted into the district, in fiscal year 2017-18 Omni La Costa Resort opted into the district, in 2018-19 Westin Carlsbad Resort opted into the district, and in 2020-21 Cape Rey Beach Hilton Resort and the Hilton Garden Inn opted into the district. These eight hotels are expected to collect a total of $764,000 in CGLBID assessments in fiscal year 2021-22. Expenditures for fiscal year 2021-22 are estimated to be $450,000. 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 2022-23, it is estimated that these eight hotels will collect a total of $770,000 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 2022-23 are budgeted at $30,800, which is 4% of the revenues. Detail of the 2022-23 budget is shown on the following page. June 7, 2022 Item #2 Page 5 of 8 2022-23 CGLBID Budget 2019-20 2020-21 2021-22 Actuals as of Projected Recommended Program Areas Description Actual Actual Budget 4/30/2022 2021-22 2022-23 Budget Carryover Fund Balance $291,861 $172,432 $307,491 307,491 307,491 597,411 Revenues: CGLBID Assessment *$2 per room night 534,264 335,402 650,000 617,500 764,000 770,000 Interest Earnings 6,154 1,544 1,088 1,200 0 Total Estimated Revenues 540,418 336,946 650,000 618,588 765,200 770,000 Expenditures: 2% Admin. Fee - City For collection of CGLBID assessment and accounting for CGLBID - 2% of CGLBID assessment revenue 10,685 7,108 13,000 12,350 15,280 15,400 Reimbursements Reimbursement to member hotels for golf related expenditures 641,382 189,660 800,000 294,900 450,000 800,000 Staff support Staff support to the CGLBID - 2% of CGLBID assessment revenue 7,780 5,119 13,000 5,661 10,000 15,400 Total Expenses 659,847 201,887 826,000 312,911 475,280 830,800 Ending Fund Balance Contingency for Revenue shortfall $172,432 $307,491 $131,491 $613,168 597,411 536,611 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 7, 2022Item #2 Page 6 of 8 12/13 13/14 14/15 15/16 16/17 17/18 Sheraton 59,404 147,486 147,814 147,110 147,110 136,592 GPP 21,234 52,718 52,918 51,714 51,294 53,722 Park Hyatt 54,518 154,320 170,508 152,404 159,530 167,087 Carlsbad By the Sea n/a n/a 68,998 77,150 71,014 61,078 Omni La Costa n/a n/a n/a n/a n/a 263,210 Westin n/a n/a n/a n/a n/a Cape Rey Hilton Garden Inn 135,156 354,524 440,238 428,378 428,948 681,689 June 7, 2022 Item #2 Page 7 of 8 18/19 19/20 2020-21 pro 2021-22 pro 111,046 167,882 45,000 77,732 46,414 28,492 30,000 32,490 163,152 108,078 30,000 114,206 60,170 42,906 35,000 42,119 262,262 188752 55000 183,583 76,690 53,683 65000 76,223 65000 76,223 719,734 536,110 325,000 656,260 June 7, 2022 Item #2 Page 8 of 8