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Home My WebLink About2023-02-07; City Council; ; Reestablishing the Carlsbad Tourism Business Improvement District Under the Property and Business Improvement District Law of 1994CA Review GH Meeting Date: Feb. 7, 2023 To: Mayor and City Council From: Scott Chadwick, City Manager Staff Contact: David Graham, Chief Innovation Officer david.graham@carlsbadca.gov, 442-339-5992 Matt Sanford, Economic Development Manager matt.sanford@carlsbadca.gov, 442-339-5987 Subject: Reestablishing the Carlsbad Tourism Business Improvement District Under the Property and Business Improvement District Law of 1994 District: All Recommended Action Adopt the resolution contained in Exhibit 1 to set a public meeting on March 7, 2023, and a public hearing on April 18, 2023, on the formation of the Carlsbad Tourism Business Improvement District under the Property and Business Improvement Law of 1994 and the levy of assessments on lodging businesses. Executive Summary The City of Carlsbad established the Carlsbad Tourism Business Improvement District in 2005 to support the city’s tourism businesses, a key local economic driver. The district assesses fees from all of the hotels, motels, resorts and short-term vacation rentals in the city to pay for tourism promotion encouraging people to visit and stay in Carlsbad. The district was created under a 1989 state law that requires the district assessments to be renewed each year, which hinders long-term planning and continuity of operations. The city has received petitions from a majority of the lodging businesses in Carlsbad – as measured by the revenue they contributed – in favor of forming a new Tourism Business Improvement District under a different state law, the Property and Business Improvement District Law of 1994 (Streets and Highways Code Section 36600 et seq.). Establishing the new district, and winding down the existing district at a later date, would have no noticeable impact on lodging businesses, except for the improved administration and operational efficiency of the district. Petitions from the majority of lodging businesses allows the City Council to begin the process of establishing the new district under the 1994 law by adopting a resolution expressing its intention to establish the district. This district would initially be established for five years, and could be reauthorized for 10-year periods, which would allow for greater operational stability. The provisions of the 1994 law also Feb. 7, 2023 Item #14 Page 1 of 45 allow for a streamlined administrative model, as detailed below, which will increase efficiency and clarity of roles. This change will not result in any increase in assessment on lodging businesses. The current Carlsbad Tourism Business Improvement District Advisory Board and city staff recommend this change. Explanation & Analysis Background The current Carlsbad Tourism Business Improvement District was established in 2005 under the state’s Parking and Business Improvement Area Law of 1989. In 2020, the district, through a petition from the majority of the lodging businesses in Carlsbad as measured by the revenue they contributed – and subsequent City Council action, raised the assessment from $1 per room night to 2% of the daily room night cost. The increase in the assessment rate increased the district’s budget from approximately $1.5 million to approximately $6.5 million. This larger budget went into effect beginning FY2020- 2021 and has allowed for more robust tourism promotion. The statutory authority for the existing district was adequate in previous years, but now the district’s assessment, budget and capabilities have grown, and a majority of Carlsbad lodging businesses – which both pay and benefit from the assessment – have expressed their support to form a new Tourism Business Improvement District, with a more modern authorization structure. At its January 12, 2022, meeting, the existing district’s Advisory Board, made up of representatives of local hotels and resorts, voted to explore options to modernize the district’s operations, including possibly reestablishing the district under the Property and Business Improvement District Law of 1994. Civitas Advisors, a business improvement district consulting firm was retained to assist with the process and worked with the Advisory Board and city staff to draft a Management District Plan (detailed below), which was approved by the Advisory Board in July 2022. Information about the potential changes, including a summary of the potential changes and a copy of the petition was sent to all lodging businesses in October 2022. The city received enough petitions in support of the change to allow the City Council to begin the process of establishing a new district. At least 50% of the businesses that are assessed, as measured by revenue generated to the district, must submit petitions to form a new district under the 1994 law, and as of Jan. 31, 2023, the city received petitions in support of the change from 67% of the district’s assessment base. Business improvement districts In general, tourism business improvement districts use the efficiencies of private sector operations in the market-based promotion of tourism. These special assessment districts allow lodging business owners to organize their efforts to increase tourism. Lodging business owners within the district are assessed a fee that funds the district’s promotions and operations. Those assessments are based on the activities that will be conducted as outlined in a management Feb. 7, 2023 Item #14 Page 2 of 45 district plan. The services that are included in the plan are intended to benefit the lodging businesses within the district. Among the tourism business improvement district benefits: • Funds cannot be diverted for other government programs and are a stable funding source for tourism promotion • Improvement districts are customized to fit the needs of each destination • Improvement districts allow for a wide range of services, including destination marketing, tourism promotion, and sales lead generation • Improvement districts are designed, created and governed by those who will pay the assessment In California, tourism business improvement districts are primarily formed under the Property and Business Improvement District Law of 1994. This approach has been used successfully in other destination areas throughout the state to improve tourism and drive additional room nights to assessed lodging businesses. If established, the re-formed district would generate approximately $6.8 million on an annual basis for promotion of travel and tourism specific to Carlsbad, consistent with the current district. A new model There are many similarities between the current model and the proposed model. As allowed under the 1989 state law, the current district collects assessments from local lodging businesses for tourism sales and marketing promotions, grant programs and other efforts to support these lodging businesses. It then contracts with the Carlsbad Convention and Visitors Bureau, doing business as Visit Carlsbad, to carry out these efforts. The district Advisory Board is separate from the Visit Carlsbad Board, meaning two governing boards are needed to make decisions regarding strategy, operations, and expenditures. The district’s assessment also must be reauthorized by the City Council on an annual basis. Under the 1994 law, the district would similarly be established as a special assessment district. Funds would also be used for tourism sales and marketing promotions, grant programs and other efforts to support these lodging businesses. However, the 1994 allows the advisory board function and the destination marketing function, which is currently carried out by Visit Carlsbad, to take place in the same organization, called an owner’s association. This change means that decisions regarding strategy, operations, and expenditures can be made within the same organization, adding efficiency to operations. The owner’s association would be subject to the Brown Act and the California Public Records Act, ensuring transparency. The owner’s association would also have to make annual reports to the City Council on the district’s activities. And, as noted above, the district can work to promote tourism over a five-year period, and potentially succeeding ten-year periods, instead of having to be reauthorized each year. This provides greater operational stability and allows strategies to be planned and executed over multiple years and to span fiscal years, which is not possible under the 1989 law. Feb. 7, 2023 Item #14 Page 3 of 45 The 1994 law clarifies certain elements about governance that the 1989 law did not. For example, there is language in the 1994 law that defines who is, or is not, considered a public official on the advisory board. The 1994 law also allows for the creation of one or more benefit zones within the district to raise funds within a specific geographic area for different categories of businesses. One example of a benefit zone could be an additional voluntary assessment focused on golf lodging. If created, this model of benefit zone could be used to reorganize the Carlsbad Golf Lodging Business Improvement District into the new district, creating even greater efficiencies in operations. For this to occur, however, the members of the Golf Lodging Business Improvement District would need to agree to a reorganization. It should be noted that the new district would keep the name of the current district, the Carlsbad Tourism Business Improvement District. Management district plan The Management District Plan (Exhibit 2) includes the proposed boundary of the new tourism business improvement district, a service plan, budget and a proposed means of governance. The district will include all lodging businesses, existing and in the future, available for public occupancy within the boundaries of the Carlsbad, which is consistent with the current district. Under the plan: • The proposed Tourism Business Improvement District will have a five-year term, beginning July 1, 2023, or as soon as possible thereafter, and end five years from its start date. The assessment will be implemented beginning July 1, 2023. • The district’s annual assessment rate would be 2% of gross short-term room rental revenue, which is consistent with the current district assessment rate. • The city will be responsible for collecting assessments on a monthly basis from each lodging business located in the Tourism Business Improvement District’s boundaries, which is consistent with the existing district. • The city shall forward the assessments to the Carlsbad Convention and Visitors Bureau, doing business as Visit Carlsbad, which will have the responsibility of managing Tourism Business Improvement District programs as provided in the Management District Plan. • The city shall be paid a fee equal to 2% of the amount of assessment collected to cover its costs of collection and administration, which is consistent with the practice in the existing district. • Lodging businesses may voluntarily elect to pay an additional 1% assessment in addition to the base assessment. The funds raised through the additional assessment will be used to promote golf-related programs and activities to increase room sales for those lodging businesses that opt-in to paying the additional assessment. The proceeds of the additional assessment will pay for golf-related programs and services specifically tailored only to those paying the additional assessment. This framework could allow for the consolidation of the current Carlsbad Golf Lodging Business Improvement District into the new Tourism Business Improvement District, gaining even further efficiencies. Feb. 7, 2023 Item #14 Page 4 of 45 • Once per year, beginning on the anniversary of the district’s formation, there is a 30-day period in which business owners paying 50% or more of the assessment may protest and begin proceedings to terminate the district. • Based on the lack of benefit received, assessments will not be collected on revenue resulting from occupancies of officers or employees of foreign governments who are exempt under federal law or international treaty. Community Engagement The establishment of a new Tourism Business Improvement District in Carlsbad would affect every lodging business within the city boundaries, so staff sent a letter to all 402 lodging businesses, including short-term vacation rental businesses, notifying them of the proposed change in October 2022. The letter included information explaining the effort to establish the Tourism Business Improvement District, its proposed value, the option to petition for the district, and contact information should there be any questions. Staff received several questions from lodging businesses and provided answers to all inquiries. Staff also followed up with email communications to all hotel businesses. Fiscal Analysis There is no immediate fiscal impact to the city from approving the establishment of the proposed Tourism Business Improvement District. The city will receive a fee of 2% of the amount collected to cover its costs of administration, consistent with its current practice. Because the district’s programs are intended to increase visitation to the city, there may be a resulting increase in transient occupancy tax and sales tax collections. Options Staff and the Carlsbad Tourism Business Improvement District Advisory board recommend the City Council adopt the resolution of intention to establish the new district, consistent with the petition received by local lodging businesses, for the reasons detailed above. The City Council could choose not to adopt the resolution of intention. If this option is chosen, the current Carlsbad Tourism Business Improvement District may continue to operate under the 1989 law and would continue to need to be reauthorized assessments on an annual basis. This would go against the stated preference of the majority of lodging businesses who petitioned for the change and could limit the district’s potential impact in promoting tourism in Carlsbad. Next Steps Should the City Council adopt the resolution, staff will proceed according to the following timeline and provide adequate notice for the public meeting and the public hearing required for the change. Feb. 8, 2023 NOTICE The Property and Business Improvement District Law requires the city to mail written notices to the owners of all businesses proposed to be within the Tourism Business Improvement District. Mailing the notice Feb. 7, 2023 Item #14 Page 5 of 45 begins a mandatory 45-day period in which owners may protest the district’s formation. Mar. 7, 2023 PUBLIC MEETING Allow public testimony on the formation of the Tourism Business Improvement District and its levy of assessments. No City Council action is required. April 18, 2023 FINAL PUBLIC HEARING If written protests are received from the owners of businesses in the proposed Tourism Business Improvement District that will pay more than 50% of the assessments proposed to be levied, and protests are not withdrawn so as to reduce the protests to less than 50%, no further proceedings to form the district and levy the proposed assessment against such businesses may be taken for one year from the date of the finding of a majority protest by the City Council. If the City Council, following the public hearing, decides to establish the proposed Tourism Business Improvement District, the City Council may adopt a resolution of formation. July 1, 2023 DISTRICT ESTABLISHED The five-year term of the proposed new Tourism Business Improvement District is to begin operations Once the new Tourism Business Improvement District is formed, future City Council action will be necessary to disestablish the existing district(s), at which point staff will return to City Council to begin the wind down process. In the interim, both the current Carlsbad Tourism Business Improvement District and the Carlsbad Golf Lodging Business Improvement District will continue to operate as authorized by the City Council. Environmental Evaluation This action does not require environmental review because it 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 or a reasonably foreseeable indirect physical change in the environment. Exhibits 1. City Council resolution 2. Tourism Business Improvement District Management District Plan Feb. 7, 2023 Item #14 Page 6 of 45 RESOLUTION NO. 2023-049 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, DECLARING ITS INTENTION TO ESTABLISH THE CARLSBAD TOURISM BUSINESS IMPROVEMENT DISTRICT AND FIXING THE TIME AND PLACE OF A PUBLIC MEETING AND A PUBLIC HEARING THEREON AND GIVING NOTICE THEREOF WHEREAS, the City of Carlsbad created the Carlsbad Tourism Business Improvement District (CTBID) in 2005 under the Parking and Business Improvement Area Law of 1989 by Resolution No. 2005- 281; and WHEREAS, the City and CTBID seek to modernize the CTBID by forming a new District pursuant to the Property and Business Improvement District Law of 1994; and WHEREAS, the Property and Business Improvement Law of 1994, Streets and Highways Code § 36600 et seq., authorizes the City to establish business improvement districts for the purposes of promoting tourism; and WHEREAS, Carlsbad Convention and Visitors Bureau, dba Visit Carlsbad, lodging business owners, and representatives from the City of Carlsbad have met to consider the formation of the CTBID; and WHEREAS, Visit Carlsbad has drafted a Management District Plan (Plan) which sets forth the proposed boundary of the CTBID, a service plan and budget, and a proposed means of governance; and WHEREAS, the proposed CTBID includes lodging businesses in the City of Carlsbad; and WHEREAS, lodging business who will pay more than fifty percent (50%) of the assessment under the CTBID have petitioned the City to establish the CTBID. 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 City Council finds that lodging businesses that will pay more than fifty percent (50%) of the assessment proposed in the Plan have signed and submitted petitions in support of t he formation of the CTBID. The City Council accepts the petitions and adopts this Resolution of Intention to establish the CTBID and to levy an assessment on certain lodging businesses within the CTBID boundaries in accordance with the Property and Business Improvement District Law of 1994. Exhibit 1 Feb. 7, 2023 Item #14 Page 7 of 45 3.That the City Council finds that the Plan satisfies all requirements of Streets and Highways Code § 36622. 4.That the City Council declares its intention to establish the CTBID and to levy and collect assessments on lodging businesses within the CTBID boundaries pursuant to the Property and Business Improvement District Law of 1994. 5.That the CTBID shall include all lodging businesses, existing and in the future, located within the boundaries of the City of Carlsbad, as shown in the map attached as Attachment A. 6.That the name of the district shall be Carlsbad Tourism Business Improvement District CTBID. 7.That the annual assessment rate shall be two percent (2%) of gross short-term room rental revenue. Based on the lack of benefit received, assessments will not be collected on revenue resulting from occupancies of any officer or employee of a foreign government who is exempt by reason of express provision of federal law or international treaty. Lodging businesses may elect to pay an additional one percent (1%) assessment. The funds raised through this additional lodging business assessment shall be used to promote golf-related programs and activities, thereby increasing demand for room night sales for those lodging businesses that opt in to paying the additional assessment. 8.That the assessments levied for the CTBID shall be applied toward sales and marketing promotions, and grants programs to market assessed lodging businesses in CTBID as tourist, meeting, and event destinations to increase demand for overnight tourism, as described in the Plan. The proceeds of the additional one percent (1%) assessment will pay for golf-related programs and services specifically tailored only to those paying the additional assessment. Funds remaining at the end of any year may be used in subsequent years in which CTBID assessments are levied as long as they are used consistent with the requirements of this resolution and the Plan. 9.That the proposed CTBID will have a five (5) year term, beginning July 1, 2023, or as soon as possible thereafter, and end five (5) years from its start date, unless renewed pursuant to Streets and Highways Code § 36660. 10.That bonds shall not be issued. Feb. 7, 2023 Item #14 Page 8 of 45 11.That the time and place for the public meeting to hear testimony on establishing the CTBID and levying assessments are set for March 7, 2023, at 5:00 pm, or as soon thereafter as the matter may be heard, at the Council Chambers located at 1200 Carlsbad Village Drive, Carlsbad, CA 92008. 12.That the time and place for the public hearing to establish the CTBID and the levy of assessments are set for April 18, 2023, at 5:00 pm, or as soon thereafter as the matter may be heard, at the Council Chambers located at 1200 Carlsbad Village Drive, Carlsbad, CA 92008. The City Clerk is directed to provide written notice to the lodging businesses subject to assessment of the date and time of the meeting and hearing, and to provide that notice as required by Streets and Highways Code § 36623, no later than February 28, 2023. 13.That at the public meeting and hearing, the testimony of all interested persons for or against the establishment of the CTBID may be received. If at the conclusion of the public hearing, there are of record written protests by the owners of the lodging businesses within the proposed CTBID that will pay more than fifty percent (50%) of the estimated total assessment of the entire CTBID, no further proceedings to establish the CTBID shall occur for a period of one (1) year. 14.That the complete Management District Plan is on file with the City Clerk and may be reviewed upon request. PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of Carlsbad on the 7th day of February, 2023, by the following vote, to wit: AYES: NAYS: ABSTAIN: ABSENT: Blackburn, Bhat-Patel, Acosta, Burkholder. None. None. None. KEITH BLACKBURN, Mayor Kfi!G f,..._, SHERRY FREISINGER, City Clerk ]"' (SEAL) Feb. 7, 2023 Item #14 Page 9 of 45 District Boundaries Attachment A Feb. 7, 2023 Item #14 Page 10 of 45 'AC ~ IC C EA/v Carlsbad City Limits ••• • • CIVITAS },----J 2023-2027 CARLSBAD TOURISM BUSINESS IMPROVEMENT DISTRICT MANAGEMENT DISTRICT PLAN Prepared pursuant to the Property and Business Improvement District Law of 1994, Streets and Highways Code section 36600 et seq. July 14, 2022 Exhibit 2 Feb. 7, 2023 Item #14 Page 11 of 45 Contents I. OVERVIEW ........................................................................................................................................ 3 II. BACKGROUND ................................................................................................................................ 5 III. BOUNDARY ....................................................................................................................................... 6 IV. ASSESSMENT BUDGET AND SERVICES ................................................................................ 8 A. Annual Service Plan ............................................................................................................ 8 B. Annual Budget .................................................................................................................. 10 C. California Constitutional Compliance .............................................................................. 11 D. Assessment ........................................................................................................................ 12 E. Penalties and Interest ........................................................................................................ 13 F. Time and Manner for Collecting Assessments ................................................................. 14 V. GOVERNANCE ............................................................................................................................... 15 A. Owners’ Association ......................................................................................................... 15 B. Brown Act and California Public Records Act Compliance ............................................ 15 C. Annual Report ................................................................................................................... 15 APPENDIX 1 – LAW .................................................................................................................................... 16 APPENDIX 2 – ASSESSED BUSINESSES ............................................................................................. 27 Prepared by Civitas (800)999-7781 www.civitasadvisors.com Feb. 7, 2023 Item #14 Page 12 of 45 ••• • • CIVITAS PARTNERSHIPS • PROGRESS • PROSPERITY CTBID Management District Plan 3 July 14, 2022 I. OVERVIEW Developed by the City of Carlsbad (City), and Carlsbad hoteliers, the Carlsbad Tourism Business Improvement District (CTBID) is an assessment district designed to provide specific benefits to payors, by funding marketing and sales promotion efforts for assessed businesses. This approach has been used successfully in other destination areas throughout the country to provide the benefit of additional room night sales directly to payors. In 2005, the CTBID was originally formed pursuant to the Parking and Business Improvement Area Law of 1989 (89 Law). This effort seeks to modernize the CTBID by disestablishing the 89 Law District and forming a new District pursuant to the Property and Business Improvement District Law of 1994 (94 Law). Location: The CTBID includes all lodging businesses, existing and in the future, available for public occupancy located within the boundaries of the City of Carlsbad, as shown on the map in Section III. Services: The CTBID is designed to provide specific benefits directly to payors by increasing demand for room night sales. Marketing and sales promotions, golf-related programs and activities, and grants programs will increase demand for overnight tourism and market payors as tourist, meeting and event destinations, thereby increasing demand for room night sales. Budget: The total CTBID annual budget for the initial year of its five (5) year operation is anticipated to be approximately $6,800,000. A similar budget is expected to apply to subsequent years, but this budget is expected to fluctuate as room sales do. Cost: The annual assessment rate is two percent (2%) of gross short-term room rental revenue. Based on the lack of benefit received, assessments will not be collected on revenue resulting from occupancies of any officer or employee of a foreign government who is exempt by reason of express provision of federal law or international treaty. Lodging businesses may voluntarily elect to pay an additional one percent (1%) assessment. The funds raised through this additional lodging business assessment shall be used to promote golf-related programs and activities, thereby increasing demand for room night sales for those lodging businesses that opt-in to paying the additional voluntary assessment. The proceeds of the additional voluntary assessment will pay for golf-related programs and services specifically tailored only to those paying the additional voluntary assessment. Collection: The City will be responsible for collecting the assessment on a monthly basis (including any delinquencies, penalties and interest) from each lodging business located in the boundaries of the CTBID. The City shall take all reasonable efforts to collect the assessments from each lodging business. Duration: The CTBID will have a five (5) year life, beginning January 1, 2023 or as soon as possible thereafter, and end five (5) years from its start date. Once per year, beginning on the anniversary of CTBID formation, there is a thirty (30) day period in which owners paying fifty percent (50%) or more of the assessment may protest and initiate Feb. 7, 2023 Item #14 Page 13 of 45 CTBID Management District Plan 4 July 14, 2022 a City Council hearing on CTBID termination. After five (5) years, the CTBID may be renewed if business owners support continuing the CTBID programs. Management: Carlsbad Convention and Visitors Bureau, dba Visit Carlsbad (VC), will serve as the CTBID’s Owners’ Association. The Owners’ Association is charged with managing funds and implementing programs in accordance with this Plan, and must provide annual reports to the City Council. Feb. 7, 2023 Item #14 Page 14 of 45 CTBID Management District Plan 5 July 14, 2022 II. BACKGROUND TBIDs are an evolution of the traditional Business Improvement District. The first TBID was formed in West Hollywood, California in 1989. Since then, over 100 California destinations have followed suit. In recent years, other states have begun adopting the California model – Massachusetts, Montana, South Dakota, Washington, Colorado, Texas and Louisiana have adopted TBID laws. Several other states are in the process of adopting their own legislation. The cities of Wichita, Kansas and Newark, New Jersey used an existing business improvement district law to form a TBID. And, some cities, like Portland, Oregon and Memphis, Tennessee have utilized their home rule powers to create TBIDs without a state law. California’s TBIDs collectively raise over $300 million annually for local destination marketing. With competitors raising their budgets, and increasing rivalry for visitor dollars, it is important that Carlsbad lodging businesses continue to invest in stable, lodging-specific marketing programs. TBIDs utilize the efficiencies of private sector operation in the market-based promotion of tourism districts. TBIDs allow lodging business owners to organize their efforts to increase demand for room night sales. Lodging business owners within the TBID pay an assessment and those funds are used to provide services that increase demand for room night sales. In California, most TBIDs are formed pursuant to the Property and Business Improvement District Law of 1994. This law allows for the creation of a benefit assessment district to raise funds within a specific geographic area. The key difference between TBIDs and other benefit assessment districts is that funds raised are returned to the private non-profit corporation governing the district. There are many benefits to TBIDs: • Funds must be spent on services and improvements that provide a specific benefit only to those who pay; • Funds cannot be diverted to general government programs; • They are customized to fit the needs of payors in each destination; • They allow for a wide range of services; • They are designed, created and governed by those who will pay the assessment; and • They provide a stable, long-term funding source for tourism promotion. Feb. 7, 2023 Item #14 Page 15 of 45 120 100 80 60 40 20 Number of Districts Operating in California 109114 101 1 2 4 6 9 12 29 32 25 38 95 75 61 64 46 0 -= r;;;;;i liiiil ii ~~~NNE~~~~~~~~~~J~~ ~~ffffffffff~~~~~~~ CTBID Management District Plan 6 July 14, 2022 III. BOUNDARY The CTBID will include all lodging businesses, existing and in the future, available for public occupancy located within the boundaries of the City of Carlsbad. Once per year, businesses within the geographic boundaries of the CTBID shall have a thirty (30) day period of opportunity to voluntarily elect to pay an additional one percent (1%) assessment to specifically fund golf-related programs and services. Businesses shall have thirty (30) days to request to be included in the golf assessment budget of the CTBID. Requests to be included must be submitted to Visit Carlsbad in writing, identify the business to be included, and be signed by an authorized representative of the business. At the same time, a business which has previously requested to be included in the golf assessment budget of the CTBID may submit a request to be removed. After each annual thirty (30) day opt in period, Visit Carlsbad shall include a current listing of all assessed businesses in the annual report submitted to the City required pursuant to Government Code §36650. Lodging business means: any structure, or any portion of any structure, which is occupied or intended or designed for occupancy by transients for dwelling, lodging or sleeping purposes and includes any hotel, inn, tourist home or house, motel, studio hotel, bachelor hotel, lodging house, rooming house, apartment house, dormitory, public or private club, mobile home or house trailer at a fixed location or other similar structure or portion thereof. Lodging business shall also include short term rentals, and private campgrounds where only a site and accompanying facilities are rented. A complete listing of lodging businesses within the CTBID can be found in Appendix 2. Feb. 7, 2023 Item #14 Page 16 of 45 CTBID Management District Plan 7 July 14, 2022 Feb. 7, 2023 Item #14 Page 17 of 45 Carlsbad City Limits CTBID Management District Plan 8 July 14, 2022 IV. ASSESSMENT BUDGET AND SERVICES A. Annual Service Plan Assessment funds will be spent to provide specific benefits conferred or privileges granted directly to the payors that are not provided to those not charged, and which do not exceed the reasonable cost to the City of conferring the benefits or granting the privileges. The privileges and services provided with the CTBID funds are sales and marketing and grants programs available only to assessed businesses. A service plan assessment budget has been developed to deliver services that benefit the assessed businesses. A detailed annual assessment budget will be developed and approved by VC. The table below illustrates the initial annual assessment budget allocations. The total initial assessment budget is $6,800,000. Although actual revenues will fluctuate due to market conditions, the proportional allocations of the budget shall remain the same. However, with the exception of golf-related programs and services, the VC board shall have the authority to adjust budget allocations between the categories by no more than twenty percent (20%) of the total budget per year. Such budget allocation adjustments shall be based on the needs and priorities of assessed lodging businesses in the CTBID, and shall confer a specific benefit to assessed lodging businesses in accordance with this Plan. A description of the proposed improvements and activities for the initial year of operation is below. The same activities are proposed for subsequent years. In the event of a legal challenge against the CTBID, any and all assessment funds may be used for the costs of defending the CTBID. Each budget category includes all costs related to providing that service. For example, the sales and marketing budget includes the cost of staff time dedicated to overseeing and implementing the sales and marketing program. Staff time dedicated purely to administrative tasks is allocated to the administrative portion of the budget. The costs of an individual staff member may be allocated to multiple budget categories. The staffing levels necessary to provide the services below will be determined by the VC on an as- needed basis. Sales & Marketing, $4,556,000 , 67% Grants Program, $340,000 , 5% Contingency / Reserve , $408,000 , 6.0% Administration & Operations, $272,000 , 4% City Admin Fee, $136,000 , 2.0% Golf-Related Programs and Services , $1,088,000 , 16% Initial Annual Assessment Budget $6,800,000 Feb. 7, 2023 Item #14 Page 18 of 45 CTBID Management District Plan 9 July 14, 2022 Sales & Marketing A sales and marketing program will promote assessed businesses as tourist, meeting, and event destinations. The sales and marketing program will have a central theme of promoting Carlsbad as a desirable place to visit overnight. The program will have the goal of increasing demand for overnight visitation and room night sales at assessed businesses, and may include the following activities: • Internet marketing efforts to increase awareness and optimize internet presence; • Print ads in magazines and newspapers targeted at potential visitors; • Television and Radio ads targeted at potential visitors; • Operation of a visitor’s center; • Development and implementation of a public relations and communications strategy, inclusive of social media outlets and press release distribution designed to increase overnight visitation at assessed businesses; • Attendance of trade shows; • Sales blitzes; • Familiarization tours; • Preparation and production of collateral promotional materials such as brochures, flyers and maps; • Attendance of professional industry conferences and affiliation events; • Lead generation activities, including the Group Incentives Program, designed to attract group events to Carlsbad; • Director of Sales meetings to plan and coordinate group direct promotion efforts; • Director of Marketing and Marketing Manager meetings to plan and coordinate leisure promotion efforts; and • Other Sales & Marketing programs and activities that increase demand for overnight visitation to assessed businesses. Golf-Related Programs & Services For lodging businesses that voluntarily elect to pay the additional one percent (1%) assessment, golf- related services may include, but are not limited to: • Golf signage, and such equipment related specifically to the promotion of golf to increase demand for overnight visitation to lodging businesses paying the voluntary additional assessment; • Joint marketing related to the promotion of assessed lodging businesses that are paying the voluntary additional assessment and golf courses included within the CTBID; • Marketing promotion such as radio, TV, or print advertising the assessed businesses paying the voluntary additional assessment and golf courses included within or near the CTBID; • On-line/internet promotions jointly advertising assessed lodging businesses paying the voluntary additional assessment and golf courses included within the CTBID to increase demand for overnight visitation to lodging businesses paying the voluntary additional assessment; • Marketing and sales staff on time spent on joint marketing efforts to increase demand for overnight visitation to lodging businesses paying the voluntary additional assessment; and • Other programs and activities that promote golf-related tourism and confer a specific benefit to the lodging businesses that are paying the voluntary additional assessment. A policy relating to the expenditure of monies raised from the additional one percent (1%) assessment shall be developed by the VC Board. Feb. 7, 2023 Item #14 Page 19 of 45 CTBID Management District Plan 10 July 14, 2022 Grants Program The grants programs will fund projects and events that increase overnight visitation to assessed businesses, as well as fund programs that alleviate challenges to maximizing occupancy rates. The objectives of the grant program are to: encourage the development of innovative tourism products; promote collaboration within and across sectors of the tourism industry; reach important travel segments such as multicultural, family and senior markets; strengthen the marketing capacity of partnering organizations; and combine the resources of the CTBID and its tourism partners to leverage their collective marketing efforts. Projects and events funded and approved by the CTBID must include a plan for the return on investment (ROI), including but not limited to, the generation of room nights and general commerce for Carlsbad, and must also include a follow-up analysis. Policies relating to projects awarded and contributions from the grants program shall be set by the VC Board annually. Administration and Operations The administration and operations portion of the budget shall be utilized for administrative staffing costs, office costs, advocacy and other general administrative costs such as insurance, legal, and accounting fees. Contingency/Reserve The budget includes a contingency line item to account for uncollected assessments, if any. If there are contingency funds collected, they may be held in a reserve fund or utilized for other program, administration or renewal costs at the discretion of the VC Board. Policies relating to contributions to the reserve fund, the target amount of the reserve fund, and expenditure of monies from the reserve fund shall be set by the VC Board. The reserve fund may be used for the costs of renewing the CTBID. B. Annual Budget The total five (5) year improvement and service plan budget is projected at approximately $6,800,000 annually, or $36,102,124 through 2027 as shown in the table below. A three percent (3%) annual increase in the total budget is shown, to account for estimated increased room night sales as a result of CTBID efforts. This three percent (3%) annual increase is a conservative estimate based on the effects of similarly sized TBID budgets. A similar budget is expected to apply to subsequent years, but this budget is expected to fluctuate as room sales do. Year Sales & Marketing Grants Programs Admin Contingency/ Reserve City Admin Fee Golf-Related Programs & Activities Total 2023 $4,556,000 $340,000 $272,000 $408,000 $136,000 $1,088,000 $6,800,000 2024 $4,692,680 $350,200 $280,160 $420,240 $140,080 $1,120,640 $7,004,000 2025 $4,833,460 $360,706 $288,565 $432,847 $144,282 $1,154,259 $7,214,120 2026 $4,978,464 $371,527 $297,222 $445,833 $148,611 $1,188,887 $7,430,544 2027 $5,127,818 $382,673 $306,138 $459,208 $153,069 $1,224,554 $7,653,460 Total $24,188,423 $1,805,106 $1,444,085 $2,166,127 $722,042 $5,776,340 $36,102,124 Feb. 7, 2023 Item #14 Page 20 of 45 CTBID Management District Plan 11 July 14, 2022 C. California Constitutional Compliance The CTBID assessment is not a property-based assessment subject to the requirements of Proposition 218. Courts have found Proposition 218 limited the term ‘assessments’ to levies on real property.1 Rather, the CTBID assessment is a business-based assessment, and is subject to Proposition 26. Pursuant to Proposition 26 all levies are a tax unless they fit one of seven exceptions. Two of these exceptions apply to the CTBID, a “specific benefit” and a “specific government service.” Both require that the costs of benefits or services do not exceed the reasonable costs to the City of conferring the benefits or providing the services. 1. Specific Benefit Proposition 26 requires that assessment funds be expended on, “a specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of conferring the benefit or granting the privilege.”2 The services in this Plan are designed to provide targeted benefits directly to assessed businesses, and are intended only to provide benefits and services directly to those businesses paying the assessment. These services are tailored not to serve the general public, businesses in general, or parcels of land, but rather to serve the specific businesses within the CTBID. The activities described in this Plan are specifically targeted to increase demand for room night sales for assessed lodging businesses within the boundaries of the CTBID, and are narrowly tailored. CTBID funds will be used exclusively to provide the specific benefit of increased demand for room night sales directly to the assessees. Assessment funds shall not be used to feature non-assessed lodging businesses in CTBID programs, or to directly generate sales for non-assessed businesses. The activities paid for from assessment revenues are business services constituting and providing specific benefits to the assessed businesses. The assessment imposed by this CTBID is for a specific benefit conferred directly to the payors that is not provided to those not charged. The specific benefit conferred directly to the payors is an increase in demand for room night sales. The specific benefit of an increase in demand for room night sales for assessed lodging businesses will be provided only to lodging businesses paying the district assessment, with marketing and sales programs promoting lodging businesses paying the CTBID assessment. The marketing and sales programs will be designed to increase room night sales at each assessed lodging businesses. Because they are necessary to provide the marketing and sales programs that specifically benefit the assessed lodging businesses, the administration and contingency services also provide the specific benefit of increased demand for room night sales to the assessed lodging businesses. The assessment was calculated based on the total cost of the activities to be provided for the benefit of the businesses within the CTBID, with costs allocated based on the proportional benefit conferred to each business. Activities funded by the CTBID are specifically targeted to increase room nights at assessed businesses. All room night sales do not represent the same benefit to the payors. For example, a higher priced room night is of greater benefit than a lower priced room night because the assessee derives greater revenue. To account for this benefit differential and to make sure the benefits are proportional, an assessment formula based on a percentage of revenue has been selected. The proposed formula accurately reflects greater benefit to assessed businesses with higher priced room nights. 1 Jarvis v. the City of San Diego 72 Cal App. 4th 230 2 Cal. Const. art XIII C § 1(e)(1) Feb. 7, 2023 Item #14 Page 21 of 45 CTBID Management District Plan 12 July 14, 2022 Although the CTBID, in providing specific benefits to payors, may produce incidental benefits to non-paying businesses, the incidental benefit does not preclude the services from being considered a specific benefit. The legislature has found that, “A specific benefit is not excluded from classification as a ‘specific benefit’ merely because an indirect benefit to a nonpayor occurs incidentally and without cost to the payor as a consequence of providing the specific benefit to the payor.”3 2. Specific Government Service The assessment may also be utilized to provide, “a specific government service or product provided directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of providing the service or product.”4 The legislature has recognized that marketing and promotions services like those to be provided by the CTBID are government services within the meaning of Proposition 265. Further, the legislature has determined that “a specific government service is not excluded from classification as a ‘specific government service’ merely because an indirect benefit to a nonpayor occurs incidentally and without cost to the payor as a consequence of providing the specific government service to the payor.”6 3. Reasonable Cost CTBID services will be implemented carefully to ensure they do not exceed the reasonable cost of such services. The full amount assessed will be used to provide the services described herein. Funds will be managed by the VC, and reports submitted on an annual basis to the City. Only assessed lodging businesses will be featured in marketing materials, receive sales leads generated from CTBID- funded activities, be featured in advertising campaigns, and benefit from other CTBID-funded services. Non-assessed lodging businesses will not receive these, nor any other, CTBID-funded services and benefits. The CTBID-funded programs are all targeted directly at and feature only assessed businesses. It is, however, possible that there will be a spill over benefit to non-assessed businesses. If non-assessed lodging businesses receive incremental room nights, that portion of the promotion or program generating those room nights shall be paid with non-CTBID funds. CTBID funds shall only be spent to benefit the assessed businesses, and shall not be spent on that portion of any program which directly generates incidental room nights for non-assessed businesses. D. Assessment The annual assessment rate is two percent (2%) of gross short-term room rental revenue. Based on the lack of benefit received, assessments will not be collected on revenue resulting from occupancies of any officer or employee of a foreign government who is exempt by reason of express provision of federal law or international treaty. Lodging businesses may voluntarily elect to pay an additional one percent (1%) assessment. The funds raised through this additional lodging business assessment shall be used to promote golf-related programs and activities, thereby increasing demand for room night sales for lodging businesses that have opted in to paying the additional voluntary assessment. The proceeds of the additional voluntary assessment will pay for golf-related programs and services specifically tailored only to those paying the additional voluntary assessment. 3 Government Code § 53758(a) 4 Cal. Const. art XIII C § 1(e)(2) 5 Government Code § 53758(b) 6 Government Code § 53758(b) Feb. 7, 2023 Item #14 Page 22 of 45 CTBID Management District Plan 13 July 14, 2022 The term “gross room rental revenue” as used herein means: the consideration charged, whether or not received, for the occupancy of space in a lodging business valued in money, whether to be received in money, goods, labor or otherwise, including all receipts, cash, credits and property and services of any kind of nature, without any deduction therefrom whatsoever. Gross room rental revenue shall not include any federal, state or local taxes collected, including but not limited to transient occupancy taxes. The assessment is levied upon and a direct obligation of the assessed lodging business. However, the assessed lodging business may, at its discretion, pass the assessment on to transients. The amount of assessment, if passed on to each transient, shall be disclosed in advance and separately stated from the amount of rent charged and any other applicable taxes, and each transient shall receive a receipt for payment from the business. If the CTBID assessment is identified separately it shall be disclosed as the “CTBID Assessment.” As an alternative, the disclosure may include the amount of the CTBID assessment and the amount of the assessment imposed pursuant to the California Tourism Marketing Act, Government Code §13995 et seq. and shall be disclosed as the “Tourism Assessment.” The assessment is imposed solely upon, and is the sole obligation of the assessed lodging business even if it is passed on to transients. The assessment shall not be considered revenue for any purpose, including calculation of transient occupancy taxes. Bonds shall not be issued. E. Penalties and Interest The CTBID shall reimburse the City of Carlsbad for any costs associated with collecting unpaid assessments. If sums in excess of the delinquent CTBID assessment are sought to be recovered in the same collection action by the City, the CTBID shall bear its pro rata share of such collection costs. Assessed businesses which are delinquent in paying the assessment shall be responsible for paying: 1. Original Delinquency. Any owner of an assessed lodging business who fails to remit any assessment imposed by this Plan within the time required shall pay a penalty of ten percent (10%) of the amount of the assessment in addition to the amount of the assessment. 2. Continued Delinquency. Any owner of an assessed lodging business who fails to remit any delinquent remittance on or before a period of thirty (30) days following the date on which the remittance first became delinquent shall pay a second delinquency penalty of ten percent (10%) of the amount of the assessment in addition to the amount of the assessment and the ten percent (10%) penalty first imposed. 3. Audit Deficiency. If, upon audit by the City, an owner of an assessed lodging business is found to be deficient in their return or remittance, or both, the City shall immediately invoice the owner for the amount of the net deficiency plus a penalty of ten percent (10%) of the net deficiency. If the owner of an assessed lodging business fails or refuses to pay the deficient amount and applicable penalties within fourteen (14) days of the date of the invoice, an additional penalty shall be imposed at the rate of one percent (1%) per day of the net deficiency, not to exceed ten percent (10%). 4. Fraud. If the City determines that the nonpayment of any remittance due under this chapter is due to fraud, a penalty of twenty-five percent (25%) of the amount of the assessment shall be added thereto in addition to the penalties stated in subsections 1 and 2 of this section. 5. Interest. In addition to the penalties imposed, any owner of an assessed lodging business who fails to remit any assessment imposed by this Plan shall pay interest at the rate of one and one- half percent (1.5%) per month or fraction thereof on the amount of the assessment, exclusive of penalties, from the date on which the remittance first became delinquent until paid. Feb. 7, 2023 Item #14 Page 23 of 45 CTBID Management District Plan 14 July 14, 2022 6. Penalties Merged with Assessment. Every penalty imposed and such interest as accrues under the provisions of this section shall become a part of the assessment required to be paid by this Plan. F. Time and Manner for Collecting Assessments The CTBID will have a five (5) year life, beginning January 1, 2023 or as soon as possible thereafter, and end five (5) years from its start date. The City will be responsible for collecting the assessment on a monthly basis (including any delinquencies, penalties and interest) from each assessed lodging business. The City shall take all reasonable efforts to collect the assessments from each assessed lodging business. The City shall forward the assessments collected to the Owners’ Association, except for the additional assessments collected from the voluntary one percent (1%) assessment for golf- related programs and activities. Feb. 7, 2023 Item #14 Page 24 of 45 CTBID Management District Plan 15 July 14, 2022 V. GOVERNANCE A. Owners’ Association The City Council, through adoption of this Management District Plan, has the right, pursuant to Streets and Highways Code §36651, to identify the body that shall implement the proposed program, which shall be the Owners’ Association of the CTBID as defined in Streets and Highways Code §36612. The City Council has determined that the Carlsbad Convention and Visitors Bureau, dba Visit Carlsbad, will serve as the Owners’ Association for the CTBID. The VC Board of Directors shall have seven to nine directors, comprised solely of the owners or representatives of assessed lodging businesses. A minimum of three Directors shall be representatives from the top three CTBID assessment payors (a single payor may represent multiple properties within the CTBID that have common ownership), determined by the assessments paid during the previous fiscal year. The CTBID may form a committee, comprised of those lodging businesses that voluntarily elect to pay the additional one percent (1%) assessment, to oversee the golf-related programs & services assessment budget. B. Brown Act and California Public Records Act Compliance An Owners’ Association is a private entity and may not be considered a public entity for any purpose, nor may its board members or staff be considered to be public officials for any purpose. The Owners’ Association is, however, subject to government regulations relating to transparency, namely the Ralph M. Brown Act and the California Public Records Act. These regulations are designed to promote public accountability. The Owners’ Association acts as a legislative body under the Ralph M. Brown Act (Government Code §54950 et seq.). Thus, meetings of the VC board and certain committees must be held in compliance with the public notice and other requirements of the Brown Act. The Owners’ Association is also subject to the record keeping and disclosure requirements of the California Public Records Act. Accordingly, the Owners’ Association shall publicly report any action taken and the vote or abstention on that action of each member present for the action. C. Annual Report The VC shall present an annual report at the end of each year of operation to the City Council pursuant to Streets and Highways Code §36650 (see Appendix 1). The annual report shall include: • Any proposed changes in the boundaries of the improvement district or in any benefit zones or classification of businesses within the district. • The improvements and activities to be provided for that fiscal year. • An estimate of the cost of providing the improvements and the activities for that fiscal year. • The method and basis of levying the assessment in sufficient detail to allow each business owner to estimate the amount of the assessment to be levied against his or her business for that fiscal year. • The estimated amount of any surplus or deficit revenues to be carried over from a previous fiscal year. • The estimated amount of any contributions to be made from sources other than assessments levied pursuant to this part. Feb. 7, 2023 Item #14 Page 25 of 45 CTBID Management District Plan 16 July 14, 2022 APPENDIX 1 – LAW *** THIS DOCUMENT IS CURRENT THROUGH THE 2022 SUPPLEMENT *** (ALL 2021 LEGISLATION) STREETS AND HIGHWAYS CODE DIVISION 18. PARKING PART 7. PROPERTY AND BUSINESS IMPROVEMENT DISTRICT LAW OF 1994 CHAPTER 1. General Provisions ARTICLE 1. Declarations 36600. Citation of part This part shall be known and may be cited as the “Property and Business Improvement District Law of 1994.” 36601. Legislative findings and declarations; Legislative guidance The Legislature finds and declares all of the following: (a) Businesses located and operating within business districts in some of this state’s communities are economically disadvantaged, are underutilized, and are unable to attract customers due to inadequate facilities, services, and activities in the business districts. (b) It is in the public interest to promote the economic revitalization and physical maintenance of business districts in order to create jobs, attract new businesses, and prevent the erosion of the business districts. (c) It is of particular local benefit to allow business districts to fund business related improvements, maintenance, and activities through the levy of assessments upon the businesses or real property that receive benefits from those improvements. (d) Assessments levied for the purpose of conferring special benefit upon the real property or a specific benefit upon the businesses in a business district are not taxes for the general benefit of a city, even if property, businesses, or persons not assessed receive incidental or collateral effects that benefit them. (e) Property and business improvement districts formed throughout this state have conferred special benefits upon properties and businesses within their districts and have made those properties and businesses more useful by providing the following benefits: (1) Crime reduction. A study by the Rand Corporation has confirmed a 12-percent reduction in the incidence of robbery and an 8-percent reduction in the total incidence of violent crimes within the 30 districts studied. (2) Job creation. (3) Business attraction. (4) Business retention. (5) Economic growth. (6) New investments. (f) With the dissolution of redevelopment agencies throughout the state, property and business improvement districts have become even more important tools with which communities can combat blight, promote economic opportunities, and create a clean and safe environment. (g) Since the enactment of this act, the people of California have adopted Proposition 218, which added Article XIII D to the Constitution in order to place certain requirements and restrictions on the formation of, and activities, expenditures, and assessments by property-based districts. Article XIII D of the Constitution provides that property-based districts may only levy assessments for special benefits. (h) The act amending this section is intended to provide the Legislature’s guidance with regard to this act, its interaction with the provisions of Article XIII D of the Constitution, and the determination of special benefits in property-based districts. (1) The lack of legislative guidance has resulted in uncertainty and inconsistent application of this act, which discourages the use of assessments to fund needed improvements, maintenance, and activities in property-based districts, contributing to blight and other underutilization of property. (2) Activities undertaken for the purpose of conferring special benefits upon property to be assessed inherently produce incidental or collateral effects that benefit property or persons not assessed. Therefore, for special benefits to exist as a separate and distinct category from general benefits, the Feb. 7, 2023 Item #14 Page 26 of 45 CTBID Management District Plan 17 July 14, 2022 incidental or collateral effects of those special benefits are inherently part of those special benefits. The mere fact that special benefits produce incidental or collateral effects that benefit property or persons not assessed does not convert any portion of those special benefits or their incidental or collateral effects into general benefits. (3) It is of the utmost importance that property-based districts created under this act have clarity regarding restrictions on assessments they may levy and the proper determination of special benefits. Legislative clarity with regard to this act will provide districts with clear instructions and courts with legislative intent regarding restrictions on property-based assessments, and the manner in which special benefits should be determined. 36602. Purpose of part The purpose of this part is to supplement previously enacted provisions of law that authorize cities to levy assessments within property and business improvement districts, to ensure that those assessments conform to all constitutional requirements and are determined and assessed in accordance with the guidance set forth in this act. This part does not affect or limit any other provisions of law authorizing or providing for the furnishing of improvements or activities or the raising of revenue for these purposes. 36603. Preemption of authority or charter city to adopt ordinances levying assessments Nothing in this part is intended to preempt the authority of a charter city to adopt ordinances providing for a different method of levying assessments for similar or additional purposes from those set forth in this part. A property and business improvement district created pursuant to this part is expressly exempt from the provisions of the Special Assessment Investigation, Limitation and Majority Protest Act of 1931 (Division 4 (commencing with Section 2800)). 36603.5. Part prevails over conflicting provisions Any provision of this part that conflicts with any other provision of law shall prevail over the other provision of law, as to districts created under this part. 36604. Severability This part is intended to be construed liberally and, if any provision is held invalid, the remaining provisions shall remain in full force and effect. Assessments levied under this part are not special taxes. ARTICLE 2. Definitions 36606. “Activities” “Activities” means, but is not limited to, all of the following that benefit businesses or real property in the district: (a) Promotion of public events. (b) Furnishing of music in any public place. (c) Promotion of tourism within the district. (d) Marketing and economic development, including retail retention and recruitment. (e) Providing security, sanitation, graffiti removal, street and sidewalk cleaning, and other municipal services supplemental to those normally provided by the municipality. (f) Other services provided for the purpose of conferring special benefit upon assessed real property or specific benefits upon assessed businesses located in the district. 36606.5. “Assessment” “Assessment” means a levy for the purpose of acquiring, constructing, installing, or maintaining improvements and providing activities that will provide certain benefits to properties or businesses located within a property and business improvement district. 36607. “Business” “Business” means all types of businesses and includes financial institutions and professions. Feb. 7, 2023 Item #14 Page 27 of 45 CTBID Management District Plan 18 July 14, 2022 36608. “City” “City” means a city, county, city and county, or an agency or entity created pursuant to Article 1 (commencing with Section 6500) of Chapter 5 of Division 7 of Title 1 of the Government Code, the public member agencies of which includes only cities, counties, or a city and county, or the State of California. 36609. “City council” “City council” means the city council of a city or the board of supervisors of a county, or the agency, commission, or board created pursuant to a joint powers agreement and which is a city within the meaning of this part. 36609.4. “Clerk” “Clerk” means the clerk of the legislative body. 36609.5. “General benefit” “General benefit” means, for purposes of a property-based district, any benefit that is not a “special benefit” as defined in Section 36615.5. 36610. “Improvement” “Improvement” means the acquisition, construction, installation, or maintenance of any tangible property with an estimated useful life of five years or more including, but not limited to, the following: (a) Parking facilities. (b) Benches, booths, kiosks, display cases, pedestrian shelters and signs. (c) Trash receptacles and public restrooms. (d) Lighting and heating facilities. (e) Decorations. (f) Parks. (g) Fountains. (h) Planting areas. (i) Closing, opening, widening, or narrowing of existing streets. (j) Facilities or equipment, or both, to enhance security of persons and property within the district. (k) Ramps, sidewalks, plazas, and pedestrian malls. (l) Rehabilitation or removal of existing structures. 36611. “Management district plan”; “Plan” “Management district plan” or “plan” means a proposal as defined in Section 36622. 36612. “Owners’ association” “Owners’ association” means a private nonprofit entity that is under contract with a city to administer or implement improvements, maintenance, and activities specified in the management district plan. An owners’ association may be an existing nonprofit entity or a newly formed nonprofit entity. An owners’ association is a private entity and may not be considered a public entity for any purpose, nor may its board members or staff be considered to be public officials for any purpose. Notwithstanding this section, an owners’ association shall comply with the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2 of Title 5 of the Government Code), at all times when matters within the subject matter of the district are heard, discussed, or deliberated, and with the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code), for all records relating to activities of the district. 36614. “Property” “Property” means real property situated within a district. Feb. 7, 2023 Item #14 Page 28 of 45 CTBID Management District Plan 19 July 14, 2022 36614.5. “Property and business improvement district”; “District” “Property and business improvement district,” or “district,” means a property and business improvement district established pursuant to this part. 36614.6. “Property-based assessment” “Property-based assessment” means any assessment made pursuant to this part upon real property. 36614.7. “Property-based district” “Property-based district” means any district in which a city levies a property-based assessment. 36615. “Property owner”; “Business owner”; “Owner” “Property owner” means any person shown as the owner of land on the last equalized assessment roll or otherwise known to be the owner of land by the city council. “Business owner” means any person recognized by the city as the owner of the business. “Owner” means either a business owner or a property owner. The city council has no obligation to obtain other information as to the ownership of land or businesses, and its determination of ownership shall be final and conclusive for the purposes of this part. Wherever this part requires the signature of the property owner, the signature of the authorized agent of the property owner shall be sufficient. Wherever this part requires the signature of the business owner, the signature of the authorized agent of the business owner shall be sufficient. 36615.5. “Special benefit” “Special benefit” means, for purposes of a property-based district, a particular and distinct benefit over and above general benefits conferred on real property located in a district or to the public at large. Special benefit includes incidental or collateral effects that arise from the improvements, maintenance, or activities of property-based districts even if those incidental or collateral effects benefit property or persons not assessed. Special benefit excludes general enhancement of property value. 36616. “Tenant” “Tenant” means an occupant pursuant to a lease of commercial space or a dwelling unit, other than an owner. ARTICLE 3. Prior Law 36617. Alternate method of financing certain improvements and activities; Effect on other provisions This part provides an alternative method of financing certain improvements and activities. The provisions of this part shall not affect or limit any other provisions of law authorizing or providing for the furnishing of improvements or activities or the raising of revenue for these purposes. Every improvement area established pursuant to the Parking and Business Improvement Area Law of 1989 (Part 6 (commencing with Section 36500) of this division) is valid and effective and is unaffected by this part. CHAPTER 2. Establishment 36620. Establishment of property and business improvement district A property and business improvement district may be established as provided in this chapter. 36620.5. Requirement of consent of city council A county may not form a district within the territorial jurisdiction of a city without the consent of the city council of that city. A city may not form a district within the unincorporated territory of a county without the consent of the board of supervisors of that county. A city may not form a district within the territorial jurisdiction of another city without the consent of the city council of the other city. Feb. 7, 2023 Item #14 Page 29 of 45 CTBID Management District Plan 20 July 14, 2022 36621. Initiation of proceedings; Petition of property or business owners in proposed district (a) Upon the submission of a written petition, signed by the property or business owners in the proposed district who will pay more than 50 percent of the assessments proposed to be levied, the city council may initiate proceedings to form a district by the adoption of a resolution expressing its intention to form a district. The amount of assessment attributable to property or a business owned by the same property or business owner that is in excess of 40 percent of the amount of all assessments proposed to be levied, shall not be included in determining whether the petition is signed by property or business owners who will pay more than 50 percent of the total amount of assessments proposed to be levied. (b) The petition of property or business owners required under subdivision (a) shall include a summary of the management district plan. That summary shall include all of the following: (1) A map showing the boundaries of the district. (2) Information specifying where the complete management district plan can be obtained. (3) Information specifying that the complete management district plan shall be furnished upon request. (c) The resolution of intention described in subdivision (a) shall contain all of the following: (1) A brief description of the proposed improvements, maintenance, and activities, the amount of the proposed assessment, a statement as to whether the assessment will be levied on property or businesses within the district, a statement as to whether bonds will be issued, and a description of the exterior boundaries of the proposed district, which may be made by reference to any plan or map that is on file with the clerk. The descriptions and statements do not need to be detailed and shall be sufficient if they enable an owner to generally identify the nature and extent of the improvements, maintenance, and activities, and the location and extent of the proposed district. (2) A time and place for a public hearing on the establishment of the property and business improvement district and the levy of assessments, which shall be consistent with the requirements of Section 36623. 36622. Contents of management district plan The management district plan shall include, but is not limited to, all of the following: (a) If the assessment will be levied on property, a map of the district in sufficient detail to locate each parcel of property and, if businesses are to be assessed, each business within the district. If the assessment will be levied on businesses, a map that identifies the district boundaries in sufficient detail to allow a business owner to reasonably determine whether a business is located within the district boundaries. If the assessment will be levied on property and businesses, a map of the district in sufficient detail to locate each parcel of property and to allow a business owner to reasonably determine whether a business is located within the district boundaries. (b) The name of the proposed district. (c) A description of the boundaries of the district, including the boundaries of benefit zones, proposed for establishment or extension in a manner sufficient to identify the affected property and businesses included, which may be made by reference to any plan or map that is on file with the clerk. The boundaries of a proposed property assessment district shall not overlap with the boundaries of another existing property assessment district created pursuant to this part. This part does not prohibit the boundaries of a district created pursuant to this part to overlap with other assessment districts established pursuant to other provisions of law, including, but not limited to, the Parking and Business Improvement Area Law of 1989 (Part 6 (commencing with Section 36500)). This part does not prohibit the boundaries of a business assessment district created pursuant to this part to overlap with another business assessment district created pursuant to this part. This part does not prohibit the boundaries of a business assessment district created pursuant to this part to overlap with a property assessment district created pursuant to this part. (d) The improvements, maintenance, and activities proposed for each year of operation of the district and the maximum cost thereof. If the improvements, maintenance, and activities proposed for each year of operation are the same, a description of the first year’s proposed improvements, maintenance, and activities and a statement that the same improvements, maintenance, and activities are proposed for subsequent years shall satisfy the requirements of this subdivision. (e) The total annual amount proposed to be expended for improvements, maintenance, or activities, and debt service in each year of operation of the district. If the assessment is levied on businesses, this amount may be estimated based upon the assessment rate. If the total annual amount proposed to be expended in each year of operation of the district is not significantly different, the amount proposed to be expended in the initial Feb. 7, 2023 Item #14 Page 30 of 45 CTBID Management District Plan 21 July 14, 2022 year and a statement that a similar amount applies to subsequent years shall satisfy the requirements of this subdivision. (f) The proposed source or sources of financing, including the proposed method and basis of levying the assessment in sufficient detail to allow each property or business owner to calculate the amount of the assessment to be levied against his or her property or business. The plan also shall state whether bonds will be issued to finance improvements. (g) The time and manner of collecting the assessments. (h) The specific number of years in which assessments will be levied. In a new district, the maximum number of years shall be five. Upon renewal, a district shall have a term not to exceed 10 years. Notwithstanding these limitations, a district created pursuant to this part to finance capital improvements with bonds may levy assessments until the maximum maturity of the bonds. The management district plan may set forth specific increases in assessments for each year of operation of the district. (i) The proposed time for implementation and completion of the management district plan. (j) Any proposed rules and regulations to be applicable to the district. (k) (1) A list of the properties or businesses to be assessed, including the assessor’s parcel numbers for properties to be assessed, and a statement of the method or methods by which the expenses of a district will be imposed upon benefited real property or businesses, in proportion to the benefit received by the property or business, to defray the cost thereof. (2) In a property-based district, the proportionate special benefit derived by each identified parcel shall be determined exclusively in relationship to the entirety of the capital cost of a public improvement, the maintenance and operation expenses of a public improvement, or the cost of the activities. An assessment shall not be imposed on any parcel that exceeds the reasonable cost of the proportional special benefit conferred on that parcel. Only special benefits are assessable, and a property-based district shall separate the general benefits, if any, from the special benefits conferred on a parcel. Parcels within a property-based district that are owned or used by any city, public agency, the State of California, or the United States shall not be exempt from assessment unless the governmental entity can demonstrate by clear and convincing evidence that those publicly owned parcels in fact receive no special benefit. The value of any incidental, secondary, or collateral effects that arise from the improvements, maintenance, or activities of a property-based district and that benefit property or persons not assessed shall not be deducted from the entirety of the cost of any special benefit or affect the proportionate special benefit derived by each identified parcel. (l) In a property-based district, the total amount of all special benefits to be conferred upon the properties located within the property-based district. (m) In a property-based district, the total amount of general benefits, if any. (n) In a property-based district, a detailed engineer’s report prepared by a registered professional engineer certified by the State of California supporting all assessments contemplated by the management district plan. (o) Any other item or matter required to be incorporated therein by the city council. 36623. Procedure to levy assessment (a) If a city council proposes to levy a new or increased property assessment, the notice and protest and hearing procedure shall comply with Section 53753 of the Government Code. (b) If a city council proposes to levy a new or increased business assessment, the notice and protest and hearing procedure shall comply with Section 54954.6 of the Government Code, except that notice shall be mailed to the owners of the businesses proposed to be assessed. A protest may be made orally or in writing by any interested person. Every written protest shall be filed with the clerk at or before the time fixed for the public hearing. The city council may waive any irregularity in the form or content of any written protest. 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 subscribing the protest is interested sufficient to identify the business and, if a person subscribing is not shown on the official records of the city as the owner of the business, the protest shall contain or be accompanied by written evidence that the person subscribing is the owner of the business or the authorized representative. A written protest that does not comply with this section shall not be counted in determining a majority protest. If written protests are received from the owners or authorized representatives of businesses in the proposed district that will pay 50 percent or more of the assessments proposed to be levied and protests are not withdrawn so as to reduce the protests to less than 50 percent, no further proceedings to levy the proposed assessment against such Feb. 7, 2023 Item #14 Page 31 of 45 ---- CTBID Management District Plan 22 July 14, 2022 businesses, as contained in the resolution of intention, shall be taken for a period of one year from the date of the finding of a majority protest by the city council. (c) If a city council proposes to conduct a single proceeding to levy both a new or increased property assessment and a new or increased business assessment, the notice and protest and hearing procedure for the property assessment shall comply with subdivision (a), and the notice and protest and hearing procedure for the business assessment shall comply with subdivision (b). If a majority protest is received from either the property or business owners, that respective portion of the assessment shall not be levied. The remaining portion of the assessment may be levied unless the improvement or other special benefit was proposed to be funded by assessing both property and business owners. 36624. Changes to proposed assessments At the conclusion of the public hearing to establish the district, the city council may adopt, revise, change, reduce, or modify the proposed assessment or the type or types of improvements, maintenance, and activities to be funded with the revenues from the assessments. Proposed assessments may only be revised by reducing any or all of them. At the public hearing, the city council may only make changes in, to, or from the boundaries of the proposed property and business improvement district that will exclude territory that will not benefit from the proposed improvements, maintenance, and activities. Any modifications, revisions, reductions, or changes to the proposed assessment district shall be reflected in the notice and map recorded pursuant to Section 36627. 36625. Resolution of formation (a) If the city council, following the public hearing, decides to establish a proposed property and business improvement district, the city council shall adopt a resolution of formation that shall include, but is not limited to, all of the following: (1) A brief description of the proposed improvements, maintenance, and activities, the amount of the proposed assessment, a statement as to whether the assessment will be levied on property, businesses, or both within the district, a statement on whether bonds will be issued, and a description of the exterior boundaries of the proposed district, which may be made by reference to any plan or map that is on file with the clerk. The descriptions and statements need not be detailed and shall be sufficient if they enable an owner to generally identify the nature and extent of the improvements, maintenance, and activities and the location and extent of the proposed district. (2) The number, date of adoption, and title of the resolution of intention. (3) The time and place where the public hearing was held concerning the establishment of the district. (4) A determination regarding any protests received. The city shall not establish the district or levy assessments if a majority protest was received. (5) A statement that the properties, businesses, or properties and businesses in the district established by the resolution shall be subject to any amendments to this part. (6) A statement that the improvements, maintenance, and activities to be conferred on businesses and properties in the district will be funded by the levy of the assessments. The revenue from the levy of assessments within a district shall not be used to provide improvements, maintenance, or activities outside the district or for any purpose other than the purposes specified in the resolution of intention, as modified by the city council at the hearing concerning establishment of the district. Notwithstanding the foregoing, improvements and activities that must be provided outside the district boundaries to create a special or specific benefit to the assessed parcels or businesses may be provided, but shall be limited to marketing or signage pointing to the district. (7) A finding that the property or businesses within the area of the property and business improvement district will be benefited by the improvements, maintenance, and activities funded by the proposed assessments, and, for a property-based district, that property within the district will receive a special benefit. (8) In a property-based district, the total amount of all special benefits to be conferred on the properties within the property-based district. (b) The adoption of the resolution of formation and, if required, recordation of the notice and map pursuant to Section 36627 shall constitute the levy of an assessment in each of the fiscal years referred to in the management district plan. 36627. Notice and assessment diagram Feb. 7, 2023 Item #14 Page 32 of 45 CTBID Management District Plan 23 July 14, 2022 Following adoption of the resolution establishing district assessments on properties pursuant to Section 36625, the clerk shall record a notice and an assessment diagram pursuant to Section 3114. No other provision of Division 4.5 (commencing with Section 3100) applies to an assessment district created pursuant to this part. 36628. Establishment of separate benefit zones within district; Categories of businesses The city council may establish one or more separate benefit zones within the district based upon the degree of benefit derived from the improvements or activities to be provided within the benefit zone and may impose a different assessment within each benefit zone. If the assessment is to be levied on businesses, the city council may also define categories of businesses based upon the degree of benefit that each will derive from the improvements or activities to be provided within the district and may impose a different assessment or rate of assessment on each category of business, or on each category of business within each zone. 36628.5. Assessments on businesses or property owners The city council may levy assessments on businesses or on property owners, or a combination of the two, pursuant to this part. The city council shall structure the assessments in whatever manner it determines corresponds with the distribution of benefits from the proposed improvements, maintenance, and activities, provided that any property- based assessment conforms with the requirements set forth in paragraph (2) of subdivision (k) of Section 36622. 36629. Provisions and procedures applicable to benefit zones and business categories All provisions of this part applicable to the establishment, modification, or disestablishment of a property and business improvement district apply to the establishment, modification, or disestablishment of benefit zones or categories of business. The city council shall, to establish, modify, or disestablish a benefit zone or category of business, follow the procedure to establish, modify, or disestablish a property and business improvement district. 36630. Expiration of district; Creation of new district If a property and business improvement district expires due to the time limit set pursuant to subdivision (h) of Section 36622, a new management district plan may be created and the district may be renewed pursuant to this part. CHAPTER 3. Assessments 36631. Time and manner of collection of assessments; Delinquent payments The collection of the assessments levied pursuant to this part shall be made at the time and in the manner set forth by the city council in the resolution levying the assessment. Assessments levied on real property may be collected at the same time and in the same manner as for the ad valorem property tax, and may provide for the same lien priority and penalties for delinquent payment. All delinquent payments for assessments levied pursuant to this part may be charged interest and penalties. 36632. Assessments to be based on estimated benefit; Classification of real property and businesses; Exclusion of residential and agricultural property (a) The assessments levied on real property pursuant to this part shall be levied on the basis of the estimated benefit to the real property within the property and business improvement district. The city council may classify properties for purposes of determining the benefit to property of the improvements and activities provided pursuant to this part. (b) Assessments levied on businesses pursuant to this part shall be levied on the basis of the estimated benefit to the businesses within the property and business improvement district. The city council may classify businesses for purposes of determining the benefit to the businesses of the improvements and activities provided pursuant to this part. (c) Properties zoned solely for residential use, or that are zoned for agricultural use, are conclusively presumed not to benefit from the improvements and service funded through these assessments, and shall not be subject to any assessment pursuant to this part. Feb. 7, 2023 Item #14 Page 33 of 45 CTBID Management District Plan 24 July 14, 2022 36633. Time for contesting validity of assessment The validity of an assessment levied under this part shall not be contested in an action or proceeding unless the action or proceeding is commenced within 30 days after the resolution levying the assessment is adopted pursuant to Section 36625. An appeal from a final judgment in an action or proceeding shall be perfected within 30 days after the entry of judgment. 36634. Service contracts authorized to establish levels of city services The city council may execute baseline service contracts that would establish levels of city services that would continue after a property and business improvement district has been formed. 36635. Request to modify management district plan The owners’ association may, at any time, request that the city council modify the management district plan. Any modification of the management district plan shall be made pursuant to this chapter. 36636. Modification of plan by resolution after public hearing; Adoption of resolution of intention (a) Upon the written request of the owners’ association, the city council may modify the management district plan after conducting one public hearing on the proposed modifications. The city council may modify the improvements and activities to be funded with the revenue derived from the levy of the assessments by adopting a resolution determining to make the modifications after holding a public hearing on the proposed modifications. If the modification includes the levy of a new or increased assessment, the city council shall comply with Section 36623. Notice of all other public hearings pursuant to this section shall comply with both of the following: (1) The resolution of intention shall be published in a newspaper of general circulation in the city once at least seven days before the public hearing. (2) A complete copy of the resolution of intention shall be mailed by first class mail, at least 10 days before the public hearing, to each business owner or property owner affected by the proposed modification. (b) The city council shall adopt a resolution of intention which states the proposed modification prior to the public hearing required by this section. The public hearing shall be held not more than 90 days after the adoption of the resolution of intention. 36637. Reflection of modification in notices recorded and maps Any subsequent modification of the resolution shall be reflected in subsequent notices and maps recorded pursuant to Division 4.5 (commencing with Section 3100), in a manner consistent with the provisions of Section 36627. CHAPTER 3.5. Financing 36640. Bonds authorized; Procedure; Restriction on reduction or termination of assessments (a)The city council may, by resolution, determine and declare that bonds shall be issued to finance the estimated cost of some or all of the proposed improvements described in the resolution of formation adopted pursuant to Section 36625, if the resolution of formation adopted pursuant to that section provides for the issuance of bonds, under the Improvement Bond Act of 1915 (Division 10 (commencing with Section 8500)) or in conjunction with Marks-Roos Local Bond Pooling Act of 1985 (Article 4 (commencing with Section 6584) of Chapter 5 of Division 7 of Title 1 of the Government Code). Either act, as the case may be, shall govern the proceedings relating to the issuance of bonds, although proceedings under the Bond Act of 1915 may be modified by the city council as necessary to accommodate assessments levied upon business pursuant to this part. (b) The resolution adopted pursuant to subdivision (a) shall generally describe the proposed improvements specified in the resolution of formation adopted pursuant to Section 36625, set forth the estimated cost of those improvements, specify the number of annual installments and the fiscal years during which they are to Feb. 7, 2023 Item #14 Page 34 of 45 CTBID Management District Plan 25 July 14, 2022 be collected. The amount of debt service to retire the bonds shall not exceed the amount of revenue estimated to be raised from assessments over 30 years. (c) Notwithstanding any other provision of this part, assessments levied to pay the principal and interest on any bond issued pursuant to this section shall not be reduced or terminated if doing so would interfere with the timely retirement of the debt. CHAPTER 4. Governance 36650. Report by owners’ association; Approval or modification by city council (a) The owners’ association shall cause to be prepared a report for each fiscal year, except the first year, for which assessments are to be levied and collected to pay the costs of the improvements, maintenance, and activities described in the report. The owners’ association’s first report shall be due after the first year of operation of the district. The report may propose changes, including, but not limited to, the boundaries of the property and business improvement district or any benefit zones within the district, the basis and method of levying the assessments, and any changes in the classification of property, including any categories of business, if a classification is used. (b) The report shall be filed with the clerk and shall refer to the property and business improvement district by name, specify the fiscal year to which the report applies, and, with respect to that fiscal year, shall contain all of the following information: (1) Any proposed changes in the boundaries of the property and business improvement district or in any benefit zones or classification of property or businesses within the district. (2) The improvements, maintenance, and activities to be provided for that fiscal year. (3) An estimate of the cost of providing the improvements, maintenance, and activities for that fiscal year. (4) The method and basis of levying the assessment in sufficient detail to allow each real property or business owner, as appropriate, to estimate the amount of the assessment to be levied against his or her property or business for that fiscal year. (5) The estimated amount of any surplus or deficit revenues to be carried over from a previous fiscal year. (6) The estimated amount of any contributions to be made from sources other than assessments levied pursuant to this part. (c) The city council may approve the report as filed by the owners’ association or may modify any particular contained in the report and approve it as modified. Any modification shall be made pursuant to Sections 36635 and 36636. The city council shall not approve a change in the basis and method of levying assessments that would impair an authorized or executed contract to be paid from the revenues derived from the levy of assessments, including any commitment to pay principal and interest on any bonds issued on behalf of the district. 36651. Designation of owners’ association to provide improvements, maintenance, and activities The management district plan may, but is not required to, state that an owners’ association will provide the improvements, maintenance, and activities described in the management district plan. If the management district plan designates an owners’ association, the city shall contract with the designated nonprofit corporation to provide services. CHAPTER 5. Renewal 36660. Renewal of district; Transfer or refund of remaining revenues; District term limit (a) Any district previously established whose term has expired, or will expire, may be renewed by following the procedures for establishment as provided in this chapter. (b) Upon renewal, any remaining revenues derived from the levy of assessments, or any revenues derived from the sale of assets acquired with the revenues, shall be transferred to the renewed district. If the renewed district includes additional parcels or businesses not included in the prior district, the remaining revenues shall be spent to benefit only the parcels or businesses in the prior district. If the renewed district does not include parcels or businesses included in the prior district, the remaining revenues attributable to these parcels shall be refunded to the owners of these parcels or businesses. Feb. 7, 2023 Item #14 Page 35 of 45 CTBID Management District Plan 26 July 14, 2022 (c) Upon renewal, a district shall have a term not to exceed 10 years, or, if the district is authorized to issue bonds, until the maximum maturity of those bonds. There is no requirement that the boundaries, assessments, improvements, or activities of a renewed district be the same as the original or prior district. CHAPTER 6. Disestablishment 36670. Circumstances permitting disestablishment of district; Procedure (a) Any district established or extended pursuant to the provisions of this part, where there is no indebtedness, outstanding and unpaid, incurred to accomplish any of the purposes of the district, may be disestablished by resolution by the city council in either of the following circumstances: (1) If the city council finds there has been misappropriation of funds, malfeasance, or a violation of law in connection with the management of the district, it shall notice a hearing on disestablishment. (2) During the operation of the district, there shall be a 30-day period each year in which assessees may request disestablishment of the district. The first such period shall begin one year after the date of establishment of the district and shall continue for 30 days. The next such 30-day period shall begin two years after the date of the establishment of the district. Each successive year of operation of the district shall have such a 30-day period. Upon the written petition of the owners or authorized representatives of real property or the owners or authorized representatives of businesses in the district who pay 50 percent or more of the assessments levied, the city council shall pass a resolution of intention to disestablish the district. The city council shall notice a hearing on disestablishment. (b) The city council shall adopt a resolution of intention to disestablish the district prior to the public hearing required by this section. The resolution shall state the reason for the disestablishment, shall state the time and place of the public hearing, and shall contain a proposal to dispose of any assets acquired with the revenues of the assessments levied within the property and business improvement district. The notice of the hearing on disestablishment required by this section shall be given by mail to the property owner of each parcel or to the owner of each business subject to assessment in the district, as appropriate. The city shall conduct the public hearing not less than 30 days after mailing the notice to the property or business owners. The public hearing shall be held not more than 60 days after the adoption of the resolution of intention. 36671. Refund of remaining revenues upon disestablishment or expiration without renewal of district; Calculation of refund; Use of outstanding revenue collected after disestablishment of district (a) Upon the disestablishment or expiration without renewal of a district, any remaining revenues, after all outstanding debts are paid, derived from the levy of assessments, or derived from the sale of assets acquired with the revenues, or from bond reserve or construction funds, shall be refunded to the owners of the property or businesses then located and operating within the district in which assessments were levied by applying the same method and basis that was used to calculate the assessments levied in the fiscal year in which the district is disestablished or expires. All outstanding assessment revenue collected after disestablishment shall be spent on improvements and activities specified in the management district plan. (b) If the disestablishment occurs before an assessment is levied for the fiscal year, the method and basis that was used to calculate the assessments levied in the immediate prior fiscal year shall be used to calculate the amount of any refund. Feb. 7, 2023 Item #14 Page 36 of 45 CTBID Management District Plan 27 July 14, 2022 APPENDIX 2 – ASSESSED BUSINESSES Lodging Business Address City, State, Zip 129 MAPLE 129 MAPLE AVE CARLSBAD, CA 92008-3264 155 SYCAMORE RENTAL 155 SYCAMORE AVE CARLSBAD, CA 92008-3145 180-190 WALNUT PROPERTIES LLC - 180A 180 WALNUT AVE CARLSBAD, CA 92008-3257 180-190 WALNUT PROPERTIES LLC - 180B 180 WALNUT AVE CARLSBAD, CA 92008-3257 180-190 WALNUT PROPERTIES LLC - 190 190 WALNUT AVE CARLSBAD, CA 92008-3146 224 NORMANDY LANE VACATION RENTAL 224 NORMANDY LN CARLSBAD, CA 92008-2222 226 NORMANDY LANE VACATION RENTAL 226 NORMANDY LN CARLSBAD, CA 92008-2222 2361 BUENA VISTA 2361 BUENA VISTA CIR CARLSBAD, CA 92008-1604 2445 OCEAN STREET LLC - UNIT A 2445 OCEAN ST CARLSBAD, CA 92008-2234 2445 OCEAN STREET LLC - UNIT B 2445 OCEAN ST CARLSBAD, CA 92008-2234 2445 OCEAN STREET LLC - UNIT C 2445 OCEAN ST CARLSBAD, CA 92008-2234 2751 OCEAN ST 2751 OCEAN ST CARLSBAD, CA 92008-2241 3065 OCEAN ST - A 3065 OCEAN ST CARLSBAD, CA 92008-2958 3065 OCEAN ST - B 3065 OCEAN ST CARLSBAD, CA 92008-2958 3065 OCEAN ST - C 3065 OCEAN ST CARLSBAD, CA 92008-2958 3080 LINCOLN UNIT 16 3080 LINCOLN ST CARLSBAD, CA 92008-2929 3287 LINCOLN VACATION RENTAL 3287 LINCOLN ST CARLSBAD, CA 92008-3131 3454 CARLSBAD BLVD 3454 CARLSBAD BLVD CARLSBAD, CA 92008-3225 3570 LLC-UNIT B 3570 CARLSBAD BLVD CARLSBAD, CA 92008-3227 3570 LLC-UNIT E 3570 CARLSBAD BLVD CARLSBAD, CA 92008-3227 365VACATIONS LLC 3492 CARLSBAD BLVD CARLSBAD, CA 92008-3225 3660 CARLSBAD BOULEVARD TRUST 3660 CARLSBAD BLVD CARLSBAD, CA 92008-8208 3662-3664 GARFIELD STREET LLC 3662 GARFIELD ST CARLSBAD, CA 92008-8218 3718 CARLSBAD BLVD 3718 CARLSBAD BLVD CARLSBAD, CA 92008-8211 376 ACACIA AVE 376 ACACIA AVE CARLSBAD, CA 92008-3212 378 ACACIA AVE 378 ACACIA AVE CARLSBAD, CA 92008-3212 3900 GS HOLDINGS LLC 3900 GARFIELD ST CARLSBAD, CA 92008-4035 3915 LINMAR LANE LLC 3915 LINMAR LN CARLSBAD, CA 92008-4125 4020 SYME LLC 4020 SYME DR CARLSBAD, CA 92008-3561 4273 HIGHLAND 4273 HIGHLAND DR CARLSBAD, CA 92008-4224 5185 SHORE DRIVE CARLSBAD 5185 SHORE DR CARLSBAD, CA 92008-4347 5185 SHORE DRIVE CARLSBAD 5185 SHORE DR CARLSBAD, CA 92008-4347 580 LAGUNA LLC 580 LAGUNA DR CARLSBAD, CA 92008-1607 AL AND PAM VACATION RENTAL- 3862 3862 CARLSBAD BLVD CARLSBAD, CA 92008-4008 ALEJANDRO TORREBLANCA 4225 ISLE DR CARLSBAD, CA 92008-3620 ALEKSANDR SERGEYEV-260 TAMARACK 260 TAMARACK AVE CARLSBAD, CA 92008-4061 ANATRA VACANZA 932 ANATRA CT CARLSBAD, CA 92011-4876 ANCHORAGE INVESTMENTS LLC - 4347 4347 HIGHLAND DR CARLSBAD, CA 92008-4226 ANDREW SELNA 230 PACIFIC AVE CARLSBAD, CA 92008-2245 ANTHONY BELTRAN 2003 COSTA DEL MAR RD CARLSBAD, CA 92009-6803 ANTHONY BOUDREAULT-5380 5380 CARLSBAD BLVD CARLSBAD, CA 92008-4308 Feb. 7, 2023 Item #14 Page 37 of 45 CTBID Management District Plan 28 July 14, 2022 ANTHONY ROSS 175 CHINQUAPIN AVE CARLSBAD, CA 92008-7463 ANTON VISHNYAK 1045 MAGNOLIA AVE CARLSBAD, CA 92008-2539 AVI BEN-ARI 4108 PARK DR CARLSBAD, CA 92008-3635 BARBARA D POWELL 2955 OCEAN ST CARLSBAD, CA 92008-2954 BARBARA DELANEY 2003 COSTA DEL MAR RD CARLSBAD, CA 92009-6814 BEACH TERRACE INN OCEAN ST CARLSBAD, CA 92008-2241 BEACH VILLAGE RENTAL 3140 LINCOLN ST CARLSBAD, CA 92008-2933 BEACHY GETAWAY 3080 LINCOLN ST CARLSBAD, CA 92008-2929 BEACHY GETAWAY 3080 LINCOLN ST CARLSBAD, CA 92008-2929 BELLA SIRENA CONDO 3080 LINCOLN ST CARLSBAD, CA 92008-2929 BEST WESTERN BEACH VIEW LODGE CARLSBAD BLVD CARLSBAD, CA 92008-2908 BEST WESTERN CARLSBAD BY THE SEA MACADAMIA DR CARLSBAD, CA 92011-3205 BILL DALY UNIT 100B 4016 GARFIELD ST CARLSBAD, CA 92008-7454 BLUE OCEAN DREAMS 331 OAK AVE CARLSBAD, CA 92008-2945 BMILLS AND CO LLC 2639 GARFIELD ST CARLSBAD, CA 92008 BOB AND MONICA FLORA VACATION RENTAL 155 WALNUT AVE CARLSBAD, CA 92008-3147 BOB AND MONICA VACATION RENTAL NO 2 157 WALNUT AVE CARLSBAD, CA 92008-3147 BOB AND SUE CRUM RENTALS - 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4024 STE A 4024 GARFIELD ST CARLSBAD, CA 92008-7401 CLAIRE KRUGER - 4024 STE B 4024 GARFIELD ST CARLSBAD, CA 92008-7401 CNSW11 LLC 3080 LINCOLN ST CARLSBAD, CA 92008-2929 CNSW4 LLC 3080 LINCOLN ST CARLSBAD, CA 92008-2929 COASTAL BREEZE VACATION RENTAL -354 354 ACACIA AVE CARLSBAD, CA 92008-3212 COASTAL BREEZE VACATION RENTAL -364 364 ACACIA AVE CARLSBAD, CA 92008-3212 COASTAL STUDIO 474 CHINQUAPIN AVE CARLSBAD, CA 92008-4103 COURTNEY SULLIVAN 1420 YOURELL AVE CARLSBAD, CA 92008-1051 COURTNEY SULLIVAN 1420 YOURELL AVE CARLSBAD, CA 92008-1051 COURTYARD SAN DIEGO CARLSBAD OWENS AVE CARLSBAD, CA 92008-6562 COZY BEACH COTTAGE 3267 LINCOLN ST CARLSBAD, CA 92008-2942 CRAFTSMAN 154 154 SYCAMORE AVE CARLSBAD, CA 92008-3144 CYNTHIA BAUSCH-6821 6821 SHEARWATERS DR CARLSBAD, CA 92011-3702 CYNTHIA T BAUSCH - 3987 3987 JEFFERSON ST CARLSBAD, CA 92008-4118 CYNTHIA T BAUSCH - 6808 6808 SHEARWATERS DR CARLSBAD, CA 92011-3701 DAN AND NANCY WARNER 3116 LINCOLN ST CARLSBAD, CA 92008-2933 DANIELLE PENMAN 2431 BUENA VISTA CIR CARLSBAD, CA 92008-1601 DANIELS-SIMPSON 2003 COSTA DEL MAR RD CARLSBAD, CA 92009-6802 DAVID WATKINS 4030 PARK DR CARLSBAD, CA 92008-2619 DAYS INN PIO PICO DR CARLSBAD, CA 92008-3406 DENNIS DELMAR 202 CHINQUAPIN AVE CARLSBAD, CA 92008-7407 DEREK ORME-2315 2315 PIO PICO DR CARLSBAD, CA 92008-1037 DONALD J MOORE 3726 CARLSBAD BLVD CARLSBAD, CA 92008-8211 DOUGLASS LEE 351 OAK AVE CARLSBAD, CA 92008-2945 ECONO LODGE INN AND SUITES PIO PICO DR CARLSBAD, CA 92008-2554 ED WOZOW 3920 SKYLINE RD CARLSBAD, CA 92008-2745 ELISABETH BAUMGARTNER-CHANG 2005 COSTA DEL MAR RD CARLSBAD, CA 92009-6819 ELISABETH BAUMGARTNER-CHANG 2005 COSTA DEL MAR RD CARLSBAD, CA 92009-6819 EQUITAS REAL ESTATE HOLDINGS LLC 2651 GARFIELD ST CARLSBAD, CA 92008-2217 EVELYN ROSE - 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DOLPHIN SUITE 3610 CARLSBAD BLVD CARLSBAD, CA 92008-8208 VACATION IN CARLSBAD - LANAI SUITE 231 OLIVE AVE CARLSBAD, CA 92008-7426 VACATION IN CARLSBAD - OHANA SUITE 231 OLIVE AVE CARLSBAD, CA 92008-7426 VACATION IN CARLSBAD - PELICAN SUITE 3610 CARLSBAD BLVD CARLSBAD, CA 92008-8208 VACATION IN CARLSBAD - SAND SUITE 3495 GARFIELD ST CARLSBAD, CA 92008-3298 VACATION IN CARLSBAD - SANDERLING 3810 CARLSBAD BLVD CARLSBAD, CA 92008-4003 VACATION IN CARLSBAD - SANDPIPER 3810 CARLSBAD BLVD CARLSBAD, CA 92008-4003 VACATION IN CARLSBAD - SEAGULL 3810 CARLSBAD BLVD CARLSBAD, CA 92008-4003 VACATION IN CARLSBAD - SNOWY PLOVER 3810 CARLSBAD BLVD CARLSBAD, CA 92008-4003 VACATION IN CARLSBAD - SUN SUITE 3495 GARFIELD ST CARLSBAD, CA 92008-3298 VACATION IN CARLSBAD - SURF SUITE 3495 GARFIELD ST CARLSBAD, CA 92008-3298 VACATION IN CARLSBAD - WAVE SUITE 3495 GARFIELD ST CARLSBAD, CA 92008-3298 VACATION IN CARLSBAD - WIND SUITE 3495 GARFIELD ST CARLSBAD, CA 92008-3298 VERONICA DE ANDA 2435 JEFFERSON ST CARLSBAD, CA 92008-1411 VILLAGE BUNGALOWS 3543 GARFIELD ST CARLSBAD, CA 92008-3242 VILLAGE BUNGALOWS 2 271 REDWOOD AVE CARLSBAD, CA 92008-4054 VOELKER HOLDINGS LLC 217 OLIVE AVE CARLSBAD, CA 92008-7426 VOELKER REAL ESTATE HOLDINGS GARFIELD LLC 4110 GARFIELD ST CARLSBAD, CA 92008-7404 VOELKER REAL ESTATE HOLDINGS HEMLOCK LLC 130 UNIT A 130 HEMLOCK AVE CARLSBAD, CA 92008-8230 VOELKER REAL ESTATE HOLDINGS HEMLOCK LLC 130 UNIT B 130 HEMLOCK AVE CARLSBAD, CA 92008-8230 VOELKER REAL ESTATE HOLDINGS HEMLOCK LLC 130 UNIT C 130 HEMLOCK AVE CARLSBAD, CA 92008-8230 VOELKER REAL ESTATE HOLDINGS HEMLOCK LLC 141 LOWER UNIT 141 HEMLOCK AVE CARLSBAD, CA 92008-8262 VOELKER REAL ESTATE HOLDINGS HEMLOCK LLC 141 UPPER UNIT 141 HEMLOCK AVE CARLSBAD, CA 92008 VW VACATION RENTALS - 341 341 OAK AVE CARLSBAD, CA 92008-2945 VW VACATION RENTALS - 355 355 OAK AVE CARLSBAD, CA 92008-2945 WEST INN AND SUITES AVENIDA ENCINAS Carlsbad, CA 92008-4343 WILLIAM AND JULIE LASHER-3760 JEFFERSON 3760 JEFFERSON ST CARLSBAD, CA 92008-3335 WILLIAM AND JULIE LASHER-3762 JEFFERSON 3762 JEFFERSON ST CARLSBAD, CA 92008-3335 WITHALL STVR 3841 MARGARET WAY CARLSBAD, CA 92008-3409 ZIBA 2003 COSTA DEL MAR RD CARLSBAD, CA 92009-6814 Feb. 7, 2023 Item #14 Page 45 of 45