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Home My WebLink About2020-09-01; City Council; Resolution 2020-180RESOLUTION NO. 2020-180 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, CONFIRMING THE MODIFIED ANNUAL REPORT OF THE CARLSBAD TOURISM BUSINESS IMPROVEMENT DISTRICT (CTBID) AND LEVYING THE MODIFIED ASSESSMENTS FOR FISCAL YEAR 2020-21 BEGINNING NOV. 1, 2020 WHEREAS, the Carlsbad Tourism Business Improvement District (CTBID) was formed in accordance with the Parking and Business Improvement Area Law of 1989 (California Streets and Highway Code, § 36500 et seq.) (the "Act"); and WHEREAS, Section 36533 of the Act requires the CTBID Advisory Board to present a report to the City Council for review and approval for each fiscal year for which assessments are to be levied and collected to pay the cost of the improvements and activities described in the report; and WHEREAS, the CTBID Advisory Board submitted an Annual Report to the City Council for FY 2020-21, which the City Council approved at its meeting on June 2, 2020 and confirmed at its meeting on June 23, 2020; and WHEREAS, the current assessment for the CTBID is a flat fee of $1 per occupied room per night for all transient occupancies; and WHEREAS, on June 26, 2020, the Advisory Board sent the City Council a letter recommending the City Council modify the assessment to be 2% of gross short-term room rental revenue for all transient occupancies; and WHEREAS, on July 14, 2020, the City Council adopted a Resolution of Intention to modify the assessment as recommended; and WHEREAS, the City Council conducted a public meeting on Aug. 25, 2020 to receive public comments and testimony on the assessment modification; and WHEREAS, the City Council conducted a public hearing on Sept. 1, 2020 to hear and consider all protests against the assessment modification; and WHEREAS, all affected businesses were notified of the Resolution of Intention and of the public meeting and public hearing dates; and Sept. 1, 2020 Item #4 Page 4 of 34 WHEREAS, the City Council did not receive written protests from affected business owners who will pay 50% or more of the modified assessment levies; and WHEREAS, the CTBID Advisory Board submitted to the City Council a modified Annual Report for FY 2020-21 based on the proposed modified assessment; and WHEREAS, the City Council approved the modified Annual Report for FY 2020-21 at its meeting on Aug. 25, 2020. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad as follows: 1. That the above recitations are true and correct. 2. That the City Council confirms the CTBID Advisory Board's modified Annual Report for FY 2020-21 (Attachment A). 3. That the boundaries of the CTBID shall be the legal boundaries of the City of Carlsbad. 4. That as of Nov. 1, 2020, the assessment to be levied shall be 2% of gross short- term room rental revenue for all transient occupancies, as defined in Carlsbad Municipal Code Section 3.12.020, due and payable to the City of Carlsbad's finance department at the same time and in the same manner as the payment of transient occupancy tax. 5. That the adoption of this resolution shall constitute the levy of the modified assessment for the CTBID for FY 2020-21, beginning Nov. 1, 2020 through June 30, 2021. Sept. 1, 2020 Item #4 Page 5 of 34 PASSED, APPROVED AND ADOPTED at a Meeting of the City Council of the City of Carlsbad on the 1st day of September, 2020, by the following vote, to wit: AYES: Hall, Blackburn, Bhat-Patel, Schumacher. NAYS: None. ABSENT: None. MATT HALL, Mayor s---KvstrYLDslinet ct,„(- BARBARA ENGLESON, City Clerk (SEAL) 01111 I I I 1111/ NO?, CAN \*P' • 0.-11 z Sept. 1, 2020 Item #4 Page 6 of 34 Carlsbad Tourism and Business Improvement District (CTBID) 2020-2021 Modified Annual Report Method of Assessment: The CTBID includes all hotel businesses located within the CTBID boundaries. The assessment shall be levied on all hotel businesses, existing and future, within the City of Carlsbad based upon 2% of gross short-term room rental revenue for all transient occupancies as defined in section 3.12.020(7) of the Carlsbad Municipal Code. The amount of assessment shall be separately stated from the amount of the rent and other taxes charged, and each transient shall receive a receipt for payment from the operator. The assessment will be remitted monthly, based on 2% of gross short-term room rental revenue for the previous month. Assessment Funding Purpose: To administer marketing and visitor programs to promote the City of Carlsbad as a tourism visitor destination and to fund projects, programs, and activities, including appropriate administrative charges that benefit hotels within the boundaries of the District. 2019-20 Work Plan: Last fiscal year, the CTBID contracted with Carlsbad Convention and Visitors Bureau (dba Visit Carlsbad) to provide tourism marketing services for Carlsbad. In addition, $20,000 in grants were awarded to fund events to increase the overnight stays in Carlsbad hotels. The previously adopted CTBID 2020-21 budget included a reduced funding level of $800,000 for Visit Carlsbad. This reduced funding level is the result of reduction in assessment revenue due to Covid-19. The services provided will focus primarily on post Covid-19 marketing recovery efforts. The majority of this will be done by interactive marketing and group sales. Funding also includes managing the visitor center and publications. The increase in the assessment from $1 per room night to 2% of gross revenue will result in an estimated budget of $1,200,000, and goes into effect November 1. This increased revenue will provide additional funding for marketing during the recovery. Due to the uncertainty of the tourism economy at this time, the CTBID Board will revisit the budget mid-year as well as the Visit Carlsbad contract to make adjustments based on the needs at that time. Detail of the modified 2020-21 budget is shown on the following page. Attachment A Sept. 1, 2020 Item #4 Page 7 of 34 2020-21 CTBID Budget 2016-17 2017-18 2018-19 2019-20 2020-21 2020-21 Program Areas Description Actuals Actuals Actual Actual Adopted Budget Modified Budget Carryover Fund Balance $655,774 $722,331 $696,716 $640,318 617,131 617,131 Revenues: CTBID Assessment $1 per room night 1,205,851 1,246,944 1,333,001 1,088,859 800,000 1,200,000 Interest Earnings 1,658 2,535 26,920 21,385 Total Estimated Revenues 1,207,509 1,249,479 1,359,921 1,110,244 800,000 1,200,000 Expenditures: 2% Admin. Fee - City 2% of CTBID assessment revenue, for collection of CTBID assessment and accounting for CTBID 24,116 24,896 26,644 21,045 16,000 24,000 CCVB Payment To operate visitor center, market and promote Carlsbad 978,612 1,130,216 1,244,575 1,040,326 800,000 800,000 Staff support Staff support to the CTBID - 2% of revenues 19,224 16,972 15,649 20,446 16,000 24,000 Professional Services Civitas Contract 32,960 12,000 CTBID Grants Grant program established by CTBID Board 119,000 103,011 129,451 18,654 75,000 35,000 Total Expenses 1,140,952 1,275,095 1,416,319 1,133,431 907,000 895,000 Ending Fund Balance Contingency for Revenue shortfall $722,331 $696,716 $640,318 $617,131 510,131 922,131 Sept. 1, 2020 Item #4 Page 8 of 34 Visit Carlsbad Expenses 2016-17 Actuals 2017-18 Actuals 2018-19 Budget 2019-20 Request Labor 348,088 406,478 422,051 434,324 Advertising Campaign 7,095 7,923 156,000 156,000 Digital MKtg 247,764 235,610 250,000 250,000 Group 184,259 198,967 301,100 194,500 PR Contract 95,099 224,353 185,000 190,000 G&A 27,911 29,323 35,649 30,676 Other promotion 35,725 39,929 41,800 42,500 945,941 1,142,583 1,391,600 1,298,000 37% Reserves 722332 Sept. 1, 2020 Item #4 Page 9 of 34 Agreement Date 11/8/2019 $40,000 6 Months $6,000/month paid (16,480) 12/19/2019 paid (6,240) 2/6/2020 paid (2,240) 6/30/2020 $15,040 5/15/2020 $20,000 6 Months $6,000/month Paid -8000 6/4/2020 Paid -6000 7/23/2020 $6,000 Sept. 1, 2020 Item #4 Page 10 of 34