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HomeMy WebLinkAbout2019-10-23; Carlsbad Tourism Business Improvement District; ; ASSESSMENT MODIFICATIONAB# MTG. CARLSBAD TOURISM BUSINESS IMPROVEMENT DISTRICT (CTBID) AGENDA BILL 10-19-186 CTBID STAFF 10-23-19 ASSESSMENT MODIFICATION GENERAL COUNSEL RECOMMENDED ACTION: .. . ( l).d_,,, 1. Consider approving recommendation by CTBID advisory committee to select Civitas Advisors as the agency to explore the options to modify the current CTBID assessment. 2. Adopt Resolution No. 2019-7 authorizing the Chairperson to enter into agreement between the Carlsbad Tourism Business Improvement District (CTBID) and Civitas Advisors and appropriating additional funding for professional services. ITEM EXPLANATION: At its July 17, 2019 board meeting, the Carlsbad Tourism Business Improvement District (CTBID) Board appointed a 3-member temporary advisory committee to work on a strategic growth plan for the CTBID. The advisory committee made up of Board Members Hughes, Rauch and Gray, was to determine whether the existing tourism study report could be utilized and if the assessment should be increased. The advisory committee was to return to the board at the next scheduled meeting with their recommendations. The advisory committee met several times over the past few months and reached out to consultants that specialize in developing long term funding solutions for Destination Marketing Organizations. Based on these interviews, they requested proposals from Jones Lang LaSalle Americas, Inc. and Civitas Advisors. The advisory committee reviewed the proposals and is recommending that Civitas Advisors be selected to explore the options to modify the current CTBID assessment at a cost of $40,000. See attached proposal at Exhibit 1. If the CTBID Board approves the recommendation of the advisory committee, they should adopt Resolution No. 2019-7 authorizing the Chairperson to enter into agreement between the Carlsbad Tourism Business Improvement District (CTBID) and Civitas Advisors. FISCAL IMPACT: The CTBID has $640,000 in reserves that is avaialble to be appropriated for this service. ENVIRONMENTAL IMPACT: This action does not qualify as a project under the California Environment Quality Act ("CEQA") and will not have a physical adverse effect on the environment. (CEQA Regulation 15378(b).) EXHIBITS: 1. Civitas Advisors Proposal 2. Resolution 2019-7 authorizing the Chairperson to enter into agreement between the Carlsbad Tourism Business Improvement District (CTBID) and Civitas Advisors and appropriating additional funding for these professional services. A. Civitas Advisor's contract EXHIBIT 1 . CARLSBAD TOURISM BUSINESS . IMPROVEMENT DISTRICT PROPOSA L Brian Hughes, Board Chair Carlsbad Convention & Visitors Bureau Dear Mr. Hughes, It was great to talk to you, Bob, Jeff, and Cheryl last week on the phone. I am pleased to present to you a proposal to assist Visit Carlsbad with exploring the options to modify the current TBI D assessment from a fixed dollar to a percentage and convert the district from a Parking and Business Improvement Area ("89 Act") to a Property and Business Improvement District ("94 Act"). Civitas has formed and renewed a majority of the nation's TBIDs, and will provide expert advice and guidance throughout the project. Our process to modify the CTBID is designed to secure significant support for the project while complying with applicable laws. In concert with the Carlsbad Convention & Visitors Bureau ("CCVB"), the Civitas team will guide a modification process that includes developing and manipulating data, obtaining feedback 'from business owners, preparing legal documents, guiding the stakeholder approval process, and attending local government hearings. Thank you for the opportunity to submit this proposal. I look forward to working with you on this exciting project. Nichole Farley, · Director of Business Development & Client Engagement Civitas I Carlsbad Convention & Visitors Bureau 1 THE OPPORTUNITY In our recent conversations about the proposed TBID modification, you described the desire to modify your current TBID assessment methodology from a fixed dollar amount to a percentage of gross sales. You also expressed an interest in exploring options to convert the district from the 89 Act to the 94 Act in order for CCVB to remain competitive in the destination marketing environment through increased marketing & promotions programs beyond that of the current TB( D. There are two laws TBIDs can be created under: the Parking and Business Improvement Area Law of 1989 ("89 Act") or the Property and Business Improvement District Law of 1994 ("94 Act"). To help your destination determine which is appropriate for you, the following page has a comparison of t he major differences between the two laws. Civitas has successfully completed over 150 district formation and renewal projects throughout the world which has generated over $1.7 billion in dedicated funding for the specific needs of our clients. Our client portfolio ranges from destinations seeking to establish themselves in the market for the first time, to iconic long standing destinations that wish to remain competitive and further cement their legacy in the industry. Civitas I Carlsbad Convention & Visitors Bureau 2 CALIFORNIA TOURISM IMPROVEMENT DISTRICTS 89 Act to 94 Act Comparison Subject District Term Initiation Process Renewal Process Governing Body Governance Process Corporation Public Entity Status Lawsuits 1989Law Districts are formed and renewed for a one year term. Adoption of a Resolution of Intention by the City Council. The Council can adopt this resolution without petitions requesting it. Publication in newspaper, two City hearings. If raising assessments.three hearings and mailed notice. An advisory board appointed by the City Council. Recommendations made by advisory board and decision making authority. · City may consider the advisory board to be a public entity for certain laws. One thirty day challenge period per year. 1994Law Districts are initially formed for up to five years, and can be renewedfor up to ten years. Preparation of management district plan. Submission of petitions to the City Council signed by businesses who will pay at least 50% of the proposed assessment. Adoption of resolution by City, public meeting and public hearing. Same as for Initiation Process. A non-profit corporation chosen and organized by the stakeholders. Approved by Council with the adopti_on of the management district plan. Decisions made by the non-profit corporation, guided by a management district plan approved by stakeholders and the City. Express exemption for non-profit corporation-it is not considered a public entity. One thirty day challenge period per five-ten year district term. Civitas I Carlsbad Convention & Visitors Bureau 3 SCOPE OF SERVICES & SCHEDULE - Step 1 Step 2 structu e Creates the necessary leadership structure to carry out the project. Civitas, the CCVB, and business owners will identify their respective roles in the project process. Includes gathering information on the proposed CTBID. Outreach efforts arc undertaken in this step to educate .Jncl engage with business owners and local officials and gain their support for the proposed CTB ID. Step4 Civitas will prepare the petition to support the CTBID conversion and work with the CCVB on strategies to secure signed petitions from business owners. Civitas will assist in determining steering committee assignments and identifying key stL1keho lders. Step 5 Step 3 Documents necessary to convert the CTBID are drafted. Civitas will work closely with business owners. the CCVB. and local government staff to ensure documents renect the needs ,ind priorities of assessed businesses. Civitas will guide the CCVB through the local government hearing process to convert the CTBID. Civitas I Carlsbad Canvention & Visitors Bureau 4 Nichole Farley John Lambeth P.-esident & CEO Di.-ecto.-of Business Development & Client Engagement Gina Reed Project Manage,- 1-t i ·------ Quinn Petitjean GIS & Database Specialist Jordan Pittman Paralegal MEE T YOUR TEAM Ci vitas is a leader in developing long t erm funding solut ions for Destination M arket ing Orga nizations. It has helped several states investigate the potential of establ ishing sta tewide funding, in addition to assisting in the formation of an unparalleled ninety-nine TBIDs throughout the United States. With its deep experi ence and expertise, Civitas has been commissioned by the U.S. Travel Association to conduct nationwide studies. Civitas also provides research, consulting, and district formation services to destinations located around the world, including Canada, South Ame.-ica, Europe, and Asia. A representative distant high-priced destination is Japan, where Civitas clients include Nomura Research Inst itute, Japan Area-Based M anagement Organiza tion Network, Japan Travel Burea u, and Setouchi Tourism Authority. For its groundbreaking work, Civitas has bee n featured in publica t ions such as Forbes and Sk ift. Civitas I Carlsbad Convention & Visitors Bureau 5 INVESTMENT P·ROVISIONS . Investment This proposal is based on the understanding that business owners and the CCVB will provide assistance and time needed to facilitate the process on the local level, including various database work, substantial time devoted to outreach meetings, and gathering support and signed petitions from businesses. The CCVB's investment for the scope of services and timeline described herein shall be $40,000. The CCVB's investment includes four (4) trips to Carlsbad; two (2) to meet with business owners and City officials and two (2) to attend City Council hearings. If additional trips are necessary, we would be happy to.make additional trips for a professional fee of $1,250 per trip, plus expenses. Expenses CCVB will be responsible for all costs and expenses in addition to the professional fees. Ordinary costs and expenses, including telephone charges, postage, and photocopying will be billed at four percent (4%) of professional fees. Other costs, such as travel, overnight shipping, bulk mailing and printing costs (over 100 pages) shall be billed at Civitas' actual cost. Expenses are not expected to exceed $4,000. Billing Civitas proposes a fixed monthly fee of $6,000 per month for six (6) months, plus expenses. A start-up fee of ten percent (10%) of project costs, $4,000, will be due and payable · upon execution of an agreement for services between Civitas and the CCVB. The amount of the start-up fee will be deducted from the final invoice, which will also be adjusted to account for the total contract price. Civitas will send CCVB a monthly invoice for fees and costs incurred. Invoices will include the fixed professional fee and expenses. The basis of calculation or other method of determining expenses will be clearly identified by item and amoun't. Investment Overview Description Price Professional Fees $36,000 Estimated Expenses $4,000 Civitas I Carlsbad Convention & Visitors Bureau 6 Cost Assumptions and Guidelines We have projected a specific amount of time for the CTBID conversion. It is assumed that the project will not exceed the budgeted amount of time. If unanticipated matters result in additional time beyond that which has been projected, we would continue billing professional fees of $6,000 per montn, plus expenses, for the project duration. Factors that could increase the scope of work and estimated costs outlined above include additional meetings not described in this proposal, analysis of additional issues above.those described in this proposal, or a lack of steering committee and business owner involvement in the project. When Civitas' services conclude, all unpaid charges will immediately become due and payable. The amount of" professional fees set forth in this agreement are a fixed amount for completion of the project within a maximum six (6) month time frame. The total amount of professional fees has been divided over the maximum six (6) month time frame to determine the monthly billing amount. If the project is completed prior to the six (6) month time frame, the remaining balance of .professional fees will be due and payable within thirty (30) days -of project completion. As you know, there are many unknown variables in a project of this nature. Although we would work diligently to convert the CTBID, factors outside Civitas and CCVB's control could delay or thwart even the best-developed plans. We will work to minimize risks and complete the project at the earliest possible date. The pricing and scope outlined in this agreement will expire upon sixty (60) days post delivery of this proposal. Business Information The database for this project will rely on information from local government sources. Errors can and will occur in this data. While Civitas will do its utmost to identify and ·correct any errors, it is acknowledged that data from local government sources may contain errors. We recommend CCVB continue to pursue data correction strategies during and after conversion, including mailings and error checking by local officials. I Carlsbad Convention & Visitors Bureau 7 AGREEMENT If you would like to agree to engage our services consistent with this proposal and the following terms, please sign below. A start-up fee of ten percent (10%) of project costs, $4,000, will be due and payable upon execution of this Agreement. Civitas will send CCVB a monthly invoice for fees and costs incurred. Each ·invoice will be payable within thirty (30) days of its mailing date. Either CCVB or Civitas shall have the right to terminate this agreement upon ten (10) days' notice. When Civitas' services.conclude, all unpaid charges will immediately become due and payable, including the balance of any professional fees if the project is completed prior to the maximum six (6) month time frame. Nothing in this Agreement and nothing in statements by Civitas personnel to CCVB will b~ construed as a promise or guarantee about the outcome of the matter. Civitas makes no such promises or guarantees. If any provision of this Agreement is held in whole or in part to be unenforceable for any reason, the remainder of that provision and of the entire Agreement will be severable and remain in effect. This Agreement may be modified by subsequent agreement of the parties only by an instrument in writing signed by both of them or an oral agreement only to the extent that the parties carry it out The parties agree to accept the terms and conditions herein. Date October 15, 2019 Date Carlsbad Convention & Visitors Bureau, by Brian Hughes, Board Chairperson Civitas Advisors, by John 'Lambeth, President & CEO Civitas I Carlsbad Convention & Visitors Bureau B 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 RESOLUTION NO. 2019-7 RESOLUTION OF THE BOARD OF DIRECTORS OF THE CARLSBAD TOURISM BUSINESS IMPROVEMENT DISTRICT, AUTHORIZING THE CHAIRPERSON TO ENTER INTO AN AGREEMENT FOR PROFESSIONAL SERVICES WITH CIVITAS ADIVISORS EXHIBIT 2 WHEREAS, the City Council of the City of Carlsbad adopted ordinance No. NS-778 enacting Chapter 3.37 if the Carlsbad Municipal Code on November 15, 2005 thereby creating the Carlsbad Tourism Business Improvement District (CTBID); and WHEREAS, the primary purpose of the CTBID is to promote tourism and provide services to visitors to the City of Carlsbad: and WHEREAS, the City of Carlsbad has authorized the Board of Directors of the CTBID to conduct the business of the CTBID in the time, place and manner that best suits the needs of the Board of Directors of the CTBID, subject to the control of the federal, state and local laws governing the activities of a Business Improvement District; and WHEREAS, the City Council has provided the Board of Directors with the ability to contract for services necessary to carry out the purpose of the CTBID; and WHEREAS, Civitas Advisors, by virtue of their extensive experience in developing long term funding for Destination Marketing Organizations, is uniquely qualified to provide professional services to the CTBID; and WHEREAS, it is estimated that the cost to provide these services $40,000; and NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Carlsbad Tourism Business Improvement District, as follows: 1. That the above recitations are true and correct. 2. That the CTBID Board selects Civitas Advisors to provide professional services to explore options to modify the current CTBID assessment in an amount not to exceed $40,000. 3. That $40,000 be appropriated form CTBID Fund Balance to Miscellaneous Professional Services for Civitas Advisors contract. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PASSED, APPROVED, AND ADOPTED at a regular meeting of the Board of Directors of the Carlsbad Tourism Business Improvement District on the ~day of _o_c_t_o_b_e_r ____ 2019, by the following vote to wit: A YES: Stripe, Canepa, Rauch, Gray, Idris, Hughes NOES: N/A ABSENT:Chapin ATTEST: \~rdn1~ BARBARA ENGLESON ro Tern Clerk of the Carlsbad Tourism Business Improvement District -2- EXHIBIT 2A AGREEMENT FOR ASSESSMENT MODIFICATION SERVICES WITH CIVITAS ADVISORS • 1 THIS AGREEMENT is made and entered into as of the i:tlt\ , day of NlJ\J(.>,rJ\ \o sz ,r' , 20_fl_, by and between the Carlsbad Tourism Business Improvement District (CTBID), and Civitas Advisors, a for profit, private organization ("Contractor"). RECITALS A. CTBID requires the professional services of a contractor that is experienced in assessment modification services. B. Contractor has the necessary experience in providing professional services and advice related to assessment modification. C. Selection of Contractor is expected to achieve the desired results in an expedited fashion. D. Contractor has submitted a proposal to CTBID and has affirmed its willingness and ability to perform such work. NOW, THEREFORE, in consideration of these recitals and the mutual covenants contained herein, CTBID and Contractor agree as follows: 1. SCOPE OF WORK CTBID retains Contractor to perform, and Contractor agrees to render, those services (the "Services") that are defined in attached Exhibit "A", which is incorporated by this reference in accordance with this Agreement's terms and conditions. 2. STANDARD OF PERFORMANCE While performing the Services, Contractor will exercise the reasonable professional care and skill customarily exercised by reputable members of Contractor's profession practicing in the Metropolitan Southern California Area, and will use reasonable diligence and best judgment while exercising its professional skill and expertise. 3. TERM The term of this Agreement will be effective for a period of six (6) months from the date of the agreement. 4. TIME IS OF THE ESSENCE Time is of the essence for each and every provision of this Agreement. CTBID Attorney Approved Version #05.06.08 1 5. COMPENSATION The total not to exceed fee payable for the Services to be performed during the initial Agreement term shall not exceed Forty Thousand dollars ($40,000). No other compensation for the Services will be allowed except for items covered by subsequent amendments to this Agreement. The CTBID reserves the right to withhold a ten percent (10%) retention until CTBID has accepted the work and/or Services specified in Exhibit "A". Compensation will be made in six (6) monthly installments of Six Thousand dollars ($6,000) each month for a not to exceed amount of $40,000 as detailed in the attached Exhibit A to this Agreement. The first installment shall be payable upon signing of the agreement in the amount of Four Thousand dollars ($4,000) for start-up fees. Subsequent installments shall be paid in the first full week of each month, through the term of this Agreement. Subsequent installments will be adjusted based on the approved actual expenses from the prior month. Adjustments to pay dates may be necessary due to the cash balance in the fund. The CTBID reserves the right to terminate or reduce funding levels outlined in the Agreement in the event of CTBID revenue reductions. Recommended deductions will be reported to the CTBID Board who shall determine the modified funding level. 6. STATUS OF CONTRACTOR Contractor will perform the Services in Contractor's own way as an independent contractor and in pursuit of Contractor's independent calling, and not as an employee of CTBID. Contractor will be under control of CTBID only as to the result to be accomplished, but will consult with CTBID as necessary. The persons used by Contractor to provide services under this Agreement will not be considered employees of CTBID for any purposes. The payment made to Contractor pursuant to the Agreement will be the full and complete compensation to which Contractor is entitled. CTBID will not make any federal or state tax withholdings on behalf of Contractor or its agents, employees or subcontractors. CTBID will not be required to pay any workers' compensation insurance or unemployment contributions on behalf of Contractor or its employees or subcontractors. Contractor agrees to indemnify CTBID within thirty (30) days for any tax, retirement contribution, social security, overtime payment, unemployment payment or workers' compensation payment which CTBID may be required to make on behalf of Contractor or any agent, employee, or subcontractor of Contractor for work done under this Agreement. At the CTBID's election, CTBID may deduct the indemnification amount from any balance owing to Contractor. 7. SUBCONTRACTING Contractor will not subcontract any portion of the Services without prior written approval of CTBID. If Contractor subcontracts any of the Services, Contractor will be fully responsible to CTBID for the acts and omissions of Contractor's subcontractor and of the CTBID Attorney Approved Version #05.06.08 2 persons either directly or indirectly employed by the subcontractor, as Contractor is for the acts and omissions of persons directly employed by Contractor. Nothing contained in this Agreement will create any contractual relationship between any subcontractor of Contractor and CTBID. Contractor will be responsible for payment of subcontractors. Contractor will bind every subcontractor and every subcontractor of a subcontractor by the terms of this Agreement applicable to Contractor's work unless specifically noted to the contrary in the subcontract and approved in writing by CTBID. 8. OTHER CONTRACTORS The CTBID reserves the right to employ other Contractors in connection with the Services. 9. INDEMNIFICATION Contractor agrees to indemnify and hold harmless the CTBID and its officers, officials, employees and volunteers from and against all claims, damages, losses and expenses including attorneys fees arising out of the performance of the work described herein caused by any negligence, recklessness, or willful misconduct of the Contractor, any subcontractor, anyone directly or indirectly employed by any of them or anyone for whose acts any of them may be liable. The parties expressly agree that any payment, attorney's fee, costs or expense CTBID incurs or makes to or on behalf of an injured employee under the CTBID's self- administered workers' compensation is included as a loss, expense or cost for the purposes of this section, and that this section will survive the expiration or early termination of this Agreement. 10. INSURANCE Contractor will obtain and maintain for the duration of the Agreement and any and all amendments, insurance against claims for injuries to persons or damage to property which may arise out of or in connection with performance of the services by Contractor or Contractor's agents, representatives, employees or subcontractors. The insurance will be obtained from an insurance carrier admitted and authorized to do business in the State of California. The insurance carrier is required to have a current Best's Key Rating of not less than "A-:VII". OR with a surplus line insurer on the State of California's List of Eligible Surplus Line Insurers (LESLI) with a rating in the latest Best's Key Rating Guide of at least "A:X". 10.1 Coverages and Limits. Contractor will maintain the types of coverages and minimum limits indicated below, unless CTBID Attorney or CTBID Manager approves a lower amount. These minimum amounts of coverage will not constitute any limitations or cap on Contractor's indemnification obligations under this Agreement. CTBID, its officers, agents and employees make no representation that the limits of the insurance specified to be carried by Contractor pursuant to this Agreement are adequate to protect Contractor. If Contractor believes that any required insurance coverage is inadequate, Contractor will CTBID Attorney Approved Version #05.06.08 3 obtain such additional insurance coverage, as Contractor deems adequate, at Contractor's sole expense. 10.1.1 Commercial General Liability Insurance. $1,000,000 combined single-limit per occurrence for bodily injury, personal injury and property damage. If the submitted policies contain aggregate limits, general aggregate limits will apply separately to the work under this Agreement or the general aggregate will be twice the required per occurrence limit. 10.1.2 Automobile Liability (if the use of an automobile is involved for Contractor's work for CTBID). $1,000,000 combined single-limit per accident for bodily injury and property damage. 10.1.3 Workers' Compensation and Employer's Liability. Workers' Compensation limits as required by the California Labor Code. Workers' Compensation will not be required if Contractor has no employees and provides, to CTBID's satisfaction, a declaration stating this. 10.1.4 Professional Liability. Errors and omissions liability appropriate to Contractor's profession with limits of not less than $1,000,000 per claim. Coverage must be maintained for a period of five years following the date of completion of the work. 10.2. Additional Provisions. Contractor will ensure that the policies of insurance required under this Agreement contain, or are endorsed to contain, the following provisions: 10.2.1 Liability. The CTBID will be named as an additional insured on General 10.2.2 Contractor will obtain occurrence coverage, excluding Professional Liability, which will be written as claims-made coverage. 10.2.3 This insurance will be in force during the life of the Agreement and any extensions of it and will not be canceled without thirty (30) days prior written notice to CTBID sent by certified mail pursuant to the Notice provisions of this Agreement. 10.3 Providing Certificates of Insurance and Endorsements. Prior to CTBID's execution of this Agreement, Contractor will furnish certificates of insurance and endorsements to CTBID. 10.4 Failure to Maintain Coverage. If Contractor fails to maintain any of these insurance coverages, then CTBID will have the option to declare Contractor in breach, or may purchase replacement insurance or pay the premiums that are due on existing policies in order to maintain the required coverages. Contractor is responsible for any payments made by CTBID to obtain or maintain insurance and CTBID may collect these payments CTBID Attorney Approved Version #05.06.08 4 12. ACCOUNTING RECORDS Contractor will maintain complete and accurate records with respect to costs incurred under this Agreement. All records will be clearly identifiable. Contractor will allow a representative of CTBID during normal business hours to examine, audit, and make transcripts or copies of records and any other documents created pursuant to this Agreement. Contractor will allow inspection of all work, data, documents, proceedings, and activities related to the Agreement for a period of three (3) years from the date of final payment under this Agreement. · 13. OWNERSHIP OF DOCUMENTS All work product produced by Contractor or its agents, employees, and subcontractors pursuant to this Agreement is the property of CTBID. In the event this Agreement is terminated, all work product produced by Contractor or its agents, employees and subcontractors pursuant to this Agreement will be delivered at once to CTBID. Contractor will have the right to make one (1) copy of the work product for Contractor's records. CTBID recognizes that all work product produced by Contractor, including technical data, evaluations, plans, specifications, reports, and other work products, are instruments of Contractor's services and are not designed for use other than what is intended by this Agreement. · 14. COPYRIGHTS Contractor agrees that all copyrights that arise from the services will be vested in CTBID and Contractor relinquishes all claims to the copyrights in favor of CTBID. 15. NOTICES The name of the persons who are authorized to give written notices or to receive written notice on behalf of CTBID and on behalf of Contractor under this Agreement. For CTBID: Cheryl Gerhardt CTBID Staff City of Carlsbad 1635 Faraday Ave. Carlsbad, CA 92008 Phone No. 760-602-2468 For Contractor: John Lambeth President & CEO Civitas Advisors 1102 Corporate Way, Suite 140 Sacramento, CA 95831 Phone No. 916-437-4300 Each party will notify the other immediately of any chang~s of address that would require any notice or delivery to be directed to another address: 16. RESERVED CTBID Attorney Approved Version #05.06.08 5 Each party will notify the other immediately of any changes of address thatwould require· any notice or delivery to be directed to another address. 16. RESERVED 17. GENERAL COMPLIANCE WITH LAWS Contractor will keep fully informed of federal, state and local laws and ordinances and regulations which in any manner affect those employed by Contractor, or in any way affect the performance of the Services by Contractor. Contractor will at all times observe and comply with these laws, ordinances, and regulations and will be responsible for the compliance of Contractor's services with all applicable laws, ordinances and regulations. Contractor will be aware of the requirements of the Immigration Reform and Control Act of 1986 and will comply with those requirements, including, but not limited to, verifying the eligibility for employment of all agents, employees, subcontractors and consultants that the services required by this Agreement. 18. DISCRIMINATION AND HARASSMENT PROHIBITED Contractor will comply with all applicable local, state and federal laws and regulations prohibiting discrimination and harassment. 19. DISPUTE RESOLUTION If a dispute should arise regarding the performance of the Services the following procedure will be used to resolve any questions of fact or interpretation not otherwise settled by agreement between the parties. Representatives of Contractor or CTBID will reduce such questions, and their respective views, to writing. A copy of such documented dispute will be forwarded to both parties involved along with recommended methods of resolution, which would be of benefit to both parties. The representative receiving the letter will reply to the letter along with a recommended method of resolution within ten (10) business days. If the resolution thus obtained is unsatisfactory to the aggrieved party, a letter outlining the disputes will be forwarded to the CTBID Board. The CTBID Board will consider the facts and solutions recommended by each party and may then opt to direct a solution to the problem. In such cases, the action of the CTBID Board will be binding upon the parties involved, although nothing in this procedure will prohibit the parties from seeking remedies available to them at law. CTBID Attorney Approved Version #05.06.08 6 20. TERMINATION In the event of the Contractor's failure to prosecute, deliver, or perform the Services, CTBID may terminate this Agreement for nonperformance by notifying Contractor by certified mail of the termination. If CTBID decides to abandon or indefinitely postpone the work or services contemplated by this Agreement, CTBID may terminate this Agreement upon written notice to Contractor. Upon notification of termination, Contractor has five (5) business days to deliver any documents owned by CTBID and all work in progress to CTBID address contained in this Agreement. CTBID will make a determination of fact based upon the work product delivered to CTBID and of the percentage of work that Contractor has performed which is usable and of worth to CTBID in having the Agreement completed. Based upon that finding CTBID will determine the final payment of the Agreement. Either party upon tendering thirty (30) days written notice to the other party may terminate this Agreement. In this event and upon request of CTBID, Contractor will assemble the work product and put it in order for proper filing and closing and deliver it to CTBID. Contractor will be paid for work performed to the termination date; however, the total will not exceed the lump sum fee payable under this Agreement. CTBID will make the final determination as to the portions of tasks completed and the compensation to be made. 21. COVENANTS AGAINST CONTINGENT FEES Contractor warrants that Contractor has not employed or retained any company or person, other than a bona fide employee working for Contractor, to solicit or secure this Agreement, and that Contractor has not paid or agreed to pay any company or person, other than a bona fide employee, any fee, commission, percentage, brokerage fee, gift, or any other consideration contingent upon, or resulting from, the award or making of this Agreement. For breach or violation of this warranty, CTBID will have the right to annul this Agreement without liability, or, in its discretion, to deduct from the Agreement price or consideration, or otherwise recover, the full amount of the fee, commission, percentage, brokerage fees, gift, or contingent fee. 22. CLAIMS AND LAWSUITS By signing this Agreement, Contractor agrees that any Agreement claim submitted to CTBID must be asserted as part of the Agreement process as set forth in this Agreement and not in anticipation of litigation or in conjunction with litigation. Contractor acknowledges that if a false claim is submitted to CTBID, it may be considered fraud and Contractor may be subject to criminal prosecution. Contractor acknowledges that California Government Code sections 12650 et seq .. the False Claims Act applies to this Agreement and, provides for civil penalties where a person knowingly submits a false claim to a public entity. These provisions include false claims made with deliberate ignorance of the false information or in reckless disregard of the truth or falsity of information. If CTBID seeks to recover penalties pursuant to the False Claims Act, it is entitled to recover its litigation costs, including attorney's fees. Contractor acknowledges that the filing of a false claim may subject Contractor to an administrative debarment proceeding as the result of which Contractor may be prevented to act as a Contractor on CTBID Attorney Approved Version #05.06.08 7 any public work or improvement for a period of up to five (5) years. Contractor acknowledges debarment by another jurisdiction is grounds for CTBID to terminate this Agreement. 23. JURISDICTIONS AND VENUE Any action at law or in equity brought by either of the parties for the purpose of enforcing a right or rights provided for by this Agreement will be tried in a court of competent jurisdiction in the County of San Diego, State of California, and the parties waive all provisions of law providing for a change of venue in these proceedings to any other county. This Agreement shall be interpreted pursuant to the laws of the State of California. 24. SUCCESSORS AND ASSIGNS It is mutually understood and agreed that this Agreement will be binding upon CTBID and Contractor and their respective successors. Neither this Agreement or any part of it nor any monies due or to become due under it may be assigned by Contractor without the prior consent of CTBID, which shall not be unreasonably withheld. 25. ENTIRE AGREEMENT This Agreement, together with any other written document referred to or contemplated by it, along with the purchase order for this Agreement and its provisions, embody the entire Agreement and understanding between the parties relating to the subject matter of it. In case of conflict, the terms of the Agreement supersede the purchase order. Neither this Agreement nor any of its provisions may be amended, modified, waived or discharged except in a writing signed by both parties. Ill Ill CTBID Attorney Approved Version #05.06.08 8 26. AUTHORITY The individuals executing this Agreement and the instruments referenced in it on behalf of Contractor each represent and warrant that they have the legal power, right and actual authority to bind Contractor to the terms and conditions of this Agreement. Civitas Advisors, Inc. Carlsbad Tourism Business Improvement District *By: By: **By: ATTEST: Civitas Advisors, Inc. If required by CTBID, proper notarial acknowledgment of execution by contractor must be attached. If a Corporation, Agreement must be signed by one corporate officer from each of the following two groups. *Group A. Chairman, President, or Vice-President **Group B. Secretary, Assistant Secretary, CFO or Assistant Treasurer Otherwise, the corporation must attach a resolution certified by the secretary or assistant secretary under corporate seal empowering the officer(s) signing to bind the corporation. APPROVED AS TO FORM: CELIA A. BREWER, General Counsel to CTBID By: ____________ _ Assistant General Counsel CTBID Attorney Approved Version #05.06.08 9 r. : ... EXHIBIT A CARLSBAD TOURISM BUSINESS IMPROVEMENT DISTRICT PROPOSAL Brian Hughes, Board Chair Carlsbad Convention & Visitors Bureau . :.· ... -··-•.•·" ...,. .. ~----~- :-·_.,.;, J Dear Mr. Hughes, It was great to talk to you, Bob, Jeff, and Cheryl last week on the phone. I am pleased to present to you a proposal to assist Visit Carlsbad with exploring the options to modify the current TBI D assessment from a fixed dollar to a percentage and convert the district from a Parking and Business Improvement Area ("89 Act") to a Property and Business Improvement District ("94 Act"). Civitas has formed and renewed a majority of the nation's TB IDs, and will provide expert advice and guidance throughout the project. Our process to modify the CTBID is designed to secure significant support for the project while complying with applicable laws. In concert with the Carlsbad Convention & Visitors Bureau ("CCVB"), the Civitas team will guide a modification process that includes developing and manipulating data, obtaining feedback from business owners, preparing legal documents, guiding the stakeholder approval process, and attending local government hearings. Thank you for the opportunity to submit this proposal. I look forward to working with you on this exciting project. Nichole Farley, Director of Business Development & Client Engagement Civitas I Carlsbad Convention & Visitors Bureau 1 THE OPPORTUNITY In our recent conversations about the proposed TBID modification, you described the desire to modify your curr~nt TBID assessment methodology from a fixed dollar amount to a percentage of gross sales. You also expressed an interest in exploring options to convert the district from the 89 Act to the 94 Act in order for CCVB to remain competitive in the destination marketing environment through increased marketing & promotions programs beyond that of the current TBID. There are two laws TB IDs can be created under: the Parking and Business Improvement Area Law of 1989 ("89 Act") or the Property and Business Improvement District Law of 1994 ("94 Act"). To help your destination determine which is appropriate for you, the following page has a comparison of the major differences between the two laws. Civitas has successfully completed over 150 district formation and renewal projects throughout the world which has generated over $1.7 billion in dedicated funding for the specific needs of our clients. Our client portfolio ranges from destinations seeking to establish themselves in the market for the first time, to iconic long standing destinations that wish to remain competitive and further cement their legacy in the industry. Civitas I Carlsbad Convention & Visitors Bureau 2 CALIFORNIA TOURISM IMPROVEMENT DISTRICTS 89 Act to 94 Act Comparison Subject District Term Initiation Process Renewal Process Governing Body Governance Process Corporation Public Entity Status Lawsuits 1989Law Districts are formed and renewed for a one year term. Adoption of a Resolution of Intention by the City Council. The Council can adopt this resolution without petitions requesting it. Publication in newspaper, two City hearings. If raising assessments.three hearings and mailed notice. An advisory board appointed by the City Council. Recommendations made by advisory board and decision making authority. City may consider the advisory board to be a public entity for certain laws. One thirty day challenge period per year. 1994Law Districts are initially formed for up to five years, and can be renewedfor up to ten years. Preparation of management district plan. Submission of petitions to the City Council signed by businesses who will pay at least 50% of the proposed assessment. Adoption of resolution by City, public meeting and public hearing. Same as for Initiation Process. A non-profit corporation chosen and organized by the stakeholders. Approved by Council with the adoption of the management district plan. Decisions made by the non-profit corporat ion, guided by a management district plan approved by stakeholders and the City. Express exemption for non-profit corporation-it is not considered a public entity. One thirty day challenge period perftve-ten year district term. Civitas I Carlsbad Convention & Visitors Bureau 3 SCOPE OF SERVICES & SCHEDULE Step 1 Step2 Creates the necessary leadership structure to carry out the project. Civltas, the CCVB, and business owners will identify their respective roles in the project process. Includes gathering information on the proposed CTBlD. Ou_treach efforts are undertaken in this step to educate and engage with business owners and local officials and gain their support for the proposed CTBlD. Step4 Civitas will prepare the petition to support the CTBID conversion and work with the CCVB on strategies to secure signed petitions from business owners. Civitas will assist in determining steering committee assignments and identifying key stakeholders. Step 5 Step 3 Documents necessary to convert the CTBID are drafted. Civitas will work closely with business owners, the CCVB, and local government staff to ensure documents reflect the needs and priorities of assessed businesses. Civitas will guide the CCVB through the local government hearing process to convert the CTBlD. Civitas I Carlsbad Convention & Visitors Bureau 4 John Lambeth President & CEO Nichole Farley Direc tor of Business Development & Client Engagement Quinn Petitjean Gina Reed Project Manager GIS & Database Specialist Jordan Pittman Paralegal MEE T YOUR TEAM Civitas is a leader in developing long term funding solutions for Destination M arketing Organizations. It has helped several states investigate the potential of establishing statewide f unding. in addition to assisting in the formation of an unparalleled ninety-ni ne TB IDs throughout the United States. With its deep ex perience and ex pertise, Civitas has been commissioned by the U.S. Trave l Association to conduct nationwide studies. Civitas also provides resea rch, consulting, and district formation services to destinations located around the world, including Canada, South America, Europe, and Asia. A representative distant high-priced destination is Japa n, where Civitas clients include Nomura Research Institute, Japan Area-Based Management Organization Net work, Japan Travel Bureau, and Setouchi Tourism Authority. For its groundbreaking work, Ci vitas has been featured in publications such as Forbes and Skift. Civitas I Carlsbad Convention & Visitors Bureau 5 INVESTMENT PROVISIONS . Investment This proposal is based on the understanding that business owners and the CCVB will provide assistance and time needed to facilitate the process on the local level, including various database work, substantial time devoted to outreach meetings, and gathering support and signed petitions from businesses. The CCVB's investment for the scope of services and timeline described herein shall be $40,000. The CCVB's investment includes four (4) trips to Carlsbad; two (2) to meet with business owners and City officials and two (2) to attend City Council hearings. If additional trips are necessary, we would be happy to make additional trips for a professional fee of $1,250 per trip, plus expenses. Expenses CCVB will be responsible for all costs and expenses in addition to the professional fees. Ordinary costs and expenses, including telephone charges, postage, and photocopying will be billed at four percent (4%) of professional fees. Other costs, such as travel, overnight shipping, bulk mailing and printing costs (over 100 pages) shall be billed at Civitas' actual cost. Expenses are not expected to exceed $4,000. Billing Civitas proposes a fixed monthly fee of $6,000 per month for six (6) months, plus expenses. A start-up fee of ten percent (10%) of project costs, $4,000, will be due and payable upon execution of an agreement for services between Civitas and the CCVB. The amount of the start-up fee will be deducted from the final invoice, which will also be adjusted to account for the total contract price. Civitas will send CCVB a monthly invoice for fees and costs incurred. Invoices will include the fixed professional fee and expenses. The basis of calculation or other method of determining expenses will be clearly ident~fied by item and amoun't. • Investment Overview Description Price Professional Fees $36,000 Estimated Expenses $4,000 Civitas I Carlsbad Convention & Visitors Bureau 6 Cost Assumptions and Guidelines We have projected a specific amount of time for the CTBID conversion. It is assumed that the project will not exceed the budgeted amount of time. If unanticipated matters result in additional time beyond that which has been projected, we would continue billing professional fees of $6,000 per month, plus expenses, for the project duration. Factors that could increase the scope of work and estimated costs outlined above include additional meetings not described in this proposal, analysis of additional issues above those described in this proposal, or a lack of steering committee and business owner involvement in the project. When Civitas' services conclude, all unpaid charges will immediately become due and payable. The amount of professional fees set forth in this agreement are a fixed amount for completion of the project within a maximum six (6) month time frame. The total amount of professional fees has been divided over the maximum six (6) month time frame to determine the monthly billing amount. If the project is completed prior to the six (6) month time frame, the remaining balance of professional fees will be due and payable within thirty (30) days .of project completion. As you know, there are many unknown variables in a project of this nature. Although we would work diligently to convert the CTBID, factors outside Civitas and CCVB's control could delay or thwart even the best-developed plans. We will work to minimize risks and complete the project atthe earliest possible date. The pricing and scope outlined in this agreement w ill expire upon sixty (60) days post delivery of this proposal. Business Information The database for this project will rely on information from local government sources. Errors can and will occur in this data. While Civitas will do its utmost to identify and correct any errors, it is acknowledged that data from local government sources may contain errors. We recommend CCVB continue to pursue data correction strategies during and after conversion, including mailings and error checking by local officials. I Carlsbad Convention & Visitors Bureau 7 AGREEMENT If you would like to agree to engage our services consistent with this proposal and the following terms, please sign below. A start-up fee often percent {10%) of project costs, $4,000, will be due and payable upon execution of this Agreement. Civitas will send CCVB a monthly invoice for fees and costs incurred. Each invoice will be payable within thirty (30) days of its mailing date. Either CCVB or Civitas shall have the right to terminate this agreement upon ten {10) days' notice. When Civitas' services.conclude, all unpaid charges will immediately become due and payable, including the balance of any professional fees if the project is completed prior to the maximum six (6) month time frame. Nothing in this Agreement and nothing in statements by Civitas personnel to CCVB will be construed as a promise or guarantee about the outcome of the matter. Civitas makes no such promises or guarantees. If any provision of this Agreement is held in whole or in part to be unenforceable for any reason, the remainder of that provision and of the entire Agreement will be severable and remain in effect. This Agreement may be modified by subsequent agreement of the parties only by an instrument in writing signed by both of them or an oral agreement only to the extent that the parties carry it out. The parties agree to accept the terms and conditions herein. Date October 15, 2019 Date Carlsbad Convention & Visitors Bureau, by ~ , ,, I. . (!_ Brian Hughes Brian Hughes, Board Chairperson Civitas Advisors, by John ·Lambeth, President & CEO Civitas I Carlsbad Convention & Visitors Bureau B