HomeMy WebLinkAboutCC 2025-08-12_10.a. TBID Amending Authorized Uses of FundsItem 10.a.
MEMORANDUM
TO: City Council
FROM: Sheridan Bohlken, Director of Recreation Services
SUBJECT: Public Hearing to Consider Amending the Authorized Uses of the
Arroyo Grande Tourism Business Improvement District Funds and
Amending the Arroyo Grande Municipal Code
DATE: August 12, 2025
RECOMMENDATION:
1) Conduct a public hearing to receive public comment and any protests regarding the
City Council’s intention to amend authorized improvements and activities funded by
assessments imposed through the Arroyo Grande Tourism Business Improvement
District (AGTBID);
2) Determine whether a majority protest has been received; if no majority protest has
been received:
a. Adopt a Resolution to make modifications to the authorized uses funded by
assessments imposed through the AGTBID, and directing the introduction of an
ordinance amending Chapter 3.46 of the Arroyo Grande Municipal Code.
b. Introduce an Ordinance for first reading to amend Chapter 3.46 of the Municipal
Code authorizing amendments to authorized uses of AGTBID funds; and
3) Find that the recommended actions to support the Arroyo Grande Tourism Business
Improvement District are not subject to the California Environmental Quality Act (“CEQA”)
because these efforts have no potential to result in either a direct, or reasonably
foreseeable indirect, physical change in the environment. (State CEQA Guidelines, §§
15060 (c)(2) and (3), 15378).
IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:
Amending authorized improvements and activities (the “Authorized Uses”) to be funded
with assessments collected through the AGTBID, and to amend the Municipal Code
accordingly, will not impact the current AGTBID budget but may shift fu ture funding
toward different project types. Staff time will be required to implement the proposed
ordinance language, update policies, and oversee project implementation and alignment
with tourism goals.
BACKGROUND:
The AGTBID was established to fund activities that promote tourism and increase
overnight stays, specifically to benefit lodging businesses. Currently, AGTBID funds are
Page 331 of 548
Item 10.a.
City Council
Public Hearing to Consider Amending the Authorized Uses of the Arroyo Grande
Tourism Business Improvement District Funds and Amending the Arroyo Grande
Municipal Code
August 12, 2025
Page 2
restricted to uses such as marketing, advertising, and administrative activities to promote
tourism.
On October 15, 20241, a majority of the AGTBID Advisory Board agreed to hold a future
discussion about the potential for expanding eligible uses of assessment funds. At the
December 17, 20242, regular meeting, the Advisory Board voted unanimously to
recommend the City Council amend the AGTBID Authorized Uses and to amend the
Arroyo Grande Municipal Code to allow greater flexibility in the use of these funds.
The proposed amendment aligns with practices in other regional jurisdictions, including
Pismo Beach, San Luis Obispo, and Paso Robles . The Resolution of Intention to amend
the authorized improvements and activities funded by assessments imposed through the
AGTBID was proposed and adopted by the Council on July 22, 20253.
ANALYSIS OF ISSUES:
Expanding the Authorized Uses of AGTBID assessment funds is a strategic and research -
supported approach to increase Arroyo Grande’s competitiveness as a visitor destination
while enhancing public amenities that benefit the AGTBID businesses, tourists, and
residents. Broadening the Authorized Use of these funds aligns with proven models in
peer communities and reflects national tourism and economic development trends.
The proposed amendments to the Authorized Uses would include the following
categories, as authorized by State law:
Improvements, including 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:
o Parking facilities, benches, trash receptacles, street lighting, decorations
including public art and cultural enhancements, parks, and fountains.
Promotion and furnishing of activities, including but not limited to:
o Promotion of public events which benefit businesses within the AGTBID and
which take place on or in public spaces within the AGTBID;
o Furnishing of music in any public place within the AGTBID;
o Promotion of tourism within the AGTBID; and
o Activities which benefit businesses located and operating within the
AGTBID.
These expanded uses offer opportunities to invest in the physical environment of the
AGTBID, making the area more attractive and accessible to visitors, while also directly
benefiting the AGTBID businesses. Enhancements such as public art installations,
1 https://pub-arroyogrande.escribemeetings.com/filestream.ashx?DocumentId=13245
2 https://pub-arroyogrande.escribemeetings.com/filestream.ashx?DocumentId=13247
3 https://pub-arroyogrande.escribemeetings.com/filestream.ashx?DocumentId=15379
Page 332 of 548
Item 10.a.
City Council
Public Hearing to Consider Amending the Authorized Uses of the Arroyo Grande
Tourism Business Improvement District Funds and Amending the Arroyo Grande
Municipal Code
August 12, 2025
Page 3
wa yfinding signage, and event-supporting infrastructure complement marketing efforts by
improving the guest experience and increasing the likelihood of repeat visits. Regional
examples demonstrate the success of such strategies:
Paso Robles saw a 25% increase in Transient Occupancy Tax (TOT) revenue
following investments in public art, wayfinding, and infrastructure that supported
destination-defining experiences like Sensorio.
San Luis Obispo enhanced downtown vibrancy and exceeded pre-pandemic TOT
revenue by incorporating beautification and sustainability initiatives funded in part
through its TBID.
Pismo Beach leveraged TBID funds to support ADA-accessible infrastructure,
restrooms, murals, and eco-tourism enhancements, directly contributing to longer
visitor stays and increased repeat tourism.
Applying these best practices in Arroyo Grande is expected to drive tourism -related
economic activity while enhancing quality of life for residents and visitors alike.
ALTERNATIVES:
The following alternatives are provided for the Council’s consideration:
1. Approve the Recommended Actions
2. Modify the Proposed Authorized Uses or Proposed Ordinance Language and
Proceed with Public Hearing.
3. Do Not Approve the Proposed Amendments and Maintain Current Authorized Uses.
ADVANTAGES:
Modifications to the Authorized Uses would e nhance destination appeal, aligns with
regional and national best practices, and provides additional benefit to the AGTBID
businesses, visitors, and residents.
DISADVANTAGES:
Modifying the Authorized Uses would shift spending from solely a marketing and
advertising focus, potentially increase administrative oversight, and does require clear
criteria and guardrails.
ENVIRONMENTAL REVIEW:
The recommended actions to support the Arroyo Grande Tourism Business Improvement
District are not subject to the California Environmental Quality Act (“CEQA”) because
these efforts have no potential to result in either a direct, or reasonably foreseeable
indirect, physical change in the environment. (State CEQA Guidelines, §§ 15060 (c)(2)
and (3), 15378).
Page 333 of 548
Item 10.a.
City Council
Public Hearing to Consider Amending the Authorized Uses of the Arroyo Grande
Tourism Business Improvement District Funds and Amending the Arroyo Grande
Municipal Code
August 12, 2025
Page 4
PUBLIC NOTIFICATION AND COMMENTS:
The Agenda was posted at City Hall and on the City’s website in accordance with
Government Code Section 54954.2.
ATTACHMENTS:
1. Resolution
2. Ordinance Amending Arroyo Grande Municipal Code Chapter 3.46
Page 334 of 548
ATTACHMENT 1
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARROYO
GRANDE TO MAKE MODIFICATIONS TO THE AUTHORIZED USES
FUNDED BY ASSESSMENTS IMPOSED THROUGH THE ARROYO
GRANDE TOURISM BUSINESS IMPROVEMENT DISTRICT (AGTBID),
PURSUANT TO A PUBLIC HEARING CONDUCTED ON AUGUST 12,
2025, AND DIRECTING THE INTRODUCTION OF AN ORDINANCE
AMENDING CHAPTER 3.46 OF THE ARROYO GRANDE MUNICIPAL
CODE, AND TAKING OTHER ACTIONS RELATED THERETO
WHEREAS, on July 22, 2025, the City Council of the City of Arroyo Grande adopted a
Resolution of Intention declaring its intent to amend the authorized improvements and
activities funded by assessments (the “Authorized Uses”) imposed through the Arroyo
Grande Tourism Business Improvement District (“AGTBID”), and to initiate the process
to amend Chapter 3.46 of the Arroyo Grande Municipal Code ; and
WHEREAS, the AGTBID was formed pursuant to the Parking and Business Improvement
Area Law of 1989, California Streets and Highways Code section 36500 et seq. (the
“Act”), and codified under Chapter 3.46 of the Arroyo Grande Municipal Code; and
WHEREAS, the proposed amendments to the Authorized Uses are intended to enhance
the benefits provided to the businesses located within the AGTBID by increasing the
ability to support such businesses, improve the visitor experience, and promote tourism
and economic vitality within the AGTBID; and
WHEREAS, notice of the public hearing on the proposed amendments was given as
required by section 36523 of the Act, including mailed notices to assessed businesses
and publication in a newspaper of general circulation; and
WHEREAS, on August 12, 2025, the City Council held a duly noticed public hearing to
receive public comments and consider any written protests regarding the proposed
amendments to the AGTBID’s Authorized Uses; and
WHEREAS, after considering all protests, the City Council finds that a majority protest,
as defined under section 36525 of the Act, was not received and the City Council may
proceed with the proposed amendments to the Authorized Uses.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Arroyo
Grande does hereby confirms and determines to make modifications to the AGTBID’s
Authorized Uses and to proceed with the amendment of Chapter 3.46 of the Arroyo
Grande Municipal Code.
Page 335 of 548
RESOLUTION NO.
PAGE 2
BE IT FURTHER RESOLVED, the Authorized Uses of the AGTBID shall include the
following as authorized by the Act:
Improvements, including 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:
o Parking facilities, benches, trash receptacles, street lighting,
decorations including public art and cultural enhancements , parks,
and fountains.
Promotion and furnishing of activities, including but not limited to:
o Promotion of public events which benefit businesses within the
AGTBID and which take place on or in public spaces within the
AGTBID;
o Furnishing of music in any public place within the AGTBID;
o Promotion of tourism within the AGTBID; and
o Activities which benefit businesses located and operating within the
AGTBID.
BE IT FURTHER RESOLVED, the City Council hereby directs staff to introduce an
ordinance for first reading to amend Chapter 3.46 of the Arroyo Grande Municipal Code
consistent with the Authorized Uses.
BE IT FURTHER RESOLVED this Resolution shall become effective immediately upon
its adoption.
On motion of Council Member , seconded by Council Member ,
and on the following roll call vote, to wit:
AYES:
NOES:
ABSENT:
the foregoing Resolution was passed and adopted this th day of , 2025.
Page 336 of 548
RESOLUTION NO.
PAGE 3
CAREN RAY RUSSOM, MAYOR
ATTEST:
JESSICA MATSON, CITY CLERK
APPROVED AS TO CONTENT:
MATTHEW DOWNING, CITY MANAGER
APPROVED AS TO FORM:
ISAAC ROSEN, CITY ATTORNEY
Page 337 of 548
ATTACHMENT 2
ORDINANCE NO.
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ARROYO
GRANDE TO AMEND THE ARROYO GRANDE MUNICIPAL CODE
CHAPTER 3.46 AMENDING THE AUTHORIZED IMPROVEMENTS AND
ACTIVITIES TO BE FUNDED BY ASSESSMENTS IMPOSED
THROUGH THE ARROYO GRANDE TOURISM BUSINESS
IMPROVEMENT DISTRICT
WHEREAS, on July 22, 2025, the City Council of the City of Arroyo Grande adopted a
Resolution of Intention declaring its intent to amend the authorized improvements and
activities funded by assessments (the “Authorized Uses”) imposed through the Arroyo
Grande Tourism Business Improvement District (“AGTBID”), and to initiate the process
to amend Chapter 3.46 of the Arroyo Grande Municipal Code; and
WHEREAS, the AGTBID was formed pursuant to the Parking and Business
Improvement Area Law of 1989, California Streets and Highways Code section 36500
et seq. (the “Act”), and codified under Chapter 3.46 of the A rroyo Grande Municipal
Code; and
WHEREAS, the proposed amendments to the Authorized Uses are intended to enhance
the benefits provided to the businesses located within the AGTBID by increasing the
ability to support such businesses, improve the visitor experience, and promote tourism
and economic vitality within the AGTBID; and
WHEREAS, on August 12, 2025, the City Council held a duly noticed public hearing to
receive public comments and consider any written protests regarding the proposed
amendments to the AGTBID’s Authorized Uses; and
WHEREAS, at the conclusion of the public hearing the City Council found there was no
majority protest, as defined under section 36525 of the Act, to the proposed amendment
to the Authorized Uses and the City Council therefore approved such amendment to the
Authorized Uses; and
WHEREAS, the City Council now desires to amend Chapter 3.46 of the Arroyo Grande
Municipal Code as described below.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE
DOES ORDAIN AS FOLLOWS:
SECTION 1. Recitals. The recitals above are true and correct and are incorporated
herein by reference and adopted as findings by the City Council.
SECTION 2. CEQA Compliance. The City Council finds that the recommended actions
to support the Arroyo Grande Tourism Business Improvement District are not subject to
the California Environmental Quality Act (“CEQA”) because these efforts have no
potential to result in either a direct, or reasonably foreseeable indirect, physical change
in the environment. (State CEQA Guidelines, §§ 15060 (c)(2) and (3), 15378).
Page 338 of 548
ORDINANCE NO.
PAGE 2
SECTION 3. Amendment. Section 3.46.030, Authorized Uses, of the Arroyo Grande
Municipal Code is hereby amended to read in its entirety as follows:
Section. 3.46.030 Authorized Uses
The purpose of forming the AGTBID is to provide revenue to defray the costs of services,
activities and programs promoting lodging businesses in the AGTBID through the
promotion of scenic, recreational, cultural and other attractions in the AGTBID as a
tourist destination. It is the intent of this chapter to provide a supplemental source of
funding for the promotion of lodging operations in the AGTBID and it is not intended to
supplant any other existing sources of revenues that may be used by the city of Arroyo
Grande for the promotion of the lodging industry.
Funds collected from assessments imposed on businesses within the AGTBID may be
used for the following improvements and activities tha t benefit the businesses located
and operating within the AGTBID, as authorized by Law:
A. Improvements, including the acquisition, construction, installation, or maintenance of
any tangible property with an estimated useful life of five years or more, in cluding, but
not limited to the following:
1. Parking facilities, benches, trash receptacles, street lighting, decorations
including public art and cultural enhancements, parks, and fountains.
B. Promotion and furnishing of activities, including but not limited to:
1. Promotion of public events which benefit businesses within the AGTBID and
which take place on or in public spaces within the AGTBID;
2. Furnishing of music in any public place within the AGTBID;
3. Promotion of tourism within the AGTBID; and
4. Activities which benefit businesses located and operating within the AGTBID.
SECTION 4. Amendment. Section 3.46.080, Use of Revenue, of the Arroyo Grande
Municipal Code is hereby amended to read in its entirety as follows:
Section. 3.46.080 Use of Revenue.
The Authorized Uses of revenue are defined in Section 3.46.030 above. The total
revenue from the levy of assessments within the AGTBID shall not be used to provide
improvements or activities outside the AGTBID or for any purpose other than the
purposes specified in Section 3.46.030. The proceeds of the lodging business
assessment and any other voluntary contributions shall be spent to administer the
AGTBID pursuant to this Chapter 3.46, including the calculation, collection, and
enforcement of assessments. All funds shall be expended consistent with the
purposes of this Section. Funds remaining at the end of any AGTBID term may be
used in subsequent years in which AGTBID assessments are levied as long as they
are used consistent with the requirements of this Section. The Arroyo Grande City
Council shall consider recommendations made by the advisory board created by
Section 3.46.100 of this chapter as to the use of assessment revenue.
SECTION 5. Savings Clause. Neither the adoption of this Ordinance nor the repeal
of any other ordinance of this City shall in any manner affect the prosecution for
violations of ordinances, which violations were committed prior to the effective date
Page 339 of 548
ORDINANCE NO.
PAGE 3
hereof, nor be construed as a waiver of any penalty or the penal provisions applicable
to any violation thereof.
SECTION 6. Severability. If any section, subsection, subdivision, sentence, clause,
phrase, or portion of this Ordinance is, for any reason, held to be invalid or
unconstitutional by the decision of any court of competent jurisdiction, such decision
shall not affect the validity of the remaining portions of this Ordinance. The City
Council hereby declares that it would have adopted this Ordinance and each section,
subsection, subdivision, sentence, clause, phrase, or portion thereof irrespective of
the fact that any one or more sections, subsections, subdivisions, sentences, clauses,
phrases, or portions thereof be declared invalid or unconstitutional.
SECTION 7: Effective Date. This Ordinance shall take effect and be in full force and
effect thirty (30) days after its passage.
SECTION 8: City Clerk’s Certification. The City Clerk shall certify to the adoption
of this Ordinance and cause the same to be posted at the duly designated posting
places within the City and published once within fifteen (15) days after passage and
adoption as required by law; or, in the alternative, the City Clerk may cause to be
published a summary of this Ordinance and post a certified copy of the text of this
Ordinance in the Office of the City Clerk five (5) days prior to the date of
adoption of this Ordinance, and, within fifteen (15) days after adoption, the City
Clerk shall cause to be published the aforementioned summary and shall post a
certified copy of this Ordinance, together with the vote for and against the same,
in the Office of the City Clerk.
On motion of Council Member , seconded by Council Member ,
and on the following roll call vote to wit:
AYES:
NOES:
ABSENT:
the foregoing Ordinance was adopted this day of ,
2025.
Page 340 of 548
ORDINANCE NO.
PAGE 4
CAREN RAY RUSSOM, MAYOR
ATTEST:
JESSICA MATSON, CITY CLERK
APPROVED AS TO CONTENT:
MATTHEW DOWNING, CITY MANAGER
APPROVED AS TO FORM:
ISAAC ROSEN, CITY ATTORNEY
Page 341 of 548