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CC 2015-07-28_09a PH AGTBID MEMORANDUM TO: CITY COUNCIL FROM: ROBERT MCFALL, INTERIM CITY MANAGER BY: DEBBIE MALICOAT, ADMINISTRATIVE SERVICES DIRECTOR SUBJECT: ANNUAL PUBLIC HEARING FOR THE ARROYO GRANDE TOURISM BUSINESS IMPROVEMENT DISTRICT DATE: JULY 28, 2015 RECOMMENDATION: It is recommended the City Council: 1) Hold a public hearing to receive testimony regarding the City Council’s intention to continue the Arroyo Grande Tourism Business Improvement District (AGTBID) and levy an annual assessment for fiscal year 2015-16; 2) Determine whether a legally sufficient number of protests have been made; 3) If a legally sufficient protest is not made, adopt a Resolution levying an annual assessment for the AGTBID for the 2015-2016 fiscal year; and 4) Adopt a Resolution approving the FY 2015-16 budget for the AGTBID. FINANCIAL IMPACT: Based on the anticipated year-end results for FY 2014-15, the total assessment expected to be collected totals approximately $180,300. In FY 2015-16, the AGTBID projected revenue is $195,000. Of the projected revenue, $3,000 is budgeted to cover the City’s administrative costs associated with collecting and disbursing the assessment. The City has also budgeted $5,000 to contribute toward the tourism efforts. Therefore, it results in a net cost of $2,000 to the City. BACKGROUND: In May 2013, the City Council adopted an Ordinance establishing the Arroyo Grande Tourism Business Improvement District. The District was formed under the Parking and Business Improvement Law of 1989, Sections 36500 et seq. of the Streets and Highways Code and incorporated into the Arroyo Grande Municipal Code (AGMC) in Title 3, Chapter 3.46. In accordance with the provisions in the Streets and Highways Code and AGMC Section 3.46.100, the City Council appointed an Advisory Board. Pursuant to Streets and Highways Code Section 36533, the Advisory Board is to prepare an annual report, which is to be submitted to the City Council for its review and Item 9.a. - Page 1 CITY COUNCIL ANNUAL PUBLIC HEARING FOR THE ARROYO GRANDE TOURISM BUSINESS IMPROVEMENT DISTRICT JULY 28, 2015 PAGE 2 approval. Accordingly, the AGTBID Advisory Board submitted the attached annual report to the City Council for consideration at its June 23, 2015 meeting, which was approved. AGMC Section 3.46.060 also provides that the assessments for the AGTBID are to be reviewed annually by the City Council based upon the annual report of the Advisory Board, and after approval of the annual report, the City Council is to follow the hearing process outlined in Streets and Highways Code Section 36534 for the annual assessment for the upcoming fiscal year. A public hearing is to be held in order to receive any written or oral protests against the continuation of the District. Accordingly, on June 23, 2015, the City Council adopted a Resolution setting a public hearing for July 28, 2015. ANALYSIS OF ISSUES: The AGTBID has been in effect for almost two years and has been very successful. A tourism website and other marketing efforts have been developed and implemented. The efforts are coordinated by a Chamber of Commerce Tourism Committee and approved by the AGTBID Advisory Board. The Chamber of Commerce has administered the program so minimal staff time has been required by the City. The AGTBID Advisory Board recommends extending the assessment and continuing the program. Today’s public hearing will allow lodging businesses subject to the assessment an opportunity to submit comments, voice concerns, and protest the assessment. As set forth in Sections 36524 and 36525 of the California Streets and Highways Code, the City Council has the ability to continue the AGTBID at this public hearing, unless written protests are received from lodging businesses that pay 50% or more of the proposed assessments. In that event, the Council cannot consider continuation of the AGTBID for at least one year. Streets and Highways Code Section 36535 provides that at the conclusion of the hearing, a Resolution confirming the Advisory Board’s report may be adopted. The statute further provides that adoption of the Resolution constitutes the levy of the assessment for the fiscal year. A Resolution has been prepared for City Council consideration and adoption if there is no legally sufficient protest. ALTERNATIVES: The following alternatives are provided for the Council’s consideration: 1. Approve staff’s recommendations; 2. Do not approve staff’s recommendations and terminate the AGTBID; 3. Direct staff to make modifications to the AGTBID and schedule another public hearing; or 4. Provide staff other direction. Item 9.a. - Page 2 CITY COUNCIL ANNUAL PUBLIC HEARING FOR THE ARROYO GRANDE TOURISM BUSINESS IMPROVEMENT DISTRICT JULY 28, 2015 PAGE 3 ADVANTAGES: The recommendations will enable the City to extend the AGTBID, which provides a mechanism to generate funding to promote hotel stays and tourism in the City, which increases transient occupancy tax revenue and supports local businesses. DISADVANTAGES: No disadvantages with the recommended action are identified. ENVIRONMENTAL REVIEW: No environmental review is required for this item. PUBLIC NOTIFICATION AND COMMENTS: The City Council Resolution of Intention to continue the AGTBID, to continue the basis for and to levy the assessment for the District, and to set a date for the public hearing on the District and the assessment for Fiscal Year 2015-16, was published in The Tribune on Friday, July 10, 2015 pursuant to Streets and Highway Code Section 36534. On Friday, July 17, 2015, a Notice of Public Hearing was published in The Tribune and mailed to each lodging business located within the City. The Agenda was posted at City Hall on Thursday, July 23, 2015 and the Agenda and staff report were posted on the City’s website on Friday, July 24, 2015. Attachments: 1. Annual Report Item 9.a. - Page 3 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE LEVYING AN ANNUAL ASSESSMENT FOR THE ARROYO GRANDE TOURISM BUSINESS IMPROVEMENT DISTRICT FOR THE 2015-16 FISCAL YEAR WHEREAS the Parking and Business Improvement Area Law of 1989, sections 36500 et seq. of the Streets and Highways Code, authorizes cities to establish business improvement districts for several purposes, one of which is the promotion of tourism; and WHEREAS the Arroyo Grande Tourism Business Improvement District was established in May, 2013 and incorporated into the Arroyo Grande Municipal Code in Chapter 3.46; and WHEREAS in accordance with the requirements of Streets and Highways Code Section 36530 and Arroyo Grande Municipal Code Section 3.46.100, the City Council appointed an Advisory Board to provide oversight, guidance, and recommendations regarding the use of the assessment funds; and WHEREAS the Arroyo Grande Municipal Code and the Parking and Business Improvement Area Law of 1989 requires the Advisory Board to prepare and submit an annual report stating proposed changes, improvements and activities for the fiscal year; and WHEREAS the Advisory Board annual report was considered and approved by the Arroyo Grande City Council at its June 23, 2015 meeting; and WHEREAS, in accordance with the procedures contained in Streets and Highways Code Section 36534, on June 23, 2015 the City Council adopted a Resolution of Intention to levy an annual assessment for the Arroyo Grande Tourism Business Improvement District for the 2015-2016 fiscal year and set a public hearing for July 28, 2015 to consider the annual assessment and hear any oral or written protests; and WHEREAS, the City Council held a duly noticed Public Hearing on July 28, 2015 to allow for protests, as required by Streets and Highway Code Section 36524, and, sufficient written or oral protests were not received from lodging businesses in the District which pay fifty percent or more of the assessment . NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Arroyo Grande as follows: SECTION 1. The City Council hereby continues the established Arroyo Grande Tourism Business Improvement District in accordance with Arroyo Grande Item 9.a. - Page 4 RESOLUTION NO. PAGE 2 Municipal Code Chapter 3.46 and California Streets and Highways Code Sections 36500 et seq. (Parking and Business Improvement Area Law of 1989) and levies assessments for fiscal year 2015-16 as further contained herein. SECTION 2. The report of the Arroyo Grande Tourism Business Improvement District Advisory Board is hereby confirmed. SECTION 3. The location and boundaries of the Arroyo Grande Tourism Business Improvement District are the boundaries of the City of Arroyo Grande. SECTION 4. The assessment levied by the Arroyo Grande Tourism Business Improvement District shall be used for activities and programs promoting lodging businesses in the District through the promotion of scenic, recreational, cultural and other attractions in the District as a tourist destination, and as further set forth in Arroyo Grande Municipal Code Section 3.46.030. SECTION 5. The assessment will be levied and allocated by the City of Arroyo Grande. SECTION 6. The assessment is to be levied on all “lodging”, as that term is defined in Arroyo Grande Municipal Code section 3.46.020. SECTION 7. The assessment for fiscal year 2015-16 shall be levied on all lodging businesses within the AGTBID boundaries and shall be based upon two percent of the rent charged by the operator per occupied room per night for all transient occupancies. The assessment shall be collected quarterly, based on two percent of the rent charged by the operator per occupied room per night in revenues for the previous quarter. SECTION 8. New lodging businesses shall not be exempt from immediate assessment. On motion of Council Member , seconded by Council Member , and by the following roll call vote, to wit: AYES: NOES: ABSENT: the foregoing Resolution was passed and adopted this 28th day of July, 2015. Item 9.a. - Page 5 RESOLUTION NO. PAGE 3 ___________________________________ JIM HILL, MAYOR ATTEST: ___ KELLY WETMORE, CITY CLERK APPROVED AS TO CONTENT: _____________________________________ ROBERT MCFALL, INTERIM CITY MANAGER APPROVED AS TO FORM: ___________________________________ HEATHER WHITHAM, CITY ATTORNEY Item 9.a. - Page 6 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE ADOPTING THE FISCAL YEAR 2015-16 BUDGET FOR THE ARROYO GRANDE TOURISM BUSINESS IMPROVEMENT DISTRICT WHEREAS, on February 26, 2013, the City Council adopted Resolution No. 4516 establishing the Arroyo Grande Tourism Business Improvement District (“AGTBID”) Advisory Board (“Advisory Board”); and WHEREAS, on May 14, 2013, the City Council adopted Ordinance No. 651 establishing the AGTBID; and WHEREAS, the purpose of the Advisory Board is to consult with and advise the City Council on those matters dealing with the method and basis of levying assessments within the AGTBID; expenditures of revenues derived from such assessments; and programs, services, improvements, and activities intended to promote lodging establishments within the District; and WHEREAS, on June 1, 2015, the Advisory Board approved the Annual Report, which included a recommended budget expenditure plan for FY 2015-16 based upon City revenue projections; and WHEREAS, on June 23, 2015, the City Council approved the Advisory Board’s Annual Report and adopted a Resolution of Intention to levy and collect assessments for the 2015- 16 fiscal year and to set the date for a public hearing for July 28, 2015; and WHEREAS, on July 28, 2015, the City Council adopted a Resolution confirming the Advisory Board’s Annual Report and levying an annual assessment for the AGTBID for the 2015-16 fiscal year; and WHEREAS, the budget recommendations will fund a work plan that meets the objectives, goals and responsibilities of the AGTBID. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Arroyo Grande as follows: 1. The recitals set forth herein are true and correct. 2. The City Council hereby adopts the FY 2015-16 budget for the Arroyo Grande Tourism Business Improvement District attached hereto as Exhibit A. On motion by 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 28th day of July, 2015. Item 9.a. - Page 7 RESOLUTION NO. PAGE 2 ___________________________________ JIM HILL, MAYOR ATTEST: ___ KELLY WETMORE, CITY CLERK APPROVED AS TO CONTENT: _______________________________________ ROBERT MCFALL, INTERIM CITY MANAGER APPROVED AS TO FORM: ___________________________________ HEATHER WHITHAM, CITY ATTORNEY Item 9.a. - Page 8 1 ARROYO GRANDE TOURISM BUSINESS IMPROVEM ENT DISTRICT ANNUAL R EPORT FY 2014-2015 ATTACHMENT 1 Item 9.a. - Page 9 2 BACKGROUND The Arroyo Grande Tourism Business Improvement District Advisory Board met for the first time, Monday, June 24, 2013. Board Members appointed: Kevin Thornton, Best Western Casa Grande; Andrew Jenest, Hampton Inn; and Mike Panchal, Aloha Inn. Jenest was elected chairman. Rachel Patranella, who replaced Jenest as the General Manager of the Hampton Inn began attending meetings in July of 2014. At the November 24, 2014 meeting, Patranella was nominated as Chairwoman. Responsibilities of the Chamber of Commerce included: • Coordinating committee and sub-committee meetings • Taking and maintaining minutes of all meetings • Managing marketing contractors • Monitoring and provide data gathered through digital marketing • Coordinating payments • Attending tourism industry meetings as Arroyo Grande’s representative • Responding to requests from other organizations • Monitoring the implementation of the marketing plan • Providing recommendations to the TBID Advisory board • Coordinating outside presentations to the Marketing Committee and TBID Board of Directors Item 9.a. - Page 10 3 Barnett Cox & Associates was responsible for updating and maintaining the website, creating content for social media channels, and the creation of marketing and advertising collateral. Media Planner and Account Manager Shari Clark headed up the team at Barnett Cox & Associates. The following is a list of activities from July 2014 through May 2015: • Promotional video for Arroyo Grande produced • AG promotional video uploaded and placed on Trip Advisor website • Photo contest run in July 2014 • Video contest run in October/November 2014 • SAVOR the Central Coast sponsorship included an adventure tour in the City of Arroyo Grande and sponsorship of Winemaker Central • Sponsorship page with Trip Advisor was created and went live in November 2014 • Digital/Mobile advertising placed with the Bay Area News Group, LA Times.com and Google Display Network • Sponsored posts run on Facebook • Digital/Mobile banner campaign began mid-October • Advertising placed in the Arroyo Grande Visitor Guide • Advertorial materials submitted to Tasting & Touring Magazine for print/online feature • Air B&B properties were added to the website • Creation of creative for a billboard in preparation for when a suitable one becomes available • Planning and quote requests for new AG Tourism video Regarding the requirements for the Annual Report as stated in Section 36533 of the Streets and Highway Code: 1. The Arroyo Grande Tourism Business Improvement District (TBID) Advisory Board does not propose any changes in the boundaries of the TBID, which were established as the boundaries of the City of Arroyo Grande. 2. With the renewal of the TBID, continuing initiatives proposed for FY 2015-16 include: • Continue to develop marketing strategies and creative campaigns that leverage the strength of traditional and non-traditional media. Expanding the use of integrated marketing and utilizing targeted advertising strategies on social channels reflect this shift to mobile devices. Traditional advertising that includes print and electronic media will continue to be a part of the integrated marketing approach. • Par ticipate in special events that specifically target hotel stays in Arroyo Grande. • Continue on the watch list for available billboards • Market Arroyo Grande through participation with Destination Marketing Organizations (DMOs) including but not limited to the Central Coast Tourism Council, the SLO Wine Association and Visit San Luis Obispo County. Item 9.a. - Page 11 4 3. Year To Date costs for FY 2014-2015 REVENUE ACTUAL AS OF 5/28/15 BUDGET VARIANCE % USED TBID ASSESSMENTS $152,233 $170,000 ($17,767)90% INTEREST $479 -$479 0% CHAMBER CONTRIBUTION $5,000$5,000 -100% CITY CONTRIBUTION -$5,000($5,000)0% TOTAL REVENUE $157,713 $180,000 ($22,287)88% EXPENDITURES ACTUAL AS OF 5/28/15 BUDGET VARIANCE % USED ADVERTISING $100,187 $91,000 ($9,187)110% CONTRACT SERVICES $5,585 $22,500 $16,915 25% MEMBERSHIP & SUBSCRIPTIONS $14,880 $18,380 $3,500 81% PUBLIC RELATIONS $10,500 $40,000$29,000 26% TOTAL EXPENDITURES $131,152 $171,880 $40,728 76% REVENUES OVER EXPENDITURES $26,561 $8,120 BEGINNING FUND BALANCE $56,517 BUDGETED ENDING FUND BALANCE $64,637 PROJECTED ENDING FUND BALANCE $74,144 PROJECTED YEAR END TBID REVENUE $178,907 Item 9.a. - Page 12 5 4. FY 2014-2015 Budget Details REVENUES REVENUE SOURCEAMOUNT TBID FEE $170,000 CITY $5,000 CHAMBER $5,000 TOTAL $180,000 ADVERTISING/MARKETING ADVERTISING $42,000 CONSULTANT SERVICES $32,000 MISC $10,000 TOTAL $84,000 MEMBERSHIP VISIT SLO COUNTY $14,880 CCTC $500 MISC.$3,000 TOTAL $18,380 EXPENDITURE TOTAL $171,880 PROJECTED FUND BALANCE $8,120 EXPENDITURES LINE ITEM EXPENDITURE CITY $3,000 CHAMBER $17,000 SUPPLIES $2,500 TOTAL $22,500 SPONSORSHIPS SAVOR $15,000 MISC.$15,000 TOTAL $30,000 EVENTS MISC.$10,000 TOTAL $10,000 WEBSITE WEBSITE MAINTENANCE $7,000 TOTAL $7,000 Item 9.a. - Page 13 6 5. FY 2015-2016 Projected Budget Detail REVENUES REVENUE SOURCEAMOUNT TBID FEE $185,000 CITY $5,000 CHAMBER $5,000 TOTAL $195,000 ADVERTISING/MARKETING CONSULTANT SERVICES $95,000 TOTAL $95,000 MEMBERSHIP CCTC $500 MISC.$5,000 TOTAL $5,500 EXPENDITURE TOTAL $183,000 PROJECTED FUND BALANCE $12,000 EXPENDITURES LINE ITEM EXPENDITURE CITY $3,000 CHAMBER $17,000 SUPPLIES $2,500 TOTAL $22,500 SPONSORSHIPS MISC.$30,000 TOTAL $30,000 EVENTS MISC.$10,000 TOTAL $10,000 WEBSITE WEBSITE MAINTENANCE $20,000 TOTAL $20,000 Item 9.a. - Page 14 7 Trip Advisor Sponsorship Page Trip Advisor Display Ads AGTBID MEDIA 2014-2015 Visit Arroyo Grande Item 9.a. - Page 15 THIS PAGE INTENTIONALLY LEFT BLANK Item 9.a. - Page 16