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
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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
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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
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Trip Advisor Sponsorship Page
Trip Advisor Display Ads
AGTBID MEDIA 2014-2015
Visit Arroyo Grande
Item 9.a. - Page 15
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Item 9.a. - Page 16