CC 2018-04-10_09e AGTBID Annual Report and Resolution of Intention
MEMORANDUM
TO: CITY COUNCIL
FROM: JIM BERGMAN, CITY MANAGER
BY: JESSICA MATSON, DEPUTY CITY CLERK
SUBJECT: CONSIDERATION OF ANNUAL REPORT AND ADOPTION OF
RESOLUTION OF INTENTION FOR LEVY OF ANNUAL ASSESSMENT
FOR ARROYO GRANDE TOURISM BUSINESS IMPROVEMENT
DISTRICT
DATE: APRIL 10, 2018
SUMMARY OF ACTION:
Receive and approve the Annual Report, which provides information on the activities
during the past year, and adopt a Resolution of Intention that would continue the levy of
annual assessment for Arroyo Grande Tourism Business Improvement District
(AGTBID) for another year.
IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:
Based on the anticipated year-end results for 2017-18, the assessment expected to be
collected totals approximately $195,000. The AGTBID budget provides $3,000 to the
City 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.
RECOMMENDATION:
It is recommended the City Council: 1) receive and approve the annual report of the
Arroyo Grande Tourism Business Improvement District (AGTBID) Advisory Board; 2)
adopt a Resolution of Intention to levy and collect assessments within the AGTBID area
for Fiscal Year 2018-19 at the same rate as in Fiscal Year 2017-18; and 3) set the date
for the public hearing for May 22, 2018.
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
Item 9.e. - Page 1
CITY COUNCIL
CONSIDERATION OF ANNUAL REPORT AND ADOPTION OF RESOLUTION OF
INTENTION FOR LEVY OF ANNUAL ASSESSMENT FOR ARROYO GRANDE
TOURISM BUSINESS IMPROVEMENT DISTRICT
APRIL 10, 2018
PAGE 2
Highways Code and incorporated into the Arroyo Grande Municipal Code (AGMC) in
Title 3, Chapter 3.46.
The purpose of forming the District was to provide revenue to defray the costs of
services, 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. An assessment is levied on all lodging businesses within the
AGTBID boundaries and is based upon two percent of the rent charged by the
operator per occupied room per night for all transient occupancies.
In December 2014, the City Council adopted an Ordinance amending Chapter 3.46 of
the Arroyo Grande Municipal Code to provide that the same exemptions that apply to
the Transient Occupancy Tax apply to AGTBID assessments and amended the
definition of "lodging" to include vacation rentals and homestays.
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 approval. Accordingly, the
AGTBID Advisory Board has submitted the attached annual report.
In past years, the AGTBID marketing consultant has completed the annual report. The
AGTBID has not had a marketing firm since October 2017. Therefore, the attached
report was prepared by City staff and it reflects work completed by the marketing
consultant up until October 2017, a current look at financials, and plans for the
upcoming year.
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 36535 for the annual
assessment for the upcoming fiscal year. Section 36534 provides for the adoption of a
Resolution of Intention to levy an annual assessment for that fiscal year. The Resolution
also sets a public hearing in order to receive any written or oral protests against the
continuation of the District as required by the applicable statute.
ANALYSIS OF ISSUES:
The AGTBID has been in effect for almost five years and has been very successful. A
tourism website and other marketing efforts have been developed and implemented.
In January 2018, the City Council combined the Tourism Marketing Committee, which
was coordinated by the Chamber of Commerce, and the AGTBID Advisory Board,
Item 9.e. - Page 2
CITY COUNCIL
CONSIDERATION OF ANNUAL REPORT AND ADOPTION OF RESOLUTION OF
INTENTION FOR LEVY OF ANNUAL ASSESSMENT FOR ARROYO GRANDE
TOURISM BUSINESS IMPROVEMENT DISTRICT
APRIL 10, 2018
PAGE 3
increasing the number of members from three (3) to nine (9). AGTBID efforts are
approved by the AGTBID Advisory Board. The Chamber of Commerce administers the
program; therefore, minimal staff time has been required by the City. The AGTBID
Advisory Board recommends extending the assessment and continuing the program.
Additionally, the AGTBID issued a Request for Proposals for tourism marketing services
on March 28, 2018 requesting a fresh perspective and innovative ideas given the
current economic climate and needs of Arroyo Grande’s tourism market. It is
anticipated an agreement will be presented to the City Council for consideration and
approval in June 2018 with the selected firm commencing work July 1, 2018.
After the City Council approves the AGTBID Advisory Board’s annual report and adopts
the Resolution of Intention, a public hearing will be noticed for May 22, 2018. The public
hearing will allow lodging businesses subject to the assessment 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 proposed citywide 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.
ALTERNATIVES:
The following alternatives are provided for the Council’s consideration:
1. Approve staff’s recommendations;
2. Request changes or clarification to the Annual Report;
3. Do not approve staff’s recommendations; or
4. Provide staff other direction.
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 actions are identified.
ENVIRONMENTAL REVIEW:
No environmental review is required for this item.
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.
Item 9.e. - Page 3
CITY COUNCIL
CONSIDERATION OF ANNUAL REPORT AND ADOPTION OF RESOLUTION OF
INTENTION FOR LEVY OF ANNUAL ASSESSMENT FOR ARROYO GRANDE
TOURISM BUSINESS IMPROVEMENT DISTRICT
APRIL 10, 2018
PAGE 4
Attachment:
1. Annual Report
Item 9.e. - Page 4
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF ARROYO GRANDE DECLARING ITS INTENTION TO
CONTINUE THE ARROYO GRANDE TOURISM
BUSINESS IMPROVEMENT DISTRICT, 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 ASSSESSMENT
FOR THE 2018-19 FISCAL YEAR
WHEREAS, the Parking and Business Improvement Area Law of 1989 (“PBIAL”),
sections 36500 et seq. of the Streets and Highways Code, authorizes cities to establish
business improvement districts for several purposes, one of which is 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 (“AGMC”) under
Chapter 3.46; and
WHEREAS, in accordance with the requirements of Health and Safety Code Section
36530 and AGMC 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 AGMC and the PBIAL requires the Advisory Board to prepare and
submit an annual report (“Annual Report”) stating proposed changes, improvements
and activities for the fiscal year; and
WHEREAS, on March 26, 2018, the Advisory Board approved the Annual Report; and
WHEREAS, the Advisory Board Annual Report was filed and approved by the Arroyo
Grande City Council on April 10, 2018.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Arroyo
Grande as follows:
Section 1. The City Council proposes to continue the Arroyo Grande Tourism
Business Improvement District (“District”) in accordance with AGMC
Chapter 3.46 and Streets and Highways Code Sections 36500 et seq. and
levy assessments for fiscal year 2018-19.
Section 2. The Annual Report is on file with the City Clerk and contains a full and
detailed description of the improvements and activities to be provided for
fiscal year 2018-19. No changes to the District boundaries are proposed,
and the report includes the estimated cost of providing improvements and
activities for fiscal year 2018-19. The assessment is not proposed to be
increased.
Item 9.e. - Page 5
RESOLUTION NO.
PAGE 2
Section 3. The boundaries of the District are the boundaries of the City of Arroyo
Grande.
Section 4. The assessment levied by the 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 AGMC Section
3.46.030.
Section 5. The assessment is proposed to be levied on all “lodging” businesses in
the District, as that term is defined in AGMC section 3.46.020, and
allocated by the City of Arroyo Grande.
Section 6. The assessment shall be based upon two percent of the rent charged by
the operator per occupied room per night for all transient occupancies and
shall be collected quarterly.
Section 7. New lodging businesses shall not be exempt from immediate
assessment.
Section 8. A public hearing, held pursuant to AGMC Chapter 3.46 and Streets and
Highways Code Section 36535, to allow for comments and to receive
written and oral protests on the District and proposed assessment, is
hereby set for 6:00 p.m., Tuesday May 22, 2018, before the City Council
of the City of Arroyo Grande at the City Council Chambers at 215 E.
Branch St., Arroyo Grande, CA.
Section 9. At the public hearing, the testimony of all interested persons for or against
the continuation of the District, the boundaries of the District, or the
furnishing of specified types of improvements or activities will be heard. A
protest may be made orally or in writing by any interested person.
However, only written protests will be considered in determining if
there is a majority protest. The form and manner of protests shall
comply with Streets and Highways Code Sections 36524 and 36525.
Section 10. Any protest pertaining to the regularity or sufficiency of the proceedings
shall be in writing and clearly state the irregularity or defect to which
objection is made.
Written protests must be received by the City Clerk of the City of Arroyo
Grande before the close of the public hearing scheduled herein and may
be delivered or mailed to the City Clerk, City of Arroyo Grande, 300 East
Branch Street, Arroyo Grande, CA 93420. A written protest may be
withdrawn in writing at any time before the conclusion of the public
hearing.
Item 9.e. - Page 6
RESOLUTION NO.
PAGE 3
Each written protest shall contain a written description of the business in
which the person signing the protest is interested sufficient to identify the
business. If the person signing the protest is not shown on the official
records of the City of Arroyo Grande as the owner of the business, then
the protest shall contain or be accompanied by written evidence that the
person is the owner of the business.
Section 11. If at the conclusion of the public hearing, there are of record, written
protests by the owners of lodging businesses within the District that will
pay fifty percent (50%) or more of the total assessments of the entire
District, no further proceedings to continue the District shall occur. New
proceedings to continue the District shall not be undertaken again for a
period of at least one (1) year from the date of the finding. If the majority
of written protests are only as to an improvement or activity proposed,
then that type of improvement or activity shall not be included in the
District.
Section 12. The City Clerk is instructed to provide notice as required by AGMC
Chapter 3.46 and Streets and Highways Code Section 36534. The City
Clerk shall give notice of the public hearing by causing this Resolution of
Intention to be published once in a newspaper of general circulation in the
City no less than seven days before the public hearing.
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 10th day of April 2018.
Item 9.e. - Page 7
RESOLUTION NO.
PAGE 4
___________________________________
JIM HILL, MAYOR
ATTEST:
___
KELLY WETMORE, CITY CLERK
APPROVED AS TO CONTENT:
___________________________________
JAMES A. BERGMAN, CITY MANAGER
APPROVED AS TO FORM:
___________________________________
HEATHER WHITHAM, CITY ATTORNEY
Item 9.e. - Page 8
Arroyo Grande Tourism Business Improvement District
2017-2018 Annual Report
Presented to the Arroyo Grande City Council by the
Arroyo Grande Tourism Business Improvement District (AGTBID) Advisory Board &
Arroyo Grande-Grover Beach Chamber of Commerce
OVERVIEW
During 2017, the AGTBID continued efforts to position Arroyo Grande as a premier tourist
destination through social media, search engine optimization, paid advertising, video marketing,
and improved website design and content. The efforts detailed below reflect work completed by
marketing firm RG Pacific, Inc., through October 2017. The agreement with RG Pacific, Inc. has
since expired per City Council direction. Additionally, staff turnover at the Chamber of
Commerce delayed the Request for Proposals (RFP) process for a new marketing firm. In
March 2018, the AGTBID issued a RFP for tourism marketing services to commence on July 1,
2018. AGTBID members are maintaining and updating the website and social media until a new
marketing firm is selected.
AGTBID 2017 HIGHLIGHTS
Online Media & Advertising
Promoted Arroyo Grande Village Summer Concert Series
Promoted Wine Month Giveaways
Promoted Beer Feast Festival
Promoted Arroyo Grande Harvest Festival
Created and sent out Newsletter about giveaways and events including Wine Month,
Harvest Festival, Triathlon, and other events.
Expanded social media efforts to include videos
Expenditures: To date, $30,000 has been spent on this effort.
Results: The website received over 400,000 impressions.
Social Media platforms have over 6,000 likes.
Website Updates & Maintenance
Launched new Vacation Rentals page
Set up pages for Beer Feast Festival and Wine Month Giveaways
Expenditures: To date, $2,846 has been spent on this effort.
Promotions
Hotel stay for one winner
Gift Card for use in Arroyo Grande
6 Passes to Jazz Jubilee provided by organizers of Jubilee by the Sea Festival
Expenditures: To date, $422 has been spent on this effort.
ATTACHMENT 1
Item 9.e. - Page 9
Page 2
Video Marketing
Promotion of videos for the Arroyo Grande Farmer’s Market and Wine Tasting
Production of two videos focused on a Girlfriend’s Getaway including restaurants and
sports programs
Expenditures: To date, $1,500 has been spent on this effort.
Results: Average of 4,000 views per month.
Partnership with Jubilee by the Sea Festival
For the first time, AGTBID partnered with organizers of the Jubilee By the Sea Festival to
expand entertainment into Arroyo Grande. Jubilee by the Sea/Pismo Jazz Jubilee is a
successful 4-day event destination that brings in Traditional Jazz lovers from all over. For the
last 40 years, the festival has had a significant positive financial impact on the 5-Cities area.
Historically, the festival has been held in five venues located in Pismo Beach. In 2017,
organizers also utilized two venues in Arroyo Grande; the South County Regional Center and
the Arroyo Grande Woman’s Club.
Expenditures: Online Advertisement $1,500
Event Sponsorship $12,000
ESTIMATED COSTS FOR FY 2017-18
Below is the AGTBID budget activity through February 28, 2018.
Revenues are projected to generate approximately $389,000 during the year.
Budget
Projected
Actual
Variance (Projected
less Budget)
Sources
Fund Balance $ 184,238 $ 184,238 $ ‐
Revenues
TBID Assessments 195,000
194,100 (900)
Contribution from AGGB Chamber 5,000 5,000 ‐
Contribution from City General
Fund 5,000 5,000 ‐
Interest Earnings ‐
850 850
Total Sources $ 389,238 $ 389,188 $ (50)
Item 9.e. - Page 10
Page 3
ESTIMATED COSTS FOR FY 2017-18 (CONTINUED)
As of February 28, 2018, actual expenses are 32% of budget due to the vacancy of a marketing
firm. The AGTBID is expecting to have a marketing firm selected and in place by July 1, 2018.
Budget
Projected
Actual
Variance (Projected
less Budget)
Uses
Advertising
Advertising 67,000
32,088 (34,912)
Consultant Services 32,000 1,500 (30,500)
Misc Advertising 10,000 (10,000)
Supplies & Services
Website Maintenance 7,000 2,845 (4,155)
City ‐ administrative 3,000 3,000 ‐
Chamber ‐ Contract
administration 17,000
20,000 3,000
Misc. contractual services 13,000 (13,000)
Misc. Supplies 2,500 (2,500)
Membership & Subscriptions
CCTC 500
425 (75)
Misc 5,000 (5,000)
‐
Public Relations
Sponsorships 55,000
12,000 (43,000)
Events 10,000 (10,000)
Total Uses $ 222,000 $ 71,858 $ (150,142)
Net Sources less Uses $ 167,238 $ 312,330 $ 145,092
Item 9.e. - Page 11
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PLANS FOR NEXT YEAR
Request for Proposals (RFP) for Tourism Marketing Services
The AGTBID issued an RFP for tourism marketing services in March 2018 and it is anticipated
the City Council will award a contract to the successful firm in June 2018. The selected
marketing firm is expected to commence work effective July 1, 2018.
The scope of work included:
Development and implementation of a variety of promotional, publicity and advertising
programs, and informational materials;
Development of an online strategy and reporting method; and
Responsibility for all aspects of the Visit Arroyo Grande website, content management
system (CMS) and related hosting.
Visit SLO Cal Co-Op
For 2018-2019, the AGTBID has a unique opportunity to utilize a partnership with Visit SLO Cal
to promote tourism activities through its existing marketing channels and communications
strategies.
Visit SLO Cal is a successful, established tourism organization with active marketing campaigns
promoting tourism throughout the County of San Luis Obispo. Visit SLO Cal has offered the
AGTBID an opportunity to join their marketing efforts to increase awareness of and travel to
Arroyo Grande. Through this co-op, the AGTBID will be able to reach more potential tourists to
visit and stay in Arroyo Grande.
Item 9.e. - Page 12