Loading...
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 Page 4 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