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CC 2015-06-23_08n AGTBID Annual Report and Resolution of Intention NRR 0 y0 O C� INCORPORATED 9 V R1 � JULY 10, 1911 P MEMORANDUM 441FORN` TO: CITY COUNCIL FROM: ROBERT MCFALL, INTERIM CITY MANAGER BY: DEBBIE MALICOAT, ADMINISTRATIVE SERVICES DIRECTOR SUBJECT: CONSIDERATION OF ANNUAL REPORT AND ADOPTION OF RESOLUTION OF INTENTION FOR LEVY OF ANNUAL ASSESSMENT FOR ARROYO GRANDE TOURISM BUSINESS IMPROVEMENT DISTRICT DATE: JUNE 23, 2015 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 2015-16 at the same rate as in Fiscal Year 2014-15; AND 3) set the date for the public hearing for July 28, 2015. FINANCIAL IMPACT: Based on the anticipated year-end results for 2014-15, the total assessment expected to be collected totals approximately $180,300. In 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 December 2014, the City Council adopted an Ordinance amending Chapter 3.46 of the Arroyo Grande Municipal Code to provide that the same exemptions Item 8.n. - 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 JUNE 23, 2015 PAGE 2 that apply to the Transient Occupancy Tax apply to Arroyo Grande Tourism Business Improvement District (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. 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. Section 35634 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 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. 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 July 28, 2015. 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 oral or 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. Item 8.n. - 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 JUNE 23, 2015 PAGE 3 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 in front of City Hall on Thursday, June 18, 2015 and the Agenda and staff report were posted on the City's website on Friday, June 19, 2015. Attachment: 1. Annual Report Item 8.n. - Page 3 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 2015-16 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 June 1, 2015, 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 June 23, 2015. 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 2015-16. 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 2015-16. No changes to the District boundaries are proposed, and the report includes the estimated cost of providing improvements and activities for fiscal year 2015-16. The assessment is not proposed to be increased. Item 8.n. - Page 4 i 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 July 28, 2015, 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 8.n. - Page 5 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 day of June 2015. Item 8.n. - Page 6 RESOLUTION NO. PAGE 4 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 8.n. - Page 7 u � " � k I I 6 � I u k Esl- p 010) I �AX r+ � M Ell C� tAOfr® �`I 4 h ARROYO GRANDE TOURISM BUSINESS IMPROVEMENT DISTRICT ANNUAL REPORT 2014 - 2015 �I�my ii�"��u iN•�+ " � 'm'-'�� ��' � R w"� ��"u ;. � U °7. r p w f' 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 EST©`�1��� � YpE (� IF ;R�A� �R� 2 Jr Item 8.n. - Page 9 Y 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 an Highway e: 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. • Participate 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 ES T jg1 e Tourism Council, the SLO Wine Association and ? � C�F Z) Visit San Luis Obispo County. RR), �`` �'1TAGE Gp,LIF�R� 3 a Jr Page 10 Item 8.n. - Y 3. Year To Date costs for FY 2014-2015 In= ACTUAL BUDGET VARIANCE % USED 5/28/15 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% TOTALREVENUE $157,713 $180,000 ($22,287) 88% ® ACTUAL BUDGET VARIANCE % USED 5/28/15 V TII $100,187 $91,000 ($9,187) 110% CONTRACT S VI $5,585 $22,500 $16,915 25% MEMBERSHIP ITI $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 V EXPENDITURES $26,561 $8,120 BEGINNING FUND BALANCE $56,517 BUDGETED N ING FUND BALANCE $64,637 PROJECTED N ING FUND BALANCE $74,144 PROJECTED YEAR END TBID REVENUE $178,907 EST©`�1��� YpE �"VIN R ALIF�R� 4 Jr Page 11 Item 8.n. - Y 4. FY 2014-2015 Budget Details REVENUE I''11 Ind EMMMM I MOVIE M T LINE ITEM EXPENDITURE TBID FEE $170,000 CITY $3,000 CITY $5,000 CHAMBER $17,000 CHAMBER $5,000 SUPPLIES $2,500 TOTAL $180,000 TOTAL $22,500 ® . ® . NEESE= ADVERTISING $42,000 WEBSITE MAINTENANCE $7,000 CONSULTANT SERVICES $32,000 TOTAL $7,000 MISC $10,000 TOTAL $84,000 SAVOR $15,000 MISC. $15,000 VISIT SLO COUNTY $14,880 TOTAL $30,000 CCTC $500 MISC. $3,000 TOTAL $18,380 MISC. $10,000 TOTAL $10,000 EXPENDITURE TOTAL $171,880 PROJECTED FUND BALANCE $8,120 EST©`�1��� YZA tRP GAI.1F�R 5 VINTAGS Jr Page 12 Item 8.n. - Y 5. FY 2015-2016 Projected Budget Detail HEREVENUE EMMMM MOVIE M T LINE ITEM EXPENDITURE TBID FEE $185,000 CITY $3,000 CITY $5,000 CHAMBER $17,000 CHAMBER $5,000 SUPPLIES $2,500 TOTAL $195,000 TOTAL $22,500 ® . ® . CONSULTANT SERVICES $95,000 WEBSITE MAINTENANCE $20,000 TOTAL $95,000 TOTAL $20,000 CCTC $500 MISC. $30,000 MISC. $5,000 TOTAL $30,000 TOTAL $5,500 INNIESEENE MISC. $10,000 TOTAL $10,000 EXPENDITURE TOTAL $183,000 PROJECTED FUND BALANCE $12,000 EST©`�1��� YZA ;�AGS GAS roRt4IA a k ar Page 13 Item 8.n. - Y AGTBID MEDIA 1 - 1 V VIII di IIII ill, Iii l-II ilm is Il hIlil- lid II III'u�l lin III' ° 9 rtallp�l f�I"r;i . 1 . Arroyo G(ande Vacak4Ona III Iw IIO II 111 1111 III IIII IIOI wll�lll WURA a a s �o w m w u of oil (fdr,12 1001 F yr a Yrcap rrtudarrc%Yurv�mlal d4wrroryprn wunarotlaa �.,I �, I �u :� � mr r r '!�aavva4lnlo e�n7ww��frwaan.$1S7,Rrdi��,Ca& I �r�lxr J '� �. "� '6"�w,msw�xaS�n),g aNaaw'saads and 0410cttrornw a ���701!/1JN»�10J'rv9/v+9�o/9/l/�J�io; riU�f,, ..II. u IIII 1111111 III�ll 1u 1 1., - VIII 1 110 11111011111 cr trip ad v llsa r Angel Omrs �RR�YI � GFBAI�D. gl ,r i i yR, 1 I EST. i �� I as r R.14 '' 1 9�Y l R I D � GRA ar�. �. 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