CC 2017-06-27_10b AGTBID Annual Assessment 2017_18
MEMORANDUM
TO: CITY COUNCIL
FROM: JIM BERGMAN, CITY MANAGER
BY: DEBBIE MALICOAT, ADMINISTRATIVE SERVICES DIRECTOR
SUBJECT: ANNUAL PUBLIC HEARING FOR THE ARROYO GRANDE
TOURISM BUSINESS IMPROVEMENT DISTRICT
DATE: JUNE 27, 2017
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 2017-18; 2) Determine whether a legally sufficient number of protests
have been made; and 3) If a legally sufficient protest is not made, adopt a
Resolution levying an annual assessment for the AGTBID for the 2017-18 fiscal
year.
IMPACT TO FINANCIAL OR PERSONNEL RESOURCES:
Based on the anticipated year-end results for 2016-17, 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.
BACKGROUND:
In May 2013, the City Council adopted an Ordinance establishing the Arroyo
Grande Tourism Business Improvement District. The creation of the AGTBID was
part of a larger economic development strategy focused on increasing tourism to
the City. The AGTBID is a 2 percent assessment of the rent charged by a lodging
business per occupied room per night. This assessment is collected quarterly
from the hotel operators and is used for marketing efforts highlighting the City of
Arroyo Grande as a tourism destination. The District was formed under the
Parking and Business Improvement Area 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.
Item 10.b. - Page 1
CITY COUNCIL
ANNUAL PUBLIC HEARING FOR THE ARROYO GRANDE TOURISM
BUSINESS IMPROVEMENT DISTRICT
JUNE 27, 2017
PAGE 2
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 submitted their annual report
to the City Council for consideration at its May 23, 2017 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 May 23, 2017, the City Council adopted a Resolution
setting a public hearing for June 27, 2017.
ANALYSIS OF ISSUES:
The AGTBID has been in effect for almost four years and has been very
successful. A tourism website and other marketing efforts have been developed
and implemented. The efforts are coordinated 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;
Item 10.b. - Page 2
CITY COUNCIL
ANNUAL PUBLIC HEARING FOR THE ARROYO GRANDE TOURISM
BUSINESS IMPROVEMENT DISTRICT
JUNE 27, 2017
PAGE 3
3. Direct staff to make modifications to the AGTBID and schedule another
public hearing; 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 lodging 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 Agenda was posted at City Hall and on the City’s website in accordance with
Government Code Section 54954.2. 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 2017-18, was published in The Tribune on Friday,
June 9, 2017 pursuant to Streets and Highway Code Section 36534. On Friday,
June 16, 2017, a Notice of Public Hearing was published in The Tribune and
mailed to each lodging business located within the City.
Item 10.b. - 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 2017-18
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 May 23, 2017 meeting; and
WHEREAS, in accordance with the procedures contained in Streets and Highways
Code Section 36534, on May 23, 2017 the City Council adopted a Resolution of
Intention to levy an annual assessment for the Arroyo Grande Tourism Business
Improvement District for the 2017-18 fiscal year and set a public hearing for June 27,
2017 to consider the annual assessment and hear any oral or written protests; and
WHEREAS, the City Council held a duly noticed Public Hearing on June 27, 2017 to
allow for protests, as required by Streets and Highway Code Section 36524, and,
sufficient written 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 10.b. - 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 2017-18 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 2017-18 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 27th day of June, 2017.
Item 10.b. - Page 5
RESOLUTION NO.
PAGE 3
___________________________________
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 10.b. - Page 6