HomeMy WebLinkAboutReso 83-19 Resolution of Intention TBID AssessmentRESOLUTION NO. 83=19
RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF MORRO BAY, CALIFORNIA,
DECLARING THE INTENTION TO CONTINUE THE MORRO BAY TOURISM
BUSINESS IMPROVEMENT DISTRICT (MBTBID), CHANGE THE BASIS AND
METHOD OF LEVYING MBTBID ASSESSMENTS AND THE
CLASSIFICATION OF BUSINESSES SO AS TO ADD VACATION RENTAL
BUSINESSES TO THE ANNUAL ASSESSMENT, AND LEVY SUCH
ASSESSMENTS FOR THE REMAINDER OF 2019/20 FISCAL YEAR FOR THE
MBTBID; AND, SETTING A PUBLIC MEETING DATE FOR TESTIMONY ON
THAT ASSESSMENT AND A PUBLIC HEARING DATE TO RECEIVE
PROTESTS TO THAT ASSESSMENT
THE CITY COUNCIL
City of Morro Bay, California
WHEREAS, the Parking and Business Improvement Area Law of 1989, section 36500 et
seq., of the California Streets and Highway Code, authorizes cities to establish and review
business improvement areas for the purpose of promoting tourism; and
WHEREAS, on April 13, 2009, City Council held a public hearing for the introduction and
first reading of Ordinance 546 amending the Morro Bay Municipal Code (MBMC) to add a new
Chapter 3.60 to establish the Morro Bay Tourism Business Improvement District ("MBTBID"),
and adopted Ordinance 546 at its April 27, 2009 meeting, which set the MBTBID assessments
at 3% from June 1, 2009 to May 31, 2010, and 2% from June' 3 2010 and thereafter; and
WHEREAS, on June 1, 2010, the MBTBID assessments returned to the 2% level, as
established by Ordinance 546; and
WHEREAS, on September 13, 2010, the City Council held a public hearing and first
reading of Ordinance 562 to amend MBMC section 3.60.050, changing the assessment
percentage to 3%, and adopted Ordinance 562 at its September 27, 2010, meeting; and
WHEREAS, on May. 16, 2019, at a duly noticed public meeting, the MBTBID advisory
boardI formed pursuant to MBMC, section 3.60.100, recommended the renewal of the MBTBID
for Fiscal Year (FY) 2019-20 to continue its activities, and the City Council has approved that
renewal for the past eight years; and
WHEREAS, all other findings of Ordinances 546 and 562 remain unchanged except as
provided herein; and
WHEREAS, on May 28, 20195 City Council conducted a public meeting where staff
presented the annual assessment report, which provides a full and detailed description of
activities to be provided during the FY 2019-20, as provided in the proposed budget for that
Fiscal Year, and available for review in the City Clerk's office, and the City Council approved
that Annual Assessment Report and declared its intention to renew the Morro Bay Tourism
Business Improvement District for the 2019/20 Fiscal Year, and to levy and collect 3%
assessments from hoteliers calculated in the manner set forth in MBMC, section 3.60.050.; and
WHEREAS, that budget generally described the funded activities to be marketed, which
attract and extend overnight stays in Morro Bay hotels, and are consistent with the authorized
uses for the assessment revenue set forth in MBMC, section 3.60.030; and
WHEREAS, it was the intention of the City Council to levy and collect 3% assessments
from the hoteliers within the TBID for the FY 2019-20; and
WHEREAS, at the public meeting held on May 28, 2019, City Council additionally set a
public hearing, for the intent to levy the MBTBID assessment for Fiscal Year 2019/20, to be held
at the Morro Bay Veterans Memorial Hall located at 209 Surf Street, Morro Bay, California, in
accordance with the California Streets and Highway Code, sections 36534 and 36535; and
WHEREAS, that public hearing to adopt a resolution to reaffirm the MBTBID, and levy
and collect the 3% assessments from hoteliers, was held on Tuesday, June 11, 2019. Before or
at this public hearing written protests to the continuation of the MBTBID and the levy of the
assessment were considered, consistent with the requirements of Streets & Highways Code,
sections 36524 and 36525 and MBMC, section 3.60.060, and written protests were not received
from hoteliers which pay 50% of more of the proposed continued assessment, and as such the
annual assessment was continued for FY 2019-20; and
WHEREAS, on September 19, 2019, at a duly noticed public meeting, the TBID advisory
board, formed pursuant to MBMC, section 3.60.100, pursuant to the request of the City Council
at its August 27, 2019 regular meeting, considered the addition of vacation rentals ("VRs") to the
existing Morro Bay Tourism Business Improvement District ("TBID") at the existing TBID
assessment rate of 3% levied on hotels; and
WHEREAS, at that September 19, 2019 meeting, the TBID Board conducted a
supplemental review of its Annual Report for FY 2019-20 (required by Section 3.60.060 of the
Morro Bay Municipal Code and Streets & Highways Code section 36533 ("Section 36533")),
which was initially approved by the TBID Board on May 7, 2019, and then subsequently
approved by the City Council on May 28, 2019; and
WHEREAS, The Annual Report pursuant to Streets &Highways Code Section 36533(a)
provides that the TBID Board "shall cause to be prepared a report for each fiscal year for which
assessments are to be levied and collected to pay the costs of the improvements and activities
described in the report." Subsection (b)(1-6) of Streets & Highways Code Section 36533
provides the Annual Report "shall contain" six elements. All six elements were addressed in the
prior report submitted to, and approved by City Council, on May 28, 2019. Section 36533 also
provides in subsection (a) that the TBID Board Annual Report submitted to the City Council
may propose changes, including, but not limited to, the boundaries of the parking and business
improvement area or any benefit zones within the area, the basis and method of levying the
assessments, and any changes in the classification of businesses."; and
WHEREAS, pursuant to the request from City Council to add VRs to the TBID, the TBID
Board recommended at its September 19, 2019 meeting the Council should approve a
Supplemental Annual Report for FY 2019-20. This supplemental report both provides a
supplemental recommendation on changes to "the basis and method of levying the
assessments, and any changes in the classification of businesses," so as to add VRs to the
TBID at the existing assessment rate of 3%, and further addresses the effect of those proposed
changes through a supplemental recommendation concerning the six required elements of an
annual report.
WHEREAS, on October 8, 2019, City Council conducted a public meeting where staff
presented the Supplemental Annual Report for FY 2019-20, attached to this Resolution as
Exhibit A and available for review in the City Clerk's office; and
WHEREAS, the budget generally describes the funded activities to be marketed, which
attract and extend overnight stays in Morro Bay hotels and vacation rentals, and are consistent
with the authorized uses for the assessment revenue set forth in MBMC, section 3.60.030; and
WHEREAS, it is the intention of the City Council to continue the levy and collection of
3% assessments from the hoteliers within the TBID for the FY 2019-20, and to levy and collect
3% assessments from vacation rental businesses (as that term is defined in Chapter 5.47
(Short -Term Vacation Rental Permit) of the Morro Bay Municipal Code) within the TBID for the
remainder of FY 2019-20 consistent with the effective date of an amendment of Chapter 3.60
(Tourism Business Improvement District Law) of the Morro Bay Municipal Code, so as to add
vacation .rental businesses to the TBID at the existing assessment rate of 3% and consistent
with MBMC section 3.60.050; and
WHEREAS, at the public meeting held on October 8, 2019, City Council additionally set
a public meeting date of October 22, 2019 to allow public testimony on, and a public hearing for
November 12, 2019 to consider protests to, the intent to levy said MBTBID assessment for
Fiscal Year 2019/20, to be held at the Morro Bay Veterans Memorial Hall located at 209 Surf
Street, Morro Bay, California, in accordance with the California Streets and Highway Code,
sections 36524 and 36525 and consistent with Government Code section 54954.6; and.
NOW, THEREFORE BE IT RESOLVED by the City Council of the City of Morro Bay as
follows:
1. The above recitations are true and correct, and incorporated herein by reference.
2. The City Council approves the attached Supplemental Annual Assessment Report and
declares its intention to affirm the renewal of the Morro Bay Tourism Business
Improvement District for the 2019/20 Fiscal Year, to continue the levy and collection of
3% assessments from hoteliers calculated in the manner set forth in MBMC,.section
3.60.050, and to levy and collect 3% assessments from vacation rental businesses (as
that term is defined in Chapter 5.47 (Short -Term Vacation Rental Permit) of the Morro
Bay Municipal Code) for the remainder of FY 2019-20 consistent with the effective date
of amendment of Chapter 3.60 (Tourism Business Improvement District Law) of the
Morro Bay Municipal Code, so as to add vacation rental businesses to the TBID at the
existing assessment rate of 3%, calculated in the manner set forth in MBMC, section
3.60.050; and
3: The City Council sets Tuesday, October 22, 2019 as the date of a public meeting on the
addition of vacation rentals businesses to the Morro Bay Tourism Business Improvement
District. At this public meeting the City Council will solicit and allow public testimony
regarding the addition of vacation rental businesses to the Morro Bay Tourism Business
Improvement District so as to levy an annual assessment on vacation rental businesses
(as that term is defined in Chapter 5.47 (Short -Term Vacation Rental Permit) of the
Morro Bay Municipal Code) at the existing TBID rate of 3% calculated in the manner set
forth in MBMC, section 3.60.050; and.
4. The City Council sets Tuesday, November 12, 2019 as the date of the public hearing to
adopt a Resolution to reaffirm the MBTBID, and to affirm the renewal of the Morro Bay
Tourism Business Improvement District for the 2019/20 Fiscal Year, to continue the levy
and collection of 3% assessments from hoteliers calculated in the manner set forth in
MBMC, section 3.60.050, and to levy and collect 3% assessments from vacation rental
businesses (as that term is defined in Chapter 5.47 (Short -Term Vacation Rental Permit)
of the Morro Bay Municipal Code) for the remainder of FY 2019-20 consistent with the
effective date of amendment of Chapter 3.60 (Tourism Business Improvement District
Law) of the Morro Bay Municipal Code so as to add vacation rental businesses to the
TBID at the existing assessment rate of 3%, calculated in the manner set forth in MBMC,
section 3.60.050; and
5. Before or at the public hearing set for November 12, 2019 written protests to the
continuation of the MBTBID and the levy of the continued and proposed assessments
may be made, consistent with the requirements of Streets & Highways Code, sections
36524 and 36525 and MBMC, section 3.60.060, and as provided below.
6. Protest Procedures are as follows:
a. Before or at the public hearing set for November 12, 20197 written protests to the
proposed addition of vacation rentals to the TBID may be made by any
businesses subject to the existing or proposed assessment, and may be mailed
or hand -delivered to the City Clerk as follows:
City of Morro Bay
Attn: City Clerk
595 Harbor Street
Morro Bay, CA 93442
b. Streets and Highways Code Section 36524(c) further provides: "Each written
protest shall contain a description of the business in which the person
subscribing the protest is interested sufficient to identify the business and, if a
person subscribing is not shown on the official records of the city as the owner of
the business, the protest shall contain or be accompanied by written evidence
that the person subscribing is the owner of the business. A written protest which
does not comply with this section shall not be counted in determining a majority
protest."
7. If written protests are received from the owners of business which will pay 50 percent or
more of the existing and proposed assessments to be levied, and protests are not
withdrawn so as to reduce the protests to less than that 50 percent, no further
proceedings to levy the proposed assessment against vacation rental businesses shall
be taken for a period of one year from the date of the finding of a majority protest by the
Council.
8. If that protest threshold is not reached, the Council consistent with the requirements of
the Parking and Business Improvement Law of 1989 (Streets and Highway Code
sections 36500, et seq.) may introduce an ordinance to amend Chapter 3.60 (Tourism
Business Improvement District Law) of the Morro Bay Municipal Code so as to add
vacation rental businesses to the TBID at the existing assessment rate, calculated in the
manner set forth in MBMC, section 3.60.050, subject to any temporary exemption
authorized by City Council to honor certain executed contracts.
PASSED AND ADOPTED by the City Council of the City of Morro Bay, at a regular
meeting thereof held on the 8th day of October, 20197 by the following vote:
AYES: Headding, Addis, Davis, McPherson
NOES: Heller
ABSENT: None
D%NA SWANSON, City Clerk
Exhibit A
Morro Bay Business Improvement District
Supplemental Annual Report for FY 2019-20
Presented to the Morro Bay City Council by the Morro Bay Tourism Business Improvement
District Advisory Board
The City of Morro Bay's Tourism Business Improvement District Advisory Board ("TBIDAB") at
its regularly scheduled meeting on September 19, 2019, pursuant to the request of the City
Council at its August 27, 2019 regular meeting, considered the addition of vacation rentals
((IV Rs") to the existing Morro Bay Tourism Business Improvement District ("TBID") at the
existing TBID assessment rate of 3% levied on hotels.
The TBIDAB conducted a supplemental review of its Annual Report for FY 2019-20 (required by
Section 3.60d06O of the Morro Bay Municipal Code and Streets & Highways Code section 36533
("Section 36533")), which was initially approved by the TBIDAB on May 7, 2019, and then
subsequently approved by the City Council on May 28, 2019.
The Annual Report pursuant to Section 36533(a) provides that the TBIDAB "shall cause to be
prepared a report for each fiscal year for which assessments are to be levied and collected to
pay the costs of the improvements and activities described in the report." Subsection (b)(1-6)
of Section 36533 provides the Annual Report "shall contain" six elements. All six elements were
addressed in the prior report submitted on May 28, 2019. Section 36533 also provides in
subsection (a) that the TBIDAB Annual Report submitted to the City Council "may propose
changes, including, but not limited to, the boundaries of the parking and business improvement
area or any benefit zones within the area, the basis and method of levying the assessments,
and any changes in the classification of businesses."
Pursuant to the request from City Council to add VRs to the TBID, the TBIDAB now submits this
Supplemental Annual Report for FY 2019-20. This supplemental report both provides a
supplemental recommendation on changes to "the basis and method of levying the
assessments, and any changes in the classification of businesses," and further addresses the
effect of those proposed changes through a supplemental recommendation concerning the six
required elements of an annual report.
The TBIDAB submits the following, as supplements to the Annual Report for FY 2019-20
(previously submitted on May 223 2019) for appreval or mocation by the City Council, and as
general recommendations for City Council action, consistent (as required by law) with the
Parking and Business Improvement Area Law of 1989.
A. Proposed Changes to the TBID (Streets &Highways Code �$ 36533(a), 36540)
1. Basis and method of levying assessments under Chapter 3.60 (Tourism
Business Improvement Law) of the Morro Bay Municipal Code ("MBMC"),
pursuant to the authority of the Parking and Business Improvement Area Law of
1989 (1989 Law"), shall include the assessment of vacation rental businesses at
the existing rate of 3%, as the term "vacation rental" is used in Chapter 5.47
(Short -Term Vacation Rental Permit) of the MBMC.
2. Classification of businesses subject to the existing assessment provided for in
Chapter 3.60 of Chapter 3.60 shall expressly include such vacation rental
businesses as referenced above.
3. Amend Chapter 3.60 of the MBMC, and take any other necessary action as
required by law, to implement the above proposed changes.
B. Six Elements of Annual Report (Streets & Highways Code 36533(b�(1-6)
1. The Morro Bay Tourism Business Improvement District (MBTBID) Advisory Board
did not propose any changes in the Boundaries of the TBID, which were established
in MBMC Section 3.60.040 to be the boundaries of the City of Morro Bay.
2. The improvements and activities to be provided for in Fiscal Year FY 2019/20 are
those services and activities permitted under Section 3.60.030 of the Morro Bay
Municipal Code, which include:
1. The general promotion of tourism within the district to include costs as specified
in the business plant to be adopted annually; and
2. Implementation of the strategic plan; and
3. Marketing of Foreign Independent Travelers (FIT), conference, group, and film
business that benefits local tourism and the local lodging (hotel/motel/vacation
rentals) industry in the district; and
4. The marketing of the district to the travel industry in order to benefit local tourism
and the local lodging industry in the district
GOALS &OBJECTIVES for FY 2019/20
1. Continue to implement the Tourism Strategic Plan, adopted by City Council in
2019.
2. Increase overall occupancy & lodging revenues, especially during midweek
and shoulder season through our new destination assets such as the website
and implementation of the strategic plan and new branding.
3. Midweek — be more aggressive through digital media to increase stays plus
grow mid -week stays through FIT and group longer stays.
4. Extend the number of average lodging room nights beyond the current level
of 1.8 (this is an increase from 2018/19 at 1.5).
5. Help incrementally increase the lodging Average Daily Rate (ADR) through
the promotion and elevation of the destination.
6. Bring exposure to Morro Bay as a viable domestic and international
destination for individuals and groups which will increase longer stays.
7. Assist with the development and growth of athletic competitions and events
that attract overnight guest and that fit in our strategic plan model.
8. Create opportunities to positively impact sales tax businesses & drive
economic development in the. City of Morro Bay such as new or upgrade of
hotel stock, grow the quality of events to entice a higher level of visitor.
9. Positively impact transient occupancy tax (TOT) for the City of Morro Bay.
3. An estimate of the cost of providing the improvements and the activities for that
fiscal year (as described below with the FY 2019/20 Revised Budget).
FY 2019-20 Approved Budget -
Sources: The FY 2019-20 revised projected actual sources include total sources of
$939,644, made up of $863,643 from TBID assessment revenues ($40,000 additional funds
by adding vacation rentals), $60,000 from the City's General Fund and $6,000 from
advertising revenue, and $10,000 from the TBID Accumulation Fund.
Uses: The FY 2019/20 projected actual expenditures are $939,086, netting no change to the
fund balance.
The below budget shows FY 2019/20 revised budget, projected actuals, and the variance of
the projected actuals compared to the revised budget.
CI h of Nforro Biv
FZ' 2019/20 TBID Proposed Budget
Operating Revenues vs. Operating Expenditures
Approved
Budget
Revenues
Advertising -Guides aznd hlaeazines S
Transient Occupancy Tax (TBID Assessment)
Transient Occupancy Tax (VR Assessment)
Itlterest
FI 19.E 2 0
Rec ised
Budget
6.000 S 6.GGG
323;644 5823,644
40000
Transfers Irl - G=lleral Fund Contribution 6G.GGG 60.000
Transfer In - Accumulation Fund 10.000
Total Revenues S 889,644 r$939,644
Expenditures
Salaries & Benefits
General Office Supplies
Forns Printing
Consulting Services
Contractual Services
Prornotion & Advertising
Print Ads
Digital Media
Out of Horne
Digital Services
Digital Assets
Marketing Consulting
Conununity Event Support
Prornotion Media
Promotion Other
Promotion Visiting Journalist
Trade Sho%vs - Space Rent
Trade Shows - Trans
Advertising Sponsorships
Professional Development
Other Professional Services
Postage
Utilities (Internet & Cell)
� 7orkers Conip Insurance
Unemployment Insurance
h$eetings and Conferences
Mileage Reinnburserinent
Meals & Lodging
Travel Exp nse
Association &Iennberships
Total Operating Expenditures
S 219.087
219.087
3.000
3.000
500
500
11,600
1100
1650000
165,000
12.000
12,000
4.500
4.50000
272,000
2890
6:600
6,600
45.000
45.000
-
7,000
-
4.375
50,000
54.000
80000
8,000
1300
20,630
MOOD
20:a00
7,600
7,600
500
500
13000
13"0
500
500
500
500
700
700
20000
2,a00
112.00
1 200
900
900
2:000
2,000
500
500
4;500
4,500
2;a00
2,000
1.500
1.500
S 857,6S7
S907,692
Transfer to Accumulation Fund -
Transfer Out 3.394 3i.394
Total Operating Expenditures Including S 889,081 5939,066
Net Operating Revenues over Expenditu S 563 S 5958
4. The Morro Bay TBID Advisory Board approved a motion to recommend that the 3%
Assessment be continued in FY 2019/20. The assessment will continue to apply to
hotels, motels and bed and breakfasts (as presently defined in the MBMC) and now
also shall include vacation rentals as the term "vacation rental" is used in Chapter
5.47 (Short -Term Vacation Rental Permit) of the MBMC.
5. The TBID budget for FY 2018/19 is projected to include
carryover into FY 2019/20M
6. The TBID FY 2019/20 Budget also includes revenues of
General Fund and $4,000 from advertising revenue.
$0 surplus left over for
$60,000 from the City's