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HomeMy WebLinkAboutReso 94-19 Continuing the TBID 20191112RESOLUTION NO. 94-19 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MORRO BAY, CALIFORNIA, CONTINUING THE PROGRAM AND LEVYING THE ASSESSMENTS FOR THE REMAINDER OF 2019/20 FISCAL YEAR FOR THE MORRO BAY TOURISM BUSINESS IMPROVEMENT DISTRICT (MBTBID) THE CITY COUNCIL City of Morro Bay, California WHEREAS, the Parking and Business Improvement Area Law of 1989, Sections 36500 et seq., of the California Streets and Highway Code, authorizes cities to establish and review business improvement areas of the purpose of promoting tourism; and WHEREAS, on April 13, 2009, the City Council held a public hearing 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 1, 2010 and thereafter; and WHEREAS, on June 1, 2010, the MBTBID assessments returned to the 2% level, as established by then MBMC section 3.60.050; 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 board, formed pursuant to MBMC, Section 3.60.100, recommended the renewal of the TBID for the 2019/20 fiscal year to continue its activities, and the City Council has approved that renewal annually since 2010; and WHEREAS, all other findings of Ordinances 546 and 562 remain unchanged; and WHEREAS, on May 28, 2019, City Council conducted a public meeting where staff presented the annual assessment report, which provided 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 plan 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 2019/20 fiscal year; 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; and 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, on October 8, 2019, City Council approved the Supplemental Annual Report for FY 2019-20 and declared its intent 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 WHEREAS, the City timely mailed to all businesses subject to the existing and proposed TBID assessment the resolution adopted on October 8, 2019 concerning the continuation of the levy of the annual TBID assessment, the intention to add vacation rental businesses to the TBID, and confirming the date and time for a public meeting on October 22, 2019 and a public hearing on November 12, 2019 concerning the addition of vacation rental businesses to the TBID; and WHEREAS, on October 22, 2019, City Council at a public meeting solicited and allowed 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 WHEREAS, the City timely published in a newspaper of general circulation in the City the resolution adopted on October 8, 2019 concerning the continuation of the levy of the annual TBID assessment, the intention to add vacation rental businesses to the TBID, and confirming the date and time for a public meeting on October 22, 2019 and a public hearing on November 121 2019 concerning the addition of vacation rental businesses to the TBID; and WHEREAS, at that public hearing on November 12, 2019 regarding the renewal of the TBID for the 2019/20 fiscal year and the addition of vacation rental business in the MBTBID, affected businesses had the opportunity to protest the TBID renewal and the inclusion of vacation rental businesses in the MBTBID assessment, with the following results: FOR: None AGAINST: Eleven (11) properties paying 0.64% of the annual assessment. 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, having reaffirmed the Supplemental Annual Assessment Report and proposed budgets at its regular meeting held on October 8, 2019, and considered all testimony, reports and opinions presented at the October 22, 2019 public meeting and November 12, 2019 public hearing, hereby declares the renewal of the Morro Bay Tourism Business Improvement District for the remainder of the 2019/20 fiscal year, instructs the hoteliers to continue the levy and collection of 3% assessments from hoteliers calculated in the manner set forth in MBMC Section 3.60.050, and instructs vacation rental businesses to levy and collect a 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 consistent with MBMC, section 3.60.070, PASSED AND ADOPTED by the City Council of the City of Morro Bay, at a regular meeting thereof held on the 12th day of November 2019 by the following vote: AYES: NOES: ABSENT ATTEST: Headding, Addis, None None SWANSON, City Clerk Davis, Heller, McPherson 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 ("VRs") 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 3,60.060 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 22, 2019) for approval or modification 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. T 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. City- of Arforro Bay 2019120 TBID Proposed Budget Operating Revenues vs. Operating Expenditures Revenues Advertising -Guides and hIagazines Transient Occupancy Tax (TBID Assessment) Transient Occupancy Tax (VR Assessment) interest Transfers In - General Find Contribution Transfer In - Accumulation Find Total Revenues Expenditures Salaries & Benefits General Office Supplies Forms Printing Consulting Services Contractual Services Promotion & Advertising Print Ads Digital hiledia Oat of Home Digital Services Digital Assets Marketing Consulting Community Event Support Promotion Media Promotion Other Promotion Visiting Journalist Trade Shows - Space Refit Trade Shows - Trans Advertising Speasorships Professional Development Other Professional Services Postage Utilities (Internet & Cell) Workers Comp Insurance Unemployment Insivance Meetings and Confezeucel Mileage Reimbursament Meals & Lodging Travel Expense Association. MEmberahips Total Operating Expenditures FI 19,E 20 dpproved Budget FP19�30 Rerized Budget 6;L`G0 S 6;000 823'644 3323,644 40,000 III oil III $ 219,QS7 219,Q37 3,000 32000 500 500 11,600 11,600 165,Q00 165,000 121000 12,000 41500 4,500 27,2,000 239,400 6,6001 6,600 45,000. 45,000 7,000 4,375 50,000 54,000 8,000 840DO 13,000 2%630 1Q,000 20,000 7,6Q0 716Q0 500 500 13,000 13,Q00 500 500 500 500 700 700 2,Qao 2,Q00 1,200 1,2Q0 900 9DD 2 2,ODa ,000 500 500 4.5DO 4,500 2. ^. � 2.,Q00 r LSQa 5 65',687 $9079692 Transfer to Accumulation Fund - $ TransFer Out 31.394 31.394 Total Operating Expenditures Including $ 809,061 59oy,uoo Net Operating Revenues over Expenditu S 563 S 548 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 $0 surplus left over for carryover into FY 2019/20F 6. The TBID FY 2019/20 Budget also includes revenues of $60,000 from the City's General Fund and $4,000 from advertising revenue.