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HomeMy WebLinkAboutItem 7a. Annual Public Hearing for the TBIDCity of San Luis Obispo, Council Memorandum City of San Luis Obispo Council Agenda Correspondence DATE: November 1, 2021 TO: Mayor and Council FROM: Greg Hermann, Deputy City Manager Molly Cano, Tourism Manager VIA: Derek Johnson, City Manager SUBJECT: Item #7a. - ANNUAL PUBLIC HEARING FOR THE TOURISM BUSINESS IMPROVEMENT DISTRICT Staff is providing this memo in response to an inquiry received from a Council Member requesting clarity on two items related to the TBID Public Hearing. As stated in the staff report, the TBID was formed in 2008 when the City Council adopted Ordinance 1517 establishing the Tourism Business Improvement District (TBID) in the City of San Luis Obispo, as requested by the local lodging industry. The assessment of two percent of gross receipts for the district became effective on October 1, 2008 and has remained unchanged since that time. The use of funds is defined in Section 12.42.030 of the Municipal Code as follow: “This ordinance is made and enacted pursuant to the provisions of the Parking and Business Improvement Area Law of 1989 (Sections 36500 et. seq., of the California Streets and Highways Code). The purpose of forming the district as a business improvement area under the Parking and Business Improvement Area Law of 1989 is to provide revenue to defray the costs of services, activities and programs promoting tourism which will benefit the operators of hotels in the district through the promotion of scenic, recreational, cultural and other attractions in the district as a tourist destination.” Annually, the city conducts a two-part process for Council to decide whether to continue the TBID, which consists of the adoption of the Annual Report followed by the Annual Public Hearing. Council approved this year’s TBID Annual Report at the September 21, 2021 meeting, and the annual report has since been shared with the community at- large. In advance of the November 2, 2021 public he aring, staff wishes to respond to Council questions (stated below) seeking clarification of clarify subsection k of Resolution No. 11276 (2021 Series), which states the following: If, at the conclusion of the public hearing, there are of record, written protests by the owners of businesses within the proposed San Luis Obispo Tourism Business Page 623 of 712 Item #7a. - ANNUAL PUBLIC HEARING FOR THE TOURISM BUSINESS IMPROVEMENT DISTRICT Page 2 Improvement District that will pay fifty percent (50%) or more of the total assessments of the entire San Luis Obispo Tourism Business Improvement District, no further proceedings to continue the San Luis Obispo Tourism Business Improvement District shall occur. New proceedings to form the San Luis Obispo Tourism Business Improvement 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 San Luis Obispo Tourism Improvement District. 1. Question: Does subsection k mean that if one or more businesses together pay 50% if the TBID assessment costs, and they file a written protest about the assessment, then the TBID will be removed entirely? Answer: Yes, if valid protests are received from hoteliers within the City of S an Luis Obispo who cumulatively contribute 50% or more of the of the proposed assessment, then the District will disband for a minimum period of 1-year. In preparation for this hearing, TBID constituents have received public notice informing them of the procedure to submit a public comment or protest. In the event a multitude of oral and written protests are received during the public hearing, staff would recommend that Council continue this item to a future meeting to provide staff the time needed to validate the protests received. Historically, the TBID has received no more than two protests annually, which does not qualify as a valid protest of 50% or more. The City has received no protests at the time of the correspondence. 2. Question: Can staff please clarify what subsection k means when it states: “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 TBID? Answer: This section means that if 50% or more of validly received protests related to a specific to activity or improvement within the TBID, that activity or improvement shall be withdrawn or excluded from the district without threatening the district as a whole. The definition of what constitutes an “improvement” and “activities” are provided in Sections 36510 and 36513 of the California Streets and Highways Code: “Improvement” means the acquisition, construction, installation, or maintenance of any tangible property with an estimated useful life of five years or more including, but not limited to, the following: (a) Parking facilities. (b) Benches. (c) Trash receptacles. (d) Street lighting. (e) Decorations. Page 624 of 712 Item #7a. - ANNUAL PUBLIC HEARING FOR THE TOURISM BUSINESS IMPROVEMENT DISTRICT Page 3 (f) Parks. (g) Fountains. “Activities” means, but is not limited to, all of the following: (a) Promotion of public events which benefit businesses in the area and which take place on or in public places within the area. (b) Furnishing of music in any public place in the area. (c) Promotion of tourism within the area. (d) Activities which benefit businesses located and operating in the area. Page 625 of 712 Page 626 of 712 Item 7a Department: Administration Cost Center: 1006 For Agenda of: 11/2/2021 Placement: Public Hearing Estimated Time: 20 minutes FROM: Greg Hermann, Deputy City Manager Prepared By: Molly Cano, Tourism Manager SUBJECT: ANNUAL PUBLIC HEARING FOR THE TOURISM BUSINESS IMPROVEMENT DISTRICT RECOMMENDATION 1. Conduct a public hearing to receive testimony regarding the City Council’s intention to continue the San Luis Obispo Tourism Business Improvement District and determine whether a legally sufficient protest is made; and 2. If no legally sufficient protest is made, adopt a Resolution entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, declaring the Basis for and the Levy of the Assessment for the San Luis Obispo Tourism Business Improvement District and Affirming the Establishment of the District.” DISCUSSION Background On September 21, 2021, Council reviewed and approved the San Luis Obispo Tourism Business Improvement District (TBID) Board’s annual report pursuant to Municipal Code Section 12.42.060 (Attachment B). The City’s Municipal Code further requires that, after the approval of the annual report, Council may choose to adopt a resolution of intention to levy an annual assessment for that fiscal year and schedule a public hearing to receive any written or oral protests against the district. Resolution No. 11276 (2021 Series), setting such a hearing, was adopted on September 21, 2021 (Attachment C). Following the September 21, 2021, Council action, all lodging businesses within the district including hotels, motels, bed and breakfast properties and the City permitted homestays, were noticed for the public hearing scheduled for November 2, 2021. Those notices were sent on October 21, 2021 to all assessed properties. Page 627 of 712 Item 7a Previous Council Action As set forth in Sections 36524 and 36525 of the California Streets and Highways Code and San Luis Obispo Municipal Code Section 12.42.060, the Council has the abil ity to continue the San Luis Obispo TBID at the public hearing, unless oral or written protests are received from City hoteliers that will pay 50% or more of the proposed assessments. Under Municipal Code Section 12.42.060, protests are weighted based upon the annual assessment for the prior year by each hotel. Staff will have assessment information available at the meeting, but for confidentiality reasons, this information is not made public before or at the meeting. In the event that a sufficient negative protest occurs, no further proceedings to continue the levy of assessments for that fiscal year shall take place. At the conclusion of the public hearing, if insufficient protest is received, Council may then adopt a resolution affirming the continuation of the San Luis Obispo TBID, setting forth the basis for the assessment, and levying the assessment upon hotels in the district for fiscal year 2021-22. Policy Context As referenced in the City’s Municipal Code Section 12.42.060 and Sections 36524 and 36525 of the California Streets and Highways Code, after approval of the annual report the City Council shall follow the hearing process. At the public hearing, the City Council shall hear and consider all protests. If written protests are received from hotel businesses in the district paying 50% or more of the annual assessment, no further proceedings to continue the levy of assessments shall take place. The protests shall be weighted based upon the annual assessment for the prior year by each hotel busines s. (Ord. 1517 § 3 (part), 2008) Public Engagement This item is on the agenda for the November 2, 2021 Council meeting and will follow all required postings and notifications. The public may have an opportunity to comment on this item at or before the meeting. All Advisory Body Meetings for the TBID were noticed in accordance with Brown Act standards. ENVIRONMENTAL REVIEW The California Environmental Quality Act (CEQA) does not apply to the recommended action in this report, because the action does not constitute a “project” under CEQA Guidelines sec. 15378. FISCAL IMPACT Budgeted: Yes Budget Year: 2021-22 Funding Identified: Yes Page 628 of 712 Item 7a Fiscal Analysis: Funding Sources Total Budget Available Current Funding Request Remaining Balance Annual Ongoing Cost General Fund $ $ $ $ State Federal Fees Other: TBID Fund $1,442,600 $1,442,600 Total $ $ $ $ 1,442,600* *For 2021-22, the TBID projected revenue is $1,444,000 with an approved expenditure budget of $1,442,600 which is intended to be used for tourism marketing and promotion. All costs associated with TBID program expenditures are paid with TBID revenues. The City retains 2% of TBID revenues to offset administrative overhead which is $28,852 in FY 2021-22 based on current revenue assumptions. ALTERNATIVES 1. Delay the public hearing. Staff does not recommend this alternative because all legally required noticing has been completed. In addition to the legal noticing, staff provided additional constituent outreach. In the event that the City receives close to 50% protest, the Council could delay the public hearing in order verify protest submissions. 2. Deny the resolution. Staff does not recommend this alternative if the requirements to deny the resolution under the legal protest specifications were not met. ATTACHMENTS A – Draft Resolution to continue the TBID in FY 21-22 B – City Council Minutes of September 21, 2021 C – Resolution No. 11276 (2021 Series) Page 629 of 712 Page 630 of 712 RESOLUTION NO. _____ (2021 SERIES) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, DECLARING THE BASIS FOR AND THE LEVY OF THE ASSESSMENT FOR THE SAN LUIS OBISPO TOURISM BUSINESS IMPROVEMENT DISTRICT AND AFFIRMING THE ESTABLISHMENT OF THE DISTRICT WHEREAS, the Parking and Business Improvement Law of 1989, section s 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 lodging businesses within the proposed City of San Luis Obispo Tourism Business Improvement District had requested the City of San Luis Obispo establish such a self-assessment improvement district in 2008; and WHEREAS, the San Luis Obispo Tourism Business Improvement District was established in July 2008, and the San Luis Obispo Tourism Business Improvement District Law was incorporated into the Municipal Code under Chapter 12.42; and WHEREAS, the City Council appointed an advisory board to carry out the functions specified in Street and Highways Code Section 36530, and to provide oversight, guidance, and recommendations regarding the use of th e assessment funds; and WHEREAS the San Luis Obispo Tourism Business Improvement District Law and the Parking and Business Improvement Law of 1989 requires the advisory body to prepare and submit an annual report stating proposed changes, improvements an d activities for the fiscal year; and WHEREAS, such report was filed and approved by the City Council on September 21, 2021 WHEREAS, on September 21, 2021 the City Council adopted Resolution No. 11276 (2021 Series) declaring its intention to continue the San Luis Obispo Tourism Business Improvement District in 2020-21; and WHEREAS, notices regarding the approval of the public hearing were sent on October 21, 2021to all assessed properties; and WHEREAS, the City Council held a duly noticed Public Hearing on November 2, 2021 to allow for protests, as contemplated by Streets and Highway Code Section 36524; and WHEREAS, sufficient written or oral protest was not received from hotel businesses in the district which pay fifty percent or more of the assessment; Page 631 of 712 Resolution No. _____ (2021 Series) Page 2 R ______ NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo as follows: a) The establishment of Tourism Business Improvement District in the City of San Luis Obispo in accordance with the San Luis Obispo Tourism Business Improvement District Law, San Luis Obispo Municipal Code Chapter 12.42, and the California Streets and Highways Code, section 36500 et seq. (Parking and Business Improvement Law of 1989) is affirmed. b) The assessment levied by the Tourism Business Improvement District shall be used to promote lodging at the hotels within the district and administer marketing programs that increase overnight lodging. c) The assessment shall be levied and allocated by the City of San Luis Obispo. d) The assessment shall to be levied on all “hotels”, as that term is defined in San Luis Obispo Municipal Code section 3.04.020, to wit: any structure, or any portion of any structure, which is occupied or intended or designed for occupancy by transients for dwelling, lodging or sleeping purposes, and includes any hotel, inn, tourist home or house, motel, studio hotel, bachelor hotel, lodging house, rooming house, apartment house, dormitory, public or private club, mobile home or house trailer at a fixed location, or other similar structure or portion thereof. e) The assessment shall be based on two percent (2%) of gross room rent. f) New hotels shall not be exempt from immediate assessment. Upon motion of _______________________, seconded by _______________________, and on the following roll call vote: AYES: NOES: ABSENT: The foregoing resolution was adopted this _____ day of _____________________, 2021. __________________________ Mayor Erica A. Stewart ATTEST: _____________________________ Teresa Purrington, City Clerk APPROVED AS TO FORM: ______________________________ J. Christine Dietrick, City Attorney IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, on ______________________. ___________________________ Teresa Purrington, City Clerk Page 632 of 712 Page 633 of 712 Page 634 of 712 Page 635 of 712 Page 636 of 712 Page 637 of 712 Page 638 of 712 Page 639 of 712 Page 640 of 712 R 11276 RESOLUTION NO. 11276 (2021 SERIES) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, DECLARING ITS INTENTION TO CONTINUE THE SAN LUIS OBISPO 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 ASSESSMENT FOR 2021-22 WHEREAS, the Parking and Business Improvement 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 promotion of tourism; and WHEREAS, the lodging businesses within the proposed City of San Luis Obispo Tourism Business Improvement District had requested the City of San Luis Obispo establish such a self-assessment improvement district in 2008; and WHEREAS, the San Luis Obispo Tourism Business Improvement District was established in July 2008 and incorporated into the Municipal Code under Chapter 12.42; and WHEREAS, the assessment went into effect on October 1, 2008; and WHEREAS, the City Council appointed an advisory board to provide oversight, guidance, and recommendations regarding the use of the assessment funds; and WHEREAS, the City Municipal Code and the Parking and Business Improvement Law require the advisory board to prepare and submit an annual report stating proposed changes, improvements and activities for the fiscal year; and WHEREAS, an annual report was prepared pursuant to Section 36533 of the Streets and Highway Code; and WHEREAS, notices regarding the approval of the annual report were sent on September 9, 2021 to all assessed properties. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of San Luis Obispo as follows: a) That the Tourism Business Improvement District Annual Report for fiscal year 2020-21 as filed by the advisory body is hereby approved. DocuSign Envelope ID: E57E5CA5-8E16-48BE-B06A-6E54A1F2946C Page 641 of 712 Resolution No. 11276 (2021 Series) Page 2 R 11276 b) The San Luis Obispo City Council proposes to continue the established Tourism Business Improvement District in the City of San Luis Obispo in accordance with City Municipal Code Chapter 12.42 and the California Streets and Highways Code, sections 36500 et seq. (Parking and Business Improvement Law of 1989). c) The assessment levied by the Tourism Business Improvement District shall be used to promote lodging at the hotels within the district and administer a marketing program that increases overnight hotel stays pursuant to the set goals. d) The assessment will be levied and allocated by the City of San Luis Obispo. e) The assessment is proposed to be levied on all “hotels”, as that term is defined in San Luis Obispo Municipal Code section 3.04.020, to wit: any structure, or any portion of any structure, which is occupied or intended or designed for occupancy by transients for dwelling, lodging or sleeping purposes, and includes any hotel, inn, tourist home or house, motel, studio hotel, bachelor hotel, lodging house, rooming house, apartment house, dormitory, public or private club, mobile home or house trailer at a fixed location, or other similar structure or portion thereof. f) The assessment shall be based on two percent (2%) of gross room rent. g) New hotels shall not be exempt from immediate assessment. h) The public hearing, held pursuant to the City Municipal Code Chapter 12.42 and the Parking and Business Improvement Law of 1989, section 36535 of the Streets and Highways Code, is to allow for comments on the District and proposed assessment, and is hereby set for 6 P.M., Tuesday, November 2, 2021, before the City Council of San Luis Obispo. i) 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. j) Any protest against the continuation of the City of San Luis Obispo Tourism Business Improvement District and the levying of the assessment, or any aspect thereof, may be made in writing. A protest may be withdrawn at any time before the conclusion of the public hearing. Any written protest shall contain a description of the business in which the person signing the protest is not shown on the official records of the City of San Luis Obispo 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 authorized representative of the business. Any protest as to the regularity or evidence of the proceedings shall be in writing and clearly state the irregularity or defect to the City of San Luis Obispo at 990 Palm Street, San Luis Obispo, CA 93401. DocuSign Envelope ID: E57E5CA5-8E16-48BE-B06A-6E54A1F2946C Page 642 of 712 Resolution No. 11276 (2021 Series) Page 3 R 11276 k) If, at the conclusion of the public hearing, there are of record, written protests by the owners of businesses within the proposed San Luis Obispo Tourism Business Improvement District that will pay fifty percent (50%) or more of the total assessments of the entire San Luis Obispo Tourism Business Improvement District, no further proceedings to continue the San Luis Obispo Tourism Business Improvement District shall occur. New proceedings to form the San Luis Obispo Tourism Business Improvement 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 San Luis Obispo Tourism Improvement District. DocuSign Envelope ID: E57E5CA5-8E16-48BE-B06A-6E54A1F2946C Page 643 of 712 Resolution No. 11276 (2021 Series) Page 4 R 11276 BE IT FURTHER THEREFORE RESOLVED, the City Clerk is instructed to provide notice as required by the City Municipal Code Chapter 12.42 and the Parking and Business Improvement Law of 1989, section 36534, subpart (a)(7) of the Streets and Highways Code, to wit: the City Clerk shall give notice of the public hearing by causing the resolution of intention to be published once in a newspaper of general circulat ion in the City no less than seven days before the public hearing. Upon motion of Council Member Christianson, seconded by Council Member Marx, and on the following roll call vote: AYES: Council Member Christianson, Marx, Pease, Vice Mayor Stewart, and Mayor Harmon NOES: None ABSENT: None The foregoing resolution was adopted this 21st day of September 2021. Vice Mayor Erica A. Stewart ATTEST: Teresa Purrington City Clerk APPROVED AS TO FORM: J. Christine Dietrick City Attorney IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, on ______________________. Teresa Purrington City Clerk DocuSign Envelope ID: E57E5CA5-8E16-48BE-B06A-6E54A1F2946C 9/27/2021 | 4:33 PM PDT Page 644 of 712 City of San Luis Obispo Tourism Business Improvement DistrictAnnual Public Hearing  Recommendations1.Conduct a public hearing to receive testimony regarding the City Council’s intention to continue the San Luis Obispo Tourism Business Improvement District and determine whether a legally sufficient protest is made; and2.If no legally sufficient protest is made, adopt a Resolution entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, declaring the Basis for and the Levy of the Assessment for the San Luis Obispo Tourism Business Improvement District and Affirming the Establishment of the District.” Background on the TBIDEstablished in 2008 7‐member Advisory Board 2% assessment on lodging properties“The purpose of forming the district as a business improvement area under the Parking and Business Improvement Area Law of 1989 is to provide revenue to defray the costs of services, activities and programs promoting tourism which will benefit the operators of hotels in the district through the promotion of scenic, recreational, cultural and other attractions in the district as a tourist destination.” 2020‐21 SLO TBID Accomplishments •Ongoing COVID‐19 pandemic response•Onboarding a new Agency‐of‐Record and national Public Relations team•Development and cautious implementation of the #SLOReady Campaign•Pivoting the Media outreach from general destination storytelling to timely trends such as sustainability•Investment in research for brand development, sentiment and DEI 2020‐21 Year by the Numbers  Public Hearing Conduct a public hearing to receive testimony regarding the intention to continue the San Luis Obispo Tourism Business Improvement District Determine whether a legally sufficient protest is madeIf no legally sufficient protest is made, adopt a resolution affirming the continuation of the San Luis Obispo Tourism Business Improvement District, setting forth the basis for the assessment, and levying the assessment upon hotels in the district for fiscal year 2021‐22.  Tourism Business Improvement DistrictAnnual Public Hearing  Recommendations1.Conduct a public hearing to receive testimony regarding the City Council’s intention to continue the San Luis Obispo Tourism Business Improvement District and determine whether a legally sufficient protest is made; and2.If no legally sufficient protest is made, adopt a Resolution entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, declaring the Basis for and the Levy of the Assessment for the San Luis Obispo Tourism Business Improvement District and Affirming the Establishment of the District.”