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Home My WebLink About09-19-2019 TBID Agenda Packet - Special MeetingCity of San Luis Obispo, Agenda, Tourism Business Improvement District Board Any writings or documents provided to a majority of the TBID Board regarding any item on this agenda will be made available f or public inspection in the Administration office of the City of San Luis Obispo at 990 Palm Street during normal business hours. Special Meeting Agenda Thursday, September 19, 2019 1:00 P.M. City Hall- Council Hearing Room CALL TO ORDER: Chair Bruce Skidmore PUBLIC COMMENT: Each speaker is limited to two minutes of public comment for items not on the agenda. Public comment for each agenda item will be called for separately and is also limited to 2 minutes per speaker. State law does not allow the board to discuss or take action on issues not on the agenda, except that members of the board may briefly respond to statements made or questions posed by the person giving public comment. Staff may be directed by the board to follow-up on such items and/or place them on the next b oard agenda. BUSINESS ITEMS Public comment will be taken for each individual agenda item. Each speaker will be limited to two minutes of public testimony. 1. VISIT SLO CAL – COUNTYWIDE TMD RENEWAL 60 mins The Board will meet for the consideration of the proposed renewal of the countywide Tourism Marketing District. Visit SLO CAL will present the district results to date and provide information on the proposed renewal as described in the Management District Plan. Staff will present the petition valuation to date for the City of SLO lodging businesses. The Board will take action in the form of a recommendation to City Council on the consideration of granting consent to the County Board of Supervisors to author ize the assessment in the City of SLO. ADJOURN. POSTING STATEMENT: I, Chantal Burns, Tourism Coordinator, do hereby certify that on September 13, 2018, by 5:00 p.m., a true and correct copy of this agenda was posted on the bulletin board outside City Hall. Internet access to agendas and related material is available at www.slocity.org. Tourism MarketingDistrict RESULTS to Date Visit SLO CAL has a three-year track record of success on behalf of our lodging investors and the tourism community. We need your support to see the district renewed. Over the next few pages we’ve outlined some of our key successes and the return on investment that Visit SLO CAL brings. As we approach the “vote” we need your support to renew the Tourism Marketing District. $2,100 STRATEGIC DIRECTION 2020 BRAND RESEARCH OPTIMIZE OUR ORGANIZATIONAL CAPACITY ESTABLISH BRAND CLARITY AND INCREASED AWARENESS THROUGH UNIFIED EFFORTS ADVOCATE FOR THE DEVELOPMENT OF CRITICAL TOURISM INFRASTRUCTURE DEMONSTRATE VALUE TO OUR STAKEHOLDERS, PARTNERS AND COMMUNITIES BUILD and EXPAND STRATEGIC PARTNERSHIPS Mom to the Max ACTIVE ADVENTURER CULTURED CLASS HIGH PROPENSITY TO VISIT & SPENDLOW AWARENESS // NEW SLO CAL BRAND LAUNCHED JANUARY 2017 AVERAGE 70%AVERAGE VISITORSPEND IN SLO CAL TOURISM ECOSYSTEM SAN FRANCISCO LOS ANGELES LAS VEGAS PHOENIX DENVER SEATTLE Visit SLO CAL funded a first-of-its-kind research co-op for the county to inform the development of a new brand and future marketing campaigns. LODGING, RESTAURANTS, ATTRACTIONS, RETAIL BUSINESS BIDS/CVB CITY/TOWN VISIT SLO CAL SLO CAL CCTC CENTRAL COAST VISIT CALIFORNIA CALIFORNIA BRAND USA USA SOURCE: MERRILL RESEARCH IMPERATIVE: ESTABLISH BRAND CLARITY AND INCREASED AWARENESS THROUGH UNIFIED EFFORTS TARGET MARKETS TARGET PERSONAS CIRCULATION PARTNER ADS 180,000 163 VISITOR MAGAZINE HIGHWAY 1 DETOUR SUPPORT & RE-OPENING BRAND ADVERTISING SUPPORTING OUR LOCAL PARTNERS spend IMPRESSIONSCLICKS$3.3m 651,531,7832,662,381 PROGRAMS SPEND PARTNERSHIPS IMPRESSIONS 9 $642,417 44 75,990,979 Co-op ad programs PROPERTY VISITS VISITOR CENTER & CHAMBER VISITS CO-OP SPEND INTERNATIONALLY-TRANSLATED DETOUR MAPS 224 24 $86k 6 CRISIS RESPONSE • Crisis Communication Plan Created (September 2015) • Chimney Fire (August - September 2016) • Highway 1 Closure (November 2016) • Thomas Fire (December 2017) • Highway 1 Dream Drive & Re-Opening (July 2018) *Metrics reflect data through March 2019 IMPERATIVE: ESTABLISH BRAND CLARITY AND INCREASED AWARENESS THROUGH UNIFIED EFFORTS IMPERATIVE: DEMONSTRATE VALUE TO OUR STAKEHOLDERS, PARTNERS AND COMMUNITIES NEW SLOCAL.COM $130 k 2016 EVENTS and PARTNERSHIPS PUBLIC RELATIONS TRAVEL TRADE MEETINGS TRADE SHOWS IMPRESSIONS APPOINTMENTS COUNTRIES - EXPOSURE BUYING POWER ARTICLES MISSIONS AD EQUIVALENCY FAM ATTENDEESFAM ATTENDEES COUNTRIES 1,166 26 679M 796 16 $400M 710 16 $8M 165308 6 EVENTS IMPACT: SPONSORSHIP PRODUCTIONS FILMING DAYSYEARS INCOUNTY HOURS OF INTERNATIONAL TV COVERAGE EVENTS IMPRESSIONS IMPRESSIONS partnerships REACH REFERRALS MEDIA REACHED INTERNATIONAL MISSIONS INTERNATIONAL TV SPOTS 43 $19 MREACH SINCE THE START OF THE TMD 17M 3 4 392 1,135 6 3.6B 5.3B 59 32k 36,547 1,380 9 3 SAN DIEGO SEATTLE PARTNERSHIP with in UNITED KINGDOM & IRELAND BLACK DIAMOND $100 k *Metrics reflect data through March 2019. AMGEN metrics reflect data through May 2019. IMPERATIVE: BUILD AND EXPAND STRATEGIC PARTNERSHIPS IMPERATIVE: ESTABLISH BRAND CLARITY AND INCREASED AWARENESS THROUGH UNIFIED EFFORTS 2017 NATIONAL PUBLIC RELATIONS PARTNER TURNER PR 2018 CURRENTLY RUNNING Air SERVICE 65% GROWTH BRAND LIFT TRACkED ARRIVALS CONFERENCE CENTER Research Now measures the consumer-brand interaction post marketing campaign and helps identify favorable changes in the customer journey.COLORADO // 3% WASHINGTON // 5% OTHER // 4% NEVADA // 2% ARIZONA // 5% TEXAS // 1%HAVE VISITED SLO CAL IN THE PAST UP FROM 36% in Wave 1*38% ADDITIONAL SEATS IN 3 YEARS270K 93% **Metrics reflect data through March 2019 VERY LIKELY SOMEWHAT UNLIKELY SOMEWHAT LIKELY 45% 12% 38% VERY UNLIKELY 5% SOURCE: RESEARCH NOW SOURCE: ARRIVALIST LIKELIHOOD TO CONSIDER VISITING AFTER SEEING ADS WOULD VISIT AGAIN FEASIBILITY STUDY 81% WOULD BOOK IN SLO CAL IF NEW FACILITY WAS BUILT 79% ARE LIKELY TO RETURN IF NEW FACILITY WAS BUILT MID-WEEK & SHOULDER SEASON SHOW HIGHEST POTENTIAL 15-20,000 SQFT BALLROOM DESIRED *Wave 1 was conducted February 2017; Wave 3 was conducted August 2018 IMPERATIVE: ESTABLISH BRAND CLARITY AND INCREASED AWARENESS THROUGH UNIFIED EFFORTS IMPERATIVE: ADVOCATE FOR THE DEVELOPMENT OF CRITICAL TOURISM INFRASTRUCTURE $1M in Air Service Marketing Support CALIFORNIA // 80% SOURCE: VOLAIRE ALLOCATION of ADDITIONAL FUNDING ADVERTISING & MARKETING Increased campaign investment in key feeder markets (Los Angeles, San Francisco, Phoenix, Seattle, Denver, Dallas-Fort Worth and Las Vegas) to drive demand during need times and increase length of stay through highly-targeted brand marketing and co-ops, in order to offset a 20% increase in countywide lodging inventory over the next four years STR is forecasting a 3.5% decrease in occupancy and a 1.7% decrease in RevPAR in 2020 The countywide Tourism Marketing District will expire in June 2020 and the lodging community, in partnership with Visit SLO CAL, is seeking the renewal of the District. Visit SLO CAL has worked with lodging investors to identify and plan for priority investment needs and growth opportunities over the coming decade. Through a ten-year renewal and increase in assessment from 1% to 1.5%, additional funding would be allocated in the following ways: SALES SUPPORT Help communities manage the unprecedented 20% increase in countywide lodging inventory over the next four years through the growth of travel trade initiatives AIR SERVICE DEVELOPMENT Grow economic impact of tourism through continued development of additional flights and new air service markets DESTINATION MANAGEMENT STRATEGY (DMS) RECOMMENDATIONS Implement Visit SLO CAL owned tourism-related recommendations coming out of the DMS Cultivate Awareness INTERNATIONAL MARKETS Investment in top inbound international markets and key new growth markets TOGETHER WE CAN SECURE SLO CAL’S SUCCESS Establish New Markets Drive More Demand Advocate for Our Future Foster International Visitation 2020-2030 SAN LUIS OBISPO COUNTY TOURISM MARKETING DISTRICT MANAGEMENT DISTRICT PLAN August 5, 2019 Prepared pursuant to the Property and Business Improvement District Law of 1994, Streets and Highways Code section 36600 et seq. CONTENTS I. OVERVIEW ........................................................................................................................................ 2 II. BACKGROUND ................................................................................................................................ 3 III. MAJOR ACCOMPLISHMENTS ..................................................................................................... 4 IV. BOUNDARY ....................................................................................................................................... 5 V. BUDGET AND SERVICES ............................................................................................................. 6 A. Annual Service Plan ............................................................................................................................. 6 B. Annual Budget ...................................................................................................................................... 8 C. California Constitutional Compliance ............................................................................................... 8 D. Assessment .......................................................................................................................................... 10 E. Penalties and Interest ......................................................................................................................... 10 F. Time and Manner for Collecting Assessments .............................................................................. 11 VI. GOVERNANCE ............................................................................................................................... 12 A. Owners’ Association .......................................................................................................................... 12 B. Brown Act and California Public Records Act Compliance ........................................................ 13 C. Annual Report .................................................................................................................................... 13 D. Audits and Accounting ...................................................................................................................... 14 APPENDIX 1 – LAW .................................................................................................................................... 15 APPENDIX 2 – ASSESSED BUSINESSES ............................................................................................. 26 Prepared by Civitas (800)999-7781 www.civitasadvisors.com SLOCTMD Management District Plan 2 August 5, 2019 I. OVERVIEW Developed by San Luis Obispo County Visitors and Conference Bureau (Visit SLO CAL), the San Luis Obispo County Tourism Marketing District (SLOCTMD) is an assessment district proposed to provide specific benefits to payors, by funding marketing, advertising, and sales efforts for assessed businesses. The countywide TMD is a cooperative effort to collectively market all that San Luis Obispo County (SLO CAL) has to offer for the benefit of assessed lodging businesses. Location: The renewed SLOCTMD includes all lodging businesses located within the boundaries of the cities of Arroyo Grande, Atascadero, Grover Beach, Morro Bay, Paso Robles, Pismo Beach, and San Luis Obispo, and the unincorporated portions of the County of San Luis Obispo, as shown on the map in Section IV. Services: The SLOCTMD is designed to provide specific benefits directly to payors by increasing awareness and demand for room night sales. Marketing, advertising, and sales will increase demand for overnight tourism and market payors as tourist, meeting and event destinations, thereby increasing demand for room night sales. Budget: The total SLOCTMD annual budget for the initial year of its ten (10) year operation is anticipated to be approximately $6,000,000. Cost: The annual assessment rate is one and one-half percent (1.5%) of gross short-term room rental revenue. Based on the benefit received, assessments will not be collected on: stays of more than thirty (30) consecutive days; stays by any officer or employee of a foreign government who is exempt from Transient Occupancy Taxes by reason of express provision of federal law or international treaty; stays by employees of Federal Credit Unions while on official credit union business; and stays pursuant to contracts executed prior to July 1, 2015. Stays pursuant to contracts executed between July 1, 2015 and June 30, 2020 shall be subject to assessment at the rate of one percent (1%) of gross short-term room revenue. Collection: The County and cities will be responsible for collecting the assessment on a monthly or quarterly basis (including any delinquencies, penalties and interest) from each lodging business located in the boundaries of the SLOCTMD, within their respective jurisdictions. The County and cities shall take all reasonable efforts to collect the assessments from each lodging business. Duration: The renewed SLOCTMD will have a ten (10) year life, beginning July 1, 2020 through June 30, 2030. Once per year, beginning on the anniversary of SLOCTMD renewal, there is a thirty (30) day period in which owners paying fifty percent (50%) or more of the assessment may protest and initiate a Board of Supervisors hearing on SLOCTMD termination. Management: Visit SLO CAL will continue to serve as the SLOCTMD’s Owners’ Association. The Owners’ Association is charged with managing funds and implementing programs in accordance with this Plan, and must provide annual reports to the Board of Supervisors. SLOCTMD Management District Plan 3 August 5, 2019 II. BACKGROUND TMDs are an evolution of the traditional Business Improvement District. The first TMD was formed in West Hollywood, California in 1989. Since then, over ninety California destinations have followed suit. In recent years, other states have begun adopting the California model – Montana, South Dakota, Washington, Colorado, Texas and Louisiana have adopted TMD laws. Several other states are in the process of adopting their own legislation. The cities of Wichita, Kansas and Newark, New Jersey used an existing business improvement district law to form a TBID. And, some cities, like Portland, Oregon and Memphis, Tennessee have utilized their home rule powers to create TMDs without a state law. California’s TMDs collectively raise over $250 million annually for local destination marketing. With competitors raising their budgets, and increasing rivalry for visitor dollars, it is important that SLO CAL lodging businesses continue to invest in stable, lodging-specific marketing programs. TMDs utilize the efficiencies of private sector operation in the market-based promotion of tourism districts. TMDs allow lodging business owners to organize their efforts to increase demand for room night sales. Lodging business owners within the TMD pay an assessment and those funds are used to provide services that increase demand for room night sales. In California, TMDs are formed pursuant to the Property and Business Improvement District Law of 1994. This law allows for the creation of a benefit assessment district to raise funds within a specific geographic area. The key difference between TMDs and other benefit assessment districts is that funds raised are returned to the private non-profit corporation governing the district. There are many benefits to TMDs:  Funds must be spent on services and improvements that provide a specific benefit only to those who pay;  Funds cannot be diverted to general government programs;  They are customized to fit the needs of payors in each destination;  They allow for a wide range of services;  They are designed, created and governed by those who will pay the assessment; and  They provide a stable, long-term funding source for tourism promotion. 1 2 4 6 9 12 19 25 29 32 38 46 61 64 70 75 88 95 99 100 0 20 40 60 80 100 19891995200020012002200320042005200620072008200920102011201220132014201520162017Number of Districts Operating in California SLOCTMD Management District Plan 4 August 5, 2019 III. MAJOR ACCOMPLISHMENTS From 2015-2020, Visit SLO CAL accomplished significant efforts within the SLOCTMD. These accomplishments are listed below: • Tourism Marketing District Approved (June 2015) • Developed Crisis Communication Plan (September 2015) • Economic Impact of Tourism Exceeds $1.5B (December 2015) • First Shoulder Season Marketing Campaign Launched (January 2016) • New Booking Engine Partnership (March 2016) • First-of-their-Kind Countywide Research Studies Completed (April 2016) • AMGEN Tour of California in SLO CAL (Morro Bay) (April 2016) • National Advertising Agency Hired (May 2016) • Strategic Direction 2020 Approved (June 2016) • Chimney Fire - Crisis Communication Plan Activated (August 2016) • First SAVOR - A San Luis Obispo County Experience - San Diego (November 2016) • Highway 1 Closure (November 2016) • UK Trade & Media Representation Contract Begins (November 2016) • Inclusion in Visit California Television Ad (Morro Rock) (Winter 2016) • SLO CAL Brand and Life's Too Beautiful to Rush Campaign Launched (January 2017) • SAVOR - A San Luis Obispo County Experience – Seattle (February 2017) • New Air Service from Seattle Begins (April 2017) • AMGEN Tour of California in SLO CAL (Pismo Beach/Morro Bay) (April 2017) • Conference Center Feasibility Study Completed (April 2017) • New Air Service from Denver Begins (June 2017) • $1M Ad Campaign Launched (October 2017) • Hired National PR Agency (TURNER PR) (November 2017) • Inclusion in Visit California Television Ad (Oceano Dunes) (Winter 2017) • Thomas Fire - Crisis Communication Plan Activated (December 2017) • Launched SLOCAL.com, SLO CAL Connection and CRM (February 2018) • Poppy Award for Best Digital Campaign (February 2018) • Launched Destination Management Strategy Process (May 2018) • Launched “SLO CAL Storytellers” Ambassador Program (June 2018) • Received DMAP Accreditation (July 2018) • Highway 1 Re-Opens (July 2018) • Visit SLO CAL Champions Dream Drive Event (August 2018) • $1M Ad Campaign Launched (September 2018) • New Air Service from Dallas Begins (April 2019) • Completion of Destination Management Strategy (Spring 2019) SLOCTMD Management District Plan 5 August 5, 2019 IV. BOUNDARY The SLOCTMD will include all lodging businesses, existing and in the future, available for public occupancy within the boundaries of the cities of Arroyo Grande, Atascadero, Grover Beach, Morro Bay, Paso Robles, Pismo Beach, and San Luis Obispo, and the unincorporated portions of the County of San Luis Obispo. Lodging business shall mean 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, short-term vacation rental, 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; and shall further include any space, lot, area or site in any trailer court, recreational vehicle park, mobile home park, camp, park or lot where a trailer, tent, recreational vehicle, mobile home, motorhome, or other similar conveyance is occupied or intended or designed for occupancy by transients dwelling, lodging or sleeping purposes. The boundary, as shown in the map below, currently includes 2,666 lodging businesses. A complete listing of lodging businesses within the renewed SLOCTMD can be found in Appendix 2. SLOCTMD Management District Plan 6 August 5, 2019 V. BUDGET AND SERVICES A. Annual Service Plan Assessment funds will be spent to provide specific benefits conferred or privileges granted directly to the payors that are not provided to those not charged, and which do not exceed the reasonable cost to the County of conferring the benefits or granting the privileges. The privileges and services provided with the SLOCTMD funds are marketing, advertising, and sales programs available only to assessed businesses. There shall be industry-specific marketing included in the marketing program, including marketing of bed and breakfasts, vacation rentals, and RV parks. A service plan budget has been developed to deliver services that benefit the assessed businesses. A detailed annual budget will be developed and approved by the Visit SLO CAL Board. The table below illustrates the initial annual budget allocations. The total initial budget is $6,000,000. Although actual revenues will fluctuate due to market conditions, the proportional allocations of the budget shall remain the same. However, the County and the Visit SLO CAL board shall have the authority to adjust budget allocations between the categories by no more than twenty-five percent (25%) of the total budget per year. A description of the proposed improvements and activities is listed below. The same activities are proposed for subsequent years. In the event of a legal challenge against the SLOCTMD, any and all assessment funds may be used for the costs of defending the SLOCTMD. Each budget category includes all costs related to providing that service, in accordance with Generally Accepted Accounting Procedures (GAAP). For example, the marketing budget includes the cost of staff time dedicated to overseeing and implementing the marketing program. Staff time dedicated purely to administrative tasks is allocated to the administrative portion of the budget. The costs of an individual staff member may be allocated to multiple budget categories, as appropriate in accordance Marketing, Sales, Advertising, and Destination Management, $4,920,000 , 82% Administration, $660,000 , 11% Contingency / Renewal, $300,000 , 5% Collection Costs, $120,000 , 2% Initial Annual Budget -$6,000,000 SLOCTMD Management District Plan 7 August 5, 2019 with GAAP. The staffing levels necessary to provide the services below will be determined by Visit SLO CAL and their Board on an as-needed basis. Marketing, Sales, Advertising & Destination Management A marketing, sales, advertising, and destination management and advertising program will promote SLO CAL as a tourist, meeting, and event destination. The program will have a central theme of promoting SLO CAL as a desirable place for overnight visits. Sales efforts will be designed to attract group, leisure travel, meetings and conferences and event business to SLO CAL. The program will have the goal of increasing awareness for overnight visitation and demand for room night sales at assessed businesses, and may include the following activities:  Strategic planning and message positioning to attract overnight visitors to assessed businesses;  Brand development and management to attract overnight visitors to assessed businesses;  Digital marketing, advertising and promotions to drive demand for lodging sales at assessed businesses, including blogs, e-newsletters, social media and direct response campaigns;  Website development and maintenance to drive demand for lodging sales at assessed businesses;  Media and public relations to increase destination awareness and demand for overnight stays at assessed businesses;  Radio, print and tv advertising to increase destination awareness and demand for overnight stays at assessed businesses;  Domestic and international sales missions to increase awareness and demand for overnight stays at assessed businesses;  Staff engaged in implementing marketing, advertising, promotions and sales activities to increase awareness and demand for overnight stays at assessed businesses;  Seasonal and event-related promotions and event guides to drive demand for lodging sales at assessed businesses;  Strategic partnerships with travel associates to increase awareness and demand for overnight stays at assessed businesses;  Management of a resource library to assist assessed businesses with sales and marketing efforts;  Event marketing to increase awareness and demand for overnight stays at assessed businesses;  Consumer communication for the benefit of assessed businesses;  Working with and as the Film Commission (Film SLO CAL) to increase awareness and demand for overnight stays at assessed businesses;  Attendance of conferences, events, and trade shows to showcase the destination and to increase awareness and demand for overnight stays at assessed businesses;  Research on market conditions and opportunities to increase awareness and demand for overnight stays at assessed businesses;  Management of a destination media kit to increase awareness and demand for overnight stays at assessed businesses;  Development, production and distribution of a destination visitors’ magazine to increase awareness and demand for overnight stays at assessed businesses; and  Destination management for the benefit of assessed businesses. SLOCTMD Management District Plan 8 August 5, 2019 Administration The administrative and operations portion of the budget shall be utilized for administrative (non- program) staffing costs, office costs, and other general program-related administrative costs such as insurance, legal, auditing, and accounting fees. Collection Costs The County and each City shall retain a fee equal to two percent (2%) of the amount of assessment collected, within their respective jurisdictions, to cover its costs of collection and administration. Contingency/Renewal The budget includes a contingency line item to account for uncollected assessments, if any. If there are contingency funds collected, they may be held in a reserve fund or utilized for other program, administration or renewal costs at the discretion of the Visit SLO CAL Board. Policies relating to contributions to the reserve fund, the target amount of the reserve fund, and expenditure of monies from the reserve fund shall be set by the Visit SLO CAL Board. Contingency/renewal funds may be spent on District programs or administrative and renewal costs in such proportions as determined by the Visit SLO CAL Board. The reserve fund may be used for the costs of renewing the SLOCTMD. B. Annual Budget The total ten (10) year improvement and service plan budget is projected at approximately $6,000,000 annually, or $60,000,000 through 2030. This amount may fluctuate as sales and revenue increase at assessed businesses, but is not expected to change significantly over the term. C. California Constitutional Compliance The SLOCTMD assessment is not a property-based assessment subject to the requirements of Proposition 218. Courts have found Proposition 218 limited the term ‘assessments’ to levies on real property.1 Rather, the SLOCTMD assessment is a business-based assessment, and is subject to Proposition 26. Pursuant to Proposition 26 all levies are a tax unless they fit one of seven exceptions. Two of these exceptions apply to the SLOCTMD, a “specific benefit” and a “specific government service.” Both require that the costs of benefits or services do not exceed the reasonable costs to the County of conferring the benefits or providing the services. 1. Specific Benefit Proposition 26 requires that assessment funds be expended on, “a specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of conferring the benefit or granting the privilege.”2 The services in this Plan are designed to provide targeted benefits directly to assessed businesses, and are intended only to provide benefits and services directly to those businesses paying the assessment. These services are tailored not to serve the general public, businesses in general, or parcels of land, but rather to serve the specific businesses within the SLOCTMD. The activities described in this Plan are specifically targeted to increase room night sales for assessed lodging businesses within the boundaries of the SLOCTMD, and are narrowly tailored. SLOCTMD funds will be used exclusively to provide the specific benefit of increased room night sales directly to the assessees. Assessment funds shall not be used to feature non-assessed lodging businesses in SLOCTMD programs, or to directly generate sales for non-assessed businesses. The activities paid 1 Jarvis v. the City of San Diego 72 Cal App. 4th 230 2 Cal. Const. art XIII C § 1(e)(1) SLOCTMD Management District Plan 9 August 5, 2019 for from assessment revenues are business services constituting and providing specific benefits to the assessed businesses. The assessment imposed by this SLOCTMD is for a specific benefit conferred directly to the payors that is not provided to those not charged. The specific benefit conferred directly to the payors is an increase in demand for room night sales. The specific benefit of an increase in demand for room night sales for assessed lodging businesses will be provided only to lodging businesses paying the district assessment, with marketing, advertising, and sales programs promoting lodging businesses paying the SLOCTMD assessment. The marketing, sales, and advertising programs will be designed to increase demand for room night sales at assessed lodging businesses. Because they are necessary to provide the marketing, advertising, and sales programs that specifically benefit the assessed lodging businesses, the administration and contingency services also provide the specific benefit of increased demand for room night sales to the assessed lodging businesses. Although the SLOCTMD, in providing specific benefits to payors, may produce incidental benefits to non-paying businesses, the incidental benefit does not preclude the services from being considered a specific benefit. The legislature has found that, “A specific benefit is not excluded from classification as a ‘specific benefit’ merely because an indirect benefit to a nonpayor occurs incidentally and without cost to the payor as a consequence of providing the specific benefit to the payor.”3 2. Specific Government Service The assessment may also be utilized to provide, “a specific government service or product provided directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of providing the service or product.”4 The legislature has recognized that marketing and promotions services like those to be provided by the SLOCTMD are government services within the meaning of Proposition 265. Further, the legislature has determined that “a specific government service is not excluded from classification as a ‘specific government service’ merely because an indirect benefit to a nonpayor occurs incidentally and without cost to the payor as a consequence of providing the specific government service to the payor.”6 3. Reasonable Cost SLOCTMD services will be implemented carefully to ensure they do not exceed the reasonable cost of such services. The full amount assessed will be used to provide the services described herein. Funds will be managed by the Visit SLO CAL Board, and reports submitted on an annual basis to the County. Marketing materials, sales leads generated from SLOCTMD-funded activities, advertising campaigns, and other SLOCTMD-funded services will be designed only to increase additional demand for room night sales at assessed lodging businesses. Non-assessed lodging businesses will not receive these, nor any other, SLOCTMD-funded services and benefits. The SLOCTMD-funded programs are all targeted directly at providing additional demand for room nights only at assessed businesses. It is, however, possible that there will be a spill over benefit to non-assessed businesses. If non-assessed lodging businesses receive incremental room nights, that portion of the promotion or program generating those room nights may be paid with non-SLOCTMD funds. SLOCTMD funds shall only be spent to benefit the assessed businesses, and shall not be spent 3 Government Code § 53758(a) 4 Cal. Const. art XIII C § 1(e)(2) 5 Government Code § 53758(b) 6 Government Code § 53758(b) SLOCTMD Management District Plan 10 August 5, 2019 on that portion of any program which directly generates incidental room nights for non-assessed businesses. D. Assessment The annual assessment rate is one and one-half percent (1.5%) of gross short-term room rental revenue. Based on the benefit received, assessments will not be collected on: stays of more than thirty (30) consecutive days; stays by any officer or employee of a foreign government who is exempt from Transient Occupancy Taxes by reason of express provision of federal law or international treaty; stays by employees of Federal Credit Unions while on official credit union business; and stays pursuant to contracts executed prior to July 1, 2015. Stays pursuant to contracts executed between July 1, 2015 and June 30, 2020 shall be subject to assessment at the rate of one percent (1%) of gross short-term room revenue. The term “gross room rental revenue” as used herein means: the consideration charged, whether or not received, for the occupancy of space in a lodging business valued in money, whether to be received in money, goods, labor or otherwise, including all receipts, cash, credits and property and services of any kind or nature, without any deduction. Gross room rental revenue includes, but is not limited to, fees, such as parking fees, resort fees, cleaning fees, pet fees, roll-away bed fees, energy fees, or miscellaneous fees and non-refundable deposits (including reservation fees) charged as a condition of occupying a room or rooms. Gross room rental revenue shall not include any federal, state or local taxes collected, including but not limited to transient occupancy taxes. The assessment is levied upon and a direct obligation of the assessed lodging business. However, the assessed lodging business may, at its discretion, pass the assessment on to transients. The amount of assessment, if passed on to each transient, shall be disclosed in advance and separately stated from the amount of rent charged and any other applicable taxes, and each transient shall receive a receipt for payment from the business. If the SLOCTMD assessment is identified separately it shall be disclosed as the “TMD Assessment.” As an alternative, the disclosure may include the amount of the SLOCTMD assessment and the amount of the assessment imposed pursuant to the California Tourism Marketing Act, Government Code §13995 et seq. and shall be disclosed as the “Tourism Assessment.” The assessment is imposed solely upon, and is the sole obligation of the assessed lodging business even if it is passed on to transients. The assessment shall not be considered revenue for any purpose, including calculation of transient occupancy taxes. Bonds shall not be issued. E. Penalties and Interest The SLOCTMD shall reimburse the cities and County for any costs associated with collecting unpaid assessments. If sums in excess of the delinquent SLOCTMD assessment are sought to be recovered in the same collection action by the cities and County, the SLOCTMD shall bear its pro rata share of such collection costs. Assessed businesses which are delinquent in paying the assessment shall be responsible for paying: 1. Original Delinquency Any business which fails to remit the assessment within the time required shall pay a penalty of ten percent (10%) of the amount of the assessment in addition to the amount of the assessment. 2. Continued Delinquency SLOCTMD Management District Plan 11 August 5, 2019 Any business which fails to remit any delinquent remittance on or before a period of thirty (30) days following the date on which the remittance first became delinquent shall pay a second delinquency penalty of ten percent (10%) of the amount of the assessment in addition to the amount of the assessment and the ten percent (10%) penalty first imposed. 3. Fraud If it is determined that nonpayment of any remittance is due to fraud, a penalty of twenty-five percent (25%) of the amount of the assessment shall be added thereto in addition to the above penalties. 4. Interest In addition to the penalties imposed, any business which fails to remit any assessment shall pay interest at the rate of one-half of one percent (0.5%) per month or fraction thereof on the amount of the assessment, exclusive of penalties, from the date on which the assessment first became delinquent until paid. 5. Penalties Merged with Assessment Every penalty imposed and such interest as accrues shall become part of the assessment required to be paid. F. Time and Manner for Collecting Assessments The SLOCTMD assessment will be implemented beginning July 1, 2020 and will continue for ten (10) years through June 30, 2030. The cities and County will be responsible for collecting the assessment on a monthly or quarterly basis (including any delinquencies, penalties and interest) from each lodging business located in their respective jurisdictions. The cities and County shall take all reasonable efforts to collect the assessments from each lodging business within their respective jurisdiction. The cities and County shall forward the collected assessment to the Owners’ Association within thirty (30) days of receiving the assessments. Any City or County that is delinquent in forwarding the collected assessment to the Owners’ Association shall be responsible for paying: 1. Original Delinquency Any City or County which fails to remit the assessment within the time required shall pay a penalty of ten percent (10%) of the amount of the assessment in addition to the amount of the assessment. 2. Continued Delinquency Any City or County which fails to remit any delinquent remittance on or before a period of thirty (30) days following the date on which the remittance first became delinquent shall pay a second delinquency penalty of ten percent (10%) of the amount of the assessment in addition to the amount of the assessment and the ten percent (10%) penalty first imposed. SLOCTMD Management District Plan 12 August 5, 2019 VI. GOVERNANCE A. Owners’ Association The Board of Supervisors, through adoption of this Management District Plan, has the right, pursuant to Streets and Highways Code §36651, to identify the body that shall implement the proposed program, which shall be the Owners’ Association of the SLOCTMD as defined in Streets and Highways Code §36612. The Board of Supervisors has determined that San Luis Obispo County Visitors and Conference Bureau (Visit SLO CAL) will serve as the Owners’ Association for the SLOCTMD. Board of Directors The Visit SLO CAL Board will strive to ensure that each jurisdiction is represented in approximate proportion to the amount contributed by lodging businesses in that jurisdiction. Each Director must be the owner or the general manager of an assessed lodging business, except for the County representative. The Directors will include the following:  At least one representative of a lodging business in each jurisdiction  At least one representative each from a vacation rental, a bed and breakfast, and an R.V. park  At least one representative who is appointed by the County of San Luis Obispo  At least one at-large assessed lodging business member The Board of Directors shall be selected as follows:  At least one lodging business representative from each of the cities shall be appointed by the respective jurisdiction’s city council or tourism organization, as each city determines  At least one lodging business representative shall be appointed by the County Board of Supervisors  At least one additional representative at-large shall be appointed by the County Board of Supervisors  Nominations shall be sought from the assessed lodging businesses for the remaining at-large seats. Nominations will be verified by the nominating committee, and a slate provided to the Board of Directors for election. The slate will take into consideration the requirement for various business types. The Board of Directors shall serve for staggered three-year terms. As part of the annual budget process, the Visit SLO CAL Board will review all staffing costs, including salaries and benefits. Visit SLO CAL will also maintain two committees that will assist in managing and implementing the TMD funds and programs and communicating with the various jurisdictions. Marketing Committee The marketing committee’s purpose will be to align marketing objectives and complementary strategies between community and county tourism marketing programming to optimize collaboration and reduce duplication. The committee will consist of managers and marketing professionals who have been selected through an application process that is managed and reviewed by the Visit SLO CAL Board of Directors and staff. The committee’s recommendations will be submitted to the Visit SLO CAL Board of Directors for approval. SLOCTMD Management District Plan 13 August 5, 2019 The Marketing Committee will include the following:  The DMO manager from each community and the county unincorporated area  At-large members, representing a mix of different sectors DMO managers will have a standing seat on the Marketing Committee. At-large members shall serve for staggered three-year terms. At the initial meeting, each at-large member shall draw lots to determine their term. Advisory Committee The advisory committee will be comprised of one elected official and one city manager/county official from each participating community. Each community will determine its representative(s) to the committee. The participating communities or advisory committee may determine on their own to establish a core group of advisory committee individuals who will represent the broader group and interests of the communities on their behalf. The advisory committee will meet with the Visit SLO CAL Executive Committee a minimum of twice per year and no more than four times per year at the request of the advisory committee. Members of both bodies will be able to place items for discussion on the agenda. The advisory committee’s input, concerns, and recommendations will be considered by Visit SLO CAL’s Executive Committee when taking action on behalf of the organization. The advisory committee will liaise back to the communities they represent with programming updates and overall metrics demonstrating the impacts of the TMD on the County and cities. B. Brown Act and California Public Records Act Compliance An Owners’ Association is a private entity and may not be considered a public entity for any purpose, nor may its board members or staff be considered to be public officials for any purpose. The Owners’ Association is, however, subject to government regulations relating to transparency, namely the Ralph M. Brown Act and the California Public Records Act. These regulations are designed to promote public accountability. The Owners’ Association acts as a legislative body under the Ralph M. Brown Act (Government Code §54950 et seq.). Thus, meetings of the Visit SLO CAL Board and certain committees must be held in compliance with the public notice and other requirements of the Brown Act. The Owners’ Association is also subject to the record keeping and disclosure requirements of the California Public Records Act. Accordingly, the Owners’ Association shall publicly report any action taken and the vote or abstention on that action of each member present for the action. C. Annual Report The Visit SLO CAL shall present an annual report by October 31, for the previous fiscal year of operation, to the Board of Supervisors pursuant to Streets and Highways Code §36650 (see Appendix 1). The annual report shall include:  Any proposed changes in the boundaries of the improvement district or in any benefit zones or classification of businesses within the district.  The improvements and activities to be provided for that fiscal year.  An estimate of the cost of providing the improvements and the activities for that fiscal year.  The method and basis of levying the assessment in sufficient detail to allow each business owner to estimate the amount of the assessment to be levied against his or her business for that fiscal year.  The estimated amount of any surplus or deficit revenues to be carried over from a previous fiscal year. SLOCTMD Management District Plan 14 August 5, 2019  The estimated amount of any contributions to be made from sources other than assessments levied pursuant to this part. D. Audits and Accounting The County of San Luis Obispo shall be allowed to review the financial records of Visit SLO CAL relative to the SLOCTMD. Visit SLO CAL shall engage either an independent certified public accountant or the County auditor-controller to conduct annual audits. The audit report must be submitted to the County no more than six (6) months after the fiscal year ends. SLOCTMD Management District Plan 15 August 5, 2019 APPENDIX 1 – LAW *** THIS DOCUMENT IS CURRENT THROUGH THE 2018 SUPPLEMENT *** (ALL 2017 LEGISLATION) STREETS AND HIGHWAYS CODE DIVISION 18. PARKING PART 7. PROPERTY AND BUSINESS IMPROVEMENT DISTRICT LAW OF 1994 CHAPTER 1. General Provisions ARTICLE 1. Declarations 36600. Citation of part This part shall be known and may be cited as the “Property and Business Improvement District Law of 1994.” 36601. Legislative findings and declarations; Legislative guidance The Legislature finds and declares all of the following: (a) Businesses located and operating within business districts in some of this state’s communities are economically disadvantaged, are underutilized, and are unable to attract customers due to inadequate facilities, services, and activities in the business districts. (b) It is in the public interest to promote the economic revitalization and physical maintenance of business districts in order to create jobs, attract new businesses, and prevent the erosion of the business districts. (c) It is of particular local benefit to allow business districts to fund business related improvements, maintenance, and activities through the levy of assessments upon the businesses or real property that receive benefits from those improvements. (d) Assessments levied for the purpose of conferring special benefit upon the real property or a specific benefit upon the businesses in a business district are not taxes for the general benefit of a city, even if property, businesses, or persons not assessed receive incidental or collateral effects that benefit them. (e) Property and business improvement districts formed throughout this state have conferred special benefits upon properties and businesses within their districts and have made those properties and businesses more useful by providing the following benefits: (1) Crime reduction. A study by the Rand Corporation has confirmed a 12-percent reduction in the incidence of robbery and an 8-percent reduction in the total incidence of violent crimes within the 30 districts studied. (2) Job creation. (3) Business attraction. (4) Business retention. (5) Economic growth. (6) New investments. (f) With the dissolution of redevelopment agencies throughout the state, property and business improvement districts have become even more important tools with which communities can combat blight, promote economic opportunities, and create a clean and safe environment. (g) Since the enactment of this act, the people of California have adopted Proposition 218, which added Article XIII D to the Constitution in order to place certain requirements and restrictions on the formation of, and activities, expenditures, and assessments by property-based districts. Article XIII D of the Constitution provides that property-based districts may only levy assessments for special benefits. (h) The act amending this section is intended to provide the Legislature’s guidance with regard to this act, its interaction with the provisions of Article XIII D of the Constitution, and the determination of special benefits in property-based districts. (1) The lack of legislative guidance has resulted in uncertainty and inconsistent application of this act, which discourages the use of assessments to fund needed improvements, maintenance, and activities in property-based districts, contributing to blight and other underutilization of property. (2) Activities undertaken for the purpose of conferring special benefits upon property to be assessed inherently produce incidental or collateral effects that benefit property or persons not assessed. Therefore, for special benefits to exist as a separate and distinct category from general benefits, the SLOCTMD Management District Plan 16 August 5, 2019 incidental or collateral effects of those special benefits are inherently part of those special benefits. The mere fact that special benefits produce incidental or collateral effects that benefit property or persons not assessed does not convert any portion of those special benefits or their incidental or collateral effects into general benefits. (3) It is of the utmost importance that property-based districts created under this act have clarity regarding restrictions on assessments they may levy and the proper determination of special benefits. Legislative clarity with regard to this act will provide districts with clear instructions and courts with legislative intent regarding restrictions on property-based assessments, and the manner in which special benefits should be determined. 36602. Purpose of part The purpose of this part is to supplement previously enacted provisions of law that authorize cities to levy assessments within property and business improvement districts, to ensure that those assessments conform to all constitutional requirements and are determined and assessed in accordance with the guidance set forth in this act. This part does not affect or limit any other provisions of law authorizing or providing for the furnishing of improvements or activities or the raising of revenue for these purposes. 36603. Preemption of authority or charter city to adopt ordinances levying assessments Nothing in this part is intended to preempt the authority of a charter city to adopt ordinances providing for a different method of levying assessments for similar or additional purposes from those set forth in this part. A property and business improvement district created pursuant to this part is expressly exempt from the provisions of the Special Assessment Investigation, Limitation and Majority Protest Act of 1931 (Division 4 (commencing with Section 2800)). 36603.5. Part prevails over conflicting provisions Any provision of this part that conflicts with any other provision of law shall prevail over the other provision of law, as to districts created under this part. 36604. Severability This part is intended to be construed liberally and, if any provision is held invalid, the remaining provisions shall remain in full force and effect. Assessments levied under this part are not special taxes. ARTICLE 2. Definitions 36606. “Activities” “Activities” means, but is not limited to, all of the fo llowing that benefit businesses or real property in the district: (a) Promotion of public events. (b) Furnishing of music in any public place. (c) Promotion of tourism within the district. (d) Marketing and economic development, including retail retention and recruitment. (e) Providing security, sanitation, graffiti removal, street and sidewalk cleaning, and other municipal services supplemental to those normally provided by the municipality. (f) Other services provided for the purpose of conferring special benefit upon assessed real property or specific benefits upon assessed businesses located in the district. 36606.5. “Assessment” “Assessment” means a levy for the purpose of acquiring, constructing, installing, or maintaining improvements and providing activities that will provide certain benefits to properties or businesses located within a property and business improvement district. 36607. “Business” SLOCTMD Management District Plan 17 August 5, 2019 “Business” means all types of businesses and includes financial institutions and professions. 36608. “City” “City” means a city, county, city and county, or an agency or entity created pursuant to Article 1 (commencin g with Section 6500) of Chapter 5 of Division 7 of Title 1 of the Government Code, the public member agencies of which includes only cities, counties, or a city and county, or the State of California. 36609. “City council” “City council” means the city council of a city or the board of supervisors of a county, or the agency, commission, or board created pursuant to a joint powers agreement and which is a city within the meaning of this part. 36609.4. “Clerk” “Clerk” means the clerk of the legislative body. 36609.5. “General benefit” “General benefit” means, for purposes of a property-based district, any benefit that is not a “special benefit” as defined in Section 36615.5. 36610. “Improvement” “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, booths, kiosks, display cases, pedestrian shelters and signs. (c) Trash receptacles and public restrooms. (d) Lighting and heating facilities. (e) Decorations. (f) Parks. (g) Fountains. (h) Planting areas. (i) Closing, opening, widening, or narrowing of existing streets. (j) Facilities or equipment, or both, to enhance security of persons and property within the district. (k) Ramps, sidewalks, plazas, and pedestrian malls. (l) Rehabilitation or removal of existing structures. 36611. “Management district plan”; “Plan” “Management district plan” or “plan” means a proposal as defined in Section 36622. 36612. “Owners’ association” “Owners’ association” means a private nonprofit entity that is under contract with a city to administer or implement improvements, maintenance, and activities specified in the management district plan. An owners’ association may be an existing nonprofit entity or a newly formed nonprofit entity. An owners’ association is a private entity and may not be considered a public entity for any purpose, nor may its board members or staff be co nsidered to be public officials for any purpose. Notwithstanding this section, an owners’ association shall comply with the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2 of Title 5 of the Government Code), at all times when matters within the subject matter of the district are heard, discussed, or deliberated, and with the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code), for all records relating to activities of the district. 36614. “Property” “Property” means real property situated within a district. SLOCTMD Management District Plan 18 August 5, 2019 36614.5. “Property and business improvement district”; “District” “Property and business improvement district,” or “district,” means a property and business improvement district established pursuant to this part. 36614.6. “Property-based assessment” “Property-based assessment” means any assessment made pursuant to this part upon real property. 36614.7. “Property-based district” “Property-based district” means any district in which a city levies a property-based assessment. 36615. “Property owner”; “Business owner”; “Owner” “Property owner” means any person shown as the owner of land on the last equalized assessment roll or otherwise known to be the owner of land by the city council. “Business owner” means any person recognized by the city as the owner of the business. “Owner” means either a business owner or a property owner. The city council has no obligation to obtain other information as to the ownership of land or businesses, and its determination of ownership shall be final and conclusive for the purposes of this part. Wherever this part requires the signature of the property owner, the signature of the authorized agent of the property owner shall be sufficient. Wherever this part requires the signature of the business owner, the signature of the authorized agent of the business owner shall be sufficient. 36615.5. “Special benefit” “Special benefit” means, for purposes of a property-based district, a particular and distinct benefit over and above general benefits conferred on real property located in a district or to the public at large. Special benefit includes incidental or collateral effects that arise from the improvements, maintenance, or activities of property-based districts even if those incidental or collateral effects benefit property or persons not assessed. Special benefit excludes general enhancement of property value. 36616. “Tenant” “Tenant” means an occupant pursuant to a lease of commercial space or a dwelling unit, other than an owner. ARTICLE 3. Prior Law 36617. Alternate method of financing certain improvements and activities; Effect on other provisions This part provides an alternative method of financing certain improvements and activities. The provisions of this part shall not affect or limit any other provisions of law authorizing or providing for the furnishing of improvements or activities or the raising of revenue for these purposes. Every improvement area established pursuant to the Parking and Business Improvement Area Law of 1989 (Part 6 (commencing with Section 36500) of this division) is valid and effective and is unaffected by this part. CHAPTER 2. Establishment 36620. Establishment of property and business improvement district A property and business improvement district may be established as provided in this chapter. 36620.5. Requirement of consent of city council A county may not form a district within the territor ial jurisdiction of a city without the consent of the city council of that city. A city may not form a district within the unincorporated territory of a county without the consent of the board SLOCTMD Management District Plan 19 August 5, 2019 of supervisors of that county. A city may not form a district within the territorial jurisdiction of another city without the consent of the city council of the other city. 36621. Initiation of proceedings; Petition of property or business owners in proposed district (a) Upon the submission of a written petition, signed by the property or business owners in the proposed district who will pay more than 50 percent of the assessments proposed to be levied, the city council may initiate proceedings to form a district by the adoption of a resolution expressing its intention to form a district. The amount of assessment attributable to property or a business owned by the same property or business owner that is in excess of 40 percent of the amount of all assessments proposed to be levied, shall not be included in determining whether the petition is signed by property or business owners who will pay more than 50 percent of the total amount of assessments proposed to be levied. (b) The petition of property or business owners required under subdivision (a) shall include a summary of the management district plan. That summary shall include all of the following: (1) A map showing the boundaries of the district. (2) Information specifying where the complete management district plan can be obtained. (3) Information specifying that the complete management district plan shall be furnished upon request. (c) The resolution of intention described in subdivision (a) shall contain all of the following: (1) A brief description of the proposed improvements, maintenance, and activities, the amount of the proposed assessment, a statement as to whether the assessment will be levied on property or businesses within the district, a statement as to whether bonds will be issued, and a description of the exterior boundaries of the proposed district, which may be made by reference to any plan or map that is on file with the clerk. The descriptions and statements do not need to be detailed and shall be sufficient if they enable an owner to generally identify the nature and extent of the improvements, maintenance, and activities, and the location and extent of the proposed district. (2) A time and place for a public hearing on the establishment of the property and business improvement district and the levy of assessments, which shall be consistent with the requirements of Section 36623. 36622. Contents of management district plan The management district plan shall include, but is not limited to, all of the following: (a) If the assessment will be levied on property, a map of the district in sufficient detail to locate each parcel of property and, if businesses are to be assessed, each business within the district. If the assessment will be levied on businesses, a map that identifies the district boundaries in sufficient detail to allow a business owner to reasonably determine whether a business is located within the district boundaries. If the assessment will be levied on property and businesses, a map of the district in sufficient detail to locate each parcel of property and to allow a business owner to reasonably determine whether a business is located within the district boundaries. (b) The name of the proposed district. (c) A description of the boundaries of the district, including the boundaries of benefit zones, proposed for establishment or extension in a manner sufficient to identify the affected property and businesses included, which may be made by reference to any plan or map that is on file with the clerk. The boundaries of a proposed property assessment district shall not overlap with the bounda ries of another existing property assessment district created pursuant to this part. This part does not prohibit the boundaries of a district created pursuant to this part to overlap with other assessment districts established pursuant to other provisions of law, including, but not limited to, the Parking and Business Improvement Area Law of 1989 (Part 6 (commencing with Section 36500)). This part does not prohibit the boundaries of a business assessment district created pursuant to this part to overlap with another business assessment district created pursuant to this part. This part does not prohibit the boundaries of a business assessment district created pursuant to this part to overlap with a property assessment district created pursuant to this part. (d) The improvements, maintenance, and activities proposed for each year of operation of the district and the maximum cost thereof. If the improvements, maintenance, and activities proposed for each year of operation are the same, a description of the first year’s proposed improvements, maintenance, and activities and a statement that the same improvements, maintenance, and activities are proposed for subsequent years shall satisfy the requirements of this subdivision. SLOCTMD Management District Plan 20 August 5, 2019 (e) The total annual amount proposed to be expended for improvements, maintenance, or activities, and debt service in each year of operation of the district. If the assessment is levied on businesses, this amount may be estimated based upon the assessment rate. If the total annual amount proposed to be expended in each year of operation of the district is not significantly different, the amount proposed to be expended in the initial year and a statement that a similar amount applies to subsequent years shall satisfy the requirements of this subdivision. (f) The proposed source or sources of financing, including the proposed method and basis of levying the assessment in sufficient detail to allow each property or business owner to calculate the amount of the assessment to be levied against his or her property or business. The plan also shall state whether bonds will be issued to finance improvements. (g) The time and manner of collecting the assessments. (h) The specific number of years in which assessments will be levied. In a new district, the maximum number of years shall be five. Upon renewal, a district shall have a term not to exceed 10 years. Notwithstanding these limitations, a district created pursuant to this part to finance capital improvements with bonds may levy assessments until the maximum maturity of the bonds. The management district plan may set forth specific increases in assessments for each year of operation of the district. (i) The proposed time for implementation and completion of the management district plan. (j) Any proposed rules and regulations to be applicable to the district. (k) (1) A list of the properties or businesses to be assessed, including the assessor’s parcel numbers for properties to be assessed, and a statement of the method or methods by which the expenses of a district will be imposed upon benefited real property or businesses, in proportion to the benefit received by the property or business, to defray the cost thereof. (2) In a property-based district, the proportionate special benefit derived by each ident ified parcel shall be determined exclusively in relationship to the entirety of the capital cost of a public improvement, the maintenance and operation expenses of a public improvement, or the cost of the activities. An assessment shall not be imposed on a ny parcel that exceeds the reasonable cost of the proportional special benefit conferred on that parcel. Only special benefits are assessable, and a property-based district shall separate the general benefits, if any, from the special benefits conferred on a parcel. Parcels within a property-based district that are owned or used by any city, public agency, the State of California, or the United States shall not be exempt from assessment unless the governmental entity can demonstrate by clear and convincing evidence that those publicly owned parcels in fact receive no special benefit. The value of any incidental, secondary, or collateral effects that arise from the improvements, maintenance, or activities of a property-based district and that benefit property or persons not assessed shall not be deducted from the entirety of the cost of any special benefit or affect the proportionate special benefit derived by each identified parcel. (l) In a property-based district, the total amount of all special benefits to be conferred upon the properties located within the property-based district. (m) In a property-based district, the total amount of general benefits, if any. (n) In a property-based district, a detailed engineer’s report prepared by a registered profession al engineer certified by the State of California supporting all assessments contemplated by the management district plan. (o) Any other item or matter required to be incorporated therein by the city council. 36623. Procedure to levy assessment (a) If a city council proposes to levy a new or increased property assessment, the notice and protest and hearing procedure shall comply with Section 53753 of the Government Code. (b) If a city council proposes to levy a new or increased business assessment, the notice and protest and hearing procedure shall comply with Section 54954.6 of the Government Code, except that notice shall be mailed to the owners of the businesses proposed to be assessed. A protest may be made orally or in writing by any interested person. Every written protest shall be filed with the clerk at or before the time fixed for the public hearing. The city council may waive any irregularity in the form or content of any written protest. A written protest may be withdrawn in writing at any time before the conclusion of the public hearing. 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 or the authorized representative. A written protest that does not comply with this section shall not be counted in determining a majority protest. If written protests are received from the owners or authorized representatives of businesses in the proposed district that will pay SLOCTMD Management District Plan 21 August 5, 2019 50 percent or more of the assessments proposed to be levied and protests are not withdrawn so as to reduce the protests to less than 50 percent, no further proceedings to levy the propo sed assessment against such businesses, as contained in the resolution of intention, shall be taken for a period of one year from the date of the finding of a majority protest by the city council. (c) If a city council proposes to conduct a single proceeding to levy both a new or increased property assessment and a new or increased business assessment, the notice and protest and hearing procedure for the property assessment shall comply with subdivision (a), and the notice and protest and hearing procedure for the business assessment shall comply with subdivision (b). If a majority protest is received from either the property or business owners, that respective portion of the assessment shall not be levied. The remaining portion of the assessment may be levied unless the improvement or other special benefit was proposed to be funded by assessing both property and business owners. 36624. Changes to proposed assessments At the conclusion of the public hearing to establish the district, the city council may adopt, revise, change, reduce, or modify the proposed assessment or the type or types of improvements, maintenance, and activitie s to be funded with the revenues from the assessments. Proposed assessments may only be revised by reducing any or all of them. At the public hearing, the city council may only make changes in, to, or from the boundaries of the proposed property and business improvement district that will exclude territory that will not benefit from the proposed improvements, maintenance, and activities. Any modifications, revisions, reductions, or changes to the proposed assessment district shall be reflected in the notice and map recorded pursuant to Section 36627. 36625. Resolution of formation (a) If the city council, following the public hearing, decides to establish a proposed property and business improvement district, the city council shall adopt a resolution of formation that shall include, but is not limited to, all of the following: (1) A brief description of the proposed improvements, maintenance, and activities, the amount of the proposed assessment, a statement as to whether the assessment will be levied on property, businesses, or both within the district, a statement on whether bonds will be issued, and a description of the exterior boundaries of the proposed district, which may be made by reference to any plan or map that is on file with the clerk. The descriptions and statements need not be detailed and shall be sufficient if they enable an owner to generally identify the nature an d extent of the improvements, maintenance, and activities and the location and extent of the proposed district. (2) The number, date of adoption, and title of the resolution of intention. (3) The time and place where the public hearing was held concerning the establishment of the district. (4) A determination regarding any protests received. The city shall not establish the district or levy assessments if a majority protest was received. (5) A statement that the properties, businesses, or properties and businesses in the district established by the resolution shall be subject to any amendments to this part. (6) A statement that the improvements, maintenance, and activities to be conferred on businesses and properties in the district will be funded by the levy of the assessments. The revenue from the levy of assessments within a district shall not be used to provide improvements, maintenance, or activities outside the district or for any purpose other than the purposes specified in the resolution of intention, as modified by the city council at the hearing concerning establishment of the district. Notwithstanding the foregoing, improvements and activities that must be provided outside the district boundaries to create a special or specific benefit to the assessed parcels or businesses may be provided, but shall be limited to marketing or signage pointing to the district. (7) A finding that the property or businesses within the area of the property and business improvement district will be benefited by the improvements, maintenance, and activities funded by the proposed assessments, and, for a property-based district, that property within the district will receive a special benefit. (8) In a property-based district, the total amount of all special benefits to be c onferred on the properties within the property-based district. (b) The adoption of the resolution of formation and, if required, recordation of the notice and map pursuant to Section 36627 shall constitute the levy of an assessment in each of the fiscal ye ars referred to in the management district plan. SLOCTMD Management District Plan 22 August 5, 2019 36626. Resolution establishing district If the city council, following the public hearing, desires to establish the proposed property and business improvement district, and the city council has not made changes pursuant to Section 36624, or has made changes that do not substantially change the proposed assessment, the city council shall adopt a resolution establishing the district. The resolution shall contain all of the information specified in Section 36625. 36627. Notice and assessment diagram Following adoption of the resolution establishing district assessments on properties pursuant to Section 36625 or Section 36626, the clerk shall record a notice and an assessment diagram pursuant to Section 3114. No other provision of Division 4.5 (commencing with Section 3100) applies to an assessment district created pursuant to this part. 36628. Establishment of separate benefit zones within district; Categories of businesses The city council may establish one or more separate benefit zones within the district based upon the degree of benefit derived from the improvements or activities to be provided within the benefit zone and may impose a different assessment within each benefit zone. If the assessment is to be levied on businesses, the city council may also define categories of businesses based upon the degree of benefit that each will derive from the improvements or activities to be provided within the district and may impose a different assessment or rate of assessment on each category of business, or on each category of business within each zone. 36628.5. Assessments on businesses or property owners The city council may levy assessments on businesses or on property owners, or a combination of the two , pursuant to this part. The city council shall structure the assessments in whatever manner it determines corresponds with the distribution of benefits from the proposed improvements, maintenance, and activities, provided that any property - based assessment conforms with the requirements set forth in paragraph (2) of subdivision (k) of Section 36622. 36629. Provisions and procedures applicable to benefit zones and business categories All provisions of this part applicable to the establishment, modification, or disestablishment of a property and business improvement district apply to the establishment, modification, or disestablis hment of benefit zones or categories of business. The city council shall, to establish, modify, or disestablish a benefit zone or category of business, follow the procedure to establish, modify, or disestablish a property and business improvement district. 36630. Expiration of district; Creation of new district If a property and business improvement district expires due to the time limit set pursuant to subdivision (h) of Section 36622, a new management district plan may be created and the district may be renewed pursuant to this part. CHAPTER 3. Assessments 36631. Time and manner of collection of assessments; Delinquent payments The collection of the assessments levied pursuant to this part shall be made at the time and in the manner set forth by the city council in the resolution levying the assessment. Assessments levied on real property may be collected at the same time and in the same manner as for the ad valorem property tax, and may provide for the same lien priority and penalties for delinquent payment. All delinquent payments for assessments levied pursuant to this part may be charged interest and penalties. 36632. Assessments to be based on estimated benefit; Classification of real property and businesses; Exclusion of residential and agricultural property (a) The assessments levied on real property pursuant to this part shall be levied on the basis of the estimated benefit to the real property within the property and business improvement district. The city council may SLOCTMD Management District Plan 23 August 5, 2019 classify properties for purposes of determining the benefit to property of the improvements and activities provided pursuant to this part. (b) Assessments levied on businesses pursuant to this part shall be levied on the basis of the estimated benefit to the businesses within the property and business improvement district. The city council may classify businesses for purposes of determining the benefit to the businesses of the improvements and activities provided pursuant to this part. (c) Properties zoned solely for residential use, or that are zoned for agricultural use, are conclusively presumed not to benefit from the improvements and service funded through these assessments, and shall not be subject to any assessment pursuant to this part. 36633. Time for contesting validity of assessment The validity of an assessment levied under this part shall not be contested in any action or proceeding unless the action or proceeding is commenced within 30 days after the resolution levying the assessment is adopted pursuant to Section 36626. Any appeal from a final judgment in an action or proceeding shall be perfected within 30 days after the entry of judgment. 36634. Service contracts authorized to establish levels of city services The city council may execute baseline service contracts that would establish levels of city services that would continue after a property and business improvement district has been formed. 36635. Request to modify management district plan The owners’ association may, at any time, request that the city council modify the management district plan. Any modification of the management district plan shall be made pursuant to this chapter. 36636. Modification of plan by resolution after public hearing; Adoption of resolution of intention (a) Upon the written request of the owners’ association, the city council may modify the management district plan after conducting one public hearing on the proposed modifications. The city council may modify the improvements and activities to be funded with the revenue derived from the levy of the assessments by adopting a resolution determining to make the modifications after holding a public hearing on the proposed modifications. If the modification includes the levy of a new or increased assessment, the city council shall comply with Section 36623. Notice of all other public hearings pursuant to this section shall comply with both of the following: (1) The resolution of intention shall be published in a newspaper of general circulation in the city once at least seven days before the public hearing. (2) A complete copy of the resolution of intention shall be mailed by first class mail, at least 10 days before the public hearing, to each business owner or property owner affected by the proposed modification. (b) The city council shall adopt a resolution of intention which states the proposed modification prior to the public hearing required by this section. The public hearing shall be held not more than 90 days after the adoption of the resolution of intention. 36637. Reflection of modification in notices recorded and maps Any subsequent modification of the resolution shall be reflected in subsequent notices and maps recorded pursuant to Division 4.5 (commencing with Section 3100), in a manner consistent with the provisions of Se ction 36627. CHAPTER 3.5. Financing 36640. Bonds authorized; Procedure; Restriction on reduction or termination of assessments (a)The city council may, by resolution, determine and declare that bonds shall be issued to finance the estimated cost of some or all of the proposed improvements described in the resolution of formation adopted pursuant to Section 36625, if the resolution of formation adopted pursuant to that section provides for the issuance of bonds, under the Improvement Bond Act of 1915 (Division 10 (commencing with Section 8500)) SLOCTMD Management District Plan 24 August 5, 2019 or in conjunction with Marks-Roos Local Bond Pooling Act of 1985 (Article 4 (commencing with Section 6584) of Chapter 5 of Division 7 of Title 1 of the Government Code). Either act, as the case may be, shall govern the proceedings relating to the issuance of bonds, although proceedings under the Bond Act of 1915 may be modified by the city council as necessary to accommodate assessments levied upon business pursuant to this part. (b) The resolution adopted pursuant to subdivision (a) shall generally describe the proposed improvements specified in the resolution of formation adopted pursuant to Section 36625, set forth the estimated cost of those improvements, specify the number of annual installments and the fiscal years during which they are to be collected. The amount of debt service to retire the bonds shall not exceed the amount of revenue estimated to be raised from assessments over 30 years. (c) Notwithstanding any other provision of this part, assessments levied to pay the principal and interest on any bond issued pursuant to this section shall not be reduced or terminated if doing so would interfere with the timely retirement of the debt. CHAPTER 4. Governance 36650. Report by owners’ association; Approval or modification by city council (a) The owners’ association shall cause to be prepared a report for each fiscal year, except the first year, for which assessments are to be levied and collected to pay the costs of the improvements, maintenance, and activities described in the report. The owners’ association’s first report shall be due after the first year of operation of the district. The report may propose changes, including, but not limited to, the boundaries of the property and business improvement district or any benefit zones within the district, the basis and method of levying the assessments, and any changes in the classification of property, including any categories of business, if a classification is used. (b) The report shall be filed with the clerk and shall refer to the property and business improvement district by name, specify the fiscal year to which the report applies, and, with respect to that fiscal year, shall contain all of the following information: (1) Any proposed changes in the boundaries of the property and business improvement district or in any benefit zones or classification of property or businesses within the district. (2) The improvements, maintenance, and activities to be provided for that fiscal year. (3) An estimate of the cost of providing the improvements, maintenance, and activities for that fiscal year. (4) The method and basis of levying the assessment in sufficient detail to allow each real property or business owner, as appropriate, to estimate the amount of the assessme nt to be levied against his or her property or business for that fiscal year. (5) The estimated amount of any surplus or deficit revenues to be carried over from a previous fiscal year. (6) The estimated amount of any contributions to be made from sources other than assessments levied pursuant to this part. (c) The city council may approve the report as filed by the owners’ association or may modify any particular contained in the report and approve it as modified. Any modification shall be made pursuant to Sections 36635 and 36636. The city council shall not approve a change in the basis and method of levying assessments that would impair an authorized or executed contract to be paid from the revenues derived from the levy of assessments, including any commitment to pay principal and interest on any bonds issued on behalf of the district. 36651. Designation of owners’ association to provide improvements, maintenance, and activities The management district plan may, but is not required to, state that an owners’ association will provide the improvements, maintenance, and activities described in the management district plan. If the management district plan designates an owners’ association, the city shall contract with the designated nonprofit corporation to provide services. CHAPTER 5. Renewal 36660. Renewal of district; Transfer or refund of remaining revenues; District term limit SLOCTMD Management District Plan 25 August 5, 2019 (a) Any district previously established whose term has expired, or will expire, may be renewed by following the procedures for establishment as provided in this chapter. (b) Upon renewal, any remaining revenues derived from the levy of assessments, or any revenues derived from the sale of assets acquired with the revenues, shall be transferred to the renewed district. If the renewed district includes additional parcels or businesses not included in the prior district, the remaining revenues shall be spent to benefit only the parcels or businesses in the prior district. If the renewed district does not include parcels or businesses included in the prior district, the remaining revenues attributable to these parcels shall be refunded to the owners of these parcels or businesses. (c) Upon renewal, a district shall have a term not to exceed 10 years, or, if the district is authorized to issue bonds, until the maximum maturity of those bonds. There is no requirement that the boundaries, assessments, improvements, or activities of a renewed district be the same as the original or prior district. CHAPTER 6. Disestablishment 36670. Circumstances permitting disestablishment of district; Procedure (a) Any district established or extended pursuant to the provisions of this part, where there is no indebtedness, outstanding and unpaid, incurred to accomplish any of the purposes of the district, may be disestablished by resolution by the city council in either of the following circumstances: (1) If the city council finds there has been misappropriation of funds, malfeasance, or a violation of law in connection with the management of the district, it shall notice a hearing on disestablishment. (2) During the operation of the district, there shall be a 30-day period each year in which assessees may request disestablishment of the district. The first such period shall begin one year after the date of establishment of the district and shall continue for 30 days. The next such 30 -day period shall begin two years after the date of the establishment of the district. Each successive year of operation of the district shall have such a 30-day period. Upon the written petition of the owners or authorized representatives of real property or the owners or authorized representatives of businesses in the district who pay 50 percent or more of the assessments levied, the city council shall pass a resolution of intention to disestablish the district. The city council shall notice a hearing on disestablishment. (b) The city council shall adopt a resolution of intention to disestablish the district prior to the public hearing required by this section. The resolution shall state the reason for the disestablishment, shall state the time and place of the public hearing, and shall contain a pro posal to dispose of any assets acquired with the revenues of the assessments levied within the property and business improvement district. The notice of the hearing on disestablishment required by this section shall be given by mail to the property owner of each parcel or to the owner of each business subject to assessment in the district, as appropriate. The city shall conduct the public hearing not less than 30 days after mailing the notice to the property or business owners. The public hearing shall be held not more than 60 days after the adoption of the resolution of intention. 36671. Refund of remaining revenues upon disestabli shment or expiration without renewal of district; Calculation of refund; Use of outstanding revenue collected after disestablishment of district (a) Upon the disestablishment or expiration without renewal of a district, any remaining revenues, after all outstanding debts are paid, derived from the levy of assessments, or derived from the sale of assets acquired with the revenues, or from bond reserve or construction funds, shall be refunded to the owners of the property or businesses then located and operating within the district in which assessments were levied by applying the same method and basis that was used to calculate the assessments levied in the fiscal year in which the district is disestablished or expires. All outstanding assessment revenue collected after disestablishment shall be spent on improvements and activities specified in the management district plan. (b) If the disestablishment occurs before an assessment is levied for the fiscal year, the method and basis that was used to calculate the assessments levied in the immediate prior fiscal year shall be used to calculate the amount of any refund.