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HomeMy WebLinkAboutItem 16 - 2019-20 Annual Report of the Tourism Business Improvement District (TBID)Item 16 �t�x ofi Council- d. Report ti ttjs o Department Name: Administration and IT Cost Center: 208-1006 For Agenda of: October 6, 2020 Placement: Business Item Estimated Time: 30 minutes FROM: Greg Hermann, Deputy City Manager Prepared By: Molly Cano, Tourism Manager SUBJECT: 2019-20 ANNUAL REPORT OF THE TOURISM BUSINESS IMPROVEMENT DISTRICT RECOMMENDATION 1. As recommended by the Tourism Business Improvement District (TBID) Board, receive and approve the TBID Board's annual report for FY 2019-20 (Attachment A); and 2. Adopt a Resolution of intention to levy and collect assessments within the TBID area in fiscal year 2020-21 at the same rate as in fiscal year 2019-20 (Attachment B). DISCUSSION Background In June 2008, the Council adopted Ordinance No. 1517 establishing a tourism business improvement district as requested by the local lodging industry. The TBID was formed under the State's Parking and Business Improvement Law of 1989, sections 36500 et seq. of the Streets and Highways Code and codified into the City's Municipal Code under Chapter 12.42. Pursuant to Municipal Code Section 12.42.060 and Sections 36530 and 36533 of the State's Parking and Business Improvement Law, the appointed TBID Advisory Board is to submit an annual report (Attachment A) that outlines the past year's efforts and how the funding was used and to what effect. Section 36534 further requires that after the approval of the annual report, the Council shall adopt a resolution of intention to levy an annual assessment for that fiscal year. The resolution also sets a public hearing in order to receive any written or oral protests against the continuation of the TBID as required by the applicable statute. Annual Report On September 9, 2020, the TBID Board met in a regular monthly meeting to finalize the 2019-20 annual report for recommendation to the Council. Public noticing for the TBID Advisory Board meeting was performed through the posting of the agenda on the City's website by 5:00 pm on September 4, 2020. For convenience, the agenda was also distributed to TBID constituents and stakeholders via email. The annual report reiterates the use of the TBID funds within the defined marketing platform that guides the strategy used to deliver on the TBID's objective and goals. Item 16 The annual report's contents include: 1. Impacts Resulting from COVID-19 2. TBID Background and Advisory Body 3. 2019-20 Year by the Numbers 4. Strategic Plan Implementation and Program Approach 5. 2019-20 Summary of Activities 6. 2019-20 Financial Statement 7. Looking Ahead to 2020-21 8. Charts and Graphs showing various results Next Steps Should the City Council approve the annual report and adopt the resolution of intention, a public hearing will be noticed for October 20, 2020. The public hearing will allow hoteliers to submit comments, voice concerns, and protest the assessment. As set forth in Sections 36524 and 36525 of the California Streets and Highways Code, the Council has the ability to continue the proposed citywide TBID at this public hearing, unless oral or written protests are received from City hoteliers that pay 50% or more of the proposed assessments. In that event, the Council cannot consider continuation of the TBID in the City for at least one year. Noticing Schedule Legal notices regarding the Council's review and approval of the TBID annual report were sent to TBID properties on Thursday, September 24, 2020. For convenience, the link to the agenda was also distributed to TBID constituents and stakeholders via email. Advisory Body Action On September 9, 2020, the TBID Board approved the 2019-20 annual report for submission to Council and recommended the continuation of the TBID for fiscal year 2020-21. (Attachment C) Policy Context As referenced in the City's Municipal Code, 12.42.060 and Sections 36530 and 36533 of the State's Parking and Business Improvement Law, the appointed TBID Advisory Board is to submit an annual report that outlines the past year's efforts and how the funding was used and to what effect. Public Engagement This item is on the agenda for the October 6, 2020 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. Item 16 ENVIRONMENTAL REVIEW The California Environmental Quality Act 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: 2019-20 Funding Identified: Yes Fiscal Analysis: Funding Sources Current FY Cost Annualized On -going Cost Total Project Cost General Fund State Federal Fees Other: TBID Fund Total The current unaudited year-end TBID Assessment Revenue for 2019-20 is $1,142,523 which is $8,152 more than the revised budget amount which had been adjusted due to COVID-19. Prior to COVID-19, the projected revenue for the TBID assessment in 2019-20 was $1.6 million however the revenue projection was adjusted by $500,000 to $1.1 million in the Spring to account for the fiscal impacts resulting from COVID-19. The TBID Board reduced expenses in excess of $230,000 to account for this change, however a deficit between the adjusted revenues and expenses remained. Due to the fiscal prudence of the TBID Board, the TBID Fund had a fund balance of $456,000 including the TBID Fund Reserve. The anticipated deficit of $211,000 remaining from 2019-20 expenditures will be covered by the available fund balance. In 2020-21, the TBID projected revenue is $1,253,400 and is budgeted for program costs including staffing. Additionally, the City will retain approximately $25,000 of the assessment revenue- roughly 2% of 2020-21 TBID Assessment Revenue - to cover the City's administrative costs associated with collecting, administering, and disbursing the assessment. ALTERNATIVES The Council may choose to not approve the report or levy the assessment. This action is not recommended as the advisory body has fully reviewed the report and recommended the approval to Council in order to move forward with the Public Hearing for the TBID. Item 16 Attachments: a - COUNCIL READING FILE - SLOTBID 2019-20 Annual Report b - Draft Resolution of Intention c - TBID Draft Minutes date September 9, 2020 Item 16 RESOLUTION NO. (2020 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 2020-21 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 24, 2020 to all assessed properties. NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo as follows: a) That the Tourism Business Improvement District Annual Report for fiscal year 2019- 20 as filed by the advisory body is hereby approved. 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). Item 16 Resolution No. (2020 Series) Page 2 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 Tourism Business Improvement District and proposed assessment, and is hereby set for 6:00 P.M., Tuesday, October 20, 2020, before the City Council of San Luis Obispo via teleconference. i) At the public hearing, the testimony of all interested persons for or against the continuation of the Tourism Business Improvement District, the boundaries of the Tourism Business Improvement District, or the furnishing of specified types of improvements or activities will be heard. j) Any protest against the continuation of the Tourism Business Improvement District and the levying of the assessment, or any aspect thereof, may be made in writing. 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. A protest may be withdrawn at any time before the conclusion of the public hearing. k) If, at the conclusion of the public hearing, there are of record, written protests by the owners of businesses within the proposed Tourism Business Improvement District that will pay fifty percent (50%) or more of the total assessments of the entire Tourism Business Improvement District, no further proceedings to continue the Tourism Business Improvement District shall occur. New proceedings to form the 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 Tourism Improvement District. I[a Resolution No. (2020 Series) Item 16 Page 3 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 circulation in the City no less than seven days before the public hearing. Upon motion of Council Member , and on the following roll call vote: AYES: NOES: ABSENT: The foregoing resolution was adopted this day of ATTEST: Teresa Purrington City Clerk APPROVED AS TO FORM: J. Christine Dietrick City Attorney seconded by Council Member Mayor Heidi Harmon 2020. 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 I[a Item 16 TOURISM BUSINESS IMPROVEMENT DISTRICT BOARD Minutes - DRAFT Wednesday, September 9, 2020 Regular Teleconference Meeting of the Tourism Business Improvement District Board CALL TO ORDER The regular teleconference meeting of the San Luis Obispo Tourism Business Improvement District Board was called to order on September 9, 2020 at 10:03 a.m. held via GoToWebinar by Chair John Conner. ROLL CALL Present: Chair John Conner and members LeBren Young -Harris, Clint Pearce, Pragna Patel -Mueller, and John Burns Absent: Natalie Ward Staff: Tourism Manager Molly Cano and Tourism Coordinator Chantal Burns PUBLIC COMMENT ON ITEMS NOT ON THE AGENDA None. --End of Public Comment -- CONSENT ITEMS ACTION: MOTION BY COMMITTEE MEMBER PEARCE SECONDED BY COMMITTEE MEMBER HARRIS, CARRIED 5-0-1, TO APPROVE THE CONSENT AGENDA ITEMS 1 THRU 7. C.1 Minutes of Meeting on Wednesday, August 12, 2020 C.2 Smith Travel Report C.3 Transient Occupancy Tax (TOT) Report CA Chamber Public Relations Monthly Report C.5 Chamber Visitor Center Monthly Report C.6 Noble Studios & DCI Marketing Monthly Report C.7 Notice of Unscheduled Vacancy Public Comment None. --End of Public Comment -- DRAFT Minutes — Tourism Business Improvement District Board Meeting of 09/09/2020 Pg. 1 Item 16 PRESENTATIONS 1. New Board Member Introductions New member John Byrns, the General Manager for the Kinney introduced himself to the Board while other board members introduced themselves. New members Natalie Ward and upcoming new member David Smith will join the October meeting. BUSINESS ITEMS 1.2019-20 TBID Annual Report Tourism Manager Cano reviewed the draft FY 2019-20 annual report while highlighting the impacts of COVID-19 on the TBID and major accomplishments for the fiscal year. Cano then presented the annual report video. Board members did not have any edits or feedback. The action taken by the TBID Board recommended the adoption of the 2019-20 annual report and thus endorsed the continuation of the district for fiscal year 2020-21as communicated through the approved recommended scheduling of the annual public hearing on October 20, 2020. Public Comments: None ---End of Public Comments --- ACTION: MOTION BY COMMITTEE MEMBER PEARCE, SECONDED BY COMMITTEE MEMBER BYRNS, CARRIED 5-0-1, to approve the 2019-20 SLO TBID Annual Report for recommendation to City Council. 2. Appointment of the TBID Board Vice Chairperson Board members reviewed the SLO TBID Bylaws regarding the Vice Chairperson positioned and both members Patel -Mueller and Pearce expressed interest in the position. Public Comments: None ---End of Public Comments --- ACTION: MOTION BY COMMITTEE MEMBER HARRIS, SECONDED BY COMMITTEE MEMBER BYRNS, CARRIED 4-1-1 (Patel -Mueller abstained), to nominate member Pearce as the current Vice Chairperson. 3.2020-21 Board Liaison & Committee Assignments Chair Conner recommended to the remaining members the below committee assignments for the 2020-21 FY and will fill in on either committee as needed. Board members had no edits or discussion to the recommended committee assignments or liaison assignments and will move forward with the presented. TBID Marketing Committee: LeBren Harris, Clint Pearce and Natalie Ward TBID Management Committee: Pragna Patel -Mueller, John Byrns and new incoming board member Committee members discussed meeting in person only for the Marketing Committee meetings at physically distanced meeting spaces. Public Comments: None. ---End of Public Comments --- DRAFT Minutes — Tourism Business Improvement District Board Meeting of 09/09/2020 Pg. 2 Item 16 No action was taken on this item. TBID LIAISON REPORTS AND COMMUNICATION 1. HOTELIER UPDATE — Liaison Reports a. Member Harris — New property Town Place Suites is planned to open in February 2021 b. Member Byms — The Kinney has reopened their restaurant and restarted weekly trivia outdoors c. Tourism Manager Cano — The Apple Farm is under new management; Blu Hotel Investors and Matt Wilkins, a previous board member, is the new general manager for La Cuesta Inn and has express interest in a March 2021 board set. 2. MARKETING COMMITTEE UPDATE — Tourism Manager Cano highlighted the social strategy that was presented by Noble Studios and DCI and was approved by committee members. 3. MANAGEMENT COMMITTEE UPDATE — Chair Conner highlighted the meeting discussions on budget and CHLA. 4. PCC UPDATE — Chair Conner highlighted the new GIA program that was discussed and reported in the August 12, 2020 minutes. 5. VISIT SLO CAL UPDATE — Liaison Reports by member Pearce and Tourism Manager Cano: a. Advocacy work for tourism with the County and State mandates. b. Working with different groups for forecasting data c. Marketing Committee reviewed marketing, sales and PR activities including Go West Summit leads web traffic numbers and launching paid search with Visit Ca. 6. TOURISM PROGRAM UPDATE — Staff Report from Tourism Manager Cano and Tourism Coordinator Burns a. David Smith from Hotel SLO is scheduled to be appointed by City Council in September and will join the TBID Board starting in October b. #SLOready Campaign — i. Campaign development through video and still photography went well ii. #SLOready Challenge was a success with 58 qualified entries ADJOURNMENT The meeting was adjourned at 11:10 a.m. The next Tourism Business Improvement District Board meeting is scheduled for Wednesday, October 14, 2020 at 10:00 a.m. held remotely and via teleconference. APPROVED BY THE TOURISM BUSINESS IMPROVEMENT DISTRICT BOARD: XX/XX/XXXX DRAFT Minutes — Tourism Business Improvement District Board Meeting of 09/09/2020 Pg. 3 City of San Luis Obispo Tourism Business improvement District FY 2019-20 Annual Report OR P —pop_'�.. C Y O� CITY 4F SqR LUIS OBISPO LQIS 04 Recommendation 1. Receive and approve the Tourism Business Improvement District (TBID) Board's 2019-20 annual report. 2. Adopt a Resolution entitled '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 2020- 21" at the same rate as in fiscal year 2019-20. I = = f 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." 3/31/21 3/31/21 3/31/23 3/31/21 3/31/2 SLO TBID Board 01 - 0 ADVISORY BOARD Dean Hutton Bruce Skidmore (Vice Chair) LeBren Harris Pragna Patel -Mueller i pool Patel Clint Pearce John Conner (Chair) Kristin Battaglia Apple Farm Inn Resigned Embassy Suites by Hilton San Luis Obispo Hampton Inn & Suites by Hilton Hotel Buena Vista Lamplighter Inn &Suites Completed Madonna Inn Appointed Petit Soleil Appointed The Kinney SLO Resigned SLO TBID Staff & Contractor Team Molly Cano, Tourism Manager Matchfirelo Chantal Burns, Tourism Coordinator MEDAMF AGROUP 2019-24 SLO TBID Strategic Plan A welconhi ng mmmurrity We share ifie abundance of e with aviDrarc economy that 5L0, Mmngthelod�hg rship enriches the livrss of visitors and econorny and servirg as the F�� ahiliiy 7UR?�ve residents alike voice of our stakeholders oration ■ ■ , • ■ • Increase visitor awarerress in target markets Elevate the SLO Brand and Experience I ncrease pcsfive visitDr perception Deliver Smart Growth Build Meaningful Partnerships sure Organizational E=ellence • Chm RevPAR by 4% year-crver--year, adjusted far inflation • Year -overhear g x wth in TOT, adjusted for inflation • Year-overlear g woth in ratio of weekday to weekend occupancy - Increase year -over -year average Earned Partnership Value snore • Grow economic impact of tourism in SLO, adjusted far inflation • Growth in member neaysletler open rates • Growth in stekehdder satisfaction score on survey The SLOTBID stewards the brand of San Luis Obispo and represents its lodging partners, driving evern4d stays by: • Tefng the San Luis Obispo story via targeted marketing oonl&A and ad yfties • Serving as aorrvener and subject riutter experi fart�rrism oorwersativns inpaoting the destination - Advancing strategic partnerships that extend the reach and inMLErroe of 1he SLO TBID AL • Ideriify the oore SLO idenlity and develop a plan to market it • Estald h aTBID social respahsiS14 program • IdenliFy opportunities to kA&-nee connxmity placerroking and destination rnenagement efforts • Dewlap a group sales stratepy • Develop a mid -week promotion program • Dewlap a kcal businesstravd pry, am to dtiue %nsitarkn • tTfluenm the SLO oonferenoe center development plan and effort • Develop an approach to mmitoring local senimeri relailEd In tourism • Identify and develop BOLD pa&mrships that generate uvernighf slays • Creates partnership management plan using measurable goals that are in line with otwTBID Mission • Develop an organtatinn ll resience plan • Establish and document a process to execrte, evaluate and crack strategic plan Identify opporiunities to streanine governance and leverage constituency of TBID TBID Objectives for 2019-20 ■ Implementation of 2019-20 Marketing Plan ■ Addition of 3 new lodging properties into the TBID ■ Successful RFP process for Marketing Services contract ■ Execution of select 2019-24 TBID Strategic Plan initiatives 44% ONE- 6M.a4oflp�* COVID-19 Impacts on Tourism in SLO ■ California Stay -At -Home order (March 2020) ■ Essential travel only ■ Cancelation of special events and promotions ■ Postpone TBID's Rainy Day campaign ■ Cal Poly Commencement ■ Seasonal spring events & travel demand ■ SLO lodging business temporary closures ■ Cautious reopening & recovery (May 2020) ■ Priority focus on health & safety for employees, residents and visitors 2019- 20 Year by the Numbers TOT Occupancy ADR RevPAR $6..292,853 57.74% $144.86 $ 87.64 OCC MONTH TO MONTH 2019-20 im nn �9 ;l 1 I.y A, h:ic r5K 1- Feb Mar Apr M,rp ADR MONTH TO MONTH 2019-20 xnnro r5G 2091iln Transient Occupancy Tax TOT CHART FOR 2019-20 10000000 8000000 6000000 4000000 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 TOT MONTH TO MONTH 019-20 1000000 800000 G00000 0000 200000 July Aug Sept Oct Nov Dec Jan 019- 0 Feb Mar Apr May Jun 2019-20 Summarized Financials INCOME TOT Revenue Assumption $8,033,000 $6,177,377 TBID Assessment Pevenue Assumption 1,5�6,t��� $1,134,371 (20°r6 of TOT Revenues 018-19 Carryover S66.000 $66,000 TBID Fund Reserve $loo,000 $1I)0,00o EXPENDITURE Prior to COVID-19,the TBID Fund had a fund balance of approximately $456,000 including the TBID Fund Reserve. The deficit of approximately $211,000 from 2019-20 expenditures will be covered by the available fund balance. 2019-20 SLO TBID Accomplishments • Be Here Campaign performance • Two Seasonal Promotions • Launched the new VisitSLO.com • Enhanced tradeshow presence +maximized strategic partnerships • Influencer campaign • Impactful Public Relations achievements • Prompt COVID-19 response 2019-20 TBID Highlights tar Looking Ahead to 2020 — 21 • Continued COVID-19 impacts on tourism • Transition of new Tourism Marketing Agency contractor team • Conscious approach to Diversity, Equity and Inclusion • Leadership through the fully seated TBID Board • Cautious revenue projections and carefully controlled expenses Recommendation 1. Receive and approve the Tourism Business Improvement District (TBID) Board's 2019-20 annual report. 2. Adopt a Resolution entitled '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 2020- 21" at the same rate as in fiscal year 2019-20. (Public Hearing to be scheduled for October 20, 2020)