REPORT TO MAYOR AND COUNCIL ADOPT RESOLUTION NO ESTABLISHING THE CONCORD TOURISM IMPROVEMENT DISTRICT

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1 AGENDA ITEM NO. AGENDA ITEM NO. 4.b REPORT TO MAYOR AND COUNCIL TO THE HONORABLE MAYOR AND CITY COUNCIL: DATE: May 28, 2013 SUBJECT: ADOPT RESOLUTION NO ESTABLISHING THE CONCORD TOURISM IMPROVEMENT DISTRICT Report in Brief A Tourism Improvement District is a tool to collect assessments from participating hotel businesses to fund tourism marketing and promotional programs that directly benefit the participating lodging businesses within the District. On April 9, 2013 the City Council adopted Resolution No declaring the City Council s intention to adopt the Concord Tourism Improvement District (CTID) that would include nine hotels located within the proposed district boundaries and be in effect for five years. The proposed CTID could generate approximately $750,000 in assessments to directly benefit the CTID. At the same meeting, the City Council also adopted Resolution No requesting Contra Costa County s consent to include the Crowne Plaza Hotel, which is located within the County s jurisdiction, in the proposed CTID. On April 23, 2013, the City Council held a public meeting to hear any comments for or against the proposed CTID. At that meeting the Greater Concord Chamber of Commerce supported the establishment of the proposed CTID; no negative comments or protests were received. Staff now recommends the City Council take the next steps at this public hearing to establish the CTID, which are as follows: Background (1) Receive all written protests and public comment, if any. (2) Determine if a majority protest exists. (3) If none, adopt Resolution No (Attachment 1) declaring the results of the protest hearing and establishing the Concord Tourism Improvement District. The Property and Business Improvement District Law of 1994, Streets and Highways Code Section et seq., authorizes cities to establish property and business improvement districts for the purposes of promoting tourism. Tourism Business Improvement Districts (TBID or TID) were created as a means to create a stable source of funding for marketing efforts to increase occupancy and room rates for lodging businesses. Funds raised through an assessment on lodging stays are used to provide services desired by and directly benefitting the hotels in the district.

2 ADOPT RESOLUTION NO ESTABLISHING THE CONCORD TOURISM IMPROVEMENT DISTRICT May 28, 2013 Page 2 Currently there are 76 TIDs in California. Locally there are several TIDs including those within the cities of Walnut Creek and Berkeley, and the Tri-Valley cities (Danville, San Ramon, Dublin, Pleasanton, and Livermore). TIDs are funded through an assessment on certain lodging stays. The amount of the assessment is determined by business owners at the formation of the district, within particular legal guidelines. Funds raised through the assessment must be spent for the benefit of the businesses paying the assessment. Funds raised through a TID cannot be diverted to government programs, beyond covering City administrative costs associated with collecting and dispersing the assessment. In November 2012, Civitas, a consulting firm specializing in establishing Property and Business Improvement Districts, was retained by the Greater Concord Chamber of Commerce to assist the working group to investigate the feasibility of establishing a TID. The Chamber, Hilton Concord, Crowne Plaza and the City of Concord all contributed funds towards this effort. The original start-up money contributed by each of these organizations will be reimbursed from TID assessments should the TID be successfully established. On April 9, 2013 the City Council adopted Resolution No declaring the City Council s intentions of adopting the CTID that would include nine hotels located within the proposed district boundaries. The City Council also adopted Resolution No requesting Contra Costa County s consent to include the Crowne Plaza hotel, which is located within the County s jurisdiction, in the proposed CTID. On April 23, 2013, the City Council held a public meeting to hear any comments for or against the proposed CTID. On May 21, 2013, the Contra Costa Board of Supervisors is scheduled to take action consenting to the Crowne Plaza s participation in the proposed CTID. Supervisor Karen Mitchoff has been a strong supporter of this request and has directed her staff to prepare the needed reports and resolution to allow the Crowne Plaza Hotel to participate in the CTID. Staff will update the Council on the County Board s actions at the May 28 th public hearing on the CTID. Discussion In order for the City to consider adopting a resolution establishing the CTID, affected hotels representing more than fifty percent (50%) of the total assessment revenue proposed to be levied must submit signed petitions requesting the CTID be established. On March 7, 2013, the working group initiated a petition drive, and has since collected petitions (Attachment 2) representing approximately seventy-five percent (75%) of the proposed assessment. This demonstrates an overwhelming support for establishing the CTID. It should be noted that the formation of a TID is not subject to Proposition 218 balloting procedures; rather it is subject to the Property and Business Improvement District Law of A non-profit corporation to be called Visit Concord would run the CTID s programs and initiatives as outlined in the CTID s Management District Plan (Attachment 3). The proposed

3 ADOPT RESOLUTION NO ESTABLISHING THE CONCORD TOURISM IMPROVEMENT DISTRICT May 28, 2013 Page 3 Management District Plan for CTID was made available at the April 9, 2013 Council meeting. Minor modifications to (1) clarify the County boundary on the proposed District Map,, and (2) correct the draft Management Plan to indicate that the City of Concord will be responsible for collecting all of the assessments from the nine hotels, including the Crowne Plaza s assessment. The April 9, 2013 City Council staff report did state that the City of Concord would be responsible for collecting the assessments from the nine participating hotels but the Management Plan did not. If the proposed resolution is adopted to form the CTID, the proposed Management District Plan would set forth the parameters in which the CTID is to be operated. The following provides some of the key points of the Management District Plan: The CTID will include hotels with more than thirty (30) rooms located within the proposed District Boundary. There are nine hotels in the District that meet this criterion. The CTID will provide marketing and sales promotions to increase tourism and to market Concord lodging businesses as tourist, meeting and event destinations. The annual assessment rate is three percent (3%) of gross room rental revenue on lodging business excluding certain types of stays, including federal and state officers or employees as well as foreign governments. This rate would generate an average of $2.76 in assessment per room night based on the average daily rates of the nine hotels. The proposed District would have a five-year life beginning June 1, 2013 and ending May 31, Once per year, beginning on the anniversary of District formation, there is a thirty (30) day period in which business owners paying more than fifty percent (50%) of the assessment may protest and initiate a City Council hearing on termination of the District. Bonds will not be issued. A nonprofit corporation is proposed to be formed, called Visit Concord, to oversee the CTID and act as the management board for its operations. The Visit Concord Board would consist of a majority of lodging business owners that are assessed by the District. Representatives from the Concord Chamber of Commerce, the Hilton Concord, and the Crowne Plaza have worked with City staff to support establishing the Concord Tourism Improvement District. Through the working group s efforts, hotel operator petitions representing approximately seventy-five percent (75%) of the CTID s proposed assessment revenues were collected, demonstrating that an overwhelming majority of affected hotel owners favor establishing the CTID.

4 ADOPT RESOLUTION NO ESTABLISHING THE CONCORD TOURISM IMPROVEMENT DISTRICT May 28, 2013 Page 4 Fiscal Impact If the proposed CTID is formed, an estimated $750,000 in annual assessments would be collected and would be distributed to Visit Concord for the purpose of increasing room occupancy resulting in increased transient occupancy tax, increase employment, and increased revenue for Concord hotels. The City, through its Economic Development program budget, contributed $10,000 to funding the Civitas agreement to help establish the TID program. The City would be reimbursed for its contribution over a period of time from proceeds of the CTID assessments. The Concord Chamber contributed $10,000 and the Hilton Concord and Crowne Plaza each contributed $5,000 towards retaining Civitas and they would also be reimbursed from CTID proceeds. Public Contact The nine affected hotel properties were notified of the meeting. The Agenda was posted. The Greater Concord Chamber of Commerce also received notification of the meeting. Recommendation for Action Staff is requesting the City Council adopt Resolution No establishing the Concord Tourism Improvement District. Prepared by: John Montagh Economic Development and Housing Manager john.montagh@cityofconcord.org Valerie J. Barone City Manager valerie.barone@cityofconcord.org Reviewed by: Victoria Walker Director of Community and Economic Development victoria.walker@cityofconcord.org Reviewed by: Mark S. Coon City Attorney mark.coon@cityofconcord.org Attachment 1 Resolution No Attachment 2 Petitions Attachment 3 CTID s Management District Plan

5 ATTACHMENT BEFORE THE CITY COUNCIL OF THE CITY OF CONCORD COUNTY OF CONTRA COSTA, STATE OF CALIFORNIA A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CONCORD DECLARING RESULTS OF PROTEST PROCEEDINGS AND ESTABLISHING THE CONCORD TOURISM IMPROVEMENT DISTRICT Resolution No / WHEREAS, the Property and Business Improvement District Law of 1994 (Streets and Highways Code et. seq.) authorizes cities and counties to establish property and business improvement districts upon petition by a weighted majority of the affected lodging business owners located within the boundaries of the district; and WHEREAS, lodging business owners who will pay more than fifty percent (50%) of the proposed assessment, as weighted according to the amount of the assessment to be paid by the petitioners, within the boundaries of the Concord Tourism Improvement District ( CTID ) have petitioned the City Council to Establish the CTID; and WHEREAS, included with the petitions was a Management District Plan summary that describes the proposed assessment to be levied on lodging businesses within the CTID to pay for sales promotion and marketing activities, and other improvements and activities set forth in the Management District Plan; and WHEREAS, the assessed lodging businesses within the CTID will be benefited by the activities and improvements set forth in the Management District Plan; and WHEREAS, on April 9, 2013 at 6:30 p.m. at 1950 Parkside Drive Concord, CA 94519, the City Council adopted a Resolution of Intention, Resolution No ; and WHEREAS, on April 9, 2013 at 6:30 p.m. at 1950 Parkside Drive Concord, CA 94519, the City Council also adopted Resolution No requesting Contra Costa County s consent to include the Crowne Plaza hotel, which is located within the County s jurisdiction, in the proposed CTID; and WHEREAS, the public meeting and public hearing to consider the establishment of the CTID have been properly noticed in accordance with Streets and Highways Code 36623; and Res. No

6 WHEREAS, on April 23, 2013 at 6:30 p.m. at 1950 Parkside Drive Concord, CA 94519, the City Council held a public meeting regarding the establishment of the CTID, and the City Council heard and received objections and protests, if any, to the establishment of the CTID and the levy of the proposed assessment; and WHEREAS, on May 21, 2013 at 9:30 a.m. at 651 Pine Street, Martinez, CA 94553, the County Board of Supervisors adopted a Resolution granting consent to the City forming the CTID in the unincorporated area of the County; and WHEREAS, on May 28, 2013 at 6:30 p.m. at 1950 Parkside Drive Concord, CA 94519, the City Council held a public hearing regarding the establishment of the CTID, and the City Council heard and received all objections and protests, if any, to the establishment of the CTID and the levy of the proposed assessment; and WHEREAS, the City Clerk has determined that there was no majority protest. A majority protest is defined as written protests received from owners of affected businesses in the proposed district which would pay fifty percent (50%) or more of the assessments proposed to be levied. Protests are weighted based on the assessment proposed to be levied on each lodging business. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CONCORD DOES RESOLVE AS FOLLOWS: Section 1. The recitals set forth herein are adopted by the City Council as findings and they are true and correct. Section 2. The Concord Tourism Improvement District is hereby established for a five year term beginning on June 1, 2013 and ending May 31, Section 3. The assessments levied for the CTID shall be applied towards sales, promotions and marketing programs to market Concord lodging businesses as tourist, meeting, and event destinations, and other improvements and activities as set forth in the Management District Plan. Section 4. The revenue from the levy of the assessments on lodging businesses within the CTID may not be used to provide for activities or improvements outside the district or for any purpose other than those specified herein, in the Management District Plan, and in the Resolution of Intention. 28 Res. No

7 Section 5. Assessments levied on lodging businesses pursuant to this resolution are levied on the basis of benefit. Because the services provided are intended to increase room rentals, an assessment based on room rentals is the best measure of benefit. Section 6. The amount of assessment, if passed on to each transient, shall be 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. Section 7. The assessments for the entire District will total approximately $750,000 in year one. Section 8. The activities and improvements set forth will be funded by the levy of an assessment on lodging businesses within the CTID as described in the Management District Plan that is on file with the City Clerk. Section 9. The activities to be provided to benefit businesses in the district will be funded by the levy of the Assessment. The revenue from the levy the Assessment shall not be used to provide activities that directly benefit businesses outside the district or for any purpose other than the purposes specified in this Resolution, the Resolution of Intention, and the Management District Plan. Section 10. The activities funded by the Assessment will provide a special and specific benefit to assessed businesses within the CTID that is not provided to those not paying the assessment. Section 11. The Assessment is a charge imposed for 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. Section 12. The Assessment is a charge imposed for 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. Section 13. Bonds will not be issued to fund the CTID. Section 14. The boundaries of the CTID shall include all lodging businesses with more than thirty (30) rooms, existing and in the future, available for public occupancy within the boundaries of the City of Concord and that portion of the County of Contra Costa bound by the Concord City limits 28 Res. No

8 and Concord Avenue, including hotels along both sides of Concord Avenue. Please see the attached map, incorporated herein as Exhibit A. Section 15. Lodging businesses with more than thirty (30) rooms are assessed, and those with fewer rooms, are not assessed. The assessment spread reflects the fact that certain activities provided in connection with the CTID are services geared towards the booking of rooms by organized groups, and such groups are not generally served by smaller hotels. The other services are marketing with a specific call to action that includes only the assessed hotels. These services will not be provided to hotels that are not assessed. Section 16. The assessments shall be used for the purposes set forth above and any funds remaining at the end of any year may be used in subsequent years in which the CTID assessment is levied as long as they are used consistent with the requirements set forth herein. Section 17. The City of Concord will be responsible for collecting the assessment on a regular basis (including any delinquencies, penalties and interest) from each lodging business located in the boundaries of the District. Lodging businesses within the City of Concord will pay the assessment at the same time and in the same manner as they pay Transient Occupancy Taxes, and in accordance with Streets and Highways Code Lodging businesses in the unincorporated area of the County that are within the CTID boundaries will be hand-billed by the City no less than quarterly. Section 18. Assessments imposed pursuant to the CTID are levied solely upon the assessed business, and the business owner is solely responsible for payment of the assessment when due. If the owner chooses to collect any portion of the assessment, up to and not to exceed the rate applicable to the business, from a transient, that portion shall be specifically called out and identified for the transient in any and all communications from the business owner as the Concord Tourism Improvement District. Section 19. Visit Concord shall be the Owners Association pursuant to Streets and Highways Code Section 20. Pursuant to Streets and Highways Code 36650, Visit Concord shall cause to be prepared a report for each fiscal year, except the first year, for which assessments are to be levied and 28 Res. No

9 collected to pay the costs of the improvement and activities described in the report. The first report shall be due after the first year of operation of the district. Section 21. The CTID established pursuant to this resolution will be subject to any amendments to the Property and Business Improvement District Law of 1994 (California Streets and Highways Code et. seq.). Section 22. The City Clerk, or his or her designee, is directed to take all necessary actions to complete the establishment of the CTID and to levy the assessments. Section 23. This Resolution shall take effect immediately upon its adoption by the City Council. Section 24. This resolution shall become effective immediately upon its passage and adoption. PASSED AND ADOPTED by the City Council of the City of Concord on May 28, 2013, by the following vote: AYES: Councilmembers - NOES: Councilmembers - ABSTAIN: Councilmembers - ABSENT: Councilmembers I HEREBY CERTIFY that the foregoing Resolution of Formation No was duly and regularly adopted at a regular meeting of the City Council of the City of Concord on May 28, APPROVED AS TO FORM: Mark S. Coon City Attorney Mary Rae Lehman, CMC City Clerk Res. No

10 Res. No Exhibit A District Map

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20 Management District Plan Concord Tourism Improvement District Prepared pursuant to the Property and Business Improvement District Law of 1994, Streets and Highways Code section et. seq April 29, 2013

21 CONCORD TOURISM IMPROVEMENT DISTRICT MANAGEMENT DISTRICT PLAN TABLE OF CONTENTS I. OVERVIEW... 1 II. IMPETUS... 2 III. BACKGROUND... 3 IV. BOUNDARY... 4 V. SERVICE PLAN AND BUDGET... 5 A. Assessment... 5 B. Delinquencies... 5 C. Determination of Special and Specific Benefit... 6 D. Time and Manner for Collecting Assessments... 7 E. Service Plan Budget Summary... 7 F. Annual Service Plan... 7 G. Adjustments... 8 H. Expiration... 9 VI. GOVERNANCE A. Owners Association B. Brown Act and California Public Records Act Compliance C. Annual Report APPENDIX LAW APPENDIX 2 LODGING BUSINESSES Prepared by Civitas Advisors Inc. (800)

22 I. OVERVIEW Developed by lodging businesses and the Concord Chamber of Commerce (the Chamber), the Concord Tourism Improvement District (the District) is a benefit assessment district proposed to help fund marketing and sales promotion efforts to specifically benefit Concord lodging businesses. This approach has been used successfully in other destination areas throughout the country to improve hotel room night sales. Location: The proposed District includes all lodging businesses with more than thirty (30) rooms located within the boundaries of the City of Concord and that portion of the County of Contra Costa bound by the Concord City limits and Interstates 4 and 680, as shown on the map in Section IV. Services: Budget: Cost: Marketing and sales promotions to increase tourism and to market Concord lodging businesses as tourist, meeting and event destinations. The total District annual budget for each year of its five-year operation is anticipated to be approximately $750,000. The annual assessment rate is three percent (3%) of gross short term room rental revenue on lodging businesses. Based on the benefit received, assessments will not be collected on: 1. Stays for a period of 30 consecutive calendar days or more, counting portions of calendar days as full days; or 2. Stays by any federal or state officer or employee when on official business and when the stay is paid for directly by the United States government or the state. This does not include stays which are paid by the transient and later reimbursed by the entity; or 3. Stays by any officer or employee of a foreign government who is exempt from transient occupancy taxes by reason of express provisions of federal law or international treaty; or 4. Stays pursuant to written contracts executed prior to June 1, A reservation is not considered a written contract. Formation: Duration: District formation requires submittal of petitions from lodging businesses representing more than 50% of the total annual assessment followed by a City Council hearing and an opportunity for a written protest. The assessed lodging business owners will receive notice of the public hearing by mail. If there is a majority written protest, the District will not be formed. The proposed District will have a five-year life beginning June 1, 2013 and ending May 31, Once per year, beginning on the anniversary of district formation, there is a 30-day period in which owners paying more than 50% of the assessment may protest and initiate a City Council hearing on termination of the District. 1 Overview Concord Tourism Improvement District

23 II. IMPETUS There are several reasons why now is the right time to form a TID in Concord; the most compelling reasons are as follows: 1. The Need to Increase Occupancy The formation of the District is a proactive effort to provide supplemental funding beyond that provided by the City. The funding will ensure that adequate financing exists for the investment required to increase occupancy in the lodging industry and be competitive in the conference segment of the tourism market. The investment will cover an expanded marketing and promotional budget needed to reach this market segment. 2. An Opportunity for Increasing City Tax Revenues As occupancy rates increase, so too will the City s TOT revenue. With stable public/private funding for tourism marketing efforts, annual occupancy rates should increase significantly as new marketing and sales promotion programs are implemented. Greater occupancy will also produce an increase in sales tax revenues from tourist spending. This represents a substantial return to the City. The formation of the District in partnership with the Chamber and lodging businesses creates a stable funding source tied directly to tourism promotion. 3. Stable Funding for Tourism Promotion The District will provide a stable source of funding for consistent tourism promotion efforts. The District will provide funding for tourism promotion free of the political and economic circumstances that can reduce or eliminate government funding for tourism promotion. 2 Impetus Concord Tourism Improvement District

24 III. BACKGROUND Tourism Improvement Districts (TIDs) utilize the efficiencies of private sector operation in the market-based promotion of tourism districts. TIDs allow lodging and tourism-related business owners to organize their efforts to increase tourism. Tourism-related business owners within the district fund a TID, and those funds are used to provide services that the businesses desire and that benefit the lodging businesses within the District. Tourism Improvement District services may include, but are not limited to: Marketing of the Destination Tourism Promotion Activities Sales Lead Generation In California, Tourism Improvement Districts are formed pursuant to the Property and Business Improvement District Law of 1994 (1994 Law). This law allows for the creation of a special benefit assessment district to raise funds within a specific geographic area. The key difference between TIDs and other special benefit assessment districts is that funds raised are returned to the private non-profit corporation governing the district. There are many benefits to Tourism Improvement Districts: Funds cannot be diverted for other government programs; Tourism Improvement Districts are customized to fit the needs of each tourism district; They allow for a wide range of services, including those listed above; Tourism Improvement Districts are designed, created and governed by those who will pay the assessment; They provide a stable funding source for tourism promotion. The Property and Business Improvement District Law of 1994 is provided in Appendix 1 of this document. 3 Background Concord Tourism Improvement District

25 IV. BOUNDARY The District will include all lodging businesses with more than thirty (30) rooms, existing and in the future, available for public occupancy within the boundaries of the City of Concord and that portion of the County of Contra Costa boundy by the Concord City limits and Interstates 4 and 680, as shown on the map below. The boundary currently includes nine lodging businesses. A complete listing of lodging businesses within the proposed District can be found on Appendix 2 of this Plan. 4 Boundary Concord Tourism Improvement District

26 V. SERVICE PLAN AND BUDGET A. Assessment The annual assessment rate is three percent (3%) of gross short term room rental revenue on lodging businesses. Based on the benefit received, assessments will not be collected on: 1. Stays for a period of 30 consecutive calendar days or more, counting portions of calendar days as full days; or 2. Stays by any federal or state officer or employee when on official business and when the stay is paid for directly by the United States government or the state. This does not include stays which are paid by the transient and later reimbursed by the entity; or 3. Stays by any officer or employee of a foreign government who is exempt from transient occupancy taxes by reason of express provisions of federal law or international treaty; or 4. Stays pursuant to written contracts executed prior to June 1, A reservation is not considered a written contract. The term gross room rental revenue as used herein means the consideration charged, whether or not received, for the occupancy of space in a hotel 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 therefrom whatsoever. Gross room rental revenue shall not include any federal, state or local taxes collected, including but not limited to transient occupancy taxes. Any other charges shall be considered gross revenue only in accordance with the local transient occupancy tax. The assessment shall not be considered rent for purposes of transient occupancy tax payments. Bonds will not be issued. The amount of assessment, if passed on to each transient, shall be disclosed in advance as the Concord TID, 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. B. Delinquencies Original Delinquency Any business which fails to remit any assessment due within the time required shall pay a penalty of ten percent of the amount of the assessment in addition to the assessment. Continued Delinquency Any business which fails to remit any delinquent assessment on or before a period of thirty (30) days following the date on which the assessment first became delinquent shall pay a second delinquency penalty of ten percent of the amount of the assessment, in addition to the amount of the assessment and the ten percent penalty first imposed. Fraud If the City or County determines that the nonpayment of any assessment 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 penalties stated above. 5 Service Plan and Budget Concord Tourism Improvement District

27 Interest In addition to the penalties imposed, any business which fails to remit any assessment shall pay interest at the rate of one percent 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. Penalties Merged with Assessment Every penalty imposed and such interest as accrues under the provisions of this section shall become a part of the assessment required to be paid. Audit Delinquency If, upon audit by the City, a business is found to be deficient in its return, remittance, or both, the City shall immediately invoice the business for the amount of the net deficiency, plus a penalty of ten percent of the net deficiency. If the business fails or refuses to pay the deficient amount and applicable penalties within thirty (30) days of the date of the invoice, an additional ten percent penalty shall be added to the original deficiency. In addition to the penalties imposed, any business which fails to remit payment of billed audit deficiencies within thirty (30) days of the date of the invoice shall pay interest at the rate of one percent per month, or fraction thereof, on the amount of the assessment, exclusive of penalties. The business shall also be liable for the cost incurred by the City for the audit if a deficiency is substantiated. C. Determination of Special and Specific Benefit Special Benefit State law provides that the expenses of the district shall be apportioned in proportion to the benefit received by assessed businesses. A special benefit is defined as a particular and distinct benefit over and above general benefits conferred on the public at large. Conversely, a general benefit is a benefit to businesses in the surrounding community or a benefit to the public in general resulting from the improvement, activity or service to be provided by the assessment levied. Many general benefits to the public at large are conveyed by municipal services, such as fire protection, police services and public transit services. These services are targeted to serve the public at large and do not confer special benefits on particular businesses. The services in this Management District Plan are designed to provide targeted services to lodging businesses. These services are tailored not to serve the general public, but rather to serve the specific lodging businesses within the District, e.g., the proposed activities are specifically targeted to increase room nights for assessed lodging businesses within the boundaries of the District, and are narrowly tailored. the District funds will be used exclusively to benefit the assessees. The activities paid for from assessment revenues are lodging business services creating special benefit to those businesses. In addition, these activities are not for the benefit of the general public and do not provide general benefit as defined above. All general benefits (if any) to the surrounding community and general public are intangible and unquantifiable. It is appropriate that these special business-related benefits be funded through business assessments. Specific Benefit State law also requires that assessment funds be expended on a specific benefit conferred directly to the payors that is not provided to those not charged, and which does not exceed the reasonable cost to the County and cities of conferring the benefit. Further, the assessment may be utilized to 6 Service Plan and Budget Concord Tourism Improvement District

28 provide a specific government service directly to the payors that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of providing the service. District services will be implemented carefully to ensure they do not exceed a reasonable cost. Funds will be managed by the Owners Association, and reports submitted on an annual basis to the City. The specific benefit the district will provide to assessed lodging businesses, and will not provide to nonassessed lodging businesses, is room night sales. In order to provide a specific benefit and government service only to payors which does not exceed the reasonable cost thereof, the marketing and public relations services provided with the district funds will be designed specifically to drive room night sales to assessed lodging businesses. Only assessed lodging businesses will be featured in marketing materials, receive sales leads generated from district-funded activities, be featured in advertising campaigns, and benefit from other district-funded services. Non-assessed lodging businesses will not receive these, nor any other, district-funded services. D. Time and Manner for Collecting Assessments The District assessment will be implemented beginning June 1, 2013 and will continue for five years through May 31, The City of Concord will be responsible for collecting the assessment on a regular basis (including any delinquencies, penalties and interest) from each lodging business located in the boundaries of the District. Lodging businesses within the City of Concord will pay the assessment at the same time and in the same manner as they pay Transient Occupancy Taxes. Lodging businesses in the County will be hand-billed by the City no less than quarterly. The City shall take all reasonable efforts to collect the assessments from each lodging business. The City shall forward the assessments to Visit Concord (VC) which will serve as the Owners Association. E. Service Plan Budget Summary A summary of the annual service plan budget for the District is provided on the following pages. The total five year improvement and service plan budget is projected at approximately $750,000 annually, or $3,750,000 through F. Annual Service Plan A service plan budget has been developed to deliver services throughout the District. An annual service plan and budget will be developed and approved by the VC Board. In the initial year of operation the costs of forming the District may be repaid, in an amount not to exceed $35,000. Funds used to repay formation costs shall be proportionally deducted from the budget categories below. Category Percent of Budget Dollar Amount Sales and Marketing 85% $637,500 Administration 10% $75,000 Collection Fee 1% $7,500 Contingency/Renewal 4% $30,000 Total Annual Budget 100% $750,000 7 Service Plan and Budget Concord Tourism Improvement District

29 Sales and Marketing A sales and marketing program will promote Concord lodging businesses as tourist, meeting and event destinations. The sales and marketing program will have a central theme of promoting Concord as a desirable place to visit, featuring a call-to-action for assessed hotels, and may include the following activities: Internet marketing efforts to increase awareness and optimize internet presence; Print ads in magazines and newspapers targeted at potential visitors; Television ads targeted at potential visitors; Radio ads targeted at potential visitors; Attendance of trade shows; Opening and support a Visit California office; Sponsorship and promotion of sporting events which attract overnight visitors; Sales blitzes; Familiarization tours; Preparation and production of collateral promotional materials such as brochures, flyers and maps; Attendance of professional industry conferences and affiliation events; Lead generation activities designed to attract tourists and group events to Concord; Director of Sales and General Manager meetings to plan and coordinate tourism promotion efforts; Education of hospitality staff on service and safety (related to alcohol and food) designed to create a visitor experience that will bring repeat visits; and Education of lodging business management and the owners association on marketing strategies best suited to meet Concord s needs. Administration and Operations The administrative and operations portion of the budget shall be utilized for staffing costs, office costs, insurance, legal and accounting fees, postage, telephone charges, and other general administrative costs. Collection Fee The City of Concord shall be paid a fee equal to 1% of the amount of assessment collected to cover their costs of collection and administration. Contingency/Renewal A prudent portion of the budget will be set aside in a contingency fund, to be used for unforeseeable costs in carrying out the sales and marketing programs. If at the expiration of the district there are contingency funds remaining, and business owners wish to renew the district, the remaining contingency funds may be used for renewal costs. G. Adjustments The City approved marketing plan shall remain consistent with the budget herein. Although actual revenues will fluctuate due to market conditions, the proportional allocations of the budget shall remain the same. However, the City and the VC board shall have the authority to adjust budget allocations between the categories by no more than fifteen percent (15%) per year. 8 Service Plan and Budget Concord Tourism Improvement District

30 H. Expiration If there are funds remaining at the end of the District term and lodging businesses choose to renew, these remaining funds could be used for the costs of renewal. Upon renewal, any funds remaining could be transferred to the renewed District. If there are funds remaining at the end of the District and lodging businesses choose not to renew, any remaining funds will be spent consistent with this Plan or returned to assessed businesses in equal proportions to the assessment paid by each business. 9 Service Plan and Budget Concord Tourism Improvement District

31 VI. GOVERNANCE A. Owners Association The City Council, 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 District as defined in Streets and Highways Code Visit Concord (VC) has been identified as the nonprofit corporation which will serve as the Owners Association for the District. A majority of the VC Board of Directors will be the owner, or owners authorized representative, of hotels paying the District assessment. B. Brown Act and California Public Records Act Compliance The Owners Association is subject to government regulations relating to transparency, namely the Ralph M. Brown Act and the California Public Records Act, designed to promote public accountability. The owners association of a TID is considered a legislative body under the Ralph M. Brown Act (Government Code et seq.). Thus, meetings of the VC board and certain committees must be held in compliance with the public notice and other requirements of the Brown Act. The Owner s Association is also subject to the record keeping requirements of the California Public Records Act. C. Annual Report The VC board shall present an annual report at the end of each year of operation to the City Council pursuant to Streets and Highways Code (see Appendix 1). 10 Governance Concord Tourism Improvement District

32 APPENDIX LAW Citation of part Property And Business Improvement District Law of 1994 *** This document is current through the 2012 Supplement *** (All 2011 legislation) This part shall be known and may be cited as the "Property and Business Improvement District Law of 1994." Legislative findings and declarations The Legislature finds and declares all of the following: (a) Businesses located and operating within the business districts 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 the business districts of its cities 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 cities to fund business related improvements, maintenance, and activities through the levy of assessments upon the businesses or real property that benefits from those improvements. (d) Assessments levied for the purpose of providing improvements and promoting activities that benefit real property or businesses are not taxes for the general benefit of a city, but are assessments for the improvements and activities which confer special benefits upon the real property or businesses for which the improvements and activities are provided Purpose of part The purpose of this part is to supplement previously enacted provisions of law that authorize cities to levy assessments within a business improvement area. 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 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)). 11 Appendix Law Concord Tourism Improvement District

33 Part prevails over conflicting provisions Any provision in this part that conflicts with any other provision of law shall prevail over the other provision of law 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 [Section repealed 2001.] "Assessment" "Assessment" means a levy for the purpose of acquiring, constructing, installing, or maintaining improvements and promoting activities which will benefit the properties or businesses located within a property and business improvement district "Business" "Business" means all types of businesses and includes financial institutions and professions "City" "City" means a city, county, city and county, or an agency or entity created pursuant to Article 1 (commencing 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 "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 '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. 12 Appendix Law Concord Tourism Improvement District

34 (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 area. (k) Ramps, sidewalks, plazas, and pedestrian malls. (l) Rehabilitation or removal of existing structures "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 "Property" "Property" means real property situated within a district "Activities" "Activities" means, but is not limited to, all of the following: (a) Promotion of public events which benefit businesses or real property in the district. (b) Furnishing of music in any public place within the district. (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) Activities which benefit businesses and real property located in the district "Management district plan"; "Plan" "Management district plan" or "plan" means a proposal as defined in Section "Owners' association" "Owners' association" means a private nonprofit entity that is under contract with a city to administer or implement activities and improvements specified in the management district plan. 13 Appendix Law Concord Tourism Improvement District

35 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 considered 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 documents relating to activities of the district "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 "Tenant" "Tenant" means an occupant pursuant to a lease of commercial space or a dwelling unit, other than an owner 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 Establishment of property and business improvement district A property and business improvement district may be established as provided in this chapter Requirement of consent of city council A county may not form a district within the territorial 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 of supervisors of that county. A city may 14 Appendix Law Concord Tourism Improvement District