RESOLUTION NO. 25.038
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
LAGUNA BEACH, CALIFORNIA, DECLARING RESULTS OF
MAJORITY PROTEST PROCEEDINGS AND RENEWING THE
LAGUNA BEACH TOURISM MARKETING DISTRICT
WHEREAS, the City of Laguna Beach (City) created the Laguna Beach Tourism Marketing District (LBTMD) on April 21, 2020, by Resolution No. 20.022; and WHEREAS, the LBTMD was created for a five (5) year term which ends on June 30, 2025; and
WHEREAS, the Property and Business Improvement Law of 1994, Streets and Highways Code § 36600 et seq., authorizes the City to renew business improvement districts upon petition by a weighted majority of the 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 petitioner, within the boundaries of the LBTMD have petitioned the City Council to renew the LBTMD; and
WHEREAS, included with the petitions was a Management District Plan (Plan) summary that describes the proposed assessment to be levied on lodging businesses, existing and in the future, within the LBTMD to pay for Sales, Marketing, & Communications programs; Cultural and Environmental Stewardship; Arts Commission programs; Laguna College of Art & Design programs; Laguna Art Museum programs; Cultural Arts Funding Grants program; and Laguna Playhouse programs, and other improvements and activities set forth in the Plan; and WHEREAS, the assessed lodging businesses within the LBTMD will receive a specific benefit from the activities and improvements set forth in the Plan; and WHEREAS, on April 8, 2025 at 5:00 PM at the Council Chambers located at 505 Forest Avenue, Laguna Beach, CA 92651, the City Council adopted a Resolution of Intention, Resolution No. 25.018; and
WHEREAS, the public meeting and public hearing to consider the renewal of the LBTMD have been properly noticed in accordance with Streets and Highways Code §36623; and WHEREAS, on May 6, 2025 at 5:00 PM at the Council Chambers located at 505 Forest Avenue, Laguna Beach, CA 92651, the City Council held a public meeting regarding the renewal of the LBTMD, and the City Council heard and received objections and protests, if any, to the renewal of the LBTMD and the levy of the proposed assessment; and WHEREAS, on June 10, 2025 at 5:00 PM at the Council Chambers located at 505 Forest Avenue, Laguna Beach, CA 92651, the City Council held a public hearing regarding the renewal of the LBTMD, and the City Council heard and received all objections and protests, if any, to the renewal of the LBTMD 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 businesses in the renewed LBTMD 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; and WHEREAS, the City bears the burden of proving by a preponderance of the evidence that an assessment imposed for a specific benefit or specific government service is not a tax, that the amount is no more than necessary to cover the costs to the City in providing the specific benefit or specific government service, and that the manner in which those costs are allocated to a payor bear a fair or reasonable relationship to the specific benefits or specific government services received by the payor.
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NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAGUNA BEACH DOES RESOLVE:
SECTION 1. The recitals set forth herein are adopted by the City Council as findings and they are true and correct.
SECTION 2. The LBTMD is hereby renewed for a ten (10) year term, beginning July 1, 2025, or as soon as possible thereafter, and ending ten (10) years from its start date, unless renewed pursuant to Streets and Highways Code § 36660.
SECTION 3. The Plan dated June 10, 2025 is hereby adopted and approved.
SECTION 4. The activities to be provided to benefit businesses in the LBTMD will be funded by the levy of the assessment. The revenue from the assessment levy shall not be used: to provide activities that directly benefit businesses outside the LBTMD; to provide activities or improvements outside the LTMD; or for any purpose other than the purposes specified in this Resolution, the Resolution of Intention, and the Plan. Notwithstanding the foregoing, improvements and activities that must be provided outside the LTMD boundaries to create a specific benefit to the assessed businesses may be provided, but shall be limited to marketing or signage pointing to the LBTMD.
SECTION 5. The City Council finds as follows:
The activities funded by the assessment will provide a specific benefit to assessed businesses within the LTMD that is not provided to those not paying the assessment. b) 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.
c) 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. -3- Reso. #25.038
Assessments imposed pursuant to the LBTMD 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 from a transient, that portion shall be specifically called out and identitied tor the transient in any and all communications from the business owner as the "LBTMD Assessment" or "Tourism Assessment" as specified in the Plan.
SECTION 6. • The assessments levied for the LBTMD shall be applied towards Sales, Marketing, & Communications programs; Cultural and Environmental Stewardship; Arts Commission programs; Laguna College of Arts & Design programs; Laguna Art Museum programs; Cultural Arts Funding Grants program; and Laguna Playhouse programs, and other improvements and activities set forth in the Plan, to market Laguna Beach lodging businesses as tourist, meeting and event destinations.
SECTION 7. Assessments levied on lodging businesses pursuant to this resolution shall be levied on the basis of benefit. Because the services provided are intended to increase sleeping room rentals, an assessment based on gross short-term sleeping room rental revenue is the best measure of benefit.
SECTION 8. The annual assessment rate is two percent (2%) of gross short-term sleeping room rental revenue. During the LBTMD term, the assessment rate may be increased by the Owners' Association Board, with approval of the City Council, to a maximum rate of two and one- half percent (2.5%) of gross short-term sleeping room revenue for assessed businesses. If the assessment rate is increased, it may subsequently be decreased but shall not be decreased below a minimum of two percent (2%) of gross short-term sleeping room revenue. LBTMD targets increased tourism and not official government visitors or long-term stays. Therefore, based on the benefit received, assessments will not be collected on: stays by any person to whom it is beyond the power of the City to impose the assessment; stays of more than thirty (30) consecutive days; stays by any federal or state of California officer or employee when on official business; and stays -4- Reso. #25.038
by any officer or employee of a foreign government who is exempt by reason of express provision of federal law or international treaty.
SECTION 9. The assessments for the entire LBTMD will total approximately $3,000,000 in year one (1).
SECTION 10. Bonds shall not be issued to fund the LBTMD.
SECTION 11. The boundaries of the LBTMD will continue to be coterminous with the boundaries of the City, and shall continue to include all lodging businesses, existing and in the future, available for public occupancy within the boundaries of the City. A boundary map is attached as Exhibit A
SECTION 12. 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 LBTMD assessment is levied as long as they are used consistent with the requirements set forth herein.
SECTION 13. The assessments to fund the activities and improvements for the LBTMD will be collected by the City on a quarterly basis, and in accordance with Streets and Highways Code 836631.
SECTION 14. The City Council, through adoption of this Resolution and the 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 LBTMD as defined in Streets and Highways Code §36612. The City Council has determined that Visit Laguna Beach shall be the LBTMD Owners' Association.
SECTION 15. Visit Laguna Beach, pursuant to Streets and Highways Code §36650, shall cause to be prepared a report for each fiscal year, except the first year, for which assessments are -5- Reso. #25.038
to be levied and 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 LBTMD.
SECTION 16. The LBTMD renewed 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 §36600 et. seq.).
SECTION 17. The City Clerk, or his or her designee, is directed to take all necessary actions to complete the renewal of the LTD and to levy the assessments.
SECTION 18. This Resolution shall take effect immediately upon its adoption by the City Council.
ADOPTED this 10th day of June, 2025.
Alex Pomma
Alex Rounaghi, Mayor
ATTEST:
curity
Ann Marie McKay, City Clerk
I, Ann Marie McKay, City Clerk of the City of Laguna Beach, certify that the foregoing Resolution No. 25.038 was duly adopted at a regular meeting of the City Council of said City held on June 10, 2025 by the following vote:
AYES: COUNCILMEMBERS: Jones, Kempf, Whalen, Orgill, Rounaghi NOES: COUNCILMEMBERS: None
ABSENT: COUNCILMEMBERS: None
Clut
City Clerk, City of Laguna Beach, Californi
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Exhibit A
Laguna Beach Tourism Marketing District
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City Boundaries
-7- Reso. #25.038
2025-2035
LAGUNA BEACH
LIFEGUARD
DEPT.
EST. 1929
LAGUNA BEACH TOURISM MARKETING DISTRICT
MANAGEMENT DISTRICT PLAN
Prepared pursuant to the Property and Business Improvement District Law of June 10, 2025 1994, Streets and Highways Code section 36600 et seq.
Table of Contents
L OVERVIEW 3
IL BACKGROUND 5
III. BOUNDARY
IV. ASSESSMENT BUDGET AND SERVICES. .7
A. ANNUAL SERVICE PLAN ... .7
B. ANNUAL BUDGET
CALIFORNIA CONSTITUTIONAL COMPLIANCE.....
ASSESSMENT.. 15
E. INTEREST AND OVERDUE CHARGES... 16
F. TIME AND MANNER FOR COLLECTING ASSESSMENTS.. 17
V. GOVERNANCE... .18
A. OWNERS' ASSOCIATION... ..18
B. BROWN ACT AND CALIFORNIA PUBLIC RECORDS ACT COMPLIANCE ... .18 C. ANNUAL REPORT. ...19
APPENDIX 1 - LAW. .20
APPENDIX 2 - ASSESSED BUSINESSES ….. .32
Prepared by
Civitas
CiViTAS
PARTNERSHIPS • PROGRESS PROSPERITY
(800)999-7781
www.civitasadvisors.com
I. OVERVIEW
Developed by Laguna Beach lodging businesses and Visit Laguna Beach (VLB) the Laguna Beach Tourism Marketing District (LBTMD) is an assessment district proposed to continue to provide specific benefits to payors, by funding Sales, Marketing, & Communications; Cultural and Environmental Stewardship; Arts Commission programs; Laguna College of Art & Design programs; Laguna Art Museum programs; Cultural Arts Funding Grants program; Laguna Playhouse programs and efforts for assessed businesses. This approach has been used successfully in other destination areas throughout the country to provide the benefit of additional room night sales directly to payors.
The LBTMD was created in 2020 for a five (5) year term. VLB and Laguna Beach lodging businesses now wish to renew the LBTMD for an additional ten (10) year term.
Location: The boundaries of the renewed LBTMD is coterminous with the boundaries of the City of Laguna Beach (City, and includes all lodging businesses, existing and in the future, available for public occupancy located within the boundaries of the City, as shown on the map in Section III.
Services: The LBTMD is designed to provide specific benefits directly to payors by increasing awareness and demand for room night sales. Sales, Marketing, & Communications programs; Cultural and Envitonmental Stewardship;; Arts Commission programs; Laguna College of Art & Design programs; Laguna Art Museum programs; Cultural Arts Funding Grants program; and Laguna Playhouse programs 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 LBTMD annual assessment budget for the initial year of its ten (10) year operation is anticipated to be approximately $3,000,000. A similar assessment budget is expected to apply to subsequent years, but this assessment budget is expected to fluctuate as room sales do, as businesses open and close, and if the assessment rate is increased or decreased as detailed in Section IV (D).
Cost: The annual assessment rate is two percent (2%) of gross short-term sleeping room rental revenue. During the LBTMD term, the assessment rate may be increased by the Owners' Association Board to a maximum rate of two and one-half percent (2.5%) of gross short-term sleeping room revenue for assessed businesses. If the assessment rate is increased, it may subsequently be decreased but shall not be decreased below a minimum of two percent (2%) of gross short-term sleeping room revenue. LBTMD targets increased tourism and not official government visitors or long-term stays.
Therefore, based on the benefit received, assessments will not be collected on: stays by any person to whom it is beyond the power of the City to impose the assessment; stays of more than thirty (30) consecutive days; stays by any federal or state of California officer or employee when on official business; and stays by any officer or employee of a foreign government who is exempt by reason of express provision of federal law or international treaty.
Collection: The City will be responsible for collecting the assessment on a quarterly basis (including any delinquencies, interest, and overdue charges) from each lodging business located in the boundaries of the LBTMD. The City shall take all reasonable efforts to collect the assessments from each lodging business.
LTMD Management District Plan 3
June 10, 2025
Duration: The renewed LBTMD will have a ten (10) year life, beginning July 1, 2025 or as soon as possible thereafter, and ending ten (10) years from its start date. After ten (10) years, the LBTMD may be renewed pursuant to the Property and Business Improvement District Law of 1994, Streets and Highways Code section 36600 et seg. (94 Law) if business owners support continuing the LBTMD programs.
Management: VLB shall continue to serve as the LBTMD'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 City Council.
LTMD Management District Plan
June 10, 2025
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 100 California destinations have followed suit. In recent years, other states have begun adopting the California model -Illinois, Minnesota, Massachusetts, 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 TMD. Additionally, some cities, like Portland, Oregon and Memphis, Tennessee have utilized their home rule powers to create TMDs without a state law.
California's TDs collectively
Number of Districts Operating in raise over $300 million annually for California local destination marketing. With
competitors raising their budgets,
120 and increasing rivalry for visitor
dollars, it is important that Laguna
100
Beach lodging businesses continue
80 to invest in stable, commerce-
60 specific marketing programs.
40 TMDs utilize the efficiencies of
20 private sector operation in the
market-based promotion of
0 tourism districts. TDs allow
1006 1008 103 tourism business
owners to
organize their efforts to increase
commerce. Lodging business owners within the TMD pay an assessment and those funds are used to provide services that increase commerce.
In California, most 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.
LBTMD Management District Plan 5
June 10, 2025
IIl. BOUNDARY
The boundaries of the LBTMD will continue to be coterminous with the boundaries of the City, and shall continue to include all lodging businesses, existing and in the future, available for public occupancy within the boundaries of the City of Laguna Beach, as shown in the map below.
Lodging business means: 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, time-share project, dormitory, public or private club, mobile home or house trailer at a fixed location, or other similar structure or portion thereof.
A complete listing of assessed lodging businesses within the renewed LBTMD can be found in Appendix 2.
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a City Boundaries
LBTMD Management District Plan
June 10, 2025
IV.K ASSESSMENT 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 City of conferring the benefits or granting the privileges. The privileges and services provided with the LBTMD funds are Sales, Marketing, & Communications; Cultural and Environmental Stewardship; Arts Commission programs; Laguna College of Art & Design programs; Laguna Art Museum programs; Cultural Arts Funding Grants program; Laguna Playhouse programs available only to assessed businesses.
A service plan assessment budget has been developed to deliver services that benefit the assessed businesses. A detailed annual assessment budget will be developed and approved by VLB. The chart below illustrates the annual assessment budget allocations for Year One (FY 2025/26 and Year Two (FY 2026/27). The total initial assessment budget is estimated to be $3,000,000.
Initial Annual Assessment Budget - $3,000,000
Year One (FY 2025/26)
Arts Commission Programs,
Cultural & Environmental
$240,000, 8%
Stewardship,
$510,000, 17%
Laguna College of Art & Design
Programs, $300,000, 10%
Sales, Marketing &
Communications, Laguna Art Museum Programs,
$750,000, 25% $300,000, 10%
Cultural Arts Funding Grants
Program, $300,000, 10%
Administration & Operations,
$300,000, 10% Laguna Playhouse Programs,
$300,000, 10%
LBTMD Management District Plan 7
June 10, 2025
Annual Assessment Budget - $3,000,000
Year Two (FY 2026/27)
Cultural & Environmental
Stewardship, Arts Commission Programs,
$750,000, 25% $240,000, 8%
Laguna College of Art & Design
Sales, Marketing & Programs, $240,000, 8%
Communications,
$750,000, 25% Laguna Art Museum Programs,
$240,000, 8%
Cultural Arts Funding Grants
Program, $240,000, 8%
Administration & Operations,
Laguna Playhouse Programs,
$300,000, 10% $240,000, 8%
Although actual revenues will fluctuate due to market conditions, the proportional allocations of the budget shall remain the same.
Beginning in Year Three (FY 2027/ 28), the City and the VLB Board shall have the authority to adjust budget allocations between the categories by no more than fifteen percent (15%) of the total budget per year. A description of the proposed improvements and activities for the initial year of operation is below. The same activities are proposed for subsequent years. In the event of a legal challenge against the LBTMD, any and all assessment funds may be used for the costs of defending the LBTMD.
Each budget category includes all costs related to providing that service. For example, the Sales, Marketing & Communications budget includes the cost of staff time dedicated to overseeing and implementing the Sales, Marketing & Communication programs. Staff time dedicated purely to administrative tasks is allocated to the Administration & Operations portion of the budget. The costs of an individual staff member may be allocated to multiple budget categories. The staffing levels necessary to provide the services below will be determined by the VIB on an as-needed basis.
Laguna Beach has a vibrant art scene and culture. Much of the City's tourism is driven by the arts, attracting overnight visitation. As a result, in order to further enhance tourism in a manner that benefits the assessed businesses, the LBTMD intends to fund many services and improvements relating to enhancing access to, in addition to the preservation and quality of, the arts. These improvements and services directly benefit the assessed businesses because they improve one of Laguna Beach's main categories of tourist attraction, and are thus geared toward increasing demand for overnight visitation to assessed businesses.
LBTMD Management District Plan 8
June 10, 2025
Sales, Marketing, & Communications
The Sales, Marketing & Communications program will have the goal of increasing overnight visitation and room night sales at assessed lodging businesses, and may include the following activities:
• Digital marketing efforts to increase awareness and optimize internet presence to drive overnight visitation and room sales to assessed lodging businesses; • Print ads in magazines and newspapers, television ads, and radio ads targeted at potential visitors to drive overnight visitation and room sales to assessed lodging businesses; • Social media efforts and content partnerships to drive overnight visitation; • Attendance of trade shows and travel trade events to promote assessed lodging businesses; • Sales blitzes for assessed lodging businesses;
• Familiarization and media tours of assessed lodging businesses; • Preparation and production of collateral promotional materials such as brochures, flyers and maps featuring assessed lodging businesses;
• Photo shoots and video production to best highlight assessed lodging businesses; • Attendance of professional industry conferences and affiliation events to promote assessed lodging businesses;
• Lead generation activities designed to attract tourists and group events to assessed lodging businesses;
• Public relations efforts and outreach to promote assessed lodging establishments and promote new product offerings to generate media coverage;
• Marketing meetings to plan and coordinate tourism promotion efforts for assessed lodging businesses;
• Attendance at local and area networking events in order to continue to build relationships and underscore the importance of VLB;
• Collaborations with regional tourism association and area destination marketing organizations to leverage costs on an extended reach to promote lodging businesses; • Education of hospitality staff on service and safety designed to create a visitor experience that will bring repeat visitors to assessed lodging businesses;
• Education of lodging business management and the Owners' Association on marketing strategies best suited to meet assessed lodging businesses' needs; and • The ability to hold a percentage of funding in a reserve fund. 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 Owners' Association. The Owner's Association shall report annually on the need for a reserve fund and its intent to carry over the reserve fund in future years.
Cultural and Environmental Stewardship
Working collaboratively with City staff, the Owners' Association will develop specific Cultural and Environmental Stewardship funding criteria, ensuring thoughtful stewardship of the destination's unique character, assets, and visitor experience. Policies and procedures acceptable to both the Owners' Association and the City will be developed. The Cultural and Environmental Stewardship program may include:
• Destination product development programs and improvements designed to drive overnight visitation and room sales to assessed lodging businesses; • Services designed to improve the visitors experience such as, but not limited to, beautification and the creation of Arts, Cultural and Educational activities; • Activities that increase the profile and notoriety of the destination as an overnight travel destination and drive room night sales to assessed lodging businesses; LBTMD Management District Plan 9
June 10, 2025
• Comprehensive and integrated wayfinding signage system including signage to assessed lodging businesses and points of interest to enhance the visitor experience; • Transportation program connecting hotels with the City's downtown, points of interest in the City and other attractions to drive room night sales to assessed lodging businesses; • Art and cultural programs and projects, to attract overnight visitors and drive room night sales to assessed lodging businesses;
• Development of artist housing and creative spaces to sustain Laguna Beach's artistic identity, strengthen cultural tourism, and support year-round arts events, driving overnight visitation through increased visitor engagement;
• Gateway enhancements (e.g., a primary entry point to the city, such as a major intersection, highway exit, or visitor hub, that creates a first impression for visitors) to enhance the visitor experience;
• Operations and improvements related to the operations of the Visitor/Welcome Center to provide visitor resources and ensure a consistent brand experience throughout the destination; • Enhancements to environmental experiences to attract overnight visitors and drive room night sales to assessed lodging businesses;
• Sustainability programs that offset impacts of tourist visitation within the destination; • Development of and improvements to visitor points of interest, such as hiking trails and parks, that attract overnight visitors;
• Enhancements to environmental experiences, which attract overnight visitors; • Infrastructure improvements that enhance the destination's competitive position to attract desirable special events year-round and attract overnight visitors; • Research to ensure LBTMD funds are strategically spent to benefit assessed lodging businesses and/or develop analyses on the effectiveness of LBTMD funds to improve increased demand fot overnight visitation at assessed lodging businesses; and • The ability to hold a percentage of funding in a reserve fund. 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 Owners' Association and the City. The Owners Association and the City shall report annually on the need for a reserve fund and its intent to carry over the reserve fund in future years.
The City and VLB shall enter into an agreement (Agreement) for the full term of the LBTMD that provides for an annual contribution of LBTMD funds to the City in a separate fund ("Cultural and Environmental Stewardship Special Revenue Fund"). The initial contribution for fiscal year 2025-26 shall be $260,000. Beginning in Year Two (FY 2026/27) the annual contribution shall increase to $500,000. The subsequent annual contributions are subject to adjustment based on the LBTMD revenue in the preceding fiscal year. For example, if LBMTD revenue increases by 5% in Fiscal Year 2026-27, the new contribution for Fiscal Year 2027-28 would be calculated as follows: $500,000 + (5% of $500,000), resulting in a new contribution of $525,000. Conversely, if LBMTD revenue decreases by 5%, the new contribution would be calculated as $500,000 - (5% of $500,000), resulting in a new contribution of $475,000. Cultural and Environmental Stewardship Special Revenue Fund revenue may be used in contracting for, providing, and implementing improvements and activities that are aimed at driving overnight visitation to assessed businesses. The City shall only expend the Cultural and Environmental Stewardship Special Revenue Fund in a manner consistent with this Plan and the 94 Law.
LBTMD Management District Plan 10
June 10, 2025
Arts Commission Programs
The Arts Commission programs facilitates the destination's cultural programming such as public art, literary art, and live performance events. Arts Commission programs may include:
• Banner and palette competitions;
• City Hall exhibitions;
• Cultural arts facilities and publications;
• Research and marketing;
• Performing arts programs;
• Professional speakers;
• Restoration of public art;
• Rotating sculpture program;
• Operation of the Arts Commission programs; and
• The ability to hold a percentage of funding in a reserve fund. 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 Arts Commission. The Arts Commission shall report annually on the need for a reserve fund and its intent to carry over the reserve fund in future years.
Laguna College of Art & Design
The Laguna College of Art & Design (LAD) category provides funding to facilitate different services and activities within the greater LAD program. This program category aims to support outreach and admissions services and ICAD gallery enhancement and operations. LCAD programs may include:
• Gallery exhibitions that drive overnight visitation and room night sales to assessed lodging businesses;
• Educational programs and workshops that drive overnight visitation and room night sales to assessed lodging businesses;
• Operations of the LCAD program; and
• The ability to hold a percentage of funding in a reserve fund. 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 ICAD. The LCAD shall report annually on the need for a reserve fund and its intent to carry over the reserve fund in future years.
Laguna Playhouse
The Laguna Playhouse is a regionally established historic Equity theatre which puts on a variety of theater art performances. The organization aims to create experiences that enhance and invigorated cultural and social interaction. Laguna Playhouse programs may include:
• Promotions and marketing of the Laguna Playhouse performances and events to drive overnight visitation and room night sales to assessed lodging businesses; • Promotion of a Player's Club Card Program which offers patrons of the Laguna Playhouse promotions to assessed lodging businesses;
• Operations of the Laguna Playhouse; and
The ability to hold a percentage of funding in a reserve fund. 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 Laguna Playhouse. The Laguna Playhouse shall report annually on the need for a reserve fund and its intent to carry over the reserve fund in future years.
LBTMD Management District Plan 11
June 10, 2025
Laguna Art Museum
The Laguna Art Museum aims to promote Laguna Beach as a premier destination for art and culture enthusiasts. Through its permanent collection, its special loan exhibitions, its educational programs, and its library and archive, the museum enhances the public's knowledge and appreciation of California art. The Laguna Art Museum programs may include:
• Exhibitions to drive overnight visitation and room sales to assessed lodging businesses; • Promotions and marketing of the Laguna Art Museum to attract overnight visitation to assessed lodging businesses;
• Operations of the Laguna Art Museum; and
The ability to hold a percentage of funding in a reserve fund. 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 Laguna Art Museum. The Laguna Art Museum shall report annually on the need for a reserve fund and its intent to carry over the reserve fund in future years.
Cultural Arts Funding Grants Program
The purpose of the Cultural Arts Funding Grants program is to provide funds for different art and culture related events and exhibits. The Cultural Arts Funding Grants program may include:
• Grants for organizations wishing to enhance the art and cultural environment of Laguna Beach, which drive overnight visitation and room night sales to assessed lodging businesses; • Cultural art events, exhibits and festivals to drive overnight visitation and room sales to assessed lodging businesses;
• Promotion and marketing of cultural art events to attract overnight visitation to assessed lodging businesses;
• Operations of the Cultural Arts Funding Grants Program; and • The ability to hold a percentage of funding in a reserve fund. 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 City. The City shall report annually on the need for a reserve fund and its intent to carry over the reserve fund in future years.
Administration & Operations
The Administration & Operations portion of the budget shall be utilized for administrative staffing costs, office costs, advocacy, and other general administrative costs such as insurance, legal, and accounting fees.
B. Annual Budget
The total ten (10) year assessment budget is projected at approximately $3,000,000 annually, or $36,750,000 through 2035, if the maximum assessment rate increases are adopted. A similar budget is expected to apply to subsequent years, but this budget is expected to fluctuate as room sales do, as businesses open and close, and if the assessment rate is increased or decreased.
The table below demonstrates the estimated maximum budget with the assumption that the assessment rate will be increased at the earliest opportunity as it is a required disclosure, it is not the anticipated course of action. Alternate courses of action may be taken in regard to implementing the assessment rate increase other than what is demonstrated in the chart below, within the parameters of this Plan.
The budget described herein is intended to be funded exclusively from LBTMD assessment revenue.
The City may contribute additional amounts toward the services provided by VLB in excess of the LBTMD Management District Plan 12
June 10, 2025
proposed budget from revenues other than the assessments levied by the LBTMD.
Estimated Annual Budget if Maximum Assessment Rates Are Adopted Cultural & Laguna Laguna Calesal Laguna
Arts Admin &
Sales, Mrkt College of Art Total
Year Environ. Commission Funding laylons Operations
& Comm. Arts & Museum Program
Stewardship Programs Design Programs Grants
FY 25-26 $750,000 $510,000 $240,000 $300,000 $300,000 $300,000 $300,000 $300,000 S3,000,000 FY 26-27 $937,500 $937,500 5300,000 $300,000 $300,000 $300,000 $300,000 $375,000 $3,750,000 FY 27-28 $937,500 $937,500 $300,000 $300,000 $300,000 $300,000 $300,000 $375,000 $3,750,000 FY 28-29 $937,500 $937,500 $300,000 $300,000 $300,000 S300,000 $300,000 $375,000 $3,750,000 FY 29-30 $937,500 $937,500 $300,000 $300,000 $300,000 $300,000 $300,000 $375,000 $3,750,000 FY 30-31 $937,500 $937,500 $300,000 $300,000 $300,000 $300,000 $300,000 $375,000 $3,750,000 FY 31-32 $937,500 $937,500 $300,000 $300,000 $300,000 S300,000 $300,000 $375,000 $3,750,000 FY 32-33 $937,500 $937,500 $300,000 $300,000 $300,000 $300,000 $300,000 $375,000 $3,750,000 FY 33-34 $937,500 $937,500 $300,000 $300,000 $300,000 $300,000 $300,000 $375,000 $3,750,000 FY 34-35 $937,500 $937,500 $300,000 $300,000 $300,000 $300,000 $300,000 $375,000 $3,750,000 Total $9,187,500 $9,187,500 $2,940,000 $2,940,000 $2,940,000 $2,940,000 $2,940,000 $3,675,000 $36,750,000 The table below demonstrates the annual improvement and service plan budget with the assumption that the rates will not be increased during the LBTMD term.
Estimated Annual Budget if Maximum Assessment Rates Are Not Adopted Laguna Laguna Cultural Laguna
Cultural & Arts Admin &
Sales, Mrkt College of Art
Year Environ. Commission Playhouse Operations Total
& Comm. Arts & Vluseun Programs
Stewardship Programs Design Program
FY 25-26 $750,000 $510,000 $240,000 $300,000 $300,000 $300,000 $300,000 $300,000 $3,000,000 FY 26-27 $750,000 $750,000 $240,000 $240,000 $240,000 $240,000 $240,000 $300,000 $3,000,000 FY 27-28 $750,000 $750,000 $240,000 $240,000 $240,000 $240,000 $240,000 $300,000 $3,000,000 FY 28-29 $750,000 $750,000 $240,000 $240,000 $240,000 $240,000 $240,000 $300,000 $3,000,000 FY 29-30 $750,000 $750,000 $240,000 $240,000 $240,000 S240,000 $240,000 $300,000 $3,000,000 FY 30-31 $750,000 $750,000 $240,000 $240,000 $240,000 $240,000 $240,000 $300,000 $3,000,000 FY 31-32 $750,000 $750,000 S240,000 S240,000 $240,000 $240,000 $240,000 $300,000 $3,000,000 FY 32-33 $750,000 $750,000 $240,000 $240,000 S240,000 $240,000 $240,000 5300,000 53,000,000 FY 33-34 $750,000 $750,000 $240,000 $240,000 $240,000 $240,000 $240,000 S300,000 $3,000,000 FY 34-35 $750,000 $750,000 $240,000 $240,000 S240,000 $240,000 $240,000 5300,000 $3,000,000 Total $7,500,000 $7,500,000 $2,400,000 $2,400,000 $2,400,000 $2,400,000 $2,400,000 $3,000,000 $30,000,000 C. California Constitutional Compliance
The LBTMD 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 LTMD Management District Plan 13
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property.! Rather, the LBTMD 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 LBTMD, 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 City of conferring the benefits or providing the services, and that the manner in which those costs are allocated to a payor bear a fair or reasonable relationship to the payor's burdens on, or benefits received from, the governmental activity.
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." 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 LBTMD. The activities described in this Plan are specifically targeted to increase demand for room night sales for assessed lodging businesses within the boundaries of the LBTMD, and are narrowly tailored. LBTMD funds will be used exclusively to provide the specific benefit of increased demand for room night sales directly to the assessees. Assessment funds shall not be used to feature non-assessed lodging businesses in LBTMD programs, or to directly generate sales for non-assessed businesses. The activities paid for from assessment revenues are business services constituting and providing specific benefits to the assessed businesses. Nothing in this Plan limits the ability of the Owners' Association to enter into private contracts with non-assessed lodging businesses for the provision of services to those businesses.
The assessment imposed by this LBTMD 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 Sales, Marketing, & Communications; Cultural and Environmental Stewardship; Arts Commission programs; Laguna College of Art & Design programs; Laguna Art Museum programs; Cultural Arts Funding Grants program; Laguna Playhouse programs promoting lodging businesses paying the LBTMD assessment. The Sales, Marketing, & Communications; Cultural and Environmental Stewardship; Arts Commission programs; Laguna College of Art & Design programs; Laguna Art Museum programs; Cultural Arts Funding Grants program; Laguna Playhouse programs will be designed to increase room night sales at each assessed lodging businesses.
Because they are necessary to provide the Sales, Marketing, & Communications; Cultural and Environmental Stewardship; Arts Commission programs; Laguna College of Art & Design programs; Laguna Art Museum programs; Cultural Arts Funding Grants program; Laguna Playhouse programs that specifically benefit the assessed lodging businesses, the Administration & Operation services also provide the specific benefit of increased demand for room night sales to the assessed lodging businesses.
Although the LBTMD, 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 ' Howard Jarvis Taxpayers Assn. v. City of San Diego (1999) 72 Cal.App.4th 230 2 Cal. Const. art XIII C § 1(e)(1)
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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."
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."* The legislature has recognized that marketing and promotions services like those to be provided by the LTD are government services within the meaning of Proposition 26°. 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."
3. Reasonable Cost
LTMD 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 VLB, and reports submitted on an annual basis to the City. Only assessed lodging businesses will be featured in marketing materials, receive sales leads generated from LBTMD- funded activities, be featured in advertising campaigns, and benefit from other LBTMD-funded services. The assessed lodging business list was compiled from records provided by the jurisdiction and complies with the requirements of the 94 Law. Pursuant to Streets and Highways Code Section 36615, the City Council's determination of ownership is final and conclusive, with no obligation to obtain other information. Non-assessed lodging businesses will not receive these, not any other, LBTMD-funded services and benefits.
The LBTMD-funded programs are targeted directly to benefit assessed businesses. LBTMD funds shall only be spent to benefit the assessed businesses, and shall not be spent on that portion of any program which directly generates incidental room nights for non-assessed businesses.
D. Assessment
The annual assessment rate is two percent (2%) of gross short-term sleeping room rental revenue.
During the LBTMD term, the assessment rate may be increased by the Owners' Association Board, to a maximum rate of two and one-half percent (2.5%) of gross short-term sleeping room revenue for assessed businesses. If the assessment rate is increased, it may subsequently be decreased but shall not be decreased below a minimum of two percent (2%) of gross short-term sleeping room revenue. Any increase or decrease authorized by the Owners' Association's Board shall be included in the Annual Report described in Section V, and must be approved by the City Council during the fiscal year annual report review. Thereafter the increase or decrease will be effective starting the following fiscal year.
Based on the benefit received, assessments will not be collected on: stays by any person to whom it is beyond the power of the City to impose the assessment; stays of more than thirty (30) consecutive days; stays by any federal or state of California officer or employee when on official business; and stays by any officer or employee of a foreign government who is exempt by reason of express provision of federal law or international treaty.
3 Government Code § 53758(a)
4 Cal. Const. art XIII C § 1(e)(2)
5 Government Code § 53758(b)
6 Government Code § 53758(b)
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The assessment was calculated based on the total cost of the activities to be provided for the benefit of the businesses within the BTMD, with costs allocated based on the proportional benefit conferred to each business. Activities funded by the LBTMD, are specifically targeted to increase room nights at assessed businesses. All room night sales do not represent the same benefit to the payors. For example, a higher priced room night is of greater benefit than a lower priced room night because the assessee derives greater revenue. To account for this benefit differential and to make sure the benefits are proportional, an assessment formula based on a percentage of revenue has been selected. The proposed formula accurately reflects greater benefit to assessed businesses with higher priced room nights.
The term "gross short-term sleeping room rental revenue" as used herein means: the consideration charged, and 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 of nature, without any deduction therefrom whatsoever; and any other rent defined in section 5.05.020 of the Laguna Beach Municipal Code. Gross short-term sleeping room rental revenue may have been, or may be, payable or paid prior to or following the occupancy to which it is attributable, and may have been paid in whole or in part in advance on a long-term basis such as in the purchase of a time-share unit or similar arrangement.
Gross sleeping room rental revenue shall not include, and therefore the assessment shall not be charged upon, 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 LBTMD assessment is identified separately it shall be disclosed as the "LBTMD Assessment." As an alternative, the disclosure may include the amount of the LBTMD assessment and the amount of the assessment imposed pursuant to the California Tourism Marketing Act, Government Code f13995 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 calculation of transient occupancy taxes.
Bonds shall not be issued.
E. Interest and Overdue Charges
The LBTMD shall reimburse the City for any costs associated with collecting unpaid assessments. If sums in excess of the delinquent LBTMD assessment are sought to be recovered in the same collection action by the City, the LBTMD 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 lodging business owner who fails to remit any assessment within the time required shall pay an overdue charge of ten percent (10%) of the amount of the assessment in addition to the amount of the assessment.
2. Continued Delinquency: Any lodging business owner who fails to remit any assessment on or before a period of thirty (30) days following the date on which the remittance first became delinquent shall pay a second delinquency overdue charge of ten percent (10%) of the amount LBTMD Management District Plan 16
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of the assessment in addition to the amount of the assessment and the ten percent overdue charge first imposed.
3. Fraud: If the City determines that the nonpayment of any remittance is due to fraud, an overdue charge of twenty-five percent (25%) of the amount of the assessment shall be added thereto in addition to the overdue charges stated in subsections (1) and (2) of this section.
4. Interest: In addition to the overdue charges imposed, any lodging business owner who fails to remit any assessment imposed shall pay interest at the rate of one-half of one percent per month or fraction thereof on the amount of the assessment, exclusive of overdue charges, from the date on which the remittance first became delinquent until paid.
5. Overdue Charges Merged with Assessment. Every assessment imposed and such interest as accrues shall become a part of the assessment herein required to be paid.
6. Failure to collect and report Assessment — If any lodging business shall fail or refuse to collect said assessment and to make, within the time provided in this Plan, any report and remittance of the assessment or any portion thereof required by this Plan, the City shall proceed in such manner as they may deem best to obtain facts and information on which to base their estimate of the assessment due. As soon as the City shall procure such facts and information as they are able to obtain upon which to base the assessment of any assessment imposed by this Plan and payable by any lodging business who has failed or refused to collect the same and to make such report and remittance, they shall proceed to determine and assess against such lodging business the assessment, interest and overdue charges provided for by this Plan. In case such determination is made, the City shall give a notice of the amount so assessed by serving it personally or by depositing it in the United States mail, postage prepaid, addressed to the lodging business so assessed at their last known place of address. Such lodging business may within ten (10) days after the serving or mailing of such notice make application in writing to the City for a hearing on the amount assessed. If application by the lodging business for a hearing is not made within the time prescribed, the assessment, interest and overdue charges, if any, determined by the City shall become final and conclusive and immediately due and payable. If such application is made, the City shall give not less than five (5) days' written notice in the manner prescribed herein to the lodging business to show cause at a time and place fixed in said notice why the amount specified therein should be not be fixed for such assessment, interest and overdue charges. At such hearing, the lodging business owner or representative may appear and offer evidence why such specified assessment, interest and overdue charges should not be so fixed. After such hearing, the City shall determine the proper assessment to be remitted and shall thereafter give written notice to the person in the manner prescribed herein of such determination and the amount of such assessment, interest and overdue charges. The amount determined to be due shall be payable after fifteen (15) days unless an appeal is taken.
F. Time and Manner for Collecting Assessments
The LBTMD assessment will be implemented beginning July 1, 2025 or as soon as possible thereafter, and ending ten (10) years from its start date. The City will be responsible for collecting the assessment on a quarterly basis (including any delinquencies, interest and overdue charges) from each assessed lodging business. The City shall take all reasonable efforts to collect the assessments from each assessed lodging business. The City shall forward the proportion of the assessments collected equivalent to the Sales, Marketing, and Communications and Administration & Operations category to the Owners' Association.
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V. 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 LTMD as defined in Streets and Highways Code §36612. The City Council has determined that VLB, a private nonprofit corporation, will continue to serve as the Owners' Association for the LBTMD. A majority of VLB's Board of Directors shall be representatives of businesses paying the LBTMD assessment. The Board will also include representation from the City and businesses with an interest in tourism. The City Council shall appoint twenty-five percent (25%) of the voting members of the Board of Directors. The first two (2) such appointments shall be City Councilmembers. Any additional such appointments necessary to compromise 25% of the voting membership of the Board, shall be other City representatives (excluding City Councilmembers) as determined in the sole and absolute discretion of the City Council. In the event that the number of voting Directors of the Board is not evenly divisible by 25%, the City shall be entitled to round up to appoint a Director to ensure that the City Council appointments comprise at least 25% of the voting members of the Board; For example, if there are 14 voting members of the Board, the City Council shall be entitled to appoint four (4) voting members (i.e., two City Councilmembers and two additional City representatives, as determined by the City Council).
Visit Laguna Beach shall establish a Cultural and Environmental Stewardship Committee (the Committee). The Committee shall advance the mission of Visit Laguna Beach by providing feedback and recommendations to the Board of Directors on the utilization of all Laguna Beach Tourism Marketing District (LBTMD) funds; the Committee's focus should be on Culture and Environmental Stewardship funds, but the Committee may advise the Board on the use of any or all LBTMD funds, including but not limited to for the use of sales, marketing, and communication. The Committee shall prioritize initiatives that enhance the quality of life for the community to drive overnight visitation to businesses paying the LBTMD assessment, including sustainability practices and initiatives ensuring responsible stewardship of resources. The Committee may be comprised of Directors or non- Directors, and may include representatives from a diverse array of community individuals, including but not limited to:
• Owners of businesses paying the LBTMD assessment or their authorized representative; • Owners of businesses in the City of Laguna Beach with an interest in tourism; • Representatives with expertise in cultural or environmental preservation, sustainability, or community development; and/or
• Representatives from the City of Laguna Beach and/or City Councilmembers.
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 Board and certain committees must be held in compliance with the public notice and other requirements of the Brown 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. The Owners' Association is also subject to the record keeping and disclosure requirements of the California Public Records Act.
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C. Annual Report
The VLB shall present an annual report at the end of each year of operation to the City Council pursuant to Streets and Highways Code 536650 (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.
• The estimated amount of any contributions to be made from sources other than assessments levied pursuant to this part.
1. Biennial Performance Review
A biennial performance review will be conducted every two years, beginning in FY 2026-27.
The review will be led by a joint committee composed of City staff and Visit Laguna Beach representatives. The committee will evaluate LBTMD program progress toward key objectives, with a primary focus on the effectiveness and impact of Cultural and Environmental Stewardship projects.
The committee will also provide recommendations to the Visit Laguna Beach Board of Directors regarding proposed adjustments to program priorities and strategies to ensure LBTMD programs are aligned with current lodging industry needs, community priorities, and the promotion of overnight stays at assessed businesses.
Findings and recommendations from the biennial performance review will be presented to both the Visit Laguna Beach Board of Directors and the City Council as part of the annual report process.
2. Cooperation for Performance Audits
In the event the City desires to conduct a performance audit related to certain duties performed by Visit Laguna Beach, Visit Laguna Beach shall cooperate with the City by providing the relevant information necessaty to conduct the requested performance audit.
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APPENDIX 1 - LAW
CURRENT THROUGH ALL LEGISLATION OF THE 2024 REGULAR AND SPECIAL SESSIONS
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 incidental or collateral effects of those special benefits are inherently part of those LBTMD Management District Plan 20
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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 following 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"
"Business" means all types of businesses and includes financial institutions and professions.
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36608. "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. 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. ) Facilities or equipment, or both, to enhance security of persons and property within the district. (k) Ramps, sidewalks, plazas, and pedestrian malls.
() 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 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 (Division 10 (commencing with Section 7920.000) 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.
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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"
(a) "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. (b) "Special benefit" also includes, for purposes of a property-based district, a particular and distinct benefit provided directly to each assessed parcel within the district. Merely because parcels throughout an assessment district share the same special benefits does not make the benefits general. 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
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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 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 (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 boundaries 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 estimated 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 LBTMD Management District Plan 24
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and a statement that the same improvements, maintenance, and activities are proposed for subsequent years shall satisfy the requirements of this subdivision.
(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 their 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. (i) Any proposed rules and regulations to be applicable to the district. (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 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 any 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.
(3) In a property-based district, properties throughout the district may share the same special benefits. In a district with boundaries that define which parcels are to receive improvements, maintenance, or activities over and above those services provided by the city, the improvements, maintenance, or activities themselves may constitute a special benefit. The city may impose assessments that are less than the proportional special benefit conferred, but shall not impose assessments that exceed the reasonable costs of the proportional special benefit conferred. Because one or more parcels pay less than the special benefit conferred does not necessarily mean that other parcels are assessed more than the reasonable cost of their special benefit. (1) In a property-based district, a detailed engineer's report prepared by a registered professional engineer certified by the State of California supporting all assessments contemplated by the management district plan.
(m) 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 LTMD Management District Plan 25
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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 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 proposed 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 activities 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 and 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 LBTMD Management District Plan 26
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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 conferred 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 years referred to in the management district plan.
36627. Notice and assessment diagram
Following adoption of the resolution establishing district assessments on properties pursuant to Section 36625, 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 disestablishment 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.
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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 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 an action or proceeding unless the action or proceeding is commenced within 30 days after the resolution levying the assessment is adopted pursuant to Section 36625. An 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 Section 36627. 36638. Assessment as government imposed fee on Civ C § 1770 transaction [Operative July 1, 2024] LBTMD Management District Plan 28
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(a) A business assessment pursuant to this part is a fee imposed by a government on the transaction for purposes of paragraph (29) of subdivision (a) of Section 1770 of the Civil Code. (b) This section shall become operative on July 1, 2024.
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)) 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 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 assessment 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 LTMD Management District Plan 29
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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 (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 proposal to dispose of any assets acquired with the revenues of the assessments levied within the property and business improvement district. The notice of shes into aste in the said serene he ely
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 disestablishment or expiration without renewal of district; Calculation of refund; Use of outstanding revenue collected after disestablishment of district LTMD Management District Plan 30
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(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.
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APPENDIX 2 - ASSESSED BUSINESSES
Business Name Site Address
1060 N Coast LLC 1060 N Coast Hwy
Adams, Paulette 590 N. Coast Hwy
Arabella Laguna 506 North Coast Hwy
Art Hotel 1404 North Coast Hwy
Beverly Rentals 251-253 Beverly St.
Bevia, Carmen 1370 Glenneyre St
Blue Agave Laguna 1235 Gaviota Dr
Butter, Ann 1676 Temple Hills Dr
Capri Laguna 1441 South Coast Hwy
Casa Laguna Inn & Spa 2510 South Coast Hwy
Casa Loma Beach Hotel (Inn at Laguna Beach) 211 North Coast Hwy Clayton, Craig 2660 Glenneyre
Cleo in the Village 335 Cleo St
Coast Inn 1401 South Coast Hwy
Corona, Robert 790 Gaviota Drive
Couse Courts 435 North Coast Highway
Cragnotti, Art & Gerri 776 Cliff Dr
Crescent Bay Inn 1435 North Coast Hwy
Cress Street LLC 143-47 Cress St
Crimp, Wendy 222 Cypress Dr
Derek Larson Real Estate 150 Cress St
Duplex at Sleepy Hollow 689/691 Sleepy Hollow Ln
El Cord 1968 Trust 120 McKnight Drive
Filsoof, Navid (255 Oak) 255 Oak Street
Filsoof, Navid (530 N Coast Hwy) 530 N. Coast Hwy
Gabricht, Andrew 640 Ramona
Gall Properties 750 S. Coast Hwy
Gaviota LLC 943-945 Gaviota
Green Ruby (1891 S Coast) 1891 S. Coast Hwy
Hagopian, Robert 31720 Virginia Way
Hermes, Sami 1779 Glenneyre St
Hotel Joaquin 985 North Coast Hwy
Hotel Laguna (Remodeling) 425 South Coast Hwy
ILM Invest (VRBO) be paid by VRBO 31881 Sunset Ave
JDM Holdings LP 627 Ramona Avenue
JL Investments 176 Wave St
John & Reilly Harris 535 Through St
Kearns, Jeremy 1436 Glenneyre St
La Casa Del Camino 1289 South Coast Hwy
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La Casita 1273 S Coast Hwy
La Vida Laguna 1121 Glenneyre St
Laguna Beach Golf & Bungalow 31106 Coast Hwy
Laguna Beach Group 1331 Glenneyre
Laguna Beach Lodge (Closed for Renovations) 30806 Coast Hwy Laguna Cliffs Inn (Laguna Beach House) 475 Coast Hwy
Laguna Cottage (dba Scandia Realty Group LLP) 255-265 St. Anns Dr Laguna HI, LLC 688-690 S Coast Hwy
Laguna HW, LLC 690-696 S Coast Hwy
Laguna Shores- Time Share 419 North Coast Hwy
Laguna Surf- Time Share 611 South Coast Hwy
Laguna Ventures Glomstad 601 Glomstad Lan
Likala, Michael 1953 S. Coast Hwy
Manzanita Cottages dba Scandia 732 Manzanita Dr
Marija Chandler- 1056 Glenneyre 1056 Glenneyre St
Marija Chandler- 1130 N Coast Hwy 1130 N. Coast Hwy
Merrill, William (VRBO) 2948 S. Coast Hwy
Montage Resort and Spa 30801 South Coast Hwy
Moritz, Margo 668 Ramona Ave.
Novak, Lou 615-617 Glenneyre St
Pacific Edge Hotel 647 South Coast Hwy
Pearl Laguna LLC 21095 Raquel Rd
Petrina, Tara (VRBO) 101 High St
Petty, Karen (VRBO) 2190 Hillview Dr
Prelitz, Chris 1215 Bluebird Canyon Dr.
Pursuit, Bret 1264 Glenneyre
Retreat at Laguna Villas 729 Gaviota Drive
Richard Raeber (VRBO) 450 Thalia St
Rogers, Ronnie 539 Reed St
Rumari, LLC 1826 S Coast Hwy
Sand & Surf Vacation 346 Mermaid
SCP Laguna LLC 825 South Coast Hwy
SCP Seven40ne 741 South Coast Hwy
Seaside Laguna Inn & Suites 1661 Coast Highway
Simon Linda 812 S Coast Hwy
Slee, Earl 806 Cliff Drive
Snaier Varkel & Francina 947 South Coast Hwy
Sonder Hospitality USA- 1600 S Coast Hwy 1600 South Coast Hwy Sonder Hospitality USA- 2020 S Coast Hwy 2020 South Coast Hwy Stanitas, Michael- 31861 S Coast Hwy 31861 Coast Hwy
Stanitas, Michael -689 S Coast Hwy 689 South Coast Highway LBTMD Management District Plan 33
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Sunset Cove Villas 683 Sleepy Hollow
Surf & Sand Resort 1555 South Coast Hwy
Tides Inn 460 North Coast Hwy
Tower 17 Properties & Management 1313 S Coast Hwy
Vacasa Seasonals
Western States Business Consultants
Williams, Daniel 165 Fairview
Wire, Hugh- 671 Agate 671 Agate Street
Wood, Roger (VRBO) 136 LaBrea Street
YMT Holdings LLC 326 Loma Terrace
Younan, David- Olive Tree Investments 354 N Coast Hwy
Young Family Trust 31522 Bluff
Jurisdiction list as of February 2025
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