CITY OF MERCED
ADMINISTRATIVE REPORT
Merced Civic Center
678 W. 18th Street
Merced, CA 95340
File #: 21-974 Meeting Date: 12/20/2021
Report Prepared by: Maria Mendoza, Economic Development Associate SUBJECT: Approval of a Supplemental Appropriation from the Economic Development Opportunity Fund (074) for $43,825.00, and Approval of a First Amendment to the Professional Service Agreement with Kristin Lowell, Inc in the Amount of $43,825.00 to Initiate the Process of Forming a Tourism Business Improvement District in the City of Merced
REPORT IN BRIEF
Considers appropriating $43,825.00 from the Economic Development Opportunity Fund for a proposed first amendment to the professional service agreement with Kristin Lowell, Inc. to start the process of establishing a Tourism Business Improvement District.
RECOMMENDATION
City Council - Adopt a motion:
A. Approving a supplemental appropriation in the amount of $43,825.00 from the unreserved, unencumbered fund balance of the Economic Development Opportunity Fund (074) to account 074- 2002-572-1700 (professional Services - Economic Development Opportunity Fund); and, B. Approving the first amendment to the professional services agreement with Kristin Lowell, Inc., in the amount of $43,825.00; and,
C. Authorizing the City Manager or Deputy City Manager to execute the necessary documents.
ALTERNATIVES
1. Approve as recommended by staff; or
2. Approve, subject to conditions as specified by the City Council; or
3. Deny the request; or
4. Refer back to staff for reconsideration of specific items as requested by the Council; or
5. Defer action until a specified date
AUTHORITY
Charter of the City of Merced, Section 200
CITY COUNCIL PRIORITIES
City of Merced 2021-2022 Adopted Budget, Section 7, Economic Development and Airport, Economic Development, Goals - “Increase visitor spending and stays in Merced by becoming a go to CITY OF MERCED Printed on 4/7/2022Page 1 of 4
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ATTACHMENT 1
File #:21-974 Meeting Date: 12/20/2021
community instead of a go through community.”
City Council Goals & Priorities FY 2021-2022, #2.b.v. Tourism - marketing that focuses on the benefit staying in and traveling to Yosemite through Merced (TBID or marketing funding).
DISCUSSION
The City Council identified forming a Tourism Business Improvement District (TBID) as part of their Fiscal Year 2021-2022 Goals and Priorities (Attachment 1).
As part of the Agreement for Services with Kristen Lowell, Inc. for the formation of a Property Based Improvement District (PBID), a series of stakeholder meetings were held in June of 2021. One of the meetings was with the Hotel/Motel Association to go over the formation of a TBID. The Hotel/Motel Association expressed their support and partnership in the endeavor.
The Merced Hotel/Motel Association and staff have agreed that the consultant team, Kristin Lowell Inc. should lead the effort working with the hotel property owners and stakeholders in forming a TBID for the City of Merced. The consultant, Kristin Lowell Inc. agrees to the terms contained in the First Amendment (Attachment 2) to the existing Professional Service Agreement (Attachment 3).
Background
The establishment of a Tourism Based Improvement District (TBID) in the City of Merced is an important step as there are tremendous opportunities to capture tourism dollars to assist in promoting Merced as a destination while allowing the city to remain competitive in a crowded global marketplace.
Prescribed under the Property and Business Improvement District Law of 1994; Street and Highways Code Section 36600-36671; property or business assessments are levied in exchange for services not currently provided by the City. While the services depend on the needs of the specific businesses of the area, typical TBID services include print and internet advertising, sales lead generation, destination marketing and development to bring more visitors to the City.
In California, TBIDs and similar improvement areas are governed by two State laws: the Parking and Business Improvement Area Law of 1989 (which allows assessments to be levied on businesses within a district) and the Property and Business Improvement District Law of 1994 (which allows assessments to be levied on owners of real property within a district).
These laws set the general procedures for establishment, assessment and public review of TBIDs.
Proposition 218, approved by the California voters on November 6, 1996, which became part of the California Constitution (Articles XIIIC and XIIID) adds additional requirements for establishing property-based assessment districts.
Scope of Work
Successful TBID’s depend on the active involvement of its property owners with support from the City.
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In order to establish a Tourism Business Improvement District (TBID), Kristin Lowell, Inc., proposes to guide a strategically led process that includes facilitating stakeholder education and consensus building, developing a TBID management district plan, preparing for, and managing a petition drive, and securing adoption of the TBID by City Council.
The consultant team proposes a two phase approach in order to complete the TBID formation process, which includes 1) Initial Review and Document Preparation, and 2) Management Plan and Engineer’s Report. For more details about the TBID formation process and scope of services, please see Attachment 2.
TBID Frequently Asked Questions
How is a TBID funded?
TBIDs are funded through an assessment on certain lodging stays. The amount of the assessment is determined by the business owners at the formation of the district, within particular legal guidelines. Certain types of stays can be exempt from the assessment if they are not procured as a result of district activities. Funds raised through the assessment must be spent for the benefit of the businesses paying the assessment. Funds raised through a TBID cannot be diverted to government programs.
Who manages a TBID?
A new non-profit corporation can be formed to manage district funds, or an existing corporation can fill this role. The businesses forming the TBID decide how the corporation will be structured and who will manage it.
Why should I support forming a TBID?
As the economy struggles, marketing efforts are an increasingly important aspect of maintaining a popular destination. TBID’s provide stable funding for the necessary marketing to keep a destination competitive in a difficult economy. As cities and countries are forced to sacrifice tourism promotion funds, TBIDs provide funding to supplement or replace those monies. Because TBID funds are not controlled by a government entity, they cannot be subjected to the budget cuts municipalities have been forced to make.
What are the advantages of a TBID?
· They provide a stable funding source for tourism promotion · They are designed and created by those who pay the assessment · They are governed by those who pay the assessment
· Funds cannot be diverted for government programs
(Source: Civitas Introduction to California Tourism Business Improvement Districts flyer) CITY OF MERCED Printed on 4/7/2022Page 3 of 4
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IMPACT ON CITY RESOURCES
Given need to market Merced and keep it on the forefront as a destination city, combined with the support from the Hotel/Motel association for the formation of a TBID, staff recommends appropriating $43,825.00 from Fund 074 (Economic Development Opportunity Fund) unreserved, unencumbered fund balance for consultant services relative to establishing a Tourism Business Improvement District (TBID).
ATTACHMENTS
1. Council Goals & Priorities FY 2021-2022.
2. First Amendment to Agreement for Professional Services with Kristin Lowell, Inc.
3. Professional Services Agreement with Kristen Lowell, Inc.
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FIRSTAMENDMENTTOAGREEMENTFOR
PROFESSIONAL SERVICES
TlllS FIRST AMENDMENT TO AGREEMENT is made and entered into this_ day of _____ , 2021, by and between the City of Merced, a California Charter Municipal Corporation ("City"), and Kristin Lowell, Inc., a California Corporation, whose address of record is 1420 E. Roseville Parkway #140-342, Roseville, California 95677, ("Consultant").
WHEREAS, City is undertaking a project to conduct a Tourism Business Improvement District in the City of Merced; and,
WHEREAS, City and Consultant have previously entered into an Agreement for Professional Services ("Agreement") dated November 6, 2020; and, WHEREAS, City and Consultant desire to amend said Agreement to provide for additional services in connection with said project.
NOW, THEREFORE, the parties hereto, in consideration of the mutual covenants hereinafter recite� agree as follows:
1. Section 22, "ADDITIONAL WORK," is hereby added to the Agreement to read as follows:
''SECTION 22. ADDITIONAL WORK. Consultant
shall perform the additional work outlined in the proposal from Consultant to City dated September 9, 2021,
attached hereto as Exhibit 1 . .,
2. Section 23, "ADDITIONAL COMPENSATION," is hereby added to the Agreement to read as follows:
"SECTION 23. ADDITIONAL COMPENSATION.
City shall pay to Consultant the not to exceed additional sum of Forty-Three Thousand Eight Hundred and
Twenty-Five Dollars ($43,825.00) for the additional
work described in the proposal attached hereto as Exhibit 1 and in accordance with the rates set forth on Exhibit 1." X:\Agreemcnts\Economic Development\2021\lst Amendment to PSA with Kristin Lowell Re TBID,docx 1 ATTACHMENT 2
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