CITY OF PACIFICA
COUNCIL AGENDA SUMMARY REPORT
6/13/2022
1 SUBJECT:
Conduct Public Hearing to consider Adopting a Resolution Confirming the Annual Report from the Pacifica Hotel Business Improvement District, Approving the Program Expenditures, and Assessing the Levy for the Fiscal Year 2022-23 at the same rates as in the Fiscal Year 2021-22.
RECOMMENDED ACTION:
Review and discuss the available options provided in this report for Council's consideration and select an option for proceeding.
STAFF CONTACT:
Yulia Carter, Chief Financial Sustainability Officer
(650) 738-7402
[email protected]
BACKGROUND/DISCUSSION:
Pursuant to California Streets and Highways Code sections 36500 et. seq., the City Council of the City of Pacifica adopted Ordinance No. 714-C.S creating the Pacifica Hotel Business Improvement District and levying an annual assessment of $1.00 per room per day of occupancy on the hotels in the City. The Pacifica BID was established under the authority of the Parking and Business Improvement Area Law of 1989, which does not require identifying a "managing agency." Many Bay Area Cities with BIDs established under the same law manage their BID operations internally. However, the City Council has previously appointed the Chamber of Commerce as the BID Managing Agency. Currently, the Advisory Committee consists of but is not limited to one representative from each of the hotels, the managing director of the Pacifica Chamber of Commerce and Visitor Center, and one representative from the Chamber of Commerce Board of Directors.
On May 13, 2022, the Chamber of Commerce filed the attached Pacifica Hotel Business Improvement District (BID) report with the City Clerk. The report was prepared by the Chamber of Commerce acting as the Managing Agency for the hotels in the BID and on behalf of the Pacifica Hotel BID Advisory Committee and presented to the City Council with the resolution of intent to continue the BID program and levy the annual assessments for the fiscal year 2022-23.
The report included projected resources and uses for FY 2022-23. There were no proposed changes in the boundaries of the Pacifica Hotel Business Improvement District. The proposed assessment is intended to be continued at $1.00 per room per day occupancy. It is estimated to generate $70,000 in revenues for the BID activities in FY2022-23 plus an estimated rollover funds of $977.30 from the current fiscal year.
It is proposed in the report that the Pacifica Chamber of Commerce will continue to serve as the Managing Agency for the BID at the proposed annual administrative fee of $35,000 or 50% of the projected FY2022-23 BID assessment to pay a part-time administrator, maintaining a visitor center, and supporting marketing efforts such as the Visitor Guide and Business Directory as Pacifica City Council 2
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reported on page 5 and further spelled out in Exhibit C of the attached report.
After reviewing the report, City staff felt that there was a significant amount of duplication of City-led marketing efforts with proposed activities in the BID marketing plan. This year the City Council adopted a Marketing Plan to attract visitors to Pacifica and benefit local hotels. City staff has made efforts to collaborate with the BID on strategies such as "Shop Pacifica" and a "workcation" promotion that would directly benefit the hotels in the district, as these programs are investing in the hospitality industry and promoting Pacifica as an overnight destination. Specific examples of duplicative efforts from the BID report include 1) the suggestion of a new "staycation" program for FY 2022-23 (pg. 7 of Attachment 1), which appears to be redundant with the City program approved by the Council, and 2) investment in a Shop Local campaign and creating a separate page on the "Visit Pacifica" website at the estimated cost to the BID between $10,500 and $14,500 (pg.6 of Attachment 1) when the City has already launched this program under the name of ShopPacifica that is currently being promoted and paid for by the City and the City would have created the ShopPacifica page on the VisitPacifica website.
At the meeting on May 23, Council directed staff and Chamber representatives to hold a meeting with the hotel representatives and Council liaisons to the Economic Development Committee to seek clarifications for proposed FY22-23 BID activities, reduce duplication and achieve collaboration. Staff held this meeting on June 1, 2022. During the meeting, some hotel representatives seemed to be unaware of the above-mentioned City programs that would directly benefit hotels or the VisitPacifica website access issues. In addition, the Chamber continued expressing security concerns about granting the City's professional Marketing consulting firm access to the VisitPacifica platform. Staff clarified that the City's standard practice requires substantial professional and general liability coverage from all their contractors, and these concerns would be covered. The Chamber requested to meet with City staff and the City Consultant again to discuss the collaboration and access to the website. This meeting is scheduled for Thursday, June 9, 2022 (a day after release of this report). Staff will be prepared to report to Council the outcomes of this meeting during the June 13 City Council meeting presentation on this item.
Since California State Law is clear that the BID Advisory Committee determines the allocation of BID assessment funds (and not the City) and the expenditure of funds must be specific and be used to increase hotel overnight occupancy and not recreational improvements or promotions for any other businesses or services, staff requested the Chamber to make the following clarifying adjustments to the BID Annual Report:
• List all activities planned for the FY2022-23 with the requested budget allocation and replace items like "tbd" or "cost varies" or wide cost ranges with specific dollar amounts. • Provide sufficient explanation and justification for every budget line-item with enough details to describe what activities are being proposed at what cost and how this would benefit the hotels in increasing their overnight occupancy. • Provide a detailed description of activities and requested budget for the "staycation" and "shop local" campaigns. Explain how/if these programs will complement the City's Workcation and ShopPacifica programs in the City's Marketing Plan. • Clarify certain proposed activities in the report that appear as allocation of funds to be approved by BID members payable for services performed by the BID members themselves or as promotion of other businesses and services. • Include the Google Analytics and traffic reports for the Visit Pacifica website every month of the last assessment year (FY2021-22) to demonstrate the benefit of the marketing efforts to BID members.
The City intends to build greater collaboration and coordination of efforts with the BID to identify key performance measures and better align available resources, unify marketing efforts toward the same goals of promoting Pacifica as an overnight destination, assist hotels with improving their occupancy rates throughout the year, and, as a result of these efforts, improve the Pacifica City Council 3
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hospitality industry and local economy in general.
As of this report release, the City staff has not received the revised report from the Chamber.
Therefore, the City Manager does not have a recommendation as part of this report but lists options available to City Council below. The original BID Annual report without modifications is included in Attachment 1.
Written and oral protests to the levy of the annual assessments may be made at the public hearing in the form and manner prescribed in Sections 36625 and 36626 of the California Streets and Highway Code up until the close of the public hearing.
LIST OF OPTIONS AVAILABLE TO CITY COUNCIL:
1. If the Council is satisfied with the BID Annual Report as submitted on May 13, 2022, described above and presented at the last meeting and in Attachment 1, it can proceed with adopting a resolution listed in Attachment 2 to renew the BID program and levy assessment.
2. If the Council believes that the report does not sufficiently describe the improvements or activities that will be undertaken in FY2022-23, then upon the conclusion of the public hearing, the Council may order changes to the "proposed activities" to be funded from the levy of the assessments for those services that are not currently contracted. The Council would need to adopt another resolution of intent listed in Attachment 3 to levy with the report as modified. In this case, the item would have to return to the Council on June 27, 2022, after proper notice of the proposed changes.
3. The City Council could delay this decision until a later date once further collaborative discussions have occurred with the BID. If selected, this option will end the assessment for FY2022-23. During the year, staff would report back to City Council on collaboration progress and determine next steps, which could include reinstituting the assessment for FY2023-24, or developing an alternative structure for the BID.
RELATION TO CITY COUNCIL GOALS AND WORK PLAN:
"Fiscal Sustainability" includes investing in economic development to increase revenues, funding a reserve/emergency fund, and being well prepared for grant opportunities.
FISCAL IMPACT:
There is no significant fiscal impact associated with this action, except for the City's administrative cost of processing BID pass-through payments that the City collects. The City collects no fee for administering the BID.
ORIGINATED BY:
City Manager's Office
ATTACHMENT LIST:
Attachment 1 - BID Annual Report Final 2022-2023 (PDF)
Attachment 2 - Resolution to Levy the Assessment- Option 1 (DOCX) Attachment 3 - Resolution of Intent to Order Changes - Option 2 (DOCX)