CITY COUNCIL STAFF REPORT
DATE: JUNE 24, 2026 PUBLIC HEARING
SUBJECT: RESOLUTION CONFIRMING THE REPORT OF THE PALM SPRINGS
SMALL TOURISM BUSINESS IMPROVEMENT DISTRICT ADVISORY
BOARD, LEVYING THE FISCAL YEAR 2026-27 ASSESSMENT, AND
CONDUCT PROTEST PROCEEDINGS
FROM: Scott C. Stiles, City Manager
BY: Department of Finance and Treasury
SUMMARY:
The Palm Springs Small Hotel Tourism Business Improvement District (TBID) was formed in November 2016. On June 10, 2026, the City Council adopted Resolution No. 25406, declaring its intention to renew the Palm Springs Small Hotel Tourism Business Improvement District, and setting the public hearing to June 24, 2026.
The City Council will conduct protest proceedings, consider renewing the TBID and a resolution confirming the report of the TBID Advisory Board and levying the Fiscal Year 2026-27 assessment.
RECOMMENDATION:
1) Open the public hearing, receive public testimony and written and oral protests to confirm the Report of the Palm Springs Tourism Small Hotel Business Improvement District Advisory Board and levying an assessment for Fiscal Year 2026-27; and
2) Adopt a Resolution entitled, “A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF PALM SPRINGS, CALIFORNIA, CONFIRMING THE REPORT OF THE
PALM SPRINGS TOURISM SMALL HOTEL BUSINESS IMPROVEMENT
DISTRICT ADVISORY BOARD AND LEVYING AN ASSESSMENT FOR FISCAL YEAR 2026-27 IN CONNECTION WITH THE PALM SPRINGS TOURISM SMALL HOTEL BUSINESS IMPROVEMENT DISTRICT.”
BACKGROUND:
The Palm Springs Small Hotel Tourism Business Improvement District (TBID) was formed in November 2016. On June 10, 2026, the City Council adopted Resolution No. 25406
City Council Staff Report
June 24, 2026 -- Page 2
Small Hotel Tourism Business Improvement District Renewal declaring its intention to renew the Palm Springs Small Hotel Tourism Business Improvement District and setting the public hearing for June 24, 2026.
A TBID is a special benefit assessment district that was established by the City Council, under existing State law, for the specific purpose of funding activities that promote tourism. This mechanism is also in place on larger hotels with an assessment to fund the Greater Palm Springs Convention and Visitor Bureau (GPSCVB). The renewal of this district would have no effect on the current GPSCVB assessment.
The law provides that business operators are assessed and pay the assessment to the City. Cities have utilized a percentage multiplied against daily hotel revenue as the formula for imposing the assessment. Further, this law provides cities have the express authority to make improvements and engage in business promotional activities that benefit the assessed businesses within the designated boundary area.
It is noted that the assessment is made against the business operator, and not against the property itself. Therefore, the assessment is legally treated by ordinance enactment as a debt owed by the business operator to the City. The City Attorney advises that Proposition 218 rules are not applicable because the assessment is not a tax on real property, and case law has clearly held that this enabling law (Streets and Highways Code sections 36500 et seq.) is not subject to Proposition 218 restrictions. (Howard Jarvis Taxpayers Assn. v. City of San Diego (1999) 72 Cal. App. 4th 230).
The renewal of the district is not by election of the business operators, but by majority protest procedure. After notice, any person subject to the proposed assessment may protest the renewal of the TBID. Each protest is weighted by the amount of the assessment to be paid. The TBID cannot be renewed if a majority of the affected businesses subject to the TBID, weighted by assessment, file a timely protest. Therefore, in order for a protest to be successful, businesses representing greater than 50% of the value of the total assessment to be collected must protest the formation of the district.
The TBID Advisory Board is recommending a 1% assessment on room revenue. The boundaries of the district would be citywide, but the assessments would be limited to hotels of 49 or less (see Attachment B for the Advisory Board Fiscal Year 2025-26 annual report).
The assessment would be collected by the City. The TBID Advisory Board is recommending the Palm Springs Bureau of Tourism (PSBOT) continue to administer the TBID funds and promotional programs as a segregated and restricted fund.
There are approximately 96 small hotels in Palm Springs with 49 rooms or less, and the small hotels believe they are at a marketing disadvantage because they do not have the same marketing infrastructure of larger, branded hotels. Most small hotels do not have international marketing budgets, global call centers, local and national sales forces, international reservation systems, global brand recognition, etc.
City Council Staff Report
June 24, 2026 -- Page 3
Small Hotel Tourism Business Improvement District Renewal FISCAL IMPACT:
Based upon the current assessment information, the assessment will generate approximately $900,000 in FY 2026-27. This revenue is restricted to use for the specific purpose of advancing the TBID’s interests.
The City incurred costs in establishing the TBID in Fiscal Year 2017-18 and will continue to incur costs in annually sustaining the TBID. These annual costs include mailings, hearings, notifications, related staff, and research time. TBID administration includes collection, distribution, and auditing of the assessment, annual report preparation, and staff time. All administrative staff time and costs are reimbursed from the proceeds of the assessment.
The Director of Finance estimates the cost to process monthly assessment returns and payments, collection of monthly assessment returns, annual administrative costs to prepare the notices, and conducting the public hearing to renew the TBID is approximately $50,000 for FY 2026-27.
REVIEWED BY:
Department Director: Kristopher J. Mooney
City Manager: Scott Stiles
ATTACHMENTS:
A. Resolution
B. Advisory Board Report Fiscal Year 2025-26