PISMO BEACH COUNCIL AGENDA REPORT
Agenda Item #11.C
SUBJECT/TITLE:
RESOLUTION LEVYING THE 2% ANNUAL ASSESSMENT FOR THE PISMO BEACH LODGING BUSINESS IMPROVEMENT DISTRICT (LBID) FOR FISCAL YEAR 2023:
JULY 1, 2022 THROUGH JUNE 30, 2023
RECOMMENDATION:
1. Open public hearing; accept protests, if any, to the proposed assessments; close public hearing;
2. Adopt a Resolution levying a 2% annual assessment for the Pismo Beach Lodging Business Improvement District (LBID) for Fiscal Year 2023: July 1, 2022 through June 30, 2023.
EXECUTIVE SUMMARY
At its April 5, 2022 Meeting, the City Council adopted Resolution No. R-2022-022 approving the Conference Visitors Bureau (CVB)/LBID Advisory Board’s Annual Report for Fiscal Year (FY) 2023; declaring the Council’s intention to levy an annual assessment of 2% on gross lodging revenues from transient rentals in the District; and setting a public hearing for April 19, 2022 to consider levying the assessment. The Resolution of Intention and accompanying Exhibit A: CVB/LBID Advisory Board Annual Report for FY 2023 was published in the New Times on April 7, 2022 and mailed to all lodging properties within the city on April 7, 2022. After the public hearing, the Council may consider adoption of a Resolution levying the LBID assessment for Fiscal Year FY 2023.
The primary purpose of this agenda item is to hold that public hearing to hear all interested persons and receive any protests. If written protests are received from lodging operations in the district proposed to pay fifty percent (50%) percent or more of the annual assessment, no further proceedings to impose the levy of assessments shall take place during the ensuing fiscal year. If protests received do not represent 50% or more, the Council may proceed to adopt the subject Resolution (Attachment 1) confirming the Updated CVB/LBID Advisory Board’s Annual Report for FY 2023, and levying the LBID assessment for FY 2023.
The CVB/LBID Advisory Board’s Annual Report for FY 2023 is provided as Attachment
1.A to this staff report.
11.C-1Council Agenda 4-19-2022
Recommendation
Staff recommends that Council:
Open the public hearing; accept protests, if any, to the proposed assessments; close the public hearing;
Adopt a Resolution levying a 2% annual assessment for the Pismo Beach Lodging Business Improvement District (LBID) for FY 2023: July 1, 2022 through June 30, 2023.
FISCAL IMPACT:
If the proposed FY 2023 Annual Report is approved, it is estimated that a 1% LBID annual assessment for FY 2023 will generate $1,606,930 in LBID Assessment Revenues in FY 2023 which, after $135,381 of administrative expenses, could be used to promote the lodging businesses in Pismo Beach. These costs could, in turn, generate transient occupancy tax revenues and other revenues for the City and related agencies.
In addition, the 1% LBID annual assessment for FY 2023 for physical improvements is estimated to generate the same $1,606,930, of which $1,077,042 is scheduled to be transferred to the Motor Vehicle Replacement Fund to support the loan repayment for the Pier Plaza and Pismo Preserve physical improvements.
Not passing this or a similar Resolution would preclude the Council from setting an Annual Assessment for the LBID for FY 2023, and thus preclude the LBID from generating an estimated $3,213,860 in Assessment Revenues in FY 2023, which could be used to promote the lodging businesses in Pismo Beach.
ALTERNATIVES:
1. Do not adopt the Resolution; do not levy an assessment in FY 2023.
2. Provide staff with other direction.
ATTACHMENTS:
1. Resolution
1.A Exhibit A to Resolution: CVB/LBID Advisory Board Annual Report for FY 2023
Prepared by: Meeting Date: April 19, 2022
Nadia Feeser, Administrative Services Director
Assistant City Manager Approval:
11.C-2Council Agenda 4-19-2022
RESOLUTION NO. R-2022-XXX
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PISMO BEACH,
CALIFORNIA LEVYING AN ANNUAL ASSESSMENT FOR THE PISMO BEACH LODGING BUSINESS IMPROVEMENT DISTRICT (LBID) FOR FISCAL YEAR 2023:
JULY 1, 2022 THROUGH JUNE 30, 2023
WHEREAS, the Parking and Business Improvement Area Law of 1989 (California Streets and Highway Code Section 36500 et seq.) authorizes cities to establish parking and business improvement areas for the purpose of imposing assessments on businesses for certain purposes; and
WHEREAS, the Pismo Beach City Council established the Pismo Beach Lodging Business Improvement District ("the District", "PBLBID", or "LBID") by the adoption of Ordinance No. O-2009-08; and
WHEREAS, as required by the California Streets and Highways Code Section 36533, the Pismo Beach Conference and Visitors Bureau/LBID Advisory Board has submitted an Annual Report to Council that outlines the activities of the District proposed for Fiscal Year (FY) 2023 (attached as Exhibit A), which was accepted by the City Council on April 5, 2022; and
WHEREAS, on April 19, 2022, the City Council conducted a public hearing to consider any protests against the levy of an annual assessment for the District, and such protests constituted less than fifty percent of the businesses to be assessed; and WHEREAS, pursuant to California Streets and Highways Code Section 36535(d), the City Council may adopt a resolution continuing the District and assessments from the current fiscal year without change.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Pismo Beach as follows:
Section 1. The City Council hereby approves the Annual Report for FY 2023, as submitted to the City Clerk by the CVB/LBID Advisory Board.
Section 2. Pursuant to the provisions of Section 36500 et seq. of the California Streets and Highways Code, City Council levies an annual assessment for the Lodging Business Improvement District for FY 2023. The assessment shall be calculated based upon 2% of the gross lodging revenues, as that term is defined in Pismo Beach Municipal Code Section 3.26.020(D).
Section 3. This Resolution is effective on its adoption.
11.C-3Council Agenda 4-19-2022
Attachment 1
UPON MOTION OF Council Member , seconded by Council Member , the foregoing resolution was adopted by the City Council of the City of Pismo Beach this 19th day of April 2022, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
RECUSED:
Approved: Attest:
________________________ ________________________
Ed Waage, Mayor Erica Inderlied, City Clerk
11.C-4Council Agenda 4-19-2022
Attachment 1
Pismo Beach Lodging Business Improvement District
Updated Annual Report and Business Plan for FY 2022-2023
Presented to the Pismo Beach City Council By the City Conference & Visitors Bureau / Lodging Business Improvement District Advisory Board
The City of Pismo Beach’s Conference & Visitors Bureau (CVB)/ Lodging Business Improvement District (LBID) Advisory Board at its meeting on March 16, 2022, completed its Pismo Beach Lodging Business Improvement District Updated Annual Report and Business Plan as required by Section 3.26.060 of the Pismo Beach Municipal Code.
Regarding the requirements for the Annual Report, as stated in Section 36533 of the California Streets and Highways Code:
1. The Pismo Beach Lodging Business Improvement District (LBID) Advisory Board did not propose any changes in the Boundaries of the LBID, which were established in Section 3.26.040 to be the boundaries of the City of Pismo Beach.
2. With the renewal of the LBID following adoption of Proposition 26, the purposes for which LBID assessments could be expended were more limited than when the LBID was initially established. As such, the improvements and activities to be provided for in Fiscal Year FY 2023 are those services and activities permitted under Section
3.26.030 of the Pismo Beach Municipal Code, which include:
A. The general promotion of lodging operations within the LBID shall include costs of programs and physical improvements as specified in the business plan to be adopted annually;
B. The marketing of conference, group, and vacation business that benefits the local lodging industry in the district;
C. The marketing of the LBID to the travel industry in order to benefit the local lodging industry in the district;
D. Administration of the LBID, including collection and enforcement of assessments.
The continuing initiatives proposed for the original 1% LBID Assessment for FY 2023 include the following: Following the Strategic Plan including smart tourism growth, collaborative partnerships, expanding the brand of Classic California, Wine and Waves and the current campaign of “The Drive is on to Pismo Beach” and ExperiencePismoBeach.com. This will be accomplished by following the 2023-2025 Marketing Plan with ongoing reviews at the CVB/LBID Advisory Board Meetings. Specific initiatives include emphasis on lodging packages, targeted advertising of the four-to-five- hour drive markets of both Southern and Northern California, Fresno, Bakersfield, Ventura County, and Santa Barbara County, as well as San Luis Obispo flight routes from Los Angeles, San Diego, Phoenix, Denver, Seattle, Dallas and San Francisco. Continue
11.C-5Council Agenda 4-19-2022
Attachment 1.A
cooperative advertising with the County Tourism Marketing District and other tourism partners, such as Central Coast Tourism Council and Visit California. There will be a continuing effort to promote off-season events that benefit the lodging industry in Pismo Beach and other marketing efforts with emphasis on all social media platforms. These efforts are designed to improve lodging occupancies, RevPAR and TOT taxes which benefit all the residents of Pismo Beach.
The physical improvements proposed for the additional 1% LBID Assessment for FY 2023 include paying down the loan to the Motor Vehicle Replacement Fund for the Pier Plaza and Pismo Preserve project, consistent with the original intent of the additional 1% for physical improvements. These efforts are designed to improve lodging occupancies, RevPAR and TOT taxes which benefit all the residents of Pismo Beach.
3.Estimated Costs for FY 2022 and FY 2023
FY 2022 Projected Actuals for Original 1% Assessment
•Sources: The FY 2022 projected actual total sources of $2,327,851, made up of $751,205 from fund balance carried over from the prior fiscal year, an estimated $1,575,420 from LBID assessment revenues, and a projected $1,226 in interest earnings and fees.
•Uses: The FY 2022 projected actual expenditures are $1,457,523. This total includes $121,976 for administrative costs and $1,335,547 for direct costs.
The following table shows: the FY 2022 budget and projected actuals for the original 1% assessment, followed by summary tables of the total uses by administrative costs, direct costs, and improvements and details on the direct costs.
11.C-6Council Agenda 4-19-2022
Attachment 1.A
The next tables summarize the total uses by administrative costs and direct costs, and provides the components of the direct costs.
Original 1% Assessment
Revised
Budget
Projected
Actuals
Variance
(Proj. -
Fund Balance 751,205$ 751,205$ -$
Revenues
1% LBID Assessment 1,575,420 1,575,420 -
LBID Penalty & Interest 1,226 1,226 - Total Sources 2,327,851$ 2,327,851$ -$
Uses
Overtime 158$ 158
Temporary Salaries 31,827$ 22,418 (9,409)
Benefits 2,791 3,403 612
Auditor 3,600 3,600 -
Legal 2,000 1,181 (819)
Cooperative Media 2,500 2,500 -
Travel & Meetings 10,000 10,000 -
Oper. Supplies & Maint 1,800 1,800 - Postage 500 500 -
Overhead 78,917 78,917 -
Advertising & Promotion 976,658 976,658 -
Purchased professional 91,389 91,389 -
LBID Audit costs 16,000 - (16,000)
Contributions 245,000 245,000 -
CA Welcome Center 20,000 20,000 -
Total Uses $1,482,982 $1,457,523 ($25,459)
Net Sources less Uses $844,868 $870,327 $25,459
FY 2022
Original 1% Assessment
Revised
Budget
Projected
Actuals
Variance
(Proj. -
Total Administrative Costs 131,435 121,976 (9,459)
Total Direct Costs 1,351,547 1,335,547 (16,000) Total Uses $1,482,982 $1,457,523 ($25,459)
Direct Cost Detail
TJA contract $1,068,047 $1,068,047 -
Other Contributions 265,000 265,000 -
Miscellaneous direct costs 2,500 2,500 - T otal Direct Costs $1,335,547 $1,335,547 -
FY 2022
11.C-7Council Agenda 4-19-2022
Attachment 1.A
FY 2022 Projected Actuals for 1% Assessment for Physical Improvements •Sources: The FY 2022 projected actual total sources of $(523,870), made up of $(2,100,515) from fund balance carried over from the prior fiscal year based on an interfund loan payable to the City’s Motor Vehicle Replacement Fund, an estimated $1,575,420 from LBID assessment revenues, and a projected $1,226 in interest earnings and fees.
•Uses: The FY 2022 projected actual expenditures are $358,888. This total includes:
$300,000 for the pedestrian connections under US interstate 101 at Spyglass; $36,000 to replace the beach playground equipment at Main Street and Addie Street, consistent with the original intent of the additional 1% for physical improvements; and $22,888 for the second interest payment on the interfund loan agreement. In addition, the principal on the interfund loan of $1,222,433 will be made this fiscal year.
The following table shows: the FY 2022 budget and projected actuals for the 1% assessment for physical improvements.
FY 2023 Proposed Actuals for Original 1% Assessment
•Sources: The FY 2023 projected actual total sources of $2,478,807, made up of $870,327 from fund balance carried over from the prior fiscal year, an estimated $1,606,930 from LBID assessment revenues, and a projected $1,550 in interest earnings and fees.
•Uses: The FY 2023 projected actual expenditures are $1,226,631. This total includes $135,381 for administrative costs and $1,091,250 for direct costs. 1% Assessment for Phsyical
Improvements
Revised
Budget
Projected
Actuals
Variance
(Proj. -
Budget)
Fund Balance (2,100,515)$ (2,100,515)$ -$
1% LBID Assessment for physical
improvements
1,575,420 1,575,420 -
Interest Earnings 1,550 - (1,550)
LBID Penalty & Interest - 1,226 1,226
Total Sources (523,545) (523,870) (324)
Uses
Spyglass pedestrian connection 300,000 300,000
Beach Playground equipment - Addie
St, Main St.
36,000 36,000
Loan Interest 22,888 22,888
Total Uses 358,888 358,888 -
Net Sources less Uses (882,433)$ (882,758)$ (324)$ Loan Repayment $1,222,433 $1,222,433 -
FY 2022
11.C-8Council Agenda 4-19-2022
Attachment 1.A
The following table shows: the FY 2023 projected actual sources and uses, followed by summary tables of the total uses by administrative costs, direct costs, and improvements and details on the direct costs.
The next tables summarize the total uses by administrative costs and direct costs, and provides the components of the direct costs.
FY 2023
Original 1% Assessment
Revised
Budget
Fund Balance 870,327$
Revenues
1% LBID Assessment 1,606,930
LBID Penalty & Interest 1,550
Total Sources 2,478,807$
Uses
Overtime
Temporary Salaries 31,827$
Benefits 2,791
Auditor 3,600
Legal 2,000
Cooperative Media 2,500
Travel & Meetings 10,000
Oper. Supplies & Maint 1,800
Postage 500
Overhead 82,863
Advertising & Promotion 884,900
Purchased professional 83,850
LBID Audit costs
Contributions 100,000
CA Welcome Center 20,000
Total Uses $1,226,631
Net Sources less Uses $1,252,176
FY 2023
Original 1% Assessment
Revised
Budget
Total Administrative Costs 135,381$
Total Direct Costs 1,091,250
Total Uses $1,226,631
Direct Cost Detail
TJA contract 968,750$
Other Contributions 120,000
Miscellaneous direct costs 2,500
Total Direct Costs 1,091,250$
11.C-9Council Agenda 4-19-2022
Attachment 1.A
FY 2023 Proposed Actuals for 1% Assessment for Physical Improvements •Sources: The FY 2023 projected actual total sources of $725,722, made up of $(882,758) from fund balance carried over from the prior fiscal year based on an interfund loan payable to the City’s Motor Vehicle Replacement Fund, an estimated $1,606,930 from LBID assessment revenues, and a projected $1,550 in interest earnings and fees.
•Uses: The FY 2023 projected actual expenditures include $10,664 for the third interest payment on the interfund loan agreement. In addition, the principal on the interfund loan of $1,066,378 will be made this fiscal year.
The following table shows: the FY 2023 budget and projected actuals for the 1% assessment for physical improvements.
As the revenues and expenditures in this report reflect projections, it is prudent to continue to monitor these items over the course of the fiscal year.
4.No change in the LBID method or basis of levying the assessment was proposed for FY 2023. More specifically, the CVB/LBID Advisory Board approved a motion to recommend that the 2% Assessment be continued in FY 2023.
5.The FY 2022 LBID budget for the original 1% assessment is projected to include a $870,327 surplus left over for carryover into FY 2023. The FY 2022 LBID budget for the 1% assessment for physical improvements is projected to include a $(882,758) deficit fund balance for carryover into FY 2023.
FY 2023
1% Assessment for Phsyical
Improvements
Revised
Budget
Fund Balance (882,758)$
1% LBID Assessment for physical
improvements
1,606,930
Interest Earnings 1,550
LBID Penalty & Interest -
Total Sources 725,722
Uses
Spyglass pedestrian connection -$
Beach Playground equipment - Addie
St, Main St.
-
Loan Interest 10,664
Total Uses 10,664
Net Sources less Uses 715,058$
Loan Repayment $1,066,378
11.C-10Council Agenda 4-19-2022
Attachment 1.A
6.The FY 2023 LBID Projected Actuals includes $3,100 in projected interest earnings, which comes from investments from the 2% assessment levied on transient rentals, and fund balance carried over from the prior fiscal year. The CVB/LBID Advisory Board did not recommend that any other contributions be budgeted for FY 2023.
11.C-11Council Agenda 4-19-2022
Attachment 1.A