PISMO BEACH CITY COUNCIL STAFF REPORT
Agenda Item #11.A
Meeting Date: April 15, 2025
TITLE:
Levying the 2% Annual Assessment for the Pismo Beach Lodging Business Improvement District (LBID) for Fiscal Year 2026: July 1, 2025 through June 30, 2026
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 2026: July 1, 2025 through June 30, 2026.
EXECUTIVE SUMMARY:
At its April 1, 2025 Meeting, the City Council adopted Resolution R-2025-014 approving the Conference Visitors Bureau (CVB)/Lodging Business Improvement District (LBID) Advisory Board’s Annual Report for Fiscal Year (FY) 2026; 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 15, 2025 to consider levying the assessment. The Resolution of Intention and Annual Report for FY 2026 were mailed to all lodging properties within the city on April 3, 2025, and a Notice of the April 15, 2025 hearing was published in the New Times, on April 3, 2025. After the public hearing, the Council may consider adoption of a resolution levying the LBID assessment for Fiscal Year FY 2026.
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 CVB/LBID Advisory Board’s Annual Report for FY 2026 and levying the LBID assessment for FY 2026.
The CVB/LBID Advisory Board’s Annual Report for FY 2026 is provided as Attachment
1.A to this staff report.
Alternatives
1. Do not adopt the resolution; do not levy an assessment in FY 2026.
2. Provide staff with other direction.
Council Agenda 4-15-2025 11.A-1
Conclusion and Recommendation
Staff recommends that the 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 2026: July 1, 2025 through June 30, 2026.
FISCAL IMPACT:
If the proposed FY 2026 Annual Report is approved, it is estimated that a 1% LBID annual assessment for FY 2026 would generate $1,371,000 in LBID Assessment Revenues in FY 2026 which, after $177,906 of administrative expenses, could be used to promote 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 2026 for physical improvements is estimated to generate the same $1,371,000. This assessment could be used to support visitor serving improvements.
Not adopting this or a similar Resolution would preclude the Council from setting an Annual Assessment for the LBID for FY 2026 and thus preclude the LBID from generating an estimated $2,742,000 in Assessment Revenues in FY 2026, which could be used to promote the lodging businesses in Pismo Beach.
ATTACHMENTS:
1. Resolution
1.A Exhibit A to Resolution: CVB/LBID Advisory Board Annual Report and Business Plan for FY 2026
Submitted by: Nadia Feeser, Administrative Services Director City Manager Approval:
Council Agenda 4-15-2025 11.A-2
RESOLUTION NO. R-2025-XXX
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PISMO BEACH, CALIFORNIA LEVYING A 2% ANNUAL ASSESSMENT FOR THE PISMO BEACH LODGING BUSINESS IMPROVEMENT DISTRICT (LBID) FOR FISCAL YEAR 2026:
JULY 1, 2025 THROUGH JUNE 30, 2026
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 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) 2026 (attached as Exhibit A), which was accepted by the City Council on April 1, 2025; and
WHEREAS, on April 15, 2025, 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 2026, as submitted to the City Clerk by the CVB/LBID Advisory Board (Exhibit A).
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 2026. 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.
Council Agenda 4-15-2025 11.A-3
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 15th day of April 2025, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
RECUSED:
Approved: Attest:
________________________ ________________________
Ed Waage, Mayor Erica Inderlied, City Clerk
IN WITNESS WHEREOF, I have hereunto set my hand on _______________________. ________________________
Erica Inderlied, City Clerk
Council Agenda 4-15-2025 11.A-4
Attachment 1
Pismo Beach Lodging Business Improvement District
Annual Report and Business Plan for Fiscal Year 2025-2026 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) Board at its meeting on March 19, 2025, 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) 2026 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 2026 include the following: Following the Strategic Plan including smart tourism growth, collaborative partnerships, expand brand initiatives and awareness and visitor and resident satisfaction with Pismo Beach. This will be accomplished by following the 2025-2028 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, Attachment 1.A
Council Agenda 4-15-2025 11.A-5
Phoenix, Denver, Seattle, Dallas and San Francisco. Continue 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. All advertising and marketing efforts will drive customers to the ExperiencePismoBeach.com website to select their lodging preference.
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 2026 include the Addie Street restroom improvements project and the Butterfly Grove Trail Signage project continued from FY 2024, plus visitor information center, stewardship banners, sponsorship or seed funding for events, Christmas decorations, beautification, Butterfly Grove parking crosswalk construction, beach cleaning equipment, lighting of ball fields, and a Downtown Strategic Plan update. 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 2025 and FY 2026
FY 2025 Projected Actuals for Original 1% Assessment
•Sources: The FY 2025 projected actual total sources of $2,114,705, made up of $707,097 from fund balance carried over from the prior fiscal year, an estimated $1,348,712 from LBID assessment revenues, and a projected $58,896 in interest earnings and fees. •Uses: The FY 2025 projected actual expenditures are $1,636,703. This total includes $145,310 for administrative costs and $1,491,393 for direct costs.
The following table shows: the FY 2025 projected actuals for the original 1% assessment, followed by summary tables of the total uses by administrative costs, direct costs, and improvements and details on the direct costs.
Attachment 1.A
Council Agenda 4-15-2025 11.A-6
The next tables summarize the total uses by administrative costs and direct costs, and provides the components of the direct costs.
FY 2025
Original 1%
Beginning Fund Balance 707,097$
Revenues
LBID Assessment Revenues 1,348,712
Interest Earnings 58,896
Total Revenues 1,407,608$
Total Sources 2,114,705$
Expenditures
SALARIES & WAGES 34,946
BENEFITS 7,800
PURCHASE PROFESSIONAL SVCS 130,166
TOT Audit 16,000
OTHER PURCHASED SERVICES 1,235,227
OPERATIONS & MAINTENANCE 2,300
OTHER EXPENSES 100,264
Sponsorships for Events 80,000
CalPoly Clam Study 30,000
Total Expenditures 1,636,703$
Net Revs - Exp (229,095)
Carryforward
Ending Fund Balance 478,002$
FY 2025
Original 1%
Administrative/Overhead 145,310$
Direct Costs 1,491,393$
Direct Costs
TJA Agreement 1,347,255$
Miscellaneous direct costs 34,138
CalPoly Clam Study 30,000
Contributions/Sponsorships
WSL SLO CAL Open at Pismo Beach 60,000
2024 Surfing for Hope Longboad Classic Event 20,000
Subtotal Contributions 80,000
Total Direct Costs 1,491,393$
Attachment 1.A
Council Agenda 4-15-2025 11.A-7
FY 2025 Projected Actuals for 1% Assessment for Physical Improvements •Sources: The FY 2025 projected actual total sources of $3,323,695, made up of $1,916,088 from fund balance carried over from the prior fiscal year, an estimated $1,348,712 from LBID assessment revenues, and a projected $58,896 in interest earnings and fees.
•Uses: The FY 2025 projected actual expenditures are $509,218. This total includes various direct costs as listed in the following table.
The following table shows the FY 2025 projected actuals for the 1% assessment for physical improvements.
FY 2026 Proposed Budget for Original 1% Assessment
•Sources: The FY 2026 preliminary proposed budget total sources of $1,864,166, made up of $478,002 from fund balance carried over from the prior fiscal year, an estimated $1,371,000 from LBID assessment revenues, and a projected $15,164 in interest earnings and fees.
•Uses: The FY 2026 preliminary proposed budget expenditures are $1,623,299. This total includes $177,906 for administrative costs and $1,445,393 for direct costs.
FY 2025
Physical
Improvements
Beginning Fund Balance 1,916,088$
Revenues
LBID Assessment Revenues 1,348,712
Interest Earnings 58,896
Total Revenues 1,407,608$
Total Sources 3,323,695$
Expenditures
Visitor Information Center 50,000
Stewardship Banner 25,000
Christmas Decorations 120,000
Annual Beautification 50,000
Pressure washer for expanded area 18,793
Maintenance Equipment to clean Promenade and
Restrooms 245,425
Total Expenditures 509,218$
Net Revs - Exp 898,389
Carryforward
Ending Fund Balance 2,814,477$
Attachment 1.A
Council Agenda 4-15-2025 11.A-8
The following table shows: the FY 2026 preliminary proposed budget 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 2026
Original 1%
Beginning Fund Balance 478,002$
Revenues
LBID Assessment Revenues 1,371,000
Interest Earnings 15,164
Total Revenues 1,386,164$
Total Sources 1,864,166$
Expenditures
SALARIES & WAGES 38,880
BENEFITS 3,977
PURCHASE PROFESSIONAL SVCS 130,166
OTHER PURCHASED SERVICES 1,235,227
OPERATIONS & MAINTENANCE 500
OTHER EXPENSES 134,549
Sponsorships for Events 50,000
CalPoly Clam Study 30,000
Total Expenditures 1,623,299$
Net Revs - Exp (237,135)
Carryforward
Ending Fund Balance 240,867$
FY 2026
Original 1%
Administrative/Overhead 177,906$
Direct Costs 1,445,393
Direct Costs
TJA Agreement 1,347,255$
Miscellaneous direct costs 18,138
CalPoly Clam Study 30,000
Contributions/Sponsorships 50,000
Subtotal Contributions -
Total Direct Costs 1,445,393$
Attachment 1.A
Council Agenda 4-15-2025 11.A-9
FY 2026 Proposed Budget for 1% Assessment for Physical Improvements •Sources: The FY 2026 preliminary proposed budget total sources of $4,200,641, made up of $2,814,477 from fund balance carried over from the prior fiscal year, an estimated $1,371,000 from LBID assessment revenues, and a projected $15,164 in interest earnings and fees.
•Uses: The FY 2026 preliminary proposed budget expenditures total $2,705,000, including various projects carried over from the previous fiscal year that were not completed. This total includes various direct costs as listed in the following table.
The following table shows the FY 2026 proposed budget for the 1% assessment for physical improvements.
As the revenues and expenditures in this report reflect projections, it is prudent to continue to monitor these items over the course of the fiscal year.
FY 2026
Physical
Improvements
Beginning Fund Balance 2,814,477$
Revenues
LBID Assessment Revenues 1,371,000
Interest Earnings 15,164
Total Revenues 1,386,164$
Total Sources 4,200,641$
Expenditures
Visitor Information Center 50,000
Stewardship Banner 20,000
Sponsorships for Events 50,000
FY24 Addie St Restroom Improvements 1,200,000
Christmas Decorations 25,000
Annual Beautification 50,000
Butterfly Grove Trail Signage 50,000
Butterfly Grove Parking Crosswalk 600,000
Beach Cleaning Equipment 100,000
Lighting of Ball Fields 60,000
Downtown Strategic Plan Update 500,000
Total Expenditures 2,705,000$
Net Revs - Exp (1,318,836)
Carryforward
Ending Fund Balance 1,495,641$
Attachment 1.A
Council Agenda 4-15-2025 11.A-10
4.No change in the LBID method or basis of levying the assessment was proposed for FY 2026. The CVB/LBID Advisory Board approved a motion to recommend that the 2% Assessment be continued in FY 2026.
5.The FY 2025 LBID budget for the original 1% assessment is projected to include a $478,002 surplus left over for carryover into FY 2026. The FY 2025 LBID budget for the 1% assessment for physical improvements is projected to include a $2,814,477 surplus left over for carryover into FY 2026.
6.The FY 2026 LBID Projected Actuals includes $30,328 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 2026.
Attachment 1.A
Council Agenda 4-15-2025 11.A-11