City of Sacramento
City Council Report
915 I Street, 1st Floor
Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2022-00316 8/23/2022 Consent Item 14.
Fiscal Year (FY) 2022/23 Sacramento Tourism Infrastructure District - Annual Proceedings File ID: 2022-00316
Location: Citywide.
Recommendation: Adopt a Resolution approving the Sacramento Tourism Infrastructure District (District) Annual Report for Fiscal Year (FY) 2022/23.
Contact: Sini Makasini, Development Project Manager, (916) 808-7967, [email protected]; Sheri Smith, Special Districts Manager, (916) 808-7204 [email protected], Department of Finance
Presenter: None.
Attachments:
1-Description/Analysis
2-Resolution
3-Exhibit A, District Map
4-Exhibit B, District Budget & Business Assessment
5-Exhibit C, Annual Report FY2022-23
Description/Analysis
Issue Detail: On October 30, 2018, Council approved the formation of the District by Resolution No. 2018-0419, whereby assessments would be used to pay debt service on the bonds or other obligations issued or incurred by the City for construction of the ballroom portion of the Sacramento Convention Center expansion, which was designed to increase overnight tourism and increase the desirability of the Sacramento Convention Center as a tourist, meeting and event destination, thereby increasing room night sales for the assessed lodging businesses. The Convention Center expansion project was completed in early 2021. California Streets and Highways Code section 36650(c) requires that an Annual Report be filed with the City Clerk for Council approval. The Annual Report is attached as Exhibit C to the Resolution.
City of Sacramento Page 1 of 3
File ID: 2022-00316 8/23/2022 Consent Item 14.
Visit Sacramento, as the owners’ association for the District, has prepared the Annual Report (Report) for FY2022/23, which is also on file with the Department of Finance Infrastructure Finance Division designated by the City Clerk as the custodian of such records. The District was formed under the Property and Business Improvement Law of 1994. The Report addresses the proposed budget, annual assessment, and improvements to be funded. The Report does not change the District boundaries, the rate and methodology of assessment, the scope of services, or any other aspect of the District’s legal structure as established in the Management District Plan approved at the formation of the District.
Policy Considerations: The actions in the recommended resolution are required by the Property and Business Improvement Law of 1994 (California Streets and Highways Code section 36600 et seq.)
Economic Impacts: Not applicable.
Environmental Considerations:
California Environmental Quality Act (CEQA): Administration of assessment districts does not constitute a project under CEQA because it involves continuing administrative or maintenance activities and organizational or administrative activities that will not result in direct or indirect physical changes in the environment. [14 Cal. Code Regs. §15378(b)(2) & (5))].
Sustainability: Not applicable.
Commission/Committee Action: None.
Rationale for Recommendation: Approval of the Annual Report is required by state law.
Financial Considerations: Financing is provided by the levy of assessments upon lodging businesses within the District that benefit from the Sacramento Convention Center expansion. The City issued bonds in the amount of $50.4 million for the Convention Center ballroom project and District assessment revenue is used to pay debt service on the bonds or other obligations issued or incurred by the City for the ballroom. The operating budget for the District may fluctuate with market conditions and room night sales and may be adjusted annually to reflect approved Council assessments and expenditure plans.
The total District annual budget for FY 2022/23 is anticipated to be approximately $3,584,191.
Approximately 88% of the budget will be funded from revenues collected within the City ($3,161,256) and 11% from the unincorporated area of Sacramento County ($422,934).
The Budget amount is derived from the District’s Management District Plan and does not reflect the City of Sacramento Page 2 of 3
File ID: 2022-00316 8/23/2022 Consent Item 14.
adverse impacts of COVID-19. Budget details are provided in Exhibit B to the Resolution. The District is self-supporting and has no impact to the General Fund.
Local Business Enterprise (LBE): Not applicable.
City of Sacramento Page 3 of 3
RESOLUTION NO. 2022-
Adopted by the Sacramento City Council
August 23, 2022
Resolution Approving the Annual Report for the Sacramento Tourism Infrastructure District for Fiscal Year 2022/23
BACKGROUND
A. Sacramento lodging business owners within the boundaries of the Sacramento Tourism Infrastructure District No. 2018-04 (District), petitioned the City of Sacramento (City) to establish the District, as a business improvement district, by which the assessments collected would be used to pay debt service on the bonds or other obligations issued or incurred by the City for construction of the ballroom portion of the Sacramento Convention Center expansion, designed to increase overnight tourism and increase the desirability of the Sacramento Convention Center as a tourist, meeting and event destination, thereby increasing room night sales for the assessed lodging businesses.
On October 30, 2018, by Resolution No. 2018-0419, City Council approved the establishment of the District, depicted in Exhibit A, for a term of no more than (40) years from the date of issuance of the first series of bonds.
B. The City Council established the District under the Property and Business Improvement District Law of 1994 (California Streets and Highway Code, Sections 36600 et seq.) (PBID Law) and has previously levied assessments on businesses in the District to pay for improvements to be provided within the District, in accordance with the PBID Law.
C. Expenditures of the District have assisted in paying debt service for the ballroom portion of the Sacramento Convention Center expansion, with the intention to increase tourism and room night sales within the District’s boundaries. All improvements are as defined within the Annual Report and by reference made a part of this resolution. The Annual Report is attached to this resolution as Exhibit C and is also on file with the Infrastructure Finance Division of the Finance Department, which the City Clerk has designated as the custodian of such records.
D. The Fiscal Year (FY) 2022/23 rate and methodology of assessment is not changed from the prior year.
D. Pursuant to California Streets and Highways Code section 36650(c), City staff is seeking City Council approval of the Annual Report.
BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE CITY COUNCIL RESOLVES AS FOLLOWS:
Section 1. The City Council finds and determines that Background statements above are true and correct.
Section 2. The City Council finds and determines that the businesses within the District specifically benefit from the improvements funded by the proposed assessment, as described in the Annual Report.
Section 3. The City Manager or City Manager’s designee is authorized to make any necessary budgetary adjustments associated with the District budget for FY2022/23 as shown on Exhibit B.
Section 4. The annual budget and assessments as set forth in the FY2022/23 Annual Report (attached hereto as Exhibit C) are confirmed, and the Annual Report is hereby approved.
Section 5. Exhibits A, B, and C are part of this resolution.
Table of Contents:
Exhibit A: District Map
Exhibit B: FY2022/23 District Budget & Business Assessment Exhibit C: Annual Report FY 2022/23
Exhibit A
Exhibit B
SACRAMENTO TOURISM INFRASTRUCTURE
BUSINESS IMPROVEMENT DISTRICT (FUND 2253)
FY2022/23 DISTRICT BUDGET & BUSINESS ASSESSMENT
Estimated Beginning Fund Balance -
Total Assessed to Business Owners 3,584,191
Total Resources $3,584,191
Authorized Expenditures:
Debt Service on Bonds Issued to Finance
Improvements TBD
Administrative Costs TBD
Total Expenditures $3,584,191
Estimated Ending Fund Balance -
Year-Over-Year Change in Fund Balance -
Business Assessment
Annual assessment rate is 1% of gross short-term room rental revenue
Sacramento Tourism Infrastructure District
Fiscal Year 2022-23
Annual Report
Developed by Visit Sacramento, the Sacramento Tourism Infrastructure District (STID) is an assessment district proposed to provide specific benefits to payors, by providing funding for capital improvements and other infrastructure project and marketing (if funds allow) designed to increase room night sales for assessed businesses.
The STID is administered by Visit Sacramento in conjunction with an STID Tourism Committee consisting of the following members:
• Rick Jennings, Councilmember District 7
• Howard Chan, Sacramento City Manager
• Michael Ault, Executive Director, Downtown Sacramento Partnership • Nikki Carlson, General Manager, Kimpton Sawyer Hotel
• David Huber, General Manager, Wyndham Sacramento
• Sami Qureshi, General Manager, Hilton Arden West
• Jeroen Gerrese, General Manager, Sheraton Grand Hotel Sacramento • Doug Warren, General Manager, Marriott Village Cal Expo • Mike Testa, President & CEO, Visit Sacramento
Location
The STID includes all lodging businesses, existing and in the future, available for public occupancy within the boundaries of the City of Sacramento and the unincorporated areas of the County of Sacramento. A boundary map is attached as Exhibit A.
Assessment Rates
The annual assessment rate is one percent (1%) of gross short-term room rental revenue. Based on the benefit received, assessments shall not be collected on stays of more than thirty (30) consecutive days. The assessment shall apply to room rental revenue from all stays which are on a transient basis; a stay is considered to be on a transient basis until thirty (30) consecutive room night stays have elapsed.
For Fiscal Year 2022/23, the assessments collected from lodging businesses within the STID will be used to pay debt service on the bonds or other obligations issued or incurred by the City to finance capital improvements specified in the MDP, including the ballroom portion the Sacramento Convention Center expansion. Expansion of the Convention Center was completed in early 2021 and was designed to increase overnight tourism and increase the desirability of the Sacramento Convention Center as a tourist, meeting and event destination, thereby increasing room night sales for assessed lodging businesses.
Budget
The total STID annual budget for Fiscal Year 2022-23 is anticipated to be approximately $3,584,191.
Approximately 88.2 percent of the budget will be funded from revenues collected within the City ($3,161,256.46) and 11.8 percent from the unincorporated area of Sacramento County ($422,934.54).
Budget number from STID MDP and then used same percentage breakdown as this year’s STMD Estimate.
Improvements
The capital improvements and debt service portion of the budget will be used to fund capital improvements designed to increase room night sales for assessed businesses. The focus of the capital improvements program is to fund a portion of the planned expansion to the Sacramento Convention Center, specifically the construction of a ballroom, designed to increase overnight tourism and increase the desirability of the Sacramento Convention Center as a tourist, meeting and event destination, thereby increasing room night sales for assessed lodging businesses.
EXHIBIT A
STID Boundary Map
BUSINESS IMPROVEMENT DISTRICT
ANNUAL REPORT CHECKLIST
FY
BID NAME: CONTRACT #
AUTHORITY
(CS&H Code Section) REQUIREMENT PAGE
FOUND
36650(b) Specify BID name
-Does the BID name exactly match the previous year’s BID name? (Check one) YES NO 36650(b) Specify fiscal year to which report applies
36650(b)(1) Any proposed changes in the boundaries
36650(b)(1) Any proposed changes in any benefit zones
-Do the boundaries and benefit zones exactly match the previous year? (Check one) YES NO (If not, describe change(s) in the NOTES section)
36650(b)(2) The improvements and activities for that fiscal year -Are the improvements and activities in line with the Original MDP? (Check one) YES NO 36650(b)(3) An estimate of the cost of providing the improvements and activities for that fiscal year
- How does the overall budget compare to last year? (Check one) HIGHER SAME LOWER - What is the greatest change (by percentage) between line items from last year to this year ______ 36650(b)(4)
The method of levying the assessment in sufficient detail to allow each real property owner/business owner to estimate the amount of the assessment to be levied against his or her property for that fiscal year 36650(b)(4)
The basis of levying the assessment in sufficient detail to allow each real property/business owner to estimate the amount of the assessment to be levied against their business/property for that fiscal year -Does the Method and Basis match the MDP? (Check one) YES NO -Is there a CPI increase for this year? (Check one) YES NO - If so: What is the rate? _______
36650(b)(5) The amount of any surplus revenues to be carried over from a previous fiscal year
-Is the surplus identified for use in specific categories? (Check one) YES NO if yes, What category(ies) ____________________________________________ 36650(b)(5) The amount of any deficit revenues to be carried over from a previous fiscal year 36650(b)(6) The amount of any contributions to be made from sources other than assessments levied pursuant to this part
-Are the contributions identified for use in a specific category? (Check one) YES NO -Did an authorized representative of the nonprofit Board sign the report? (Check one) YES NO -Does the report state the date the Board approved the Report/Budget? (Check one) YES NO NOTES: