City Council
Report
City Council Meeting: July 9, 2024
Agenda Item: 5.B
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To: Mayor and City Council
From: David Martin, Director, Administration
Subject: Approval of the Santa Monica Tourism Marketing District Fiscal Year 2024-25 Budget and Work Plan
Recommended Action
Staff recommends that the City Council:
1. Approve the Santa Monica Tourism Marketing District Fiscal Year 2024-25 Budget and Work Plan; and,
2. Adopt a finding of no possibility of significant effect pursuant to Section 15061(b)(3) of the California Environmental Quality Act (CEQA) Guidelines.
Summary
Tourism is essential to the City’s vitality and economic recovery. In 2012, in partnership with local hotels, Santa Monica Travel and Tourism (SMTT) established the Santa Monica Tourism and Marketing District (SMTMD). The purpose of the SMTMD is to increase overnight room sales with targeted marketing and promotions. Funding for the marketing programs and activities of the SMTMD are derived from assessments and revenues collected from the hotels operating within the boundaries of the SMTMD. The attached SMTMD Annual Report (Annual Report) summarizes the SMTMD’s proposed programs and activities for upcoming Fiscal Year 2024-25, including the SMTMD budget, hotel report, and marketing plan.
Staff recommends that Council review and approve the Annual Report in accordance with the State laws governing tourism marketing districts.
Discussion
Under Streets and Highway Code Section 36650, the Santa Monica Tourism and 2 of 5
Marketing District (SMTMD) is required to prepare Annual Reports providing the following information:
• Any proposed changes to the boundaries of the tourism marketing district or to any benefit zones or classification within the district, • The improvements, maintenance, and activities for that fiscal year, • An estimate of the cost of providing the improvements, maintenance, and activities for that fiscal year,
• The method and basis of levying the assessment in sufficient detail to allow each real property or business owner, as appropriate, to estimate the amount of the assessment to be levied against his or her property or business for that fiscal year,
• The estimated amount of any surplus or deficit in revenues to be carried over from a previous fiscal year,
• The estimated amount of contributions to be made from sources otherthan assessments levied pursuant to this part.
In accordance with Section 36650, the SMTMD has submitted its FY 2024-2025 SMTMD Annual Report (Attachment A), including the work plan and budget for Council approval. The following overview summarizes the proposed expenditures to be funded with SMTMD assessments in the upcoming fiscal year.
SMTMD Reporting Year FY 2024-25
Revenues
Estimated TMD Assessments 6,651,742
Bank Interest 1,800
Total Revenues* $6,653,542
Expenditures
Cost of Programs
Travel Industry Sales 1,550,000
Marketing 1,125,848
Visitor Services
Meetings, Incentives, Conferences,
and Exhibitions
125,000
300,000
Client Services
Public Relations
75,000
226,000
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General and Administrative Services 665,000
Salaries & Benefits 2,192,922
Contingency Fund 332,587
Fixed Asset 61,185
Total Expenses $6,653,542
Estimated Carry-over from Previous Fiscal Year $0
Estimated In-Kind Contributions $220,000
* This does not include $2,994,004 in City funding included in the FY 2024-25 Proposed Budget for a services agreement with SMTT that the City provides SMTT annually to continue SMTT’s tourism and marketing programs, operate Visitors Centers, produce collateral materials, create brand awareness, and promote Santa Monica through print and social media.
The SMTMD expenditures and services for FY 2024-25 are budgeted at $6,653,542 to focus on recovery and destination promotion to serve as a catalyst for economic recovery. The attached annual work plan reflects the initiatives and programs focused on five strategic areas:
1. Drive Balanced Demand for the Destination
2. Enhance the Brand and Steward the Destination Experience
3. Champion the Value of Tourism
4. Strengthen Strategic Partnerships and Relationships
5. Ensure Operational Excellence
The FY 2024-25 workplan continues to leverage Visit California and Los Angeles Tourism & Convention Board’s efforts. The core goals of the workplan will continue to focus on strengthening and enhancing Santa Monica as a brand, marketing and promoting Santa Monica as a tourism destination, increasing occupancy, establishing partnerships within the tourism community, private sector, and government entities to position Santa Monica as a filming destination, and expanding a presence in emerging markets. With that lens, SMTT will continue to reach and extend its presence into key domestic markets as well as explore opportunities to tap potential growth markets such as Mexico, Scandinavia, and China to ensure Santa Monica is well positioned to attract a balance and wide range of visitors. 4 of 5
The proposed FY 2024-25 budget was approved by the Tourism Marketing District Committee and the Santa Monica Travel and Tourism (SMTT) Board of Directors at a joint meeting on May 29, 2024. Council may approve the annual report or may modify any section contained in the annual report and approve it as modified. As the assessment formulas in the SMTMD remain as approved in 2017, staff recommends Council approve the attached Annual Report.
Past Council Actions
Meeting Date Description
Attachment A - 6/13/2023 Council approved the Annual Report for FY 2023-24 (Calendar Year 2024) representing the sixth report for
the SMTMD renewal term.
Attachment B - 11/1/2016 Council adopted Resolution 11005 (CCS) extending the SMTMD by nine and one-half years beginning on
January 1, 2018, through June 30, 2027.
Attachment C - 12/11/2012 Council adopted Resolution No. 10722 (CCS) establishing the Santa Monica Tourism Marketing
District (SMTMD).
Attachment D FY 2024-2025 SMTMD Annual Report
Environmental Review
The SMTMD’s FY 2024-25 workplan is exempt from CEQA pursuant to Section 15061(b)(3) of the CEQA Guidelines which states that CEQA does not apply, “where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment.” The workplan establishes the programs and services of the SMTMD. Therefore, it can be seen with certainty that actions would not result in adverse physical impacts on the environment, and as such, is categorically exempt from CEQA.
Financial Impacts and Budget Actions
There is no immediate financial impact or budget action necessary as a result of the recommended action.
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Prepared By: Nia Tang, Senior Development Analyst
Approved Forwarded to Council
Attachments:
A. Attachment A. 06/13/2023 Staff Report
B. Attachment B. 11/01/2016 Staff Report
C. Attachment C. 12/11/2012 Staff Report
D. Attachment D. 2024 - 2025 SMTMD Annual Report