Agenda Item #12.1
For Council Meeting of: August 23, 2022
CITY OF SANTA ROSA
CITY COUNCIL
TO: MAYOR AND CITY COUNCIL
FROM: RAFAEL RIVERO, ECONOMIC DEVELOPMENT SPECIALIST
PLANNING AND ECONOMIC DEVELOPMENT DEPARTMENT
SUBJECT: SANTA ROSA TOURISM BUSINESS IMPROVEMENT AREA FISCAL YEAR 2021-2022 ANNUAL REPORT AND FISCAL YEAR 2022-2023 WORK PLAN AGENDA ACTION: RESOLUTION
RECOMMENDATION
It is recommended by the Planning and Economic Development Department that the Council, by resolution, accept the Santa Rosa Tourism Business Improvement Area Fiscal Year 2021-2022 Annual Report, approve the continuation of the annual assessment on Santa Rosa lodging businesses, and adopt the Fiscal Year 2022-2023 Budget and Work Plan.
EXECUTIVE SUMMARY
The Santa Rosa Tourism Business Improvement Area (SRTBIA) was established by Ordinance 3946 on August 3, 2010, creating an assessment district on Santa Rosa lodging establishments which funds a partnership program between the City of Santa Rosa and the Santa Rosa Metro Chamber. The 3% Assessment provides for efficient and complementary destination marketing, tourism and group sales, the operation and management of the California Welcome Center in Railroad Square, and other programs that contribute to community culture and destination vitality, as well as encourage overnight stays.
This item supports Council Goal 4, Promote Economic and Community Vibrancy, in that tourism is one of Sonoma County’s key industry sectors providing a substantial economic return to the City.
BACKGROUND
The SRTBIA was established by Santa Rosa Ordinance 3946 on August 3, 2010, creating a public-private partnership between the City of Santa Rosa, the Santa Rosa Metro Chamber, and Santa Rosa lodging businesses.
The SRTBIA is a 3% assessment paid by people staying at Santa Rosa lodging establishments. On a quarterly basis, the lodging establishments remit these funds to the City. After a 2% City administrative fee is deducted from the total funds remitted, the remaining 98% of the funds are disbursed as follows:
30% of the funds collected go to the City and is managed by the Economic Development Division of the Planning and Economic Development Department The remaining 70% goes to the Santa Rosa Metro Chamber for their Convention & Visitors Bureau and Welcome Center operations & services
Lodging businesses collecting the 3% assessment are those operating within the Santa Rosa city limits, and include hotels, motels, bed and breakfast inns, vacation rentals, and all similar lodging businesses.
The Assessment provides for efficient and complementary destination marketing, tourism and group sales, the operations and management of the California Welcome Center, and other programs and activities that contribute to community culture and destination vitality, as well as encourage overnight stays and support for tourism infrastructure.
The total percentage of assessments and taxes passed on to people staying at Santa Rosa lodging establishments is 14%. This consists of:
9% Transient Occupancy Tax (TOT)
2% Sonoma County Tourism Business Improvement District (pertinent only to lodging establishments with revenues of $350,000 or greater, and passed through to Sonoma County Tourism) 3% Santa Rosa Tourism Business Improvement Area
PRIOR CITY COUNCIL REVIEW
On July 27, 2010, the City Council, by Resolution No. 27690, appointed the Advisory Board for the Santa Rosa Tourism Business Improvement Area, consisting of one Santa Rosa Metro Chamber employee, One City of Santa Rosa employee, and three hotel operators, at least one of whom is employed by a full-service hotel, and one of whom is employed by a select-service hotel.
On August 3, 2010, the City Council, by Ordinance No. 3946, established the Santa Rosa Tourism Business Improvement Area.
On February 28, 2012, the City Council, by Resolution No. 28044, delegated authority for approval of all sponsorship invoices up to $10,000 to the Director of Economic Development and Housing, or his/her designee, and to the City Manager, or his/her designee, for amounts for $10,001 to $100,000.
On May 21, 2013, the City Council, by Resolution No. 28281, authorized the Economic Development and Housing Director to approve and execute agreements where the source of funds for such agreements are SRTBIA assessments, the funds will solely be used for the purposes stated in Santa Rosa City Code Section 6-56.290, and the purposes of the agreements are approved under the SRTBIA Work Plan, as approved annually by Council.
On July 11, 2017, the City Council, by Resolution No. RES-2017-124, accepted the Fiscal Year 2016-2017 Annual Report, approved the continuation of the annual assessment on Santa Rosa lodging businesses, and adopted the Fiscal Year 2017-2018 Budget and Work Plan.
On July 24, 2018, the City Council, by Resolution No. RES-2018-123, accepted the Fiscal Year 2017-2018 Annual Report, approved the continuation of the annual assessment on Santa Rosa lodging businesses, and adopted the Fiscal Year 2018-2019 Budget and Work Plan.
On July 23, 2019, the City Council, by Resolution No. RES-2019-111, accepted the Fiscal Year 2018-2019 Annual Report, approved the continuation of the annual assessment on Santa Rosa lodging businesses and adopted the Fiscal Year 2019-2020 Budget and Work Plan.
On August 18, 2020, the City Council, by Resolution No. RES-2020-140, accepted the Fiscal Year 2019-2020 Annual Report, approved the continuation of the annual assessment on Santa Rosa lodging businesses and adopted the Fiscal Year 2020-2021 Budget and Work Plan with modified conditions due to the Covid-19 outbreak.
On August 3, 2021, the City Council, by Resolution No. RES-2021-134, accepted the Fiscal Year 2019-2020 Annual Report, approved the continuation of the annual assessment on Santa Rosa lodging businesses and adopted the Fiscal Year 2020-2021 Budget and Work Plan with modified conditions due to the Covid-19 outbreak.
ANALYSIS
The Annual Report (Exhibit A) highlights activities and expenditures that have occurred during FY 2021-2022.
Following another challenging year, the long-term outlook for the local tourism industry is positive with steady growth and tremendous optimism. Despite a rough start in 2022 with the omicron variant, an increase in vaccination rates and a drastic drop in serious infections have signaled the return of visitors and positive travel trends.
As the recovery phase continues, some modifications to the Work Plan may still be required. Programs and projects will adhere to mitigation practices and safety protocols based on local and any future statewide Health Orders.
SRTBIA programs, projects, and activities are managed by the City’s Economic Development Division and the Chamber’s Visit Santa Rosa program and focus on:
Increasing awareness of Santa Rosa as a visitor destination through public relations, marketing, and social media campaigns.
Offering a visitor destination and local pride campaign designed to highlight the city as the urban center of Sonoma County.
Maximizing the effective use of SRTBIA funds through a coordinated work plan.
Conducting group sales that position Santa Rosa as the best place for conferences, reunions, sports tournaments, and tour planners.
Attracting new events that support the niche travel markets such as food and wine, arts and culture, craft breweries, Pride Week, cycling and sports.
The SRTBIA Advisory Board met on July 28, 2022, approving the attached Annual Report and recommending approval by Council.
TOT and SRTBIA revenues have shown a steady improvement during the last three quarters in 2021 compared to the prior year.
One new downtown hotel offering 36 rooms opened its doors to guests in the third quarter of the year. Two other hotels went through anticipated renovations and have been fully operational. All hotels returned to the active inventory stock in 2021, with the exception of one which was purchased by the County of Sonoma for the purpose of providing shelter to residents experiencing homelessness.
In accordance with the Parking and Business Improvement Area Law of 1989, Section 36500 et seq. of the California Streets and Highways Code, the attached annual report includes the following:
Changes to boundaries: No changes recommended.
Improvements and activities to be provided for the upcoming fiscal year: Outlined in the attached report.
Changes to the method and basis of levying assessments: No changes recommended.
Estimated cost of providing the improvements and activities: Outlined in the attached report.
The amount of any surplus or deficit revenues to be carried forward: Outlined in the attached report.
Amount of contributions made from sources other than assessments for Visit Santa Rosa (VSR):
$15,500 – County of Sonoma Welcome Center funding
$13,250 – Other
FISCAL IMPACT
Approval of this action does not have a fiscal impact on the General Fund.
ENVIRONMENTAL IMPACT
This action is exempt from the California Environmental Quality Act (CEQA) because it is not a project which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, pursuant to CEQA Guidelines Section 15378.
BOARD/COMMISSION/COMMITTEE REVIEW AND RECOMMENDATIONS
The SRTBIA Advisory Board met on July 28, 2022 and approved the attached Annual Report and Work Plan, recommending approval by Council.
NOTIFICATION
Not applicable.
ATTACHMENTS
Resolution
Exhibit A – Santa Rosa Tourism Business Improvement Area Annual Report for Fiscal Year 2021-2022 and Work Plan for Fiscal Year 2022-2023
CONTACT
Rafael Rivero, Economic Development Specialist
Tel. (707) 543-3460
[email protected]
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