CITY OF SIMI VALLEY
MEMORANDUM
June 3, 2024
TO: City Council
FROM: Office of the City Manager
SUBJECT: A PUBLIC HEARING TO RECEIVE PROTESTS FROM SIMI VALLEY
LODGING BUSINESSES REGARDING THE RENEWAL OF THE SIMI
VALLEY TOURISM MARKETING DISTRICT (SVTMD), CONSIDERATION
OF ADOPTION OF A RESOLUTION TO RENEW THE SVTMD AND
SECOND READING OF ORDINANCE NO. 1356
STAFF RECOMMENDATION
It is recommended the City Council:
1. Conduct a public hearing to receive protests from Simi Valley Lodging Businesses and determine if less than 50% of the lodging businesses protest the renewal of the Simi Valley Tourism Marketing District (SVTMD); and
2. Consider adoption of Resolution 2024-18 (page 10) declaring the results of a majority protest proceeding and establishing the SVTMD.
3. Conduct a second reading of Ordinance No. 1356 (page 16) to effectuate renewal of the SVTMD and to continue the levy of assessments.
BACKGROUND AND OVERVIEW
On June 9, 2014, the City created the Simi Valley Touri sm Marketing District for a five (5) year term, from July 1, 2014 through June 30, 2019 and subsequently renewed the District for an additional five years through June 30, 2024. The SVTMD raises revenue through an additional charge (an assessment) on room nights at lodging locations within the City limits, with all proceeds to be spent to inc rease business to those assessing the additional charge. The District provides a revenue source to help fund marketing and sales promotion efforts for Simi Valley lodging businesses and provides a stable funding source for tourism promotion.
The administration of the SVTMD is the responsibility of the Simi Valley Chamber of Commerce through a contract with the City. On April 15, 2024, the City Council received petitions from all six of the Simi Valley lodging businesses requesting the City to renew the District for a ten (10) year term beginning July 1, 2024 through
AGENDA ITEM NO.
5A
2 June 3 0, 2034 and adopted a Resolution of Intention to renew the District . As required by law, the City conducted a public meeting on May 6, 2024 to receive comments from the public regarding the renewal of the SVTMD. To effectuate the renewal, staff subsequently introduced Ordinance No. 1356 at the conclusion of the public meeting. The final step of the SVTMD’s reformation, also required by law, is to hold a public hearing for the City Council to receive protests from the Simi Valley lodging businesses and to take final action to renew the District . This action is taking place this evening.
Should less than 50% of the lodging businesses protest this evening, the City Council may move forward and adopt a resolution to renew the Simi Valley Marketing District and subsequently conduct a second reading of Ordinance No. 1356.
FINDINGS AND ALTERNATIVES
Background of Districts
Throughout California, over eighty municipalities have formed Districts in order to provide a stable funding source for tourism marketing. In 1994, the California Legislature passed the Property and Business Improvement District Law of 1994 (1994 State Law). This law allows for the cre ation of special benefit assessment districts (Districts) to raise funds within a specific geographical area with the purpose of providing information and promoting activities that benefit real property or business within the District. One method to raise funds is by the assessment of an additional charge, either a percentage of the room rate or a flat amount, on all room nights at hotels and motels located within the boundary of the District. All funds raised within the District are returned to a private, non- profit corporat ion charged with governing the D istrict. Funds generated through the assessment must be used for activities and programs that benefit the assessed businesses, i.e. by increasing room night sales.
The driving force to form a District is normally through a request from the businesses that will be subject to the assessment, in this case, the lodging businesses. As only cities and counties are allowed to form such Districts, requests for the formation of a District are made to the local legislative body. The legislative body then follows the process dictated by the 1994 State law to form a District.
The sales and marketing of the District will have a central theme of promoting the community as a desirable place for lodging. Some of the typical activities of a District include, but are not limited to:
• Internet marketing to increase awareness and optimize internet presence for lodging businesses;
• Advertisements on television, radio, magazines, and newspapers; • Attendance at trade shows and professional industry conferences; • Sales promotions;
3 • Familiarization tours;
• Use of collateral material such as brochures, flyers, and maps; • Lead generation activities to attract tourism and group events; • Education of hospitality staf f at lodging businesses to create positive visitor experiences; and
• Education of management at lodging businesses on marketing strategies.
Locally, the cities of Oxnard, Camarillo, Port Hueneme and Ventura jointly formed a District, named Ventura County Tourism Business District and assess a charge of 2% of the gross short term (less than 31 days) room rental rate at all hotels, motels, RV parks, and inns located within the District boundary (which is defined as the City limits of the four cities). Addit ionally, the cities of Thousand Oaks and Agoura Hills jointly formed a District, Conejo Valley Tourism Improvement District, which assesses a charge of 2% per gross room rental (less than 31 days) . Other nearby jurisdictions that have formed Districts include Santa Clarita (2% of gross room rate), Burbank (1% of gross room rate), Lancaster (3% of gross room rate), Pasadena (2.89% of gross room rate), Torrance (1% of gross room rate), Santa Monica ($2.10 - $6.75 per occupied room per night), Long Beach (3% of gross room rate), West Hollywood (3% of gross room rate), and Los Angeles (1.5% of gross room rate).
On June 9, 2014, the City created the SVTMD by resolution for a five (5) year term, from July 1, 2014 through June 30, 2019. The administration of the District is the responsibility of the Si mi Valley Chamber of Commerce through a contract with the City. Prior to expiration of the term and at the request of the Simi Valley lodging businesses, the City Council renewed the District by resolution for an additional five (5) years, for the period beginning July 1, 2019 through June 30, 2024. As the term for the District is set to expire June 30, 2024, the Simi Valley Chamber of Commerce has received input from several lodging businesses regarding the renewal of the District i n Simi Valley . Subsequently, City representatives and the Chamber of Commerce engaged in discussions regarding the process to renew the District for a ten year term beginning July 1, 2024 through June 30, 2034. This effort will continue to create a revenue stream to increase tourism and room nights at the s ix lodging locations (Best Western Posada Royale; Grand Vista; Courtyard By Marriott; Holiday Inn Express; Motel 6; and Extended Stay America) in the community. While the main focus of a District tends to be the increase in tourism lodging (general vacation/visitation, youth/sports tournaments, family visits), the Chamber of Commerce and its lodging members are also cognizant of the amount of room nights created by business travelers.
Another growth area noted by Simi Valley lodging businesses is the wedding and special occasion market. Additionally, the Ronald Reagan Presidential Library and Museum in addition to tourism, and Hummingbird Nest Ranch, provide for opportunities to bring conference, business retreat, and convention travel to the Simi Valley community.
Successfully marketing Si mi Valley as a venue for these and other activities will generate additional room nights at Simi Valley lodging businesses.
4 The Chamber of Commerce has contracted with Civitas Advisors, a Sacramento based company with extensive experience in forming Districts, to assist with the new Management District Plan for the District. Civitas Advisors assisted in the District formation process and prepared the requisite Management District Plan for the initial and current five year term (2019 – 2024).
A successful District would likely translate to increased revenue to the City through an increase in Transient Occupancy Tax. Additionally, increasing room nights has a secondary effect wherein restaurants, auto rental businesses, fuel stations, photographers and event planners, and general retail businesses can see an increase in business. Thes e transactions at local businesses would also generate additional sales tax revenue to the City.
Proposed Simi Valley Tourism Marketing District
As required by the 1994 State Law, all Districts must have a Management District Plan (MDP) which acts as the governing document for the District. The MDP details the reasons for the District, the boundary of the District, governance of the District, and a proposed budget. As the boundary of the proposed District would be the Simi Valley City limits, any lodging business that opens after the formation of the District would be subject to the District.
The 1994 State Law provides that a District is operated through an owners’ association.
As proposed in the MDP submitted by Simi Valley Lodging Businesses (Attachment B, page 28), the Chamber of Commerce will act as the owners’ association of the District.
To carry out the activities and programs of the District, the Cham ber of Commerce will utilize its standing advisory committee known as the Simi Valley Tourism Alliance (SVTA).
The SVTA will be responsible for developing and approving marketing, promotional activities, and the program budget for the District and the Chamber of Commerce will be responsible for the implementation of the SVTA’s budget and activities. The SVTA shall be composed of a majority of representatives of the assessed lodging businesses and at least one (1) representative of the City of Simi Valley designated by the City Council.
The 1994 State Law considers the owners’ association a legislative body and is therefore subject to the Ralph M. Brown Act and the California Public Records Act. As such, all activities and meetings of the Chamber of Commerce Board of Directors, as it relates to the District activities, and activities and m eetings of the District, must be in compliance with the Brown Act. Additionally, the 1994 State Law requires the Chamber of Commerce to provide an annual report to the City Council at the end of each year of operation of the SVTMD.
The following are the key provisions of the District as provided for in the MDP:
• Assessment of 2% of gross short term room rental revenue for all rooms at lodging businesses in Simi Valley.
• Funds will be used for marketing and sales promotions to increase room nights and to market Simi Valley lodging businesses.
5 • District will be in place for ten years (July 1, 2024 – June 30, 2034). • City shall collect the assessment from the lodging businesses and transfer the funds to the Simi Valley Chamber of Commerce, who will serve as the owners’ association of the lodging businesses.
• The City shall receive 1% of the total collections as reimbursement for City services.
• The District shall be known as the Simi Valley Tourism Marketing District.
Based on the reported room revenue by the Simi Valley lodging businesses, it is anticipated that the SVTMD will generate $400,000 annually. The MDP proposes a first year annual budget as follows:
• Sales, Marketing & Operations (76%) $304,000
• Administration (20%) $ 80,000
• Contingency/Renewal Account (3%) $ 12,000
• City Collection Fee (1%) $ 4,000
TOTAL $400,000
The City will collect the assessment from the lodging businesses at the same time that the City collects the Transient Occupancy Tax from the businesses. As part of the District and noted above, the City receives 1% of the District collections to offset its administrative costs. The City would forward the assessment collected, less 1%, to the Chamber of Commerce for programs and activities of the SVTMD.
City Council Actions to Form the District
The first step to renewing a District is for the lodging businesses within the proposed boundary of the District to petition the City to renew a District. Upon the submission of the written petitions signed by the business owners in the proposed District who will pay more than 50% of the assessments proposed to be levied, the City Council may initiate proceedings to renew the District by adopting a Resolution of Intention. The Resolution of Intention declares the City’s intention to renew a District and sets a time and place for a public hearing to receive testimony regarding the District.
On March 21 and April 5, 2024, the Chamber of Commerce submitted to the City petitions (Attachment A, page 22) from all six of the Simi Valley lodging businesses totaling 100% of the lodging businesses . These petitions request the City Council to initiate special assessment proceedings to form a District in accordance with the 1994 State Law.
On April 15, 2024, the City Council accepted the signed petitions from Simi Valley Lodging Businesses and adopt ed a Resolution of Intention which declared the City’s intent to renew the Simi Valley Tourism Marketing District.
On May 06, 2024, the City Council conducted a public meeting to receive comments from the public regarding the reformation of the Simi Valley Tourism Marketing District and 6 introduced Ordinance No. 1356, which effectuated the District’s renewal. There were no submitted Speaker Cards in favor or against this agenda item.
The final step in the renewal of the District is a public hearing to receive protests regarding its reformation. At this public hearing, lodging businesses may protest the renewal of the Simi Valley Tourism Marketing District a nd if more than 50% of the lodging businesses protest the District’s reformation, the reformation cannot move forward. If less than 50% of the lodging businesses protest, then the City Council may move forward and adopt a resolution which renews the District and conduct a second reading of Ordinance No 1356.
In accordance with State Law, because only lodging businesses are being assessed, only protests from lodging businesses are valid protests in the renewal of a District. Provided less than 50% of Simi Valley Lodging Businesses protest, staff recommends the City Council adopt the attached Resolution No. 2024- 18 approving the renewal of the SVTMD and conduct a second reading of Ordinance No 1356, effectuating the District’s renewal.
Should the City Council move forward with the renewal of the District, it would go into effect on July 1, 2024.
Staff recommends the City Council conduct the public hearing and receive protests from Simi Valley Lodging Businesses. In the event that less than 50% of the Simi Valley Lodging Businesses protest the renewal of the District, staff recommends the City Council adopt the attached resolution renewing the Simi Valley Tourism Marketing District and conduct the second reading of Ordinance No.1356 to solidify the District’s renewal.
The following alternatives are available to the City Council:
1. Conduct a public hearing to receive protests from Simi Valley Lodging Businesses and determine if less than 50% of the lodging businesses protest the Simi Valley Tourism Marketing District’s reformation;
2. Consider adoption of Resolution 2024-18 declaring the results of a majority protest proceeding and establishing the Simi Valley Tourism Marketing District;
3. Conduct a second reading of Ordinance No. 1356 to effectuate renewal of the Simi Valley Tourism Marketing District and to continue the levy of assessments;
4. Elect not to proceed with the District process at this time;
5. Provide staff with further direction.
Staff recommends Alternative Nos. 1, 2 and 3.
7 SUGGESTED CITY COUNCIL MOTION
I move that the City Council:
1. Receive protests from Simi Valley Lodging Businesses and determine if less than 50% of the lodging businesses protest the renewal of the Simi Valley Tourism Marketing District (SVTMD).
2. Adopt Resolution 2024-18 declaring the results of a majority protest pr oceeding and establishing the SVTMD; and
3. Adopt Ordinance No. 1356 to effectuate renewal of the SVTMD and to continue the levy of assessments.
SUMMARY
A growing trend to support local business and increase community tourism is the formation of tourism improvement districts (District). A District raises revenue through an assessment on room nights at lodging locations within a defined area with all proceeds to be spent to increase business to those assessing the additional charge.
The City Council has taken several actions toward the formation of the Simi Valley Tourism Marketing District. The final step in the formation of the SVTMD is a public hearing to receive protests regarding its renewal . If less than 50% of the lodging businesses protest, then the City Council may move forward and adopt a resolution which renews the District and subsequently, conduct a second hearing of Ordinance No. 1356 to solidify the District’s renewal. In accordance with State Law, because only lodging businesses are being assessed, only protests from lodging businesses are valid protests in the formation of a District. Provided less than 50% of Simi Valley Lodging Businesses protest, staff recommends the City Council adopt the attached resolution approving the renewal o f the District and conduct a second reading of Ordinance No. 1356.
____________________________________
Linda Swan
Assistant City Manager
INDEX Page
Public Hearing Procedure ............................................................... 8 Resolution No. 2024-18 of Intention to Form a District .................. 10 Ordinance No. 1356……………………………………………………16
Attachment A – Petitions from Lodging Businesses ...................... 22 Attachment B – Draft Management District Plan……………………28 8 PUBLIC HEARING PROCEDURE
HEARING DATE: June 3, 2024
1. CLERK: This is the time and place set for a public hearing to receive protests from the Simi Valley lodging businesses regarding the renewal of the Simi Valley Marketing District and
determine if less than 50% of the lodging businesses protest the Simi Valley Tourism Marketing District’s renewal ;
consideration of adoption of Resolution 2024-18 declaring the results of a majority protest proceeding and establishing the Simi Valley Tourism Marketing District; and conduct a second reading of Ordinance No. 1356 to effectuate renewal of the Simi Valley Tourism Marketing District and to continue the levy of assessments. (Read by City Clerk including
reading of Resolution and Ordinance if applicable)
2. MAYOR: Before we begin, are there any conflicts or ex parte communications to report?
3. ANY COUNCIL (Report)
MEMBER:
4. MAYOR: Staff may begin with the oral report on this matter.
5. STAFF: (Report)
6. MAYOR: Any questions of staff from City Council Members? (Questions of staff and staff response)
7. MAYOR: At this time I would like to open the hearing for the Simi Valley lodging businesses in the City Council Chambers wishing to be heard on this matter?
8. AUDIENCE: Public Testimony and Comments
9. MAYOR: Does Staff desire to respond to any comments or issues raised?
10. STAFF: (Response to comments and additional City Council questions)
11. MAYOR: The hearing is now closed.
9 12. MAYOR: Any further comments or questions from City Council Members? (Note: If the City Council has any further
questions of staff, the Public Hearing may need to be re- opened.)
13. MAYOR: I will now entertain a motion.
14. ANY COUNCIL
MEMBER:
City Council Actions (by motion of any Council Member):
1) Adopt Resolution 2024-18 declaring the results of a
majority protest proceeding establishing the Simi Valley Tourism Marketing District, and conduct second hearing of Ordinance No. 1356 to effectuate renewal of the District and to continue the levy of assessments, or elect not to proceed with the District process at this time or provide staff with further direction (does require a second and a vote; requires reading of ordinance);
* Any action to refer the matter back to staff or to continue the matter requires a second and a vote.
15. ANY COUNCIL
MEMBER: Second
16. MAYOR: (Call for vote)
17. MAYOR: Proceed to the next item.
1 RESOLUTION NO. 2024-18
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SIMI VALLEY
DECLARING RESULTS OF MAJORITY PROTEST PROCEEDINGS AND
RENEWING THE SIMI VALLEY TOURISM MARKETING DISTRICT
WHEREAS, the City of Simi Valley (City) created the Simi Valley Tourism Marketing District (SVTMD) in 2014 by Resolution No. 2014-32 for an initial five (5) year term: and
WHEREAS, the SVTMD was renewed by Resolution No. 2019- 15 for a five year term which ends on June 30, 2024; and
WHEREAS, the Property and Business Improvement District Law of 1994 (Streets and Highways Code §36600 et. Seq.) authorizes the City to renew business improvement districts upon petition by a weighted majority of the business owners located within the boundaries of the district; and
WHEREAS, lodging business owners who will pay more than fifty percent (50%) of the proposed assessment, as weighted according to the amount of the assessment to be paid by the petitioner, within the boundaries of the SVTMD have petitioned the City Council of Simi Valley (City Council) to renew the SVTMD; and
WHEREAS, the renewed SVTMD includes all lodging businesses, existing and in the future, available for public occupancy located within the boundaries of the City of Simi Valley; and
WHEREAS, included with the petitions was a Management District Plan (Plan) summary that describes the proposed assessment to be levied on all lodging businesses, existing and in the future, available for public occupancy located within the SVTMD to pay for marketing and sales promotion programs, and other improvements and activities set forth in the Plan; and
WHEREAS, the assessed lodging businesses within the SVTMD will receive a specific benefit from the activities and improvements set forth in the Plan; and
WHEREAS, on April 15, 2024, at 6:30 PM at the City Council Chambers located at 2929 Tapo Canyon Road, Simi Valley, CA 93063, the City Council adopted a Resolution of Intention, Resolution No. 2024-08; and
WHEREAS, the public meeting and public hearing to consider the renewal of the SVTMD have been properly noticed in accordance with Streets and Highways Code §36623; and
10 2
WHEREAS, on May 6, 2024 at 6:30 PM at the City Council Chambers located at 2929 Tapo Canyon Road, Simi Valley, CA 93063, the City Council held a public meeting regarding the renewal of the SVTMD , introduced and conducted a first reading of the Ordinance No. 1356 regarding the renewal of the SVTMD, and the City Council heard no objections and protests to the renewal of the SVTMD and t he levy of the proposed assessment; and
WHEREAS, on June 3, 2024 at 6:30 PM at the City Council Chambers located at 2929 Tapo Canyon Road, Simi Valley, CA 93063, the City Council held a public hearing regarding the renewal of the SVTMD, and the City Council heard and received all objections and protests, if any, to the renewal of the SVTMD and continue the levy of assessment; and
WHEREAS, the City Clerk has determined that there was no majority protest. A majority protest is defined as written protests received from owners of businesses in the renewed SVTMD which would pay fifty percent (50%) or more of the assessments proposed to be levied. Protests are weighted based on the assessment proposed to be levied on each lodging business; and
WHEREAS, following the public hearing, at the same City Council meeting on June 3, 2024, held at the City Council Chambers located at 2929 Tapo Canyon Road, Simi Valley, CA 93063, the City Council may conduct a second reading of the Ordinance to renew the SVTMD and to continue the levy of assessments; and
WHEREAS, Adoption of this Resolution does not diminish the legal effect of the adoption of the Ordinance to be adopted at the final hearing; and
WHEREAS, the City bears the burden of proving by a preponderance of the evidence that an assessment imposed for a specific benefit or specific government service is not a tax, that the amount is no more than necessary to cover the costs to the City in providing the specific benefit or specific government service, and that the manner in which those costs are allocated to a payor bear a fair or reasonable relationship to the specific benefits or specific government services received by the payor.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL THAT:
Section 1
. The recitals set forth herein are adopted by the City Council as findings and they are true and correct.
Section 2. The SVTMD is hereby renewed for a ten (10) year term, beginning July 1, 2024, or as soon as possible thereafter and ending ten (10) years from its start date.
Section 3. The Plan dated April 4, 2024 is hereby adopted and approved.
11 RES. NO. 2024-18
3 Section 4. The activities to be provided to benefit businesses in the SVTMD will be funded by the levy of the assessment. The revenue from the assessment levy shall not be used: to provide activities that directly benefit businesses outside the SVTMD; to provide activities or improvements outside the SVTMD; or for any purpose other than the purposes specified in this Resolution, the Resolution of Intention, the Ordinance, and the Plan.
Notwithstanding the foregoing, improvements and activities that must be provided outside the SVTMD boundaries to create a specific benefit to the assessed businesses may be provided, but shall be limited to marketing or signage pointing to the SVTMD.
Section 5. The City Council finds as follows:
a) The activities funded by the assessment will provide a specific bene fit to assessed businesses within the SVTMD that is not provided to those not paying the assessment.
b) The assessment is a charge imposed for a specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of conferring the benefit or granting the privilege.
c) The assessment is a charge imposed for a specific government service or product provided directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of providing the service or product.
d) Assessments imposed pursuant to the SVTMD are levied solely upon the assessed business, and the business owner is solely responsible for payment of the assessment when due. If the owner chooses to collect any portion of the assessment from a transient, that portion shall be specifically called out and identified for the transient in any and all communications from the business owner as the “SVTMD Assessment” or “Tourism Assessment” as specified in the Plan.
Section 6.
The assessments levied for the SVTMD shall be applied
towards marketing and sales promotion programs to market Simi Valley lodging businesses as tourist, meeting and event destinations, and other improvements and activities as set forth in the Plan.
Section 7. Assessments levied on lodging businesses pursuant to this resolution shall be levied on the basis of benefit. Because the services provided are intended to increase room rentals, an assessment based on room rentals is the best measure of benefit.
Section 8. The assessments for the entire SVTMD will total approximately $400,000 in year one (1).
12 RES. NO. 2024-18
4 Section 9. Bonds shall not be issued to fund the SVTMD.
Section 10. The SVTMD shall include all lodging businesses, existing and in the future, available for public occupancy within the boundaries of the City of Simi Valley. A boundary map is attached hereto and incorporated herein by reference.
Section 11.
The assessments shall be used for the purposes set forth above and any funds remaining at the end of any year may be used in subsequent years in which the SVTMD assessment is levied as long as they are used consistent with the requirements set forth herein.
Section 12.
The assessments to fund the activities and improvements for the SVTMD will be collected by the City on a quarterly basis (including any delinquencies, interest and overdue charges), and in accordance with Streets and Highways Code §36631.
Section 13.
The City Council, through adoption of this Resolution and the Plan, has the right pursuant to Streets and Highways Code §36651, to identify the body that shall implement the proposed program, which shall be the Owners’ Association of the SVTMD as defined in Streets and Highways Code §36612. The City Council has determined that Simi Valley Chamber of Commerce (the Chamber) shall continue to be the SVTMD Owners’ Association. The Chamber’s standing advisory committee, the “Simi Valley Tourism Alliance” (SVTA), shall continue to be responsible for approving the SVTMD sales, marketing, and operations budget and programs.
Section 14. The Chamber, pursuant to Streets and Highways Code §36650, shall cause to be prepared a report for each fiscal year, except the first year, for which assessments are to be levied and collected to pay the costs of the improvement and activities described in the report. The first report shall be due after the first year of operation of the SVTMD.
Section 15. The SVTMD renewed pursuant to this Resolution will be subject to any amendments to the Property and Business Improvement District Law of 1994 (California Streets and Highways Code §36600 et. seq.).
Section 16
. The City Clerk, or his or her designee, is directed to take all necessary actions to complete the renewal of the SVTMD and to levy the assessments.
Section 17
. This Resolution shall take effect i mmediately upon its adoption by the City Council.
Section 18. The City Clerk shall certify to the adoption of this resolution and shall cause a certified resolution to be filed in the Office of the City Clerk 13 RES. NO. 2024-18
5 PASSED and ADOPTED this 3rd day of June 2024.
Attest:
Lucy Blanco, City Clerk Fred D. Thomas, Mayor of the City of Simi Valley, California
Approved as to Form: Approved as to Content:
Algeria R. Ford, City Attorney Brian Paul Gabler, City Manager
Linda Swan
Assistant City Manager
14 RES. NO. 2024-18
6 Boundary Map
15 RES. NO. 2024-18
4868-6795-0265 v1
ORDINANCE NO. 1356
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SIMI VALLEY ADDING CHAPTER 3-7 (TOURISM MARKETING DISTRICT) TO THE SIMI VALLEY CITY CODE
RENEWING THE SIMI VALLEY TOURISM MARKETING DISTRICT
WHEREAS, the City of Simi Valley created the Simi Valley Tourism Marketing District (SVTMD), on June 9, 2014 by Resolution No. 2014-32; and
WHEREAS, the SVTMD was created for a five year term which ended on June 30, 2019 and renewed for a five year term by Resolution No. 2019-15, which ends on June 30, 2024; and
WHEREAS, lodging businesses who will pay more than fifty percent (50%) of the proposed assessment have petitioned the City Council to renew the SVTMD; and
WHEREAS, included with the petitions was a Management District Plan (Plan) summary that describes the proposed assessment to be levied on all lodging businesses, existing and in the future, available for public occupancy located within the boundaries of the City to pay for marketing and sales promotions, and other improvements and activities set forth in the Plan; and
WHEREAS, the assessed businesses within the SVTMD will receive a specific benefit from the activities and improvements set forth in the Plan; and
WHEREAS, on April 15, 2024 , at 6:30 PM at the City Council Chambers located at 2929 Tapo Canyon Road, Simi Valley, CA 93063, the C ouncil adopted a Resolution of Intention, Resolution No.2024-08; and
WHEREAS, the public meeting and public hearing to consider the renewal of the SVTMD have been properly noticed in accordance with Streets and Highways Code § 36623; and
WHEREAS, on May 6, 2024, at 6:30 PM at the City Council Chambers located at 2929 Tapo Canyon Road, Simi Valley, CA 93063, the Council held a public meeting and conducted the first reading of this ordinance to renew the SVTMD and continue the levy of assessments, and the Council heard and received objections and protests, if any, to the renewal of the SVTMD and the levy of the proposed assessment; and
WHEREAS, on June 3, 2024 at 6:30 PM at the City Council Chambers located at 2929 Tapo Canyon Road, Simi Valley, CA 93063, the Council held a public hearing to renew the SVTMD and continue the levy of assessments, and the C ouncil heard and received all objections and protests, if any, to the renewal of the SVTMD and the levy of the proposed assessment; and
16 4868-6795-0265 v1
WHEREAS, following the public hearing, a second reading of this ordinance to renew the SVTMD and to continue the levy of assessments was heard on June 3, 2024, at the City Council Chambers , located a t 2929 Tapo Canyon Road, Simi Valley, CA 93063. At the conclusion of the second reading of this Ordinance, the Council considered adoption of this ordinance, renewing the SVTMD and levying the assessment; and
WHEREAS, the City Clerk has determined that there was no majority protest. A majority protest is defined as written protests received from owners of businesses in the renewed SVTMD who would pay fifty percent (50%) or more of the assessments proposed to be levied. Protests are weighted based on the assessment proposed to be levied on each lodging business; and
WHEREAS, pursuant to the Taxpayer Protection and Government Accountability Act (TPGAA), an initiative certified eligible for qualification for the November 5, 2024, general election ballot, the proposed assessment is an exempt charge pursuant to TPGAA Section 5(j)(6), as the SVTMD is a tourism m arketing district formed under the provisions of the Property and Business Improvement District Law of 1994, as set forth in the Streets and Highways Code § 36600, et seq.; and
WHEREAS, the amount of the proposed assessment for the SVTMD will total approximately $400,000 in the first year. Pursuant to the TPGAA, the City has found the proposed assessment amount is reasonable given the scope of services to be provided and shall not exceed the actual cost of providing the SVTMD services to the payors; and
WHEREAS, adoption of this Ordinance does not diminish the legal effect of the adoption of the Resolution of Formation.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SIMI VALLEY DOES HEREBY ORDAIN AS FOLLOWS:
SECTION 1.
Chapter 3-7 of the Simi Valley City Code is hereby added to read as follows:
3-7.01. Establishment of Area and Benefit Zone.
Pursuant to Section 36500 et seq. of the Streets and Highways Code of the State of California, a business improvement area designated as the Simi Valley Tourism Marketing District (“SVTMD”) of the City of Simi Valley is hereby created and established and the “benefit zone” is hereby created and established coterminous with the SVTMD.
3-7.02 Use of Funds.
Assessments levied for the SVTMD shall be used for sales, promotions and marketing programs to market Simi Valley lodging businesses as tourist, meeting, and event destinations, and other improvements and activities as set forth in the Management District Plan. The revenue from the levy of the assessments on lodging 17 ORD. NO. 1356
4868-6795-0265 v1
businesses within the SV TMD may not be used to provide for activities or improvements outside the SVTMD or for any purpose other than those specified herein, in the Management District Plan, and in the Resolution of Intention. Any funds remaining at the end of any year may be used in subsequent years in which the SVTMD assessment is levied as long as they are used consistent with the requirements set forth herein.
3-7.03 Renewed.
The City of Simi Valley hereby renews the SVTMD, for a ten year term, beginning July 1, 2024, or as soon as possible thereafter, under the provisions of the Property and Business Improvement District Law of 1994, as set forth in the Streets and Highways Code of the state, Section 36600 et seq.
3-7.04. Management District Plan.
The Management District Plan (Plan) presented at the final public hearing of the renewal of the SVTMD held pursuant to the Property and Business Improvement District Law of 1994 is hereby adopted and approved.
3-7.05. Activities and Improvements.
A. The activities to be provided to benefit businesses in the SVTMD will be funded by the levy of the assessment. The revenue from the assessment levy shall not be used: to provide activities that directly benefit businesses outside the SVTMD; to provide activities or improvements outside the SVTMD; or for any purpose other than the purposes specified in this ordinance, the Resolution of Intention, the Resolution of Formation, and the Plan. Notwithstanding the foregoing, improvements and activities that must be provided outside the SVTMD boundaries to create a specific benefit to the assessed businesses may be provided, but shall be limited to marketing or signage pointing to the SVTMD.
B. The Council finds as follows:
1. The activities funded by the assessment will provide a specific benefit to assessed businesses within the SVTMD that is not provided to those not paying the assessment.
2. The assessment is a charge imposed for a specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the City of conferring the benefit or granting the privilege.
3. The assessment is a charge imposed for a specific government service or product provided directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the City of providing the service or product.
18 ORD. NO. 1356
4868-6795-0265 v1
4. Assessments imposed pursuant to the SV TMD are levied solely upon the assessed business, and the business owner is solely responsible for payment of the assessment when due. If the owner chooses to collect any portion of the assessment from a transient or customer, that portion shall be specifically called out and identified for the transient or customer in any and all communications from the business owner as the “SVTMD Assessment” or “Tourism Assessment” as specified in the Plan.
5. The assessments levied for the SVTMD shall be applied toward marketing and sales promotions, and other improvements and activities as set forth in the Plan.
6. Assessments levied on lodging businesses pursuant to this ordinance shall be levied on the basis of benefit. Because the services provided are intended to increase room rentals, an assessment based on gross short-term room rental revenue is the best measure of benefit.
3-7.06. Bonds
Bonds shall not be issued to fund the SVTMD.
3-7.07. Boundaries.
The renewed TMD includes all lodging businesses, existing and in the future, available for public occupancy located within the boundaries of the City as described in the Management District Plan.
3-7.08. Assessments.
A. Each business in the benefit zone shall pay an assessment of two percent (2%) of gross short-term sleeping room rental revenue charged and received from transient hotel guests who do not make the hotel their principal place of residence. Based on the benefit received, assessments will not be collected on stays of more than 30 consecutive days.
B. Any modification to the benefit zone or program of activities for which the assessments are to be levied would be subject to notification of all affected businesses within the TMD and a public hearing before the City Council. At such public hearing, the City Council shall hear all protests and receive evidence, including written protests, for and against such modifications, including the inclusion of additional hotels or business.
Assessments on newly established hotels shall commence immediately upon the first day of operation and after the public hearing for inclusion of such property.
C. The method of assessment established by this chapter shall not be changed without written notice to all businesses in the TMD and a public hearing held by the City Council. At such a public hearing, the City Council shall hear all protests and receive evidence, including written protests, for and against the establishment of any change in the 19 ORD. NO. 1356
4868-6795-0265 v1
method of assessment.
3-7.9. Collections.
The City will be responsible for collecting the assessment on a quarterly basis (including any delinquencies, interest, and overdue charges) from each lodging business located in the boundaries of the SVTMD. The City shall take all r easonable efforts to collect the assessments from each assessed lodging business. The City shall receive 1% of the total assessments as reimbrusement for City services.
3-7.10. Owners’ Association.
The City Council through adoption of this ordinance and the Plan, has the right pursuant to Streets and Highways Code §36651, to identify the body that shall implement the proposed program, which shall be the Owners’ Association of the SVTMD as defined in Streets and Highways Code §36612. The City Council has determined that the Simi Valley Chamber of Commerce shall be the SVTMD Owners’ Association. Passage of this ordinance authorizes the City Council to contract with the Simi Valley Chamber of Commerce to administer the SVTMD.
3-7.11. Annual Report.
The Owners’ Associaton, pursuant to Streets and Highways Code §36650, shall cause to be prepared a report for each fiscal year, except the first year, for which assessments are to be levied and collected to pay the costs of the improvement and activities described in the report. The first report shall be due after the first year of operation of the SVTMD.
3-7.12. Amendments to Enabling Legislation.
The SVTMD renewed pursuant to this ordinance shall be subject to any amendments to the Property and Business Improvement District Law of 1994 (California Streets and Highways Code §36600 et. seq.).
SECTION 2. Severability.
If any section, subsection, sentence, clause or phrase or word of this Ordinance is for any reason held to be unconstitutional, unlawful or otherwise invalid by a court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this ordinance. The Council of the City of Simi Valley declares that it would have passed and adopted this ordinance and each and all provisions irrespective of the fact that any one or more of said provisions may be declared invalid or unconstitutional without regard to any such decision or preemptive legislation.
SECTION 3. Effective Date. This ordinance of the City of Simi Valley shall be effective thirty (30) days after its passage, this ordinance or a summary thereof, as provided in Government Code Section 36933, shall be published at least once in a newspaper of general circulation published and circulated in the City of Simi Valley, along with the names of the Council voting for and against its passage.
20 ORD. NO. 1356
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PASSED and ADOPTED this 3rd day of June 2024.
Attest:
__________________________________
Lucy Blanco, City Clerk Fred D. Thomas, Mayor of the City of Simi Valley, California
Approved as to Form: Approved as to Content:
___________________________________
Algeria R. Ford, City Attorney Brian Paul Gabler, City Manager
21 ORD. NO. 1356
ATTACHMENT A
22 23
24 25
26 27
February 21, 2024
SIMI VALLEY
TOURISM MARKETING DISTRICT
MANAGEMENT DISTRICT PLAN
Prepared pursuant to the Property and Business Improvement District Law of 1994, Streets and Highways Code section 36600 et seq. April 4, 2024
ATTACHMENT B
2024-2034
28 CONTENTS
I. OVERVIEW ................................................................................................................................................ 3 II. BACKGROUND.......................................................................................................................................... 4 III. BOUNDARY .......................................................................................................................................... 5 IV. ASSESSMENT BUDGET AND SERVICES ......................................................................................... 6 A. ANNUAL SERVICE PLAN ......................................................................................................................................... 6 B. ANNUAL BUDGET ................................................................................................................................................. 8 C. CALIFORNIA CONSTITUTIONAL COMPLIANCE .............................................................................................................. 8 D. ASSESSMENT ....................................................................................................................................................... 9 E. INTEREST AND OVERDUE CHARGES ........................................................................................................................ 10 F. TIME AND MANNER FOR COLLECTING ASSESSMENTS ................................................................................................. 11 GOVERNANCE................................................................................................................................................. 12 A. OWNERS’ ASSOCIATION ....................................................................................................................................... 12 B. BROWN ACT AND CALIFORNIA PUBLIC RECORDS ACT COMPLIANCE .............................................................................. 12 C. ANNUAL REPORT ................................................................................................................................................ 12 APPENDIX 1 – LAW .......................................................................................................................................... 13 APPENDIX 2 – ASSESSED BUSINESSES ....................................................................................................... 25 Prepared by
Civitas
(800)999-7781
www.civitasadvisors.com
29 SVTMD Management District Plan 3
April 4, 2024
I. OVERVIEW
Developed by Simi Valley lodging businesses and the Simi Valley Chamber of Commerce (SVCC), the Simi Valley Tourism Marketing District (SVTMD) is an assessment district proposed to continue to provide specific benefits to payors, by funding marketing and sales promotion efforts for assessed businesses. This approach has been used successfully in other destination areas throughout the country to provide the benefit of additional room night sales directly to payors . The SVTMD was initially created in 2014 for a five (5) year term and renewed in 2019 for an additional five (5) year term. Simi Valley lodging businesses and the SVCC now wish to renew the SVTMD for an additional ten (10) year term.
Location: The renewed SVTMD includes all lodging businesses , existing and in the future, available for public occupancy located within the boundaries of the City of Simi Valley, as shown on the map in Section III.
Services: The SVTMD is designed to provide specific benefits directly to payors by increasing awareness and demand for room night sales . Marketing and sales promotions will increase demand for overnight tourism and market payors as tourist, meeting and event destinations, thereby increasing demand for room night sales.
Budget: The total SVTMD annual assessment budget for the initial year of its ten (10) year operation is anticipated to be approximately $400,000. A similar assessment budget is expected to apply to subsequent years, but this assessment budget is expected to fluctuate as room sales do and as businesses open and close.
Cost: The annual assessment rate is two percent (2%) of gross short -term sleeping room rental revenue. Based on the benefit received, assessments will not be collected on :
stays of more th an thirty (30) consecutive days .
Collection: The City of Simi Valley (City) will be responsible for collecting the assessment on a quarterly basis (including any delinquencies, interest, and overdue charges) from each lodging business located in the boundaries of the SVTMD. T he City shall take all reasonable efforts to collect the assessments from each assessed lodging business.
Duration: The renewed SVTMD will have a ten (10) year life, beginning July 1, 2024 or as soon as possible thereafter, and ending ten (10) years from its start date. After ten (10) years, the SVTMD may be renewed pursuant to the Property and Business Improvement District Law of 1994, Streets and Highways Code section 36600 et seq. (94 Law) if assessed lodging business owners support continuing the SVTMD programs.
Management: The SVCC shall continue to serve as the SVTMD’s Owners’ Association. The Owners’ Association is charged with managing funds and implementing programs in accordance with this Plan, and must provide annual reports to the City Council. 30 SVTMD Management District Plan 4
April 4, 2024
II. BACKGROUND
TMDs are an evolution of the traditional Business Improvement District. The first TMD was formed in West Hollywood, California in 1989. Since then, over 100 California destinations have followed suit. In recent years, other states have begun adopting the California model –Illinois, Minnesota, Massachusetts, Montana, South Dakota, Washington, Colorado, Texas and Louisiana have adopted TMD laws. Several other states are in the process of adopting their own legislation. The cities of Wichita, Kansas and Newark, New Jersey used an existing business improvement district law to form a TMD. Additionally, some cities, like Portland, Oregon and Memphis, Tennessee have utilized their home rule powers to create TMDs without a state law.
California’s TMDs collectively
raise over $300 million annually for
local destination marketing. With
competitors raising their budgets,
and increasing rivalry for visitor
dollars, it is important that Simi
Valley lodging businesses continue
to invest in stable, commerce-
specific marketing programs.
TMDs utilize the efficiencies of
private sector operation in the
market-based promotion of
tourism districts. TMDs allow tourism business owners to organize their efforts to increase commerce. Lodging business owners within the TMD pay an assessment and those funds are used to provide services that increase commerce.
In California, most TMDs are formed pursuant to the Property and Business Improvement District Law of 1994. This law allows for the creation of a benefit assessment district to raise funds within a specific geographic area. The key difference between TMDs and other benefit assessment districts is that funds raised are returned to the private non-profit corporation governing the district.
There are many benefits to TMDs:
• Funds must be spent on services and improvements that provide a specific benefit only to those who pay;
• Funds cannot be diverted to general government programs; • They are customized to fit the needs of payors in each destination; • They allow for a wide range of services;
• They are designed, created and governed by those who will pay the assessment; and • They provide a stable, long-term funding source for tourism promotion. 31 SVTMD Management District Plan 5
April 4, 2024
III. BOUNDARY
The SVTMD will continue to include all lodging businesses, existing and in the future, available for public occupancy within the boundaries of the City of Simi Valley, as shown in the map below.
Lodging business means: any type of commercial establishment, or any portion of any type of commercial establishment, which provides for the occupancy of transients for dwelling, lodging, or sleeping purposes, whether by the day, week, or month, including, but not limited to, hotels, inns, and motels.
A complete listing of assessed lodging businesses within the renewed SVTMD can be found in Appendix 2.
32 SVTMD Management District Plan 6
April 4, 2024
IV. ASSESSMENT BUDGET AND SERVICES
A. Annual Service Plan
Assessment funds will be spent to provide specific benefits conferred or privileges granted directly to the payors that are not provided to those not charged, and which do not exceed the reasonable cost to the City of conferring the benefits or granting the privileges. The privileges and services provided with the SVTMD funds are sales and marketing programs available only to assessed businesses.
A service plan assessment budget has been developed to deliver services that benefit the assessed businesses. A detailed annual assessment budget will be developed and approved by the SVCC. The chart below illustrates the initial annual assessment budget allocations. These activities and allocations will also apply in subsequent years. The total initial assessment budget is estimated to be $400,000.
Although actual revenues will fluctuate due to market conditions, the proportional allocations of the budget shall remain the same. However, the City and the SVCC board shall have the authority to adjust budget allocations between the categories by no more than fifteen percent (15%) of the total budget per year. A description of the proposed improvements and activities for the initial year of operation is below. The same activities are proposed for subsequent years. In the event of a legal challenge against the SVTMD, any and all assessment funds may be used for the costs of defending the SVTMD.
Each budget category includes all costs related to providing that service. For example, the sales, marketing & operations budget includes the cost of staff time dedicated to overseeing and implementing the sales, marketing & operations program. Staff time dedicated purely to administrative tasks is allocated to the administrative portion of the budget. The costs of an individual staff member may be allocated to multiple budget categories. The staffing levels necessary to provide the ser vices below will be determined by the SVCC on an as-needed basis.
Sales, Marketing, & Operations
The sales, marketing, and operations program will promote assessed businesses as tourist, meeting, and event destinations. The sales, marketing, and operations program will have a central theme of Sales, Marketing &
Operations,
$304,000, 76%
Administration,
$80,000, 20%
Contingency / Reserve,
$12,000, 3%
City Admin.
Fee, $4,000, 1%
Initial Annual Assessment Budget - $400,000
33 SVTMD Management District Plan 7
April 4, 2024
promoting Simi Valley as a desirable place for overnight visits. The program will have the goal of increasing overnight visitation and room night sales at assessed businesses, and may include the following activities:
• Internet marketing efforts to increase awareness and optimize internet presence to drive overnight visitation and room sales to assessed businesses; • Print ads in magazines and newspapers, television ads, and radio ads targeted at potential visitors to drive overnight visitation and room sales to assessed businesses; • Attendance of trade shows to promote assessed businesses; • Sales blitzes for assessed businesses;
• Familiarization tours of assessed businesses;
• Preparation and production of collateral promotional materials such as brochures, flyers and maps featuring assessed businesses;
• Development and implementation of a public relations and communications strategy, inclusive of social media outlets and press release distribution designed to increase overnight visitation at assessed businesses;
• Partnership with both local and state tourism organizations to target key domestic and/or international markets to increase overnight visitation at assessed businesses; • Development of Return on Investment (ROI) analysis on effectiveness of SVTMD funds to improve effectiveness and increase overnight visitation at assessed businesses; • Attendance of professional industry conferences and affiliation events to promote assessed businesses;
• Lead generation activities designed to attract tourists and group events to assessed businesses; • SVTMD District Administrator will plan and coordinate tourism promotion efforts for assessed businesses; and
• Development and maintenance of a website designed to promote assessed businesses.
Administration
The administration portion of the budget shall be utilized for administrative staffing costs, office costs, advocacy, and other general administrative costs such as insurance, legal, and accounting fees.
City Administration Fee
The City of Simi Valley shall retain a fee equal to one percent (1%) of the amount of assessment collected to cover its costs of collection and administration.
Contingency/Reserve
The budget includes a contingency line item to account for uncollected assessments, if any. If there are contingency funds collected, they may be held in a reserve fund or utilized for other program, administration or renewal costs at the discretion of the SVCC Board. Policies relating to contributions to the reserve fund, the target amount of the reserve fund, and expenditure of monies from the reserve fund shall be set by the SVCC Board. Contingency/reserve funds may be spent on SVTMD programs or administrative and renewal costs in such proportions as determined.
No more than six (6) months' worth of annual SVTMD assessment revenue collection may be held in reserves without the explicit approval of the Owners' Association. 34 SVTMD Management District Plan 8
April 4, 2024
B. Annual Budget
The total ten (10) year assessment budget is projected at approximately $ 400,000 annually, or $4,000,000 through 2034. A similar budget is expected to apply to subsequent years, but this budget is expected to fluctuate as room sales do and as businesses open and close.
C. California Constitutional Compliance
The SVTMD assessment is not a property -based assessment subject to the requirements of Proposition 218. Courts have found Proposition 218 limited the term ‘assessments’ to levies on real property.1 Rather, the SVTMD assessment is a business -based assessment, and is subject to Proposition 26. Pursuant to Proposition 26 all levies are a tax unless they fit one of seven exceptions.
Two of these exceptions apply to the SVTMD, a “specific benefit” and a “specific government service.” Both require that the costs of benefits or services do not exceed the reasonable costs to the City of conferring the benefits or providing the services.
1. Specific Benefit
Proposition 26 requires that assessment funds be expe nded on, “ a specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of conferring the benefit or granting the privilege.”2 The services in this Plan are designed to provide targeted benefits directly to assessed businesses, and are intended only to provide benefits and services directly to those businesses paying the assessment. These services are tailored not to serve the general public , businesses in general, or parcels of land, but rather to serve the specific businesses within the SVTMD. The activities described in this Plan are specifically targeted to increase demand for room night sales for assessed lodging businesses within the boundaries of the SVTMD, and are narrowly tailored. SVTMD funds will be used exclusively to provide the specific benefit of increased demand for room night sales directly to the assessees. Assessment funds shall not be used to feature non -assessed lodging businesses in SVTMD programs, or to directly generate sales for non-assessed businesses. The activities paid for from assessment revenues are business services constituting and providing specific benefits to the assessed businesses. Nothing in this Plan limits the ability of the Owners’ Association to enter into private contracts with non -assessed lodging businesses for the provision of services to those businesses.
The assessment imposed by this SVTMD is for a specific benefit conferred directly to the payors that is not provided to those not charged. The specific benefit conferred directly to the payors is an increase in demand for room night sales. The specific benefit of an increase in demand for room night sales for assessed lodging businesses will be provided only to lodging businesses paying the district assessment, with marketing and sales programs promoting lodging businesses paying the SVTMD assessment. The marketing and sales programs will be designed to increase room night sales at each assessed lodging businesses. Because they are necessary to provide the marketing and sales programs that specifically benefit the assessed lodging businesses, the administration and contingency services also provide the specific benefit of increased demand for room night sales to the assessed lodging businesses.
Although the SVTMD, in providing specific benefits to payors, may produce incidental benefits to non-paying businesses, the incidental benefit does not preclude the services from being considered a specific benefit. The legislature has found that, “A specific benefit is not excluded from classification 1 Jarvis v. the City of San Diego 72 Cal App. 4th 230
2 Cal. Const. art XIII C § 1(e)(1)
35 SVTMD Management District Plan 9
April 4, 2024
as a ‘specific benefit’ merely bec aus e an indirect benefit to a nonpayor occurs incidentally and without cost to the payor as a consequence of providing the specific benefit to the payor.”3
2. Specific Government Service
The assessment may also be utilized to provide, “a specific government service or product provided directly to the payor that is not provided to thos e not cha rged, and whic h does not exce ed the reasonable costs to the local government of providing the service or product.”4 The legislature has recognized that marketing and promotions services like those to be provid ed by the SVTMD are government services within the meaning of Proposition 265. Further, the legislature has determined that “a specific government service is not excluded from classification as a ‘specific government service’ merely because an indirect benefit to a nonpayor occurs incidentally and without cost to the payor as a consequence of providing the specific government service to the payor.”6
3. Reasonable Cost
SVTMD services will be implemented carefully to ensure they do not exceed the reasonable cost of such services. The full amount assessed will be used to provide the services described herein. Funds will be managed by the SVCC, and reports submitted on an annual basis to the City. Only assessed lodging businesses will be featured in marketing materials, receive sales leads generated from SVTMD- funded activities , be featur ed in advertis ing campaigns , a nd bene fit from other SVTMD-funded services. Non-assess ed l odging business es will not receive these, nor any other, SVTMD-funded services and benefits.
The SVTMD-funded programs are targeted directly to benefit assessed businesses. It is, however, pos
sible that there will be a spill over benefit to non-assessed businesses. If non-assessed lodging businesses receive incremental room nights, that portion of the promotion or program generating those room nights shall be paid with non- SVTMD funds. SVTMD funds shall only be spent to benefit the assessed businesses, and shall not be spent on that portion of any program which directly generates incidental room nights for non-assessed businesses.
D. Asse ssment
The annual assessment rate is two percent (2%) of gros s short-term sleeping room rental revenue.
Based on the bene fit received, assessments will not be collected on stays of mor e than thirty (30) consecutive days.
The assessment was calculated based on the total cost of the activities to be provided for the benefit of the businesses within the SVTMD, with costs allocated based on the proportional benefit conferred to each business. Activities funded by the SVTMD, are specifically targeted to increase room nights at assessed businesses.
3 Government Code § 53758(a)
4 Cal. Const. art XIII C § 1(e)(2)
5 Government Code § 53758(b)
6 Government Code § 53758(b)
36 SVTMD Management District Plan 10
April 4, 2024
The term “gross short-term sleeping room rental revenue” as used herein means: the monetary value of the consideration charged on the room rate for the occupancy of space in a lodging business, not including other charges such as destination fees, resort fees, reservation fees, forfeited deposits, cancelation fees, attrition fees, no -show fees, parking fe es, internet fees, roll -a-way beds fees, early and/or late checkout fees, or any other charges or fees (existing or in the future).
Gross short-term sleeping room rental revenue shall not include, and therefore the assessment shall not be charged upon, any federal, state or local taxes collected, including but not limited to transient occupancy taxes.
The assessment is levied upon and a direct obligation of the assessed lodging business. However, the assessed lodging business may, at its discretion, pass the assessment on to transients. The amount of assessment, if passed on to each transient, shall be disclosed in advance and separately stated from the amount of rent charged and any other applicable taxes, and each transient shall receive a receipt for payment from the business. If the SVTMD assessment is identified separately it shall be disclosed as the “SVTMD Assessment.” As an alternative, the disclosure may include the amount of the SVTMD assessment and the amount of the assessment imposed pursuant to the California Tourism Marketing Act, Government Code §13995 et seq. and shall be disclosed as the “Tourism Assessment.” The assessment is imposed solely upon, and is the sole obligation of the assessed lodging business even if it is passed on to transients. The assessment shall not be con sidered revenue for calculation of transient occupancy taxes.
Bonds shall not be issued.
E. Interest and Overdue Charges
The SVTMD shall reimburse the City for any costs associated with collecting unpaid assessments. If sums in excess of the delinquent SVTMD assessment are sought to be recovered in the same collection action by the City, the SVTMD shall bear its pro rata share of such collection costs. Assessed businesses which are delinquent in paying the assessment shall be responsible for paying:
1. Original Delinquency: Any lodging business that shall fail to remit the assessment imposed within the time required shall pay a n overdue charge of ten (10%) percent of the assessment in addition to the amount of the assessment.
2. Continued Delinquency: Any lodging business that shall fail to remit any delinquent remittance on or before thirty (30) days following the date on which the remittance first became delinquent shall pay an overdue charge in the amount of ten (10%) percent of the assessment in addition to the amount of the assessment and the ten (10%) percent overdue charge first imposed.
3. Fraud: For the fraudulent nonpayment of any remittance, an overdue charge in the amount of twenty-five (25%) percent of the amount of the assessment shall be imposed in addition to the overdue charges set forth in subparagraphs (1) and (2) of this section (E).
4. Interest: In addition to the overdue charges imposed, any lodging business that shall fail to remit any assessment imposed shall pay interest at the rate of one -half of one percent (0.5%) per month on the amount of the assessment, exclusive of overdue charges, from the date on which the remittance first became delinquent.
5. Overdue Charges and Interest Merged with Assessment: Every overdue charge imposed, and such interest as accrues, shall merge and become a part of the assessment required to be paid. 37 SVTMD Management District Plan 11
April 4, 2024
F. Time and Manner for Collecting Assessments
The SVTMD assessment will be implemented beginning July 1, 2024 or as soon as possible thereafter, and ending ten (10) years from its start date. The City will be responsible for collecting the assessment on a quarterly basis (including any delinquencies, interest and overdue charges ) from each lodging business located in the SVTMD. The City shall take all reasonable efforts to collect the assessments from each lodging business. The City shall forward the assessments collected to the Owners’ Association.
G. Disbursement of Unspent SVTMD Assessment Funds
Pursuant to Streets and Highways Code §36671, upon the disestablishment or expiration without renewal of the SVTMD, any remaining revenues, after all outstanding debts are paid, derived from the levy of assessments, or derived from the sale of assets acquired with the revenues, shall be refunded to the lodging business owners then located and operating within the SVTMD in which assessments were levied by applying the same method and basis that was used to calculate the assessments levied in the fiscal year in which the SVTMD is disestablished or expires. All outstanding SVTMD assessment revenue shall be spent on improvements and activities specified in this Management District Plan.
38 SVTMD Management District Plan 12
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GOVERNANCE
A.
The City Council, through adoption of this Management District Plan, has the right, pursuant to Streets and Highways Code §36651, to identify the body that shall implement the proposed program, which shall be the O Association of the SVTMD as defined in Streets and Highways Code §36612. The City Council has determined that SVCC will continue to serve as the Owners Association for the SVTMD.
responsible for approving the SVTMD sales, marketing, and operations budget and programs.
Brown Act and California Public Records Act Compliance
Association is, however, subject to government regulations relating to transparency, namely the Ralph
Act (Government Code §54950 et seq.).
Thus, meetings of the Board and certain committees must be held in compliance with the public notice and other requirements of the Brown Act. Accordingly, the of each member present
and disclosure requirements of
the California Public Records Act.
C. Annual Report
The SVCC shall present an annual report at the end of each year of operation to the City Council pursuant to Streets and Highways Code §36650 (see Appendix 1). The annual report shall include:
Any proposed changes in the boundaries of the improvement district or in any benefit zones or classification of businesses within the district.
The improvements and activities to be provided for that fiscal year.
An estimate of the cost of providing the improvements and the activities for that fiscal year.
The method and basis of levying the assessment in sufficient detail to allow each business owner to estimate the amount of the assessment to be levied against his or her business for that fiscal year.
The estimated amount of any surplus or deficit revenues to be carried over from a previous fiscal year.
The estimated amount of any contributions to be made from sources other than assessments levied pursuant to this part.
39 SVTMD Management District Plan 13
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APPENDIX 1 – LAW
*** THIS DOCUMENT IS CURRENT THROUGH THE 2023 EXTRA SESSION CH 1, 2023 REGULAR SESSION CH. 890***
(ALL 2023 LEGISLATION)
STREETS AND HIGHWAYS CODE
DIVISION 18. PARKING
PART 7. PROPERTY AND BUSINESS IMPROVEMENT DISTRICT LAW OF 1994
CHAPTER 1. General Provisions
ARTICLE 1. Declarations
36600. Citation of part
This part shall be known and may be cited as the “Property and Business Improvement District Law of 1994.”
36601. Legislative findings and declarations; Legislative guidance
The Legislature finds and declares all of the following:
(a) Businesses located and operating within business districts in some of this state’s communities are economically disadvantaged, are underutilized, and are unable to attract customers due to inadequate facilities, services, and activities in the business districts. (b) It is in the public interest to promote the economic revitalization and physical maintenance of business districts in order to create jobs, attract new businesses, and prevent the erosion of the business districts. (c) It is of particular local benefit to allow business districts to fund business related improvements, maintenance, and activities through the levy of assessments upon the businesses or real property that receive benefits from those improvements.
(d) Assessments levied for the purpose of conferring special benefit upon the real property or a specific benefit upon the businesses in a business district are not taxes for the general benefit of a city, even if property, businesses, or persons not assessed receive incidental or collateral effects that benefit them. (e) Property and business improvement districts formed throughout this state have conferred special benefits upon properties and businesses within their districts and have made those properties and businesses more useful by providing the following benefits:
(1) Crime reduction. A study by the Rand Corporation has confirmed a 12-percent reduction in the incidence of robbery and an 8 -percent reduction in the total incidence of violent crimes within the 30 districts studied.
(2) Job creation.
(3) Business attraction.
(4) Business retention.
(5) Economic growth.
(6) New investments.
(f) With the dissolution of redevelopment agencies throughout the state, property and business improvement districts have become even more important tools with which communities can combat blight, promote economic opportunities, and create a clean and safe environment. (g) Since the enactment of this act, the people of California have adopted Proposition 218, which added Article XIII D to the Constitution in order to place certain requirements and restrictions on the formation of, and activities, expenditures, and asses sments by property-based districts. Article XIII D of the Constitution provides that property-based districts may only levy assessments for special benefits. (h) The act amending this section is intended to provide the Legislature’s guidance with regard to this act, its interaction with the provisions of Article XIII D of the Constitution, and the determination of special benefits in property-based districts.
(1) The lack of legislative guidance has resulted in uncertainty and inconsistent application of this act, which discourages the use of assessments to fund needed improvements, maintenance, and activities in property-based districts, contributing to blight and other underutilization of property. (2) Activities undertaken for the purpose of conferring special benefits upon property to be assessed inherently produce incidental or collateral effects that benefit property or persons not assessed. 40 SVTMD Management District Plan 14
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Therefore, for special benefits to exist as a separate and distinct category from general benefits, the incidental or collateral effects of those special benefits are inherently part of those special benefits.
The mere fact that special benefits produce in cidental or collateral effects that benefit property or persons not assessed does not convert any portion of those special benefits or their incidental or collateral effects into general benefits.
(3) It is of the utmost importance that property -based districts created under this act have clarity regarding restrictions on assessments they may levy and the proper determination of special benefits.
Legislative clarity with regard to this act will provide districts with clear instructions and courts with legislative intent regarding restrictions on property -based assessments, and the manner in which special benefits should be determined.
36602. Purpose of part
The purpose of this part is to supplement previously enacted provisions of law that authorize cities to levy assessments within property and business improvement districts, to ensure that those assessments conform to all constitutional requirements and are determined and assessed in accordance with the guidance set forth in this act. This part does not affect or limit any other provisions of law authorizing or providing for the furnishing of improvements or activities or the raising of revenue for these purposes.
36603. Preemption of authority or charter city to adopt ordinances levying assessments
Nothing in this part is intended to preempt the authority of a charter city to adopt ordinances providing for a different method of levying assessments for similar or additional purposes from those set forth in this part. A property and business improvemen t district created pursuant to this part is expressly exempt from the provisions of the Special Assessment Investigation, Limitation and Majority Protest Act of 1931 (Division 4 (commencing with Section 2800)).
36603.5 Part prevails over conflicting provisions
Any provision of this part that conflicts with any other provision of law shall prevail over the other provision of law, as to districts created under this part.
36604. Severability
This part is intended to be construed liberally and, if any provision is held invalid, the remaining provisions shall remain in full force and effect. Assessments levied under this part are not special taxes.
ARTICLE 2. Definitions
36606. “Activities”
“Activities” means, but is not limited to, all of the following that benefit businesses or real property in the district:
(a) Promotion of public events.
(b) Furnishing of music in any public place.
(c) Promotion of tourism within the district.
(d) Marketing and economic development, including retail retention and recruitment. (e) Providing security, sanitation, graffiti removal, street and sidewalk cleaning, and other municipal services supplemental to those normally provided by the municipality. (f) Other services provided for the purpose of conferring special benefit upon assessed real property or specific benefits upon assessed businesses located in the district.
36606.5. “Assessment”
“Assessment” means a levy for the purpose of acquiring, constructing, installing, or maintaining improvements and providing activities that will provide certain benefits to properties or businesses located within a property and business improvement district.
36607. “Business”
“Business” means all types of businesses and includes financial institutions and professions. 41 SVTMD Management District Plan 15
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36608. “City”
“City” means a city, county, city and county, or an agency or entity created pursuant to Article 1 (commencing with Section 6500) of Chapter 5 of Division 7 of Title 1 of the Government Code, the public member agencies of which includes only cities, counties, or a city and county, or the State of California.
36609. “City council”
“City council” means the city council of a city or the board of supervisors of a county, or the agency, commission, or board created pursuant to a joint powers agreement and which is a city within the meaning of this part.
36609.4. “Clerk”
“Clerk” means the clerk of the legislative body.
36609.5. “General benefit”
“General benefit” means, for purposes of a property-based district, any benefit that is not a “special benefit” as defined in Section 36615.5.
36610. “Improvement”
“Improvement” means the acquisition, construction, installation, or maintenance of any tangible property with an estimated useful life of five years or more including, but not limited to, the following:
(a) Parking facilities.
(b) Benches, booths, kiosks, display cases, pedestrian shelters and signs. (c) Trash receptacles and public restrooms.
(d) Lighting and heating facilities.
(e) Decorations.
(f) Parks.
(g) Fountains.
(h) Planting areas.
(i) Closing, opening, widening, or narrowing of existing streets. (j) Facilities or equipment, or both, to enhance security of persons and property within the district. (k) Ramps, sidewalks, plazas, and pedestrian malls.
(l) Rehabilitation or removal of existing structures.
36611. “Management district plan”; “Plan”
“Management district plan” or “plan” means a proposal as defined in Section 36622.
36612. “Owners’ association”
“Owners’ association” means a private nonprofit entity that is under contract with a city to administer or implement improvements, maintenance, and activities specified in the management district plan. An owners’ association may be an existing nonprofit entity or a newly formed nonprofit entity. An owners’ association is a private entity and may not be considered a public entity for any purpose, nor may its board members or staff be considered to be public officials for any purpose. Notwithstanding this sec tion, an owners’ association shall comply with the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2 of Title 5 of the Government Code), at all times when matters within the subject matter of the district are heard, disc ussed, or deliberated, and with the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code), for all records relating to activities of the district.
36614. “Property”
“Property” means real property situated within a district.
36614.5. “Property and business improvement district”; “District” 42 SVTMD Management District Plan 16
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“Property and business improvement district,” or “district,” means a property and business improvement district established pursuant to this part.
36614.6. “Property-based assessment”
“Property-based assessment” means any assessment made pursuant to this part upon real property.
36614.7. “Property-based district”
“Property-based district” means any district in which a city levies a property-based assessment.
36615. “Property owner”; “Business owner”; “Owner”
“Property owner” means any person shown as the owner of land on the last equalized assessment roll or otherwise known to be the owner of land by the city council. “Business owner” means any person recognized by the city as the owner of the business. “Owner” means either a business owner or a property owner. The city council has no obligation to obtain other information as to the ownership of land or businesses, and its determination of ownership shall be final and conclusive for the purposes of this part. W herever this part requires the signature of the property owner, the signature of the authorized agent of the property owner shall be sufficient. Wherever this part requires the signature of the business owner, the signature of the authorized agent of the business owner shall be sufficient.
36615.5. “Special benefit” [Effective January 1, 2023]
(a) “Special benefit” means, for purposes of a property-based district, a particular and distinct benefit over and above general benefits conferred on real property located in a district or to the public at large. Special benefit includes incidental or collateral effects that arise from the improvements, maintenance, or activities of property-based districts even if those incidental or collateral effects benefit property or persons not assessed. Special benefit excludes general enhancement of property value.
(b) “Special benefit” also includes, for purposes of a property-based district, a particular and distinct benefit provided directly to each assessed parcel within the district. Merely because parcels throughout an assessment district share the same special benefits does not make the benefits general.
36616. “Tenant”
“Tenant” means an occupant pursuant to a lease of commercial space or a dwelling unit, other than an owner.
ARTICLE 3 Prior Law
36617. Alternate method of financing certain improvements and activities; Effect on other provisions
This part provides an alternative method of financing certain improvements and activities. The provisions of this part shall not affect or limit any other provisions of law authorizing or providing for the furnishing of improvements or activities or the ra ising of revenue for these purposes. Every improvement area established pursuant to the Parking and Business Improvement Area Law of 1989 (Part 6 (commencing with Section 36500) of this division) is valid and effective and is unaffected by this part.
CHAPTER 2. Establishment
36620. Establishment of property and business improvement district
A property and business improvement district may be established as provided in this chapter.
36620.5. Requirement of consent of city council
A county may not form a district within the territorial jurisdiction of a city without the consent of the city council of that city. A city may not form a district within the unincorporated territory of a county without the consent of the board 43 SVTMD Management District Plan 17
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of supervisors of that county. A city may not form a district within the territorial jurisdiction of another city without the consent of the city council of the other city.
36621. Initiation of proceedings; Petition of property or business owners in proposed district
(a) Upon the submission of a written petition, signed by the property or business owners in the proposed district who will pay more than 50 percent of the assessments proposed to be levied, the city council may initiate proceedings to form a district by the adoption of a resolution expressing its intention to form a district.
The amount of assessment attributable to property or a business owned by the same property or business owner that is in excess of 40 percent of the amount of all assessments proposed to be levied, shall not be included in determining whether the petition is signed by property or business owners who will pay more than 50 percent of the total amount of assessments proposed to be levied. (b) The petition of property or business owners required under subdivision (a) shall include a summary of the management district plan. That summary shall include all of the following:
(1) A map showing the boundaries of the district.
(2) Information specifying where the complete management district plan can be obtained. (3) Information specifying that the complete management district plan shall be furnished upon request.
(c) The resolution of intention described in subdivision (a) shall contain all of the following:
(1) A brief description of the proposed improvements, maintenance, and activities, the amount of the proposed assessment, a statement as to whether the assessment will be levied on property or businesses within the district, a statement as to whether bond s will be issued, and a description of the exterior boundaries of the proposed district, which may be made by reference to any plan or map that is on file with the clerk. The descriptions and statements do not need to be detailed and shall be sufficient if they enable an owner to generally identify the nature and extent of the improvements, maintenance, and activities, and the location and extent of the proposed district. (2) A time and place for a public hearing on the establishment of the property and business improvement district and the levy of assessments, which shall be consistent with the requirements of Section 36623.
36622. Contents of management district plan
The management district plan shall include, but is not limited to, all of the following:
(a) If the assessment will be levied on property, a map of the district in sufficient detail to locate each parcel of property and, if businesses are to be assessed, each business within the district. If the assessment will be levied on businesses, a map that identifies the district boundaries in sufficient detail to allow a business owner to reasonably determine whether a business is located within the district boundaries. If the assessment will be levied on property and businesses, a map of the district in sufficient detail to locate each parcel of property and to allow a business owner to reasonably determine whether a business is located within the district boundaries.
(b) The name of the proposed district.
(c) A description of the boundaries of the district, including the boundaries of benefit zones, proposed for establishment or extension in a manner sufficient to identify the affected property and businesses included, which may be made by reference to any plan or map that is on file with the clerk. The boundaries of a proposed property assessment district shall not overlap with the boundaries of another existing property assessment district created pursuant to this part. This part does not prohibit the boundaries of a district created pursuant to this part to overlap with other assessment districts established pursuant to other provisions of law, including, but not limited to, the Parking and Business Improvement Area Law of 1989 (Part 6 (commencing with Section 36500)). This part does not prohibit the boundaries of a business assessment district created pursuant to this part to overlap with another business assessment district created pursuant to this part. This part does not prohibit the boundaries of a business assessment district created pursuant to this part to overlap with a property assessment district created pursuant to this part. (d) The improvements, maintenance, and activities proposed for each year of operation of the district and the estimated cost thereof. If the improvements, maintenance, and activities proposed for each year of operation are the same, a description of the f irst year’s proposed improvements, maintenance, and activities and a statement that the same improvements, maintenance, and activities are proposed for subsequent years shall satisfy the requirements of this subdivision.
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(e) The total annual amount proposed to be expended for improvements, maintenance, or activities, and debt service in each year of operation of the district. If the assessment is levied on businesses, this amount may be estimated based upon the assessment rate. If the total annual amount proposed to be expended in each year of operation of the district is not significantly different, the amount proposed to be expended in the initial year and a statement that a similar amount applies to subsequent years sha ll satisfy the requirements of this subdivision.
(f) The proposed source or sources of financing, including the proposed method and basis of levying the assessment in sufficient detail to allow each property or business owner to calculate the amount of the assessment to be levied against their property or business. The plan also shall state whether bonds will be issued to finance improvements.
(g) The time and manner of collecting the assessments. (h) The specific number of years in which assessments will be levied. In a new district, the maximum number of years shall be five. Upon renewal, a district shall have a term not to exceed 10 years. Notwithstanding these limitations, a district created pursuant to this part to finance capital improvements with bonds may levy assessments until the maximum maturity of the bonds. The management district plan may set forth specific increases in assessments for each year of operation of the district. (i) The proposed time for implementation and completion of the management district plan. (j) Any proposed rules and regulations to be applicable to the district. (k)
(1) A list of the properties or businesses to be assessed, including the assessor’s parcel numbers for properties to be assessed, and a statement of the method or methods by which the expenses of a district will be imposed upon benefited real property or businesses, in proportion to the benefit received by the property or business, to defray the cost thereof. (2) In a property -based district, the proportionate special benefit derived by each identified parcel shall be determined exclusively in relationship to the entirety of the capital cost of a public improvement, the maintenance and operation expenses of a public improvement, or the cost of the activities. An assessment shall not be imposed on any parcel that exceeds the reasonable cost of the proportional special benefit conferred on that parcel. Only special benefits are assessable, and a property-based district shall separate the general benefits, if any, from the special benefits conferred on a parcel. Parcels within a property -based district that are owned or used by any city, public agency, the State of California, or the United States shall not be exempt from assessment unless the governmental entity can demonstrate by clear and convincing evidence that those publicly owned parcels in fact receive no special benefit. The value of any incidental, secondary, or collateral effects that arise from the impro vements, maintenance, or activities of a property -based district and that benefit property or persons not assessed shall not be deducted from the entirety of the cost of any special benefit or affect the proportionate special benefit derived by each identified parcel. (3) In a property -based district, properties throughout the district may share the same special benefits. In a district with boundaries that define which parcels are to receive improvements, maintenance, or activities over and above those services provide d by the city, the improvements, maintenance, or activities themselves may constitute a special benefit. The city may impose assessments that are less than the proportional special benefit conferred, but shall not impose assessments that exceed the reasonable costs of the proportional special benefit conferred. Because one or more parcels pay less than the special benefit conferred does not necessarily mean that other parcels are assessed more than the reasonable cost of their special benefit. (l) In a property -based district, a detailed engineer’s report prepared by a registered professional engineer certified by the State of California supporting all assessments contemplated by the management district plan. (m) Any other item or matter required to be incorporated therein by the city council.
36623. Procedure to levy assessment
(a) If a city council proposes to levy a new or increased property assessment, the notice and protest and hearing procedure shall comply with Section 53753 of the Government Code. (b) If a city council proposes to levy a new or increased business assessment, the notice and protest and hearing procedure shall comply with Section 54954.6 of the Government Code, except that notice shall be mailed to the owners of the businesses propos ed to be assessed. A protest may be made orally or in writing by any interested person. Every written protest shall be filed with the clerk at or before the time fixed for the public hearing. The city council may waive any irregularity in the form or conte nt of any written protest. A written protest may be withdrawn in writing at any time before the conclusion of the public hearing. Each 45 SVTMD Management District Plan 19
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written protest shall contain a description of the business in which the person subscribing the protest is interested sufficient to identify the business and, if a person subscribing is not shown on the official records of the city as the owner of the business, the protest shall contain or be accompanied by written evidence that the person subscribing is the owner of the business or the authorized representative. A written protest that does not comply with this section shall not be counted in determining a majority protest. If written protests are received from the owners or authorized representatives of businesses in the proposed district that will pay 50 percent or more of the assessments proposed to be levied and protests are not withdrawn so as to reduce the protests to less than 50 percent, no further proceedings to levy the proposed assessment against such businesses, as contained in the resolution of intention, shall be taken for a period of one year from the date of the finding of a majority protest by the city council. (c) If a city council proposes to conduct a single proceeding to levy both a new or increased property assessment and a new or increased business assessment, the notice and protest and hearing procedure for the property assessment shall comply with subdiv ision (a), and the notice and protest and hearing procedure for the business assessment shall comply with subdivision (b). If a majority protest is received from either the property or business owners, that respective portion of the assessment shall not be levied. The remaining portion of the assessment may be levied unless the improvement or other special benefit was proposed to be funded by assessing both property and business owners.
36624. Changes to proposed assessments
At the conclusion of the public hearing to establish the district, the city council may adopt, revise, change, reduce, or modify the proposed assessment or the type or types of improvements, maintenance, and activities to be funded with the revenues from the assessments. Proposed assessments may only be revised by reducing any or all of them. At the public hearing, the city council may only make changes in, to, or from the boundaries of the proposed property and business improvement district that will exclu de territory that will not benefit from the proposed improvements, maintenance, and activities. Any modifications, revisions, reductions, or changes to the proposed assessment district shall be reflected in the notice and map recorded pursuant to Section 36627.
36625. Resolution of formation
(a) If the city council, following the public hearing, decides to establish a proposed property and business improvement district, the city council shall adopt a resolution of formation that shall include, but is not limited to, all of the following:
(1) A brief description of the proposed improvements, maintenance, and activities, the amount of the proposed assessment, a statement as to whether the assessment will be levied on property, businesses, or both within the district, a statement on whether bonds will be issued, and a description of the exterior boundaries of the proposed district, which may be made by reference to any plan or map that is on file with the clerk. The descriptions and statements need not be detailed and shall be sufficient if they enable an owner to generally identify the nature and extent of the improvements, maintenance, and activities and the location and extent of the proposed district. (2) The number, date of adoption, and title of the resolution of intention. (3) The time and place where the public hearing was held concerning the establishment of the district.
(4) A determination regarding any protests received. The city shall not establish the district or levy assessments if a majority protest was received.
(5) A statement that the properties, businesses, or properties and businesses in the district established by the resolution shall be subject to any amendments to this part. (6) A statement that the improvements, maintenance, and activities to be conferred on businesses and properties in the district will be funded by the levy of the assessments. The revenue from the levy of assessments within a district shall not be used to provide improvements, maintenance, or activities outside the district or for any purpose other than the purposes specified in the resolution of intention, as modified by the city council at the hearing concerning establishment of the district.
Notwithstanding the foregoing, improvements and activities that must be provided outside the district boundaries to create a special or specific benefit to the assessed parcels or businesses may be provided, but shall be limited to marketing or signage pointing to the district. (7) A finding that the property or businesses within the area of the property and business improvement district will be benefited by the improvements, maintenance, and activities funded by 46 SVTMD Management District Plan 20
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the proposed assessments, and, for a property -based district, that property within the district will receive a special benefit.
(8) In a property -based district, the total amount of all special benefits to be conferred on the properties within the property-based district.
(b) The adoption of the resolution of formation and, if required, recordation of the notice and map pursuant to Section 36627 shall constitute the levy of an assessment in each of the fiscal years referred to in the management district plan.
36627. Notice and assessment diagram
Following adoption of the resolution establishing district assessments on properties pursuant to Section 36625, the clerk shall record a notice and an assessment diagram pursuant to Section 3114. No other provision of Division 4.5 (commencing with Section 3100) applies to an assessment district created pursuant to this part.
36628. Establishment of separate benefit zones within district; Categories of businesses
The city council may establish one or more separate benefit zones within the district based upon the degree of benefit derived from the improvements or activities to be provided within the benefit zone and may impose a different assessment within each benefit zone. If the assessment is to be levied on businesses, the city council may also define categories of businesses based upon the degree of benefit that each will derive from the improvements or activities to be provided within the district and may impos e a different assessment or rate of assessment on each category of business, or on each category of business within each zone.
36628.5. Assessments on businesses or property owners
The city council may levy assessments on businesses or on property owners, or a combination of the two, pursuant to this part. The city council shall structure the assessments in whatever manner it determines corresponds with the distribution of benefits f rom the proposed improvements, maintenance, and activities, provided that any property - based assessment conforms with the requirements set forth in paragraph (2) of subdivision (k) of Section 36622.
36629. Provisions and procedures applicable to benefit zones and business categories
All provisions of this part applicable to the establishment, modification, or disestablishment of a property and business improvement district apply to the establishment, modification, or disestablishment of benefit zones or categories of business. The city council shall, to establish, modify, or disestablish a benefit zone or category of business, follow the procedure to establish, modify, or disestablish a property and business improvement district.
36630. Expiration of district; Creation of new district
If a property and business improvement district expires due to the time limit set pursuant to subdivision (h) of Section 36622, a new management district plan may be created and the district may be renewed pursuant to this part.
CHAPTER 3: Assessments
36631. Time and manner of collection of assessments; Delinquent payments
The collection of the assessments levied pursuant to this part shall be made at the time and in the manner set forth by the city council in the resolution levying the assessment. Assessments levied on real property may be collected at the same time and in the same manner as for the ad valorem property tax, and may provide for the same lien priority and penalties for delinquent payment. All delinquent payments for assessments levied pursuant to this part may be charged interest and penalties.
36632. Assessments to be based on estimated benefit; Classification of real property and businesses; Exclusion of residential and agricultural property
(a) The assessments levied on real property pursuant to this part shall be levied on the basis of the estimated benefit to the real property within the property and business improvement district. The city council may 47 SVTMD Management District Plan 21
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classify properties for purposes of determining the benefit to property of the improvements and activities provided pursuant to this part.
(b) Assessments levied on businesses pursuant to this part shall be levied on the basis of the estimated benefit to the businesses within the property and business improvement district. The city council may classify businesses for purposes of determining the benefit to the businesses of the improvements and activities provided pursuant to this part.
(c) Properties zoned solely for residential use, or that are zoned for agricultural use, are conclusively presumed not to benefit from the improvements and service funded through these assessments, and shall not be subject to any assessment pursuant to this part.
36633. Time for contesting validity of assessment
The validity of an assessment levied under this part shall not be contested in an action or proceeding unless the action or proceeding is commenced within 30 days after the resolution levying the assessment is adopted pursuant to Section 36625. An appeal from a final judgment in an action or proceeding shall be perfected within 30 days after the entry of judgment.
36634. Service contracts authorized to establish levels of city services
The city council may execute baseline service contracts that would establish levels of city services that would continue after a property and business improvement district has been formed.
36635. Request to modify management district plan
The owners’ association may, at any time, request that the city council modify the management district plan. Any modification of the management district plan shall be made pursuant to this chapter.
36636. Modification of plan by resolution after public hearing; Adoption of the resolution of intention
(a) Upon the written request of the owners’ association, the city council may modify the management district plan after conducting one public hearing on the proposed modifications. The city council may modify the improvements and activities to be funded with the revenue derived from the levy of the assessments by adopting a resolution determining to make the modifications after holding a public hearing on the proposed modifications. If the modification includes the levy of a new or increased assessment, the city council shall comply with Section 3662 3. Notice of all other public hearings pursuant to this section shall comply with both of the following:
(1) The resolution of intention shall be published in a newspaper of general circulation in the city once at least seven days before the public hearing.
(2) A complete copy of the resolution of intention shall be mailed by first class mail, at least 10 days before the public hearing, to each business owner or property owner affected by the proposed modification.
(b) The city council shall adopt a resolution of intention which states the proposed modification prior to the public hearing required by this section. The public hearing shall be held not more than 90 days after the adoption of the resolution of intention.
36637. Reflection of modification in notices recorded and maps
Any subsequent modification of the resolution shall be reflected in subsequent notices and maps recorded pursuant to Division 4.5 (commencing with Section 3100), in a manner consistent with the provisions of Section 36627.
36638. Assessment as government improvised fee on Civ C § 1770 transaction [Operative July 1, 2024]
(a) A business assessment pursuant to this part is a fee imposed by a government on the transaction for purposes of paragraph (29) of subdivision (a) of Section 1770 of the Civil Code. (b) This section shall become operative on July 1, 2024.
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CHAPTER 3.5 Financing
36640. Bonds authorized; Procedure; Restriction on reduction or termination of assessments
(a) The city council may, by resolution, determine and declare that bonds shall be issued to finance the estimated cost of some or all of the proposed improvements described in the resolution of formation adopted pursuant to Section 36625, if the resoluti on of formation adopted pursuant to that section provides for the issuance of bonds, under the Improvement Bond Act of 1915 (Division 10 (commencing with Section 8500)) or in conjunction with Marks –Roos Local Bond Pooling Act of 1985 (Article 4 (commencing with Section 6584) of Chapter 5 of Division 7 of Title 1 of the Government Code). Either act, as the case may be, shall govern the proceedings relating to the issuance of bonds, although proceedings under the Bond Act of 1915 may be modified by the city council as necessary to accommodate assessments levied upon business pursuant to this part.
(b) The resolution adopted pursuant to subdivision (a) shall generally describe the proposed improvements specified in the resolution of formation adopted pursuant to Section 36625, set forth the estimated cost of those improvements, specify the number of annual installments and the fiscal years during which they are to be collected. The amount of debt service to retire the bonds shall not exceed the amount of revenue estimated to be raised from assessments over 30 years.
(c) Notwithstanding any other provision of this part, assessments levied to pay the principal and interest on any bond issued pursuant to this section shall not be reduced or terminated if doing so would interfere with the timely retirement of the debt.
CHAPTER 4. Governance
36650. Report by owners’ association; Approval or modification by city council
(a) The owners’ association shall cause to be prepared a report for each fiscal year, except the first year, for which assessments are to be levied and collected to pay the costs of the improvements, maintenance, and activities described in the report. The owners’ association’s first report shall be due after the first year of operation of the district. The report may propose changes, including, but not limited to, the boundaries of the property and business improvement district or any benefit zones within the district, the basis and method of levying the assessments, and any changes in the classification of property, including any categories of business, if a classification is used.
(b) The report shall be filed with the clerk and shall refer to the property and business improvement district by name, specify the fiscal year to which the report applies, and, with respect to that fiscal year, shall contain all of the following information:
(1) Any proposed changes in the boundaries of the property and business improvement district or in any benefit zones or classification of property or businesses within the district. (2) The improvements, maintenance, and activities to be provided for that fiscal year. (3) An estimate of the cost of providing the improvements, maintenance, and activities for that fiscal year.
(4) 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.
(5) The estimated amount of any surplus or deficit revenues to be carried over from a previous fiscal year.
(6) The estimated amount of any contributions to be made from sources other than assessments levied pursuant to this part.
(c) The city council may approve the report as filed by the owners’ association or may modify any particular contained in the report and approve it as modified. Any modification shall be made pursuant to Sections 36635 and 36636.
The city council shall not approve a change in the basis and method of levying assessments that would impair an authorized or executed contract to be paid from the revenues derived from the levy of assessments, including any commitment to pay principal and interest on any bonds issued on behalf of the district.
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36651. Designation of owners’ association to provide improvements, maintenance, and activities
The management district plan may, but is not required to, state that an owners’ association will provide the improvements, maintenance, and activities described in the management district plan. If the management district plan designates an owners’ association, the city shall contract with the designated nonprofit corporation to provide services.
CHAPTER 5. Renewal
36660. Renewal of district; Transfer or refund of remaining revenues; District term limit
(a) Any district previously established whose term has expired, or will expire, may be renewed by following the procedures for establishment as provided in this chapter. (b) Upon renewal, any remaining revenues derived from the levy of assessments, or any revenues derived from the sale of assets acquired with the revenues, shall be transferred to the renewed district. If the renewed district includes additional parcels or businesses not included in the prior district, the remaining revenues shall be spent to benefit only the parcels or businesses in the prior district. If the renewed district does not include parcels or businesses included in the prior district, the remaining revenues attributable to these parcels shall be refunded to the owners of these parcels or businesses. (c) Upon renewal, a district shall have a term not to exceed 10 years, or, if the district is authorized to issue bonds, until the maximum maturity of those bonds. There is no requirement that the boundaries, assessments, improvements, or activities of a renewed district be the same as the original or prior district.
CHAPTER 6. Disestablishment
36670. Circumstances permitting disestablishment of district; Procedure
(a) Any district established or extended pursuant to the provisions of this part, where there is no indebtedness, outstanding and unpaid, incurred to accomplish any of the purposes of the district, may be disestablished by resolution by the city council in either of the following circumstances:
(1) If the city council finds there has been misappropriation of funds, malfeasance, or a violation of law in connection with the management of the district, it shall notice a hearing on disestablishment. (2) During the operation of the district, there shall be a 30-day period each year in which assessees may request disestablishment of the district. The first such period shall begin one year after the date of establishment of the district and shall contin ue for 30 days. The next such 30 -day period shall begin two years after the date of the establishment of the district. Each successive year of operation of the district shall have such a 30-day period. Upon the written petition of the owners or authorized representatives of real property or the owners or authorized representatives of businesses in the district who pay 50 percent or more of the assessments levied, the city council shall pass a resolution of intention to disestablish the district. The city council shall notice a hearing on disestablishment. (b) The city council shall adopt a resolution of intention to disestablish the district prior to the public hearing required by this section. The resolution shall state the reason for the disestablishment, shall state the time and place of the public hearing, and shall contain a proposal to dispose of any assets acquired with the revenues of the assessments levied within the property and business improvement district. The notice of the hearing on disestablishment required by this section shall be given by mail to the property owner of each parcel or to the owner of each business subject to assessment in the district, as appropriate. The city shall conduct the public hearing not less than 30 days after mailing the notice to the property or business owners. T he public hearing shall be held not more than 60 days after the adoption of the resolution of intention.
36671. Refund of remaining revenues upon disestablishment or expiration without renewal of district; Calculation of refund; Use of outstanding revenue collected after disestablishment of district
(a) Upon the disestablishment or expiration without renewal of a district, any remaining revenues, after all outstanding debts are paid, derived from the levy of assessments, or derived from the sale of assets acquired with the revenues, or from bond reserve or construction funds, shall be refunded to the owners of the property or businesses then located and operating within the district in which assessments were levied by applying the same method and basis that was used to calculate the assessments levied in the fiscal year in which the district is disestablished or expires. All outstanding assessment revenue collected after disestablishment shall be spent on improvements and activities specified in the management district plan. 50 SVTMD Management District Plan 24
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(b) If the disestablishment occurs before an assessment is levied for the fiscal year, the method and basis that was used to calculate the assessments levied in the immediate prior fiscal year shall be used to calculate the amount of any refund.
51 SVTMD Management District Plan 25
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APPENDIX 2 – ASSESSED BUSINESSES
Lodging Business Address
Holiday Inn Express 2550 Erringer Rd, Simi Valley, CA 93065 Grand Vista Hotel 999 Enchanted Way, Simi Valley, CA 93065 Best Western Posada Royale Hotel & Suites 1775 Madera Road, Simi Valley, CA 93065 Courtyard Ventura Simi Valley 191 Cochran Street, Simi Valley, CA 93065 Extended Stay America Hotel 2498 Stearns Street, Simi Valley, CA 93063 Motel 6 2566 N Erringer Road, Simi Valley, CA 93065
*List as of February 2024
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