REPORT to the City COuncil
FROM: GEORGEANNE A. WHITE, City Manager
Office of the Mayor & City Manager
BY: SANTINO DANISI, City Controller/Finance Director
Finance Department
SUBJECT
Title
Approval of items related to the renewal of a Tourism Business Improvement District upon verification of a sufficient number of valid petitions collected to support the renewal of the district
1. ***RESOLUTION- Declaring its intention to renew the Fresno-Clovis Tourism Business Improvement District (FCTBID) and establishing the time and place of a public meeting and a public hearing thereon and giving notice thereof (Subject to Mayor’s Veto)
2. ***RESOLUTION - Requesting consent of the City of Clovis to renew the FCTBID (Subject to Mayor’s Veto)
Body
RECOMMENDATION
Staff recommends that the City Council approve both Resolutions to initiate the process for renewing the Fresno-Clovis Tourism Business Improvement District (FCTBID).
EXECUTIVE SUMMARY
The FCTBID was formed in 2010 for a five-year term ending on December 31, 2015, and subsequently renewed for a ten-year term ending on December 31, 2025. As the FCTBID reaches the end of its initial term, businesses have expressed a desire to renew it. The FCTBID will continue to provide a steady funding source to the Fresno-Clovis Convention and Visitor’s Bureau (FCCVB) through an assessment levied on hoteliers within the District. The Property and Business Improvement District Law of 1994, which authorizes this kind of entity, requires that one municipal entity act as the lead agency through which the FCTBID is formed and assessments are collected. The FCCVB will serve as the FCTBID’s Owner’s Association. The Owner’s Association is charged with managing funds and implementing programs in accordance with the Management District Plan, and must provide annual reports to the City Council.
Adoption of the Resolution Declaring Intention to Renew the FCTBID will result in a public meeting on November 6, 2025 and a public hearing on December 4, 2025 on the renewal of the Fresno/Clovis Tourism Business Improvement District (FCTBID) and the levy of assessments on lodging businesses and short-term rentals. The Adoption of Resolution of Requesting Consent requests consent from the City of Clovis to grant the Fresno City Council jurisdiction for all purposes in connection with the creation, operation, and future renewals of the renewed FCTBID.
Background
The FCTBID is a benefit assessment district proposed to continue a revenue source to help fund destination sales and marketing efforts for Fresno/Clovis lodging businesses and short-term rentals. This approach has been used successfully in other destination areas throughout the state to improve tourism and drive additional room nights to assessed lodging businesses. The renewed FCTBID includes all lodging businesses, including all short-term rentals, existing and in the future, available for public occupancy located within the boundaries of the Cities of Fresno and Clovis. Because the renewed FCTBID will include the City of Clovis, consent must be requested by the City Council of Fresno and granted by the City Council of Clovis in order for the City of Clovis to be included in the creation, operation and future renewals of the FCTBID.
Lodging business owners decided to pursue renewal of the FCTBID in order to continue a revenue source devoted to marketing the Cities of Fresno and Clovis as a tourist, meeting and event destination. If renewed, the FCTBID would generate approximately $3,585,000 on an annual basis for promotion of travel and tourism specific to the Cities of Fresno and Clovis.
Tourism Business Improvement Districts
Tourism Business Improvement Districts (TBIDs) utilize the efficiencies of private sector operation in the market-based promotion of tourism. These special assessment districts allow lodging business owners to organize their efforts to increase tourism. Lodging business owners within the TBID fund the TBID, and those funds are used to provide services that are desired by and benefit the lodging businesses within the TBID.
TBID benefits:
Ø Funds cannot be diverted for other government programs;
Ø They are customized to fit the needs of each destination;
Ø They allow for a wide range of services; including: destination marketing, tourism promotion, and sales lead generation;
Ø They are designed, created and governed by those who will pay the assessment; and
Ø They provide a stable funding source for tourism promotion.
In California, TBIDs are primarily formed pursuant to the Property and Business Improvement District Law of 1994 (94 Law). This law allows for the creation of special benefit assessment districts to raise funds within a specific geographic area. The key difference between TBIDs and other special benefit assessment districts is that funds raised are returned to the private non-profit corporation governing the TBID.
MANAGEMENT DISTRICT PLAN
The Management District Plan (Attachment 4) includes the proposed boundary of the FCTBID, a service plan and budget and a proposed means of governance. The FCTBID will include all lodging businesses, including short-term rentals, existing and in the future, available for public occupancy within the boundaries of the Cities of Fresno and Clovis.
The annual assessment rate is two percent (2%) of gross short-term room rental revenue in years one (1) and two (2) of the term. The assessment rate will automatically increase to two and one-half of one percent (2.5%) of gross short-term room rental revenue in years three (3) through six (6) and will subsequently increase to three percent (3%) of gross short-term room rental revenue in years seven (7) through ten (10) of the term, as outlined in the table below.
|
Years |
Assessment Rate |
|
1 - 2 |
2% |
|
3 - 6 |
2.5% |
|
7 - 10 |
3% |
Based on the benefit received, assessments will not be collected on the following stays:
• Stays of more than thirty (30) consecutive days;
• Stays by railroad crews and airline crews;
• Stays by any officer or employee of a foreign government who is exempt by reason of express provision of federal law or international treaty or any federal or California city, county or state government officer or employee when on official business; and
• Stays by any occupant whose rent is of a value less than two dollars ($2.00) a day.
The renewed FCTBID will have a ten (10) year term, beginning January 1, 2026, or as soon as possible thereafter, and ending ten (10) years from its start date. The assessment will be implemented beginning January 1, 2026. Once per year beginning on the anniversary of FCTBID renewal there is a thirty (30) day period in which business owners paying fifty percent (50%) or more of the assessment may protest and begin proceedings to terminate the FCTBID.
The Cities of Fresno and Clovis will be responsible for collecting the assessment not less than quarterly from each assessed business located in the FCTBID boundaries within each respective city. The City of Fresno shall forward the assessments received by each City to the Fresno/Clovis Convention and Visitors Bureau, which will have the responsibility of managing FCTBID programs as provided in the Management District Plan. The Cities of Fresno and Clovis shall be paid a fee equal to one percent (1%) of the amount of assessment collected to cover their costs of collection and administration.
FCTBID renewal PROCESS
October 16, 2025
RESOLUTION OF INTENTION
Upon the submission of a written petition, signed by the business owners in the renewed district who will pay more than fifty percent (50%) of the assessments proposed to be levied, the City Council of Fresno (Council) may initiate proceedings to renew a district by the adoption of a resolution expressing its intention to renew a district.
Petition Status: Petitions in favor of FCTBID renewal were submitted by 28 lodging businesses and short-term rentals, which represent 53.81% of the total FCTBID assessment. This majority petition allows the Council to initiate proceedings for FCTBID renewal at the October 16, 2025 meeting.
RESOLUTION REQUESTING CONSENT
Upon adoption of the Resolution of Intention, the City of Fresno must request consent from all jurisdictions to be included in the proposed FCTBID. Consent must be received from the jurisdictions prior to the final public hearing for their jurisdiction to be included in the established FCTBID.
By October 20, 2025
NOTICE
The 94 Law requires the City of Fresno to mail written notice to the owners of all businesses proposed to be within the FCTBID. Mailing the notice begins a mandatory forty-five (45) day period in which owners may protest FCTBID renewal.
November 6, 2025
PUBLIC MEETING
Allow public testimony on the renewal of the FCTBID and levy of assessments. No Council action required.
December 4, 2025
FINAL PUBLIC HEARING
If written protests are received from the owners of businesses in the renewed FCTBID which will pay fifty percent (50%) or more of the assessments proposed to be levied and protests are not withdrawn so as to reduce the protests to less than fifty percent (50%), no further proceedings to levy the proposed assessment against such businesses shall be taken for a period of one (1) year from the date of the finding of a majority protest by the Council.
If the Council, following the public hearing, decides to establish the renewed FCTBID, the Council shall adopt a resolution of formation.
ENVIRONMENTAL FINDINGS
Pursuant to California Environmental Quality Act (CEQA) Guidelines Section 15378, this item is not a project for the purposes of CEQA.
LOCAL PREFERENCE
Local preference is not applicable because this is not an agreement for materials, supplies, equipment or services.
FISCAL IMPACT
None immediately. The Cities of Fresno and Clovis shall be paid a fee equal to 1% of the amount of assessment collected to cover their costs of collection and administration. Because the FCTBID programs are intended to increase visitation to the Cities, there may be an increase in transient occupancy tax and sales tax collections.
Attachments:
Resolution Declaring Intent to Establish the FCTBID
Resolution Requesting Consent from the City of Clovis to Establish the FCTBID
Notice of Public Meeting and Public Hearing
FCTBID Management District Plan 2026-2035