REPORT TO THE CITY COUNCIL
October 30, 2014
FROM: BRUCE RUDD, City Manager
BY: WILMA QUAN-SCHECTER, Deputy City Manager
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
2. RESOLUTION - Requesting consent of the City of Clovis to renew the FCTBID
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. 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.
BACKGROUND
The renewed FCTBID will include all lodging businesses, existing and in the future, available for public occupancy located within the boundaries of the cities of Fresno and Clovis. The FCTBID is designed to provide specific benefits directly to payors through a sales and marketing program that will promote assessed businesses as tourist, meeting and event destinations. The goal of the sales and marketing program will be to increase overnight visitation and room night sales in cities of Fresno and Clovis.
The funding for a TBID comes from an assessment levied upon hoteliers within the District's boundaries. This is separate and distinct from the Transient Occupancy Tax (TOT) that hoteliers are required to submit. Initial estimates are that the TBID will collect approximately $1,400,000 per year in the first five (5) of its ten (10) year operation. The anticipated budget for the last five (5) years of its ten (10) year operation will be approximately $2,000,000 per year in assessments annually from both the Fresno and Clovis businesses within the FCTBID. The City of Fresno will be reimbursed up to 1% of the collected assessment for administrative costs associated with the collection and record-keeping related to the assessment. In addition to receiving reimbursement for expenses, the City of Fresno will have a seat on the FCTBID Board, as will the City of Clovis.
The FCTBID can only be renewed by a governing municipal agency. The law requires that businesses owners who would pay more than 50% of the assessment sign petitions indicating their desire to renew the FCTBID. Upon receipt of sufficient petitions, if the City Council chooses to proceed, it is must pass a Resolution of Intent to Form the District and to set a date for both a public meeting and a public hearing. There will be a public meeting to allow public testimony regarding renewal of the TBID, which the Resolution of Intention will set for November 20, 2014. Written protests can be submitted up until the time set for the public hearing, which the Resolution of Intention will set for December 18, 2014. At the public hearing, Council may adopt a resolution renewing the TBID, so long as the City has not received written protests from business owners who will pay more than 50% of the assessment. The action requested of City Council on October 30th is simply to provide notice that it is the intent of the City to renew the TBID and to set the meeting date and the hearing date for the vote. The Council's approval of the Resolutions on October 30th does not formally establish, or bind the Council to establish, the District.
The law requires that the City of Clovis also approve the renewal of the District within their city limits because this District encompasses the City of Clovis as well as Fresno. The Fresno City Council is being asked to approve a Resolution requesting the City of Clovis to renew the formation of the District within their city limits. If the FCTBID is successfully established, assessments levied in the City of Clovis on hoteliers in Clovis will be collected by the City of Clovis and forwarded to the City of Fresno for transmittal to the FCTBID.
ENVIRONMENTAL FINDINGS
This is not a project for CEQA purposes.
LOCAL PREFERENCE
This action is not subject to local preference.
FISCAL IMPACT
There is no fiscal impact to the City. All necessary actions to post the public hearing notices and mail ballots to affected parties will be paid by the CVB. If the FCTBID is renewed, the City will be responsible for collecting the assessment from hoteliers and will pass the funds through to the FCTBID. The City will be reimbursed for administrative costs of collecting the assessment and transmitting it to the FCTBID.
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