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HomeMy WebLinkAboutAgenda Report - December 21, 2016 C-11TM CITY OF LODI COUNCIL COMMUNICATION AGENDA ITEM Cs- i I AGENDA TITLE: Approve Lodi Tourism Business Improvement District (LTBID) 2016 Annual Report MEETING DATE: December 21, 2016 PREPARED BY: Business Development Manager RECOMMENDED ACTION: Approve Lodi Tourism Business Improvement District (LTBID) 2016 Annual Report BACKGROUND INFORMATION: On September 2, 2015 the Council adopted Resolution no. 2015- 159 establishing the Lodi Tourism Business Improvement District (LTBID) for a five-year term, beginning October 2, 2015 and continuing through September 30, 2020. Pursuant to Streets and Highways Code Section 36600 et seq., also known as the "Property and Business Improvement District Law of 1994," the Owners Association, identified in the resolution as the Lodi Conference and Visitors Bureau (Visit Lodi!), is required to present an annual report (Exhibit A) to the Council for each year in which assessments are to be levied and collected to pay the costs of the improvements and activities described within the report. The City provides additional funding to Visit Lodi! Under a Memorandum of Understanding (MOU) at a rate of 19 percent of the Transient Occupancy Tax collections. The original MOU, approved by the City Council on August 19, 2009, was in affect from July 1, 2009 through June 30, 2014 and included a provision for an annual report. An addendum was approved by City Council on May 21, 2014 and extended the MOU for an additional three years. FISCAL IMPACT: Funding for Visit Lodi! generates additional funding for local merchants and the City as tourism dollars are spent locally. FUNDING AVAILABLE: $133,500 is included in the FY 2016/17 budget. er Business Development Manager APPROVED: hen Schwa suer Step , City Manager LODI CALIFORNIA w -4"-e. November 2, 2016 Steve Schwabauer, City Manager City of Lodi 221 W. Pine St. Lodi, CA 95240 Dear Mr. Schwabauer, Enclosed please find the Annual Report for the Lodi Tourism Business Improvement District (LTBID) which was established October 2, 2015, by Resolution No. 2015-159. The report spells out any changes to the boundaries, proposed activities, costs to provide those activities as well as estimated surplus, and contributions made from sources other than assessments as required by California Streets and Highways Code 36650. If there are any questions on the enclosed report, please feel free to give me a call. gards, Na President a • CEO Visit Lodi! Conference & Visitors Bureau 25 N School St. Lodi, CA 95240 t [209] 365-1195 f [209] 365-1191 www.VisitLodl.Com Lodi Tourism Business Improvement District Annual Report Boundaries There are no proposed changes to the boundaries or assessed business. Improvements and Activities The improvements and activities to be provided for the fiscal year 2016-2017 are consistent with the Management District Plan. There are no proposed changes. Sales and Marketing A sales and marketing program will promote assessed businesses as tourist, meeting, and event destinations. The sales and marketing program will have a central theme of promoting Lodi 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 targeted at potential visitors to drive overnight visitation and room sales to assessed businesses; • Television ads targeted at potential visitors to drive overnight visitation and room sales to assessed businesses; ■ 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; • 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; • Sponsorship of events that attract tourist and groups to assessed businesses; • Director of Sales and General Manager meetings to plan and coordinate tourism promotion efforts for assessed businesses; • Education of hospitality staff on service and safety (related to alcohol and food) designed to create a visitor experience that will bring repeat visits to assessed businesses; and ■ Education of lodging business management and the owners' association on marketing strategies best suited to meet assessed business's needs. Administration and Operations The administration and operations portion of the budget shall be utilized for administrative staffing costs, office costs, and other general administrative costs such as insurance, legal, and accounting fees. Visitor Service Enhancements The Visitor Services Enhancement (VSE) program will provide potential funding for programs and initiatives based on criteria to be developed by the LTBID. The focus of the VSE program will be on the entire destination brand footprint to ensure a consistent brand experience throughout the LTBID. VSE may include: ■ A long-term ambassador program with trained staff that supplements the current level of police presence around assessed businesses and encourages overnight visitation; • Welcome Center and kiosk improvements including new technology -driven visitor information enhancements; and • Brand -centric visitor services training program for both public and private sector staff. Collection Fee The City shall be paid a fee equal to three and one quarter percent (3.25%) of the amount of assessment collected, to cover its costs of collection and administration. Cost Estimate 2017 Projections The cost of providing improvements and activities for 2017 is consistent with the Management District Plan. The total budget has changed slightly due to normal fluctuations in hotel occupancy and room rates. The anticipated total BID revenues for 2017 is $677,250.00. Category % $ Sales & Marketing 78.5% $532,414 Administration 12.25% $84,162 Visitor Services 1% $4,800 Contingency / Renewal 5% $33,863 City Fee 3.25% $22,011 Totals 100% $677,250 Assessment There is no change in the method and basis of levying the assessment. Assessment The annual assessment rate is four and one-half percent (4.5%) within the City of Lodi and three percent (3%) in the unincorporated areas of San Joaquin County of gross short-term (stays less than 31 days) room rental revenue. Based on the benefit received, assessments will not be collected on stays of more than thirty (30) consecutive days. Assessments pursuant to the LTBID shall not include room rental revenue resulting from stays pursuant to contracts executed prior to September 1, 2015. The term "gross room rental revenue" as used herein means: The consideration charged, whether or not received, for the occupancy of space in a hotel valued in money, whether to be received in money, goods, labor or otherwise, including all receipts, cash, credits and property and services of any kind or nature, without any deduction therefrom whatsoever. Gross room rental revenue shall not include 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. The assessment shall be disclosed as the "LTBID 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 considered revenue for any purposes, including calculation of transient occupancy taxes. Bonds shall not be issued. Penalties and Interest • Any lodging business which fails to remit any assessment imposed within the time required shall pay a penalty often percent (10%) of the amount of the assessment in addition to the amount of the assessment. • Any lodging business which fails to remit any delinquent remittance on or before a period of thirty (30) days following the date on which the remittance first became delinquent shall pay a second delinquency penalty of ten percent (10%) of the amount of the assessment in additional to the amount of the assessment and the ten percent (10%) penalty first imposed. • If the City or County determines that the nonpayment of any remittance due is due to fraud, a penalty of twenty-five percent (25%) of the amount of the assessment shall be added thereto in addition to the penalties stated in subsections 1 and 2 of this section. • In addition to the penalties imposed, any lodging business which fails to remit any assessment imposed shall pay interest at the rate of one-half of one percent (0.5%) per month or fraction thereof on the amount of the assessment exclusive of penalties, from the date on which the remittance first became delinquent until paid. • Every penalty imposed and such interest as accrues shall become a part of the assessment required to be paid. Surplus and Other Funding Surplus We do not anticipate any surplus this year. If there are any unexpected unspent funds they will be carried over to our marketing and advertising budget. Other Funding There are additional estimated revenues of $92,380 from the following sources: Source Estimated Amount City of Lodi 1 $75,000 Tourism Lunch $11,850 Attraction Map & Guide $1,500 Postage donations $30 Retail $1,500 Marketing Services Fees $1,000 Website Advertising $1,800 Total $92,680 Results The LTBID was created to increase room night sales and revenue for assessed hotels. Transient Occupancy data collected by the City shows that goal has been accomplished. As of the 2nd quarter of 2016, hotel room revenues were up over 15% from the same period of 2015.