Administrative Report DISCUSSION ITEM TO:

CITY COUNCIL

FROM:

Steve McClary, City Manager

DATE REPORT PREPARED:

December 22, 2016

MEETING DATE:

January 10, 2017

SUBJECT:

Resolution of Intention to Renew the Ojai Tourism Improvement District; Resolution Requesting Consent of the County of Ventura to Renew the Ojai Tourism Improvement District

Recommendation Adopt Resolution No. Declaring Intention to renew Ojai Tourism Improvement District and fixing hearing date, and Resolution No. Requesting Consent of the County of Ventura to renew the Ojai Tourism Improvement District. Executive Summary Adoption of the Resolution of Intention to Renew will result in a public meeting on February 14, 2017, and a public hearing on March 14, 2017 on the renewal of the Ojai Tourism Improvement District and the levy of assessments on lodging businesses. Adoption of the Resolution Requesting Consent will result in the resolution being transmitted to the Ventura County Board of Supervisors for their consideration to consent to include their territory in the renewed Ojai Tourism Improvement District (District). Background The District is a benefit assessment district proposed to continue funding marketing and sales promotion efforts for greater Ojai lodging businesses. This approach has been used successfully in other destination areas throughout the state to improve tourism and drive additional room nights. The proposed District includes all lodging businesses, located within the boundaries of the City of Ojai and a portion of the County of Ventura. Hoteliers decided to pursue renewal of the District in order to maintain a revenue source devoted to marketing greater Ojai as a tourist, meeting and event destination. If renewed, the District would Page 1 of 4

generate approximately $460,000 on an annual basis for promotion of travel and tourism specific to Ojai. _ The current District was established in 2012 for a five (5) year term, beginning November 1, 2012 through October 31, 2017. Hoteliers now wish to renew the District for an additional ten (10) years. Tourism Improvement Districts Tourism Improvement Districts utilize the efficiencies of private sector operations in the marketbased promotion of tourism. These special assessment districts allow lodging and tourism-related business owners to organize their efforts to increase tourism. Tourism-related business owners within the district fund the district, and those funds are used to provide services that the businesses desire and that benefit the lodging businesses within the district. District benefits: ➢ Funds cannot be diverted for other government programs ➢ They are customized to fit the needs of each destination ➢ They allow for a wide range of services; including: Marketing of the Destination, Tourism Promotion Activities and Sales Lead Generation ➢ They are designed, created and governed by those who will pay the assessment ➢ They provide a stable funding source for tourism promotion In California, Tourism Business Improvement Districts (TBIDs) are formed pursuant to the Property and Business Improvement District Law of 1994. This law allows for the creation of a special benefit assessment district 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 district. Management District Plan The Management District Plan includes the proposed boundary of the District, a service plan and budget and a proposed means of governance. The District will include all lodging businesses, existing and in the future, available for public occupancy within the boundaries of the City of Ojai and a portion of the County of Ventura. The renewed OTID will have a ten (10) year life. The assessment will be implemented beginning November 1, 2017 through October 31, 2027. Once per year beginning on the anniversary of district renewal there is a 30-day period in which business owners paying more than fifty percent (50%) of the assessment may protest and begin proceedings to terminate the district. The City and County will be responsible for collecting the assessment on a monthly or quarterly basis from each lodging business located in the District boundaries, within their respective jurisdictions. The City and County shall forward the assessments to the Ojai Chamber of Page 2 of 4

Commerce, which will have the responsibility of managing District programs as provided in the Management District Plan. The City and County shall retain a fee equal to one percent (1%) of the amount of assessment collected to cover their costs of collection and administration. This matter was heard before the City Council on December 13, 2016 but continued to this meeting to allow review of the Management District Plan. The plan was forwarded to Council on December 14, 2016. District Renewal Process January 10, 2017'

RESOLUTION OF INTENTION HEARING Upon the submission of a written petition, signed by the lodging business owners in the renewed district who will pay more than fifty percent (50%) of the assessments proposed to be levied, the City 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 District renewal were submitted by lodging business with, which represent % of the total district assessment. This majority petition allows the Council to initiate proceedings for district renewal at the January 10, 2017 meeting.

January 10, 2017

RESOLUTION REQUESTING CONSENT A city may not renew a district within the unincorporated territory of a county without the consent of the board of supervisors of that county. Adoption of this resolution formally requests the Ventura County Board of Supervisors to consent to including a portion of their territory in the renewed District. Their consent must be received prior to the final public hearing on March 14, 2017

January 11, 2017

NOTICE The Property and Business Improvement District Law of 1994 requires the City mail written notice to the owners of all businesses proposed to be within the District. Mailing the notice begins a mandatory 45-day period in which owners may protest District renewal.

February 14, 2017

PUBLIC MEETING Allow public testimony on the renewal of the District and levy of assessments. No Council action required.

March 14, 2017

FINAL PUBLIC HEARING If written protests are received from the owners of businesses in the renewed District which will pay more than fifty percent (50%) 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 Page 3 of 4

proposed assessment against such businesses shall be taken for a period of one year from the date of the finding of a majority protest by the Council. At the conclusion of the public hearing to renew the district, the Council may adopt, revise, change, reduce, or modify the proposed assessment or the type or types of improvements and activities to be funded with the revenues from the assessments. Proposed assessments may only be revised by reducing any or all of them. If the Council, following the public hearing, decides to renew the District, the Council shall adopt a resolution of formation. Alternatives The Council could choose not to adopt the Resolution of Intention to Renew and the Resolution Requesting Consent. Staff does not recommend this option. Fiscal Impact None immediately. The City and County will retain a fee of one percent (1%) of the amount collected, within their respective jurisdictions, to cover their costs of administration. Because the district programs are intended to increase visitation to the City, there may be an increase in transient occupancy tax and sales tax collections.

LL Submitted by Steve McClary, City Manager

Approved for forwarding City Manager's Office

Attachments: A — Resolution of Intention to Renew the Ojai Tourism Improvement District and setting time and place for public hearing; B -- Resolution Requesting Consent of the County of Ventura to Renew the Ojai Tourism Improvement District

Page 4 of 4

RESOLUTION NO. 2017 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF OJAI DECLARING ITS INTENTION TO RENEW THE OJAI TOURISM IMPROVEMENT DISTRICT (OTID) AND FIXING THE TIME AND PLACE OF A PUBLIC MEETING AND A PUBLIC HEARING THEREON AND GIVING NOTICE THEREOF WHEREAS, the City of Ojai created the OTID on October 9, 2012 by Resolution No. 12-52; and WHEREAS, the OTID was created for a five (5) year term which ends on October 31, 2017; and WHEREAS, the Property and Business Improvement Law of 1994, Streets and Highways Code § 36600 et seq., authorizes the City to renew business improvement districts for the purposes of promoting tourism; and WHEREAS, the Ojai Chamber of Commerce, lodging business owners, and representatives from the City of Ojai have met to consider the renewal of the OTID; and WHEREAS, the Ojai Chamber of Commerce has drafted a Management District Plan (Plan) which sets forth the proposed boundary of the OTID, a service plan and budget, and a proposed means of governance; and WHEREAS, the renewed district includes lodging businesses in the City of Ojai and a portion of the County of Ventura; and WHEREAS, consent to include lodging businesses in the County of Ventura's jurisdiction will be requested from the County of Ventura; and WHEREAS, lodging businesses that will pay more than fifty percent (50%) of the assessment under the OTID have petitioned the City Council to renew the OTID. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL THAT: 1.

The recitals set forth herein are true and correct.

2.

The City Council finds that lodging businesses that will pay more than fifty percent (50%) of the assessment proposed in the Plan have signed and submitted petitions in support of the renewal of the OTID. The City Council accepts the petitions and adopts this Resolution of Intention to renew the OTID and to levy an assessment on certain lodging businesses within the OTID boundaries in accordance with the Property and Business Improvement District Law of 1994.

3.

The City Council finds that the Plan satisfies all requirements of Streets and Highways Code § 36622. Attachment A Page 1 of 4

4.

The City Council declares its intention to renew the OTID and to levy and collect assessments on lodging businesses within the OTID boundaries pursuant to the Property and Business Improvement District Law of 1994.

5.

The OTID shall include all lodging businesses located within the boundaries of the City of Ojai and that portion of the County of Ventura, as shown in the map attached as Exhibit A.

6.

The name of the district shall be Ojai Tourism Improvement District (OTID).

7.

The initial annual assessment rate (November — December 2016) is one percent (1%) of gross short-term room rental revenue. Beginning January 1, 2018, the annual assessment rate shall be one and one-half percent (1.5%) of gross short-term room rental revenue. During the ten (10) year term, the assessment rate may be increased by the Owners' Association Board to a maximum of two percent (2%) of gross short-term room rental revenue as described in Section V. The assessment rate may also be decreased by the Owners' Association Board, but shall not drop below one percent (1%) of gross short-term room rental revenue. The maximum increases or decrease in any year shall be one-quarter of one percent (0.25%). Based on the benefit received, assessments will not be collected on: stays of more than thirty (30) consecutive days; and stays pursuant to contracts executed prior to November 1, 2012.

8.

The assessments levied for the OTID shall be applied toward sales promotion and marketing programs to market assessed lodging businesses in Ojai as tourist, meeting, and event destinations, as described in the Plan. Funds remaining at the end of any year may be used in subsequent years in which OTID assessments are levied as long as they are used consistent with the requirements of this resolution and the Plan.

9.

The renewed OTID will have a ten (10) year term, beginning November 1, 2017 through October 31, 2027, unless renewed pursuant to Streets and Highways Code § 36660.

10.

Bonds shall not be issued.

11.

The time and place for the public meeting to hear testimony on establishing the OTID and levying assessments is set for February 14, 2017, at 7:00 PM, or as soon thereafter as the matter may be heard, at the Council Chambers located at 401 S. Ventura Street, Ojai, CA 93023.

12.

The time and place for the final public hearing to establish the OTID and the levy of assessments are set for March 14, 2017, at 7:00 PM, or as soon thereafter as the matter may be heard, at the Council Chambers located at 401 S. Ventura Street, Ojai, CA 93023. The City Clerk is directed to provide written notice to the lodging businesses subject to assessment of the date and time of the meeting and hearing, and to provide that notice as required by Streets and Highways Code § 36623, no later than January 21, 2017.

13.

At the public meeting and hearing the testimony of all interested persons for or against the renewal of the OTID may be received. If at the conclusion of the public hearing, there are of record written protests by the owners of the lodging businesses within the proposed OTID that will pay more than fifty percent (50%) of the estimated total assessment of the entire OTID, no Attachment A Page 2 of 4

further proceedings to renew the OTID shall occur for a period of one year. 14.

The complete Plan is on file with the City Clerk and may be reviewed upon request.

15.

This resolution shall take effect immediately upon its adoption by the City Council.

I HEREBY CERTIFY that the foregoing Resolution of Intention was introduced and adopted at a regular meeting of the City Council on the 10th day of January 2017 by the following vote:

AYES: Council MEMBERS: NOES: Council MEMBERS: ABSENT: Council MEMBERS: ABSTAIN: Council MEMBERS:

Mayor

ATTEST:

City Clerk

Attachment A Page 3 of 4

EXHIBIT A District Boundaries

Ojai Tourism Improvement District .** N 0 a 9/29i2016 C I VITAS

A

4 4 . 111 lift.tan tkinetitit,fmra

•

eras ejo' () 10*

11COI Ot9 Limits

1=1 c TID Boundary

Attachment A Page 4 of 4

RESOLUTION NO. 17 RESOLUTION REQUESTING CONSENT OF THE COUNTY OF VENTURA TO RENEW THE OJAI TOURISM IMPROVEMENT DISTRICT WHEREAS, the City Council (the "Council") of the City of Ojai (the "City") desires to begin proceedings to renew the Ojai Tourism Improvement District ("OTID") WHEREAS, certain lodging business owners have requested that the Council of the City renew the OTID; and WHEREAS, a portion of the territory proposed to be included in the renewed OTID lies within the boundaries of the County of Ventura, as shown on the map attached hereto as Exhibit A and incorporated herein by such attachment; and WHEREAS, the area of the County of Ventura which lies within the boundaries of the renew OTID will, in the opinion of the Council, be benefited by the improvements and activities, and the purpose sought to be accomplished by the work can best be accomplished be a single comprehensive scheme of work; NOW, THEREFORE, be it resolved by the City Council of the County of Ojai that: Section 1: The above recitals are true and correct. Section 2: Consent of the County of Ventura, through its Board of Supervisors, is hereby requested to renew the OTID, and to grant to the Council jurisdiction for all the purposes in connection with creation, operation and future renewals of the proposed OTID. Section 3: The City Clerk is hereby directed to transmit a certified copy of this Resolution to the Clerk of the Board of the County of Ventura. ON MOTION duly made, seconded, and carried the foregoing resolution was passed and adopted by the City Council of the City of Ojai, State of California, this 10th day of January 2017 by the following vote: AYES: NOES: ABSENT: ABSTAIN: Mayor (SEAL) ATTEST: City Clerk Attachment B Page 1 of 2

EXHIBIT A District Boundaries

Ojai Tourism Improvemcnt District 9/29/2016

&

CI VITA$ 4 g

I-7 CO CRY Limit = COI 110 Boundary

Attachment B Page 1 of 2