HomeMy WebLinkAbout- - BIA Reauthorization - 6/15/2010CITY COUNCIL AGENDA REPORT
MEETING DATE: June 15, 2010 ITEM NUMBER:
SUBJECT: BUSINESS IMPROVEMENT AREA (BIA) REAUTHORIZATION
DATE: JUNE 8, 2010
FROM: CITY MANAGER/ADMINISTRATION
PRESENTATION THOMAS R. HATCH, ASSISTANT CITY MANAGER
BY:
FOR FURTHER INFORMATION CONTACT: THOMAS R. HATCH @ (714) 754-5288
KELLY R. SHELTON @ (714) 754-5328
RECOMMENDATION:
It is recommended that the City Council hold the requisite Public Hearing and adopt the
attached Resolution to levy an annual assessment for Fiscal Year 2010-2011 for the
Business Improvement Area (BIA) for hotels and motels located within the City of Costa
Mesa.
BACKGROUND:
As directed by the City Council, staff has proceeded with the process to re -authorize the
annual assessment of the BIA for Fiscal Year 2010-2011. This assessment is imposed
as a "bed tax" against overnight stays at the ten hotels that participate as members in
the Costa Mesa Conference and Visitor Bureau (CMCVB). The CMCVB Board is
comprised of the managers of the member hotels, a City Council Member and the City
Manager.
Authorization of the BIA will impose a two percent (2%) assessment on the cost of each
night's lodging at the member hotels. The resulting levy will be used for the continuing
operation of the CMCVB.
At the meeting of May 4, 2010, the City Council approved and filed the Annual Report
for the BIA for Fiscal Year 2010-2011, and adopted Resolution 10-30, a Resolution of
Intention that included approval of the BIA budget and the setting of a Public Hearing for
June 15, 2010 (see Attachment 1). The adoption of a second Resolution levying the
assessment is the final step in the re -authorization of the BIA assessment.
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The authority to develop a Business Improvement Area is detailed in the Streets and
Highways Code, Section 36500. This State law enables Costa Mesa to impose an
assessment fee on businesses within an area designated by the City. All of Costa Mesa
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has been designated as the BIA benefit zone. Currently, the number of properties included
in the BIA assessment levy is limited to the ten hotels identified in both Resolution 10-30
and the second Resolution levying the assessment to be adopted at this meeting (see
Attachment 2).
As a function of the renewal process all ten affected property owners have been legally
noticed of the assessment, and of the public hearing that is required to provide an
opportunity to "protest" the establishment of the area, the extent of the area, or the types of
improvements within the area. Staff has also noticed all the hotels and motels in the City
not included in the BIA to allow them the opportunity to be included as well. The City
Council makes the ultimate decision as to the size of, and the properties to be included in
the BIA. Once the second Resolution is adopted, the boundaries of the BIA cannot be
altered during the current fiscal year.
Mayer, Hoffman, McCann P.C. has completed the annual audit of the CMCVB for the fiscal
year ending on June 30, 2009 as required by the Professional Services Contract in effect
between the City and the CMCVB. This is included in the Annual Report submitted on May
4, 2010.
ALTERNATIVES CONSIDERED:
Refrain from adopting the Resolution levying the assessment (Attachment 2).
FISCAL REVIEW:
According to the 2010-2011 Annual Report, the CMCVB has estimated that a total of
$1,146,000 in BIA revenues will be generated for the entire fiscal year ending on June
30, 2010. The CMCVB has estimated that their expenditures for that same period will
amount to approximately $904,250 leaving $241,750 in unexpended funds. Examples
of CMCVB expenditures include: an advertising campaign; media relations; industry
Fam tours (tours for industry professionals, such as travel writers and conference
planners, sponsored by the CMCVB); brochures/promotional items; trade shows;
administration; special promotions; and hotel niche marketing. The CMCVB returns $50
per room to each of the ten participating hotels to offset each member hotels'
advertising costs.
The City receives one percent (1 %) of the BIA assessment as partial reimbursement for
its collection and administrative costs. The one percent (1%) allocated to the City for
reimbursement is estimated at $11,460 for the coming fiscal year. This fee will
sufficiently cover the costs incurred by the City in assisting the Bureau.
LEGAL REVIEW:
The Parking and Business Improvement Area Law of 1989 requires the adoption of the
attached second Resolution reviewed and approved by the City Attorney's Office.
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CONCLUSION:
The adoption of the attached Resolution is the final step required to authorize the BIA
assessment for the 2010-2011 Fiscal Year. The BIA assessment and CMCVB annual
report must be reviewed and approved each fiscal year by the City Council in order to
continue the CMCVB's operations.
THOMAS R. HATCH
Assistant City Manager
COLLEEN O'DONOGHUE
Assistant Finance Director
DISTRIBUTION
ATTACHMENTS
CMCVB
Chamber of Commerce
KELLY R. SHELTON
Exec. Assist. To City Manager
KIMBERLY HALL BARLOW
City Attorney
1 Resolution of Intention 10-30
2 Resolution Levying Assessment 10-
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