CITY OF CARMEL-BY-THE-SEA

Council Report

April 7, 2015

To: Honorable Mayor and Members of the City Council Douglas J. Schmitz, City Administrator From: Leslie Fenton, Executive Assistant

Subject: Annual Report of the Carmel Hospitality Improvement District (HID) and Public Hearing to consider the adoption of a Resolution of Intention to Levy the Annual Assessment for the (HID).

RECOMMENDATION(S):

1) Receive the Annual Report of the HID Advisory Board; and

2) Conduct a Public Hearing to consider the adoption of a Resolution of Intention to Levy the Annual Assessment.

EXECUTIVE SUMMARY: Per Ordinance 2012-05 the HID Advisory Board shall present their Annual Report to the City Council in April of each year. After receiving the report the Council is required to conduct a public hearing to levy the assessment for the following fiscal year. ANALYSIS/DISCUSSION: On July 3, 2012 City Council adopted Ordinance 2012-05 and Resolution 2012-48 establishing the Carmel HID, creating the HID Advisory Board and approving an assessment to be levied against each lodging operation to pay for the activities within the HID to be paid at the time the lodging establishment pays transient occupancy tax (TOT). The monies collected from the HID can be used for general promotion of tourism, marketing of conference, group, and vacation business that benefit local tourism and the local lodging industry, and marketing of the HID to the travel industry in order to benefit local tourism and the local lodging industry. The current assessment is calculated based upon $1 per occupied room per night

To comply with regulations established by ordinance and resolution, the HID Advisory Board will present their Annual Report to the Council. Immediately following, the Council will open and conduct a public hearing to consideration the adoption of the Resolution of Intention to Levy the Annual Assessment and to receive public testimony regarding the levy of the assessment for the coming fiscal year. At the conclusion of the public hearing, if there are written protests by the owners of the lodging operations within the HID that would pay fifty percent (50%) or more of the total assessments of the entire

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HID, there will be no assessed levy in the coming fiscal year. If there are no written protests received by those lodging owners paying fifty percent (50%) or more of the total assessments the Council will assess the levy for the coming fiscal year. FISCAL IMPACT: The Hospitality Improvement District is funded by an assessment upon lodging operators. Budgeted (yes/no) Funding Source( general fund, grant,

state)

PREVIOUS COUNCIL ACTION/DECISION HISTORY: On July 3, 2012 City Council adopted Ordinance 2012-05 and Resolution 2012-48 establishing the Carmel HID.

ATTACHMENTS:

1. HID Advisory Board Annual Report 2. Resolution 2015- APPROVED: ____________________________________ Date: __________________ Douglas J. Schmitz, City Administrator

Council Meeting Date: 4/7/15 Agenda Item: 8.A

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Hospitality Improvement District

(HID)

2014 Annual Report

ATTA

CH

MEN

T #1

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Public Relations

• Number of Travel Writers Hosted: 43• Number of Articles Written: 52 (confirmed)• Number of Writers Assisted with Information/Photos: 55

Comparable Value in Paid Advertising: $1,490,093

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Recent Major Articles

• Links• California Meetings & Events• South Bay Accent

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Social Media

PinterestSince November 1, 2014, the number of people presented with the Visit Carmel brand almost doubled in size from 2,800 average monthly viewers to 5,200 average monthly viewers.

InstagramGrowth tripled from November 2014 to March 2015. Visit Carmel Instagram is about to hit 1,000 followers with over 5,000 people having engaged with Visit Carmel content.

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Group Marketing

• 24 Trade Shows Attended• Hosted 49 Site Inspections• 989 Meeting Planner ContactsC

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age 7

District TOT Revenue

$4,894,055

$5,369,331

$4,600,000

$4,700,000

$4,800,000

$4,900,000

$5,000,000

$5,100,000

$5,200,000

$5,300,000

$5,400,000

$5,500,000

2013 2014

+9.7%

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Percent Change in TOT12-Month Trailing Average

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

Jan-Feb2013

Mar-Apr2013

May-Jun2013

Jul-Aug2013

Sep-Oct2013

Nov-Dec2013

Jan-Feb2014

Mar-Apr2014

May-Jun2014

Jul-Aug2014

Sep-Oct2014

Nov-Dec2014

Monterey Carmel Santa Barbara

New Rooms Added to Inventory in SB

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2014 HID Expenses

Expense Distribution

45%

8%5%

42%

Salaries &Administration

BusinessExpense

Operations

Sales,Marketing & PR

Sales, Marketing & Public Relations

66%

18%

11%5%

Public Relations

Trade Shows &Conferences

Travel

Sales &Promotions

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Balance Sheet & Budget

Balance Sheet as of 12/31/2014

Check & Savings $120,745

Furniture & Equip. $1,420

TOTAL ASSETS $122,166

2015 BudgetRevenue $260,000

Expenses

Administration & General $44,331

Operating Expenses $3,217

Public Relations $65,984

Sales & Marketing $156,745

NET INCOME/LOSS $<10,277>

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Recognition & Accomplishments

• #6 Travel Destination in the U.S. -- Condé Nast Traveler, November 2013

• #3 Best City for Romance in the World -- Travel + Leisure, February 2014

• #7 Best Restaurants for U.S. Cities -- Condé Nast Traveler, April 2014

• #4 Best Girlfriends Trip -- USA Today & 10Best

• #2 Best Small City in the U.S. -- Condé Nast Traveler, July 2014

• One of America’s Best Beach Towns -- National Geographic Traveler, July 2014

• Top 10 Places to Spend the Holidays – Travel + Leisure, 2014

• Top 10 Places most Stunningly Beautiful Towns – The Culture Trip, 2014

• #6 Artsy American Towns – World Property Journal, Great Destinations, February 2015

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Attachment 2

CITY OF CARMEL-BY-THE-SEA CITY COUNCIL

RESOLUTION 2015-__

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA DECLARING ITS INTENTION TO

LEVY THE ANNUAL ASSESSMENT FOR THE CARMEL HOSPITALITY IMPROVEMENT DISTRICT

________________________________________________________________

WHEREAS, the California Streets and Highways Code Section 36500 et seq. authorizes cities to establish business improvement districts to promote tourism, create jobs, attract new business, and enhance the business districts; and

WHEREAS, tourism is an essential contributor to the economy of the City of Carmel-by-the-Sea, and the promotion of the City’s lodging operations will serve an important public purpose; and

WHEREAS, the owners of the lodging operations and the Carmel Chamber of Commerce requested that the City Council establish such a business improvement district; and

WHEREAS, the City Council introduced Ordinance 2012-05 and adopted

Resolution 2012-48 on July 3, 2012 establishing the Carmel Hospitality Improvement District (HID), creating the HID Advisory Board and approving an assessment to be levied against each lodging operation to pay for the activities within the HID to be paid at the time the lodging establishment pays transient occupancy tax (TOT) to the City of Carmel-by-the-Sea; and

WHEREAS, Resolution 2012-48 includes provisions for an Annual Report, the

adoption of an annual resolution of intention to levy the assessment and a public hearing on the assessment.

NOW, THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA DOES ORDAIN AS FOLLOWS:

Section 1. The proposed assessment is to be levied on all lodging operations within the HID boundaries based upon the formula of $1 per occupied room per night to pay for the activities, including, but not limited to employing a lodging operations manager. Section 2. Pursuant to Resolution 2012-48, the Annual Report of the HID Advisory Board shall be presented to the City Council and the City Council will consider the adoption of a Resolution of Intention to Levy the Annual Assessment at its Regular Meeting on April 7, 2015 at 4:30 p.m.

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Attachment 2

Section 3. Pursuant to Government Code Section 54954.6, a public hearing to allow public testimony regarding the levy of the annual assessment is hereby set for June 2, 2015 at 4:30 pm before the City Council at City Hall on Monte Verde Street between Ocean Ave. and 7th Avenue, Carmel-by-the-Sea, California. Section 4. The City Clerk is instructed to provide notice to the public of the public hearing as follows:

a. Publish this Resolution of Intention by placing a display advertisement of at least one-eighth page in a newspaper of general circulation at least seven (7) days before the public meeting on April 7, 2015.

b. Mail a complete copy of the Resolution of Intention to each and every owner

and/or operator of a lodging operation in the proposed HID within seven (7) days of the adoption of this Resolution by the City Council, along with a separate notice of the proposed assessment prepared by the City Attorney.

PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA this 7th day of April by the following roll call vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: SIGNED: ATTEST: _______________________ ________________________ Jason Burnett, Mayor Lee Price, MMC Interim City Clerk

Council Meeting Date: 4/7/15 Agenda Item: 8.A

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