HomeMy WebLinkAboutRes No. 09-14 Riv Co. Included in P.S. Resort Comm Tourism BID CITY OF PALM DESERT
FINANCE DEPARTMENT
Staff Report
REQUEST: CONSIDERATION OF RESOLUTION NO. 09- 14 TO GRANT
CONSENT TO THE COUNTY OF RIVERSIDE TO BE ADDED TO
THE PALM SPRINGS DESERT RESORTS COMMUNITIES
TOURISM BUSINESS IMPROVEMENT DISTRICT
SUBMITTED BY: JUSTIN MCCARTHY, INTERIM CITY MANAGER
PAUL S. GIBSON, DIRECTOR OF FINANCE
DATE: FEBRUARY 26, 2009
CONTENTS: Proposed City of Palm Desert Resolution No. 09-�
Recommendation:
By Minute motion, adopt Resolution No. 09- �4 granting consent to
the County of Riverside to include the City of Palm Desert in the existing
Palm Springs Desert Resort Communities Tourism Business
Improvement District.
Executive Summarv:
The Palm Springs Desert Resorts Communities Convention and Visitors Authority
(CVA) Joint Powers Authority recently approved a Business Improvement District (BID)
for all cities within the Coachella Valley. The County of Riverside is commencing the
process of adopting a new BID ordinance, and has asked if Palm Desert wishes to
participate at this time. The purpose for creating the BID is twofold: (1) to increase
funding for the CVA by increasing the financial and operational participation of valley
hotels; and (2) to decrease the amount of Transient Occupancy Tax (TOT) contributions
from the cities.
By participating in the BID, the City of Palm Desert's TOT contribution would decrease
by 75% from $1,000,000 to $250,000 beginning in the next calendar year, January 1,
2010. In the fiscal year 2009/2010, this would translate to a savings of $375,000. Palm
Desert hotels would retain their ability to participate in advertising ventures with the
CVA, receive business leads, etc. The City would still have the ability to participate in
joint advertising with the CVA which saves the City considerable costs in advertising.
Resolution No. 09-14
Staff Report
February 26, 2009
Page2of3
Participation in the BID is reflected at the hotel properties as an assessment of 2% of
room revenue. The 2% assessment is currently being charged and submitted to the
CVA by three hotels: (1) Desert Springs Marriott, (2) Courtyard by Marriott, and (3)
Residence Inn by Marriott. These hotels have voiced their support of the City remaining
a member of the CVA. Through BID inclusion, the hotels can participate as board
members of the Hospitality Industry and Business Council (HIBC) and have a voice in
the type and direction of marketing and advertising of the CVA. If the City chooses not
to participate in the BID, the hotels and the City will lose all rights to participate with the
CVA in the near future as CVA is in the process of amending their charter and bylaws to
reflect the change in the funding mechanism by the BID with a July 2009 deadline.
Backqround:
Staff researched the types of assessments and taxes charged by other hotels to
determine the feasibility of such a program in the Coachella Valley. It was found that
hotels in cities and counties throughout California and other states utilize the additional
assessment methodology to add to their billing. A summary of these findings is as
follows:
• San Francisco charges 1.5% surcharge to the room rate for tourism authority
• San Diego hotels charge a 2% surcharge similar to the Riverside County BID.
• Hotels charge assessments for: (1) parking, (2) energy surcharge, (3)
amusement park fee, (4) resort fee.
• Sacramento hotels charge two additional fees called STBID assessment and a
CA tourism assessment.
Individuals typically are concerned with the room rates and locations when determining
which hotel they plan on utilizing. Taxes and fees would likely be a secondary
consideration to many individuals, and are not normally part of the equation when
reserving a room.
An alternative method of saving money that the City Council could consider would be
the termination of the City's participation in the CVA. Staff has previously researched
the effects of withdrawal from the CVA and brought the results of those findings to City
Council in October 2005. The Joint Powers Agreement of the CVA state that withdrawal
is effective on the last day of the calendar year, and notice of withdrawal must be
provided thirteen months prior to the effective date. Notice given at this point would
result in an effective date of December 31, 2010. Notice for this effective date must be
given prior to December 1, 2009 to meet the thirteen month requirement.
The fiscal impact of choosing to withdraw results in the City continuing to pay its annual
membership fees of $1 million through December 2010 rather than being able to take
advantage of the lower cost of $250,000 in the calendar year 2010, a savings of
$750,000. Additionally, the City and its hotels would lose all rights to participate in voting
G:\Finance\Niamh Ortega\Staff Reports\Palm Springs Desert Resort Communities TOUfISCYI 8��.�OCX
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Resolution No. 09-14
Staff Report
February 26, 2009
Page 3 of 3
and advertising in the CVA which would impact Palm Desert hotels for at least one full
year.
Since early 2006, Staff has taken a more active role in participating with the CVA in co-
ops, familiarization trips, trade shows, and other promotional opportunities. In the
process, Staff learned that the CVA's international impact is far reaching and the
contacts that come with the CVA's sales team are irreplaceable. Their connection with
travel and tour operators and aggressive sales missions benefit the entire Valley,
including Palm Desert. These types of contacts and travel missions would be difficult to
develop and replicate as a single entity and are crucial to reaching potential visitors.
The City does receive marketing and promotional value through its participation in the
cooperative advertising and marketing of the CVA. Withdrawal may require the City to
find ways to replicate this benefit at an undetermined cost. As such, staff is
recommending participation in the BID as a cost-saving alternative.
Submitted by:
� r
� r
sti McCarthy Paul S. Gibson
Interi City Manage City Treasurer/ Director of Finance
+CITY COUNCILACTION /
APPROVED b� ✓
RECEIVED OTHER
MEETI G DATE
AYES:� �i
NOES:
ABSENI: �
ABSTAIN: -
VERIFIED BY:
Original on File with Ci erk's O�ce
G:\Finance\Niamh Ortega\Staff Reports\Palm Springs Desert Resort Communities TOUfISI'Tl 8��.�OCX
RESOLUTION NO. 09- 14
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM
DESERT, CALIFORNIA, GRANTING CONSENT TO THE COUNTY OF
RIVERSIDE TO BE INCLUDED IN THE PALM SPRINGS DESERT
RESORT COMMUNITIES TOURISM BUSINESS IMPROVEMENT
DISTRICT
THE CITY COUNCIL OF THE CITY OF PALM DESERT DOES HEREBY
RESOLVE AS FOLLOWS:
WHEREAS, the California Legislature, in adopting the Parking and Business
Improvement Area Law of 1989 (Streets & Highways Code Section 36500 et seq.)
("Business Improvement Law") authorized cities and counties to levy assessments on
businesses in order to promote economic revitalization and tourism, to create jobs,
attract new businesses, and prevent erosion of business districts; and
WHEREAS, the County of Riverside has established a business improvement
district ("BID") to be commonly known as the Palm Springs Desert Resort Communities
Tourism Business Improvement District ("Tourism BID"), pursuant to the Business
Improvement Law, the purpose of which is to promote tourism within the desert
communities and to fund programs that benefit the hotel and motel businesses within
desert communities; and
WHEREAS, the Board of Supervisors of the County of Riverside has formed the
Tourism BID within the boundaries of the Cities of Cathedral City, Desert Hot Springs,
Indian Wells, Indio, La Quinta, Palm Springs, and Rancho Mirage, by the adoption of
Resolution No. 2008-300, dated July 1, 2008;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Palm
Desert as follows:
Section 1. Recitals are True and Correct The recitals set forth herein are true
and correct.
Section 2. Consent to Countv of Riverside to Join Multi-Jurisdictional BID
The City Council of the City of Palm Desert allows and consents to the inclusion of the
City of Palm Desert within the boundaries of the Tourism BID.
Section 3. Transmission of Resolution to Countv of Riverside The Clerk of
the City of Palm Desert is hereby directed to transmit a certified copy of this Resolution
to the Clerk of the Board of Supervisors of the County of Riverside.
G:IFinanceWiamh OrtegalReso/utionslRES-TOUR/SM B/D.Docx
Resolution No. 09- �4
BE IT FURTHER RESOLVED that the City Council of the City of Palm Desert,
California, does hereby adopt this Resolution of Intention as set forth herein.
PASSED AND ADOPTED this 26th day of February, 2009, by the following vote
to wit:
AYES:
NOES:
ABSENT:
ABSTAIN:
ATTEST:
Robert A. Spiegel, MAYOR
RACHELLE D. KLASSEN, CITY CLERK
CITY OF PALM DESERT, CALIFORNIA
APPROVED AS TO FORM:
DAVID J. ERWIN, CITY ATTORNEY
BEST, BEST & KRIEGER, LLP
, � .�
� �'��ti �' �r s �
� '� �se�t �es�s
� CONVENTION AND VISITORS AUTHORITY
. PALM SPRINGS DESERT RESORTS
� CONVENTION AND VISITORS AUTHORITY
� � JOINT POWERS AGREEMENT
�
,�
Last Amended June I 8,2002
Serving the Desert Resort Communities of Riverside County
Cathedral City • Desert Hot Springs • Indian Wells • Indio • La Oufnta • Palm Desert • Palm Springs • Rancho Mirage
Washing-t.on, DC Sales,Office 51 v / ,
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5 Y,ing Street, Suite 315 • Alexandria, VA 22314 • T.: 703-549:8026 •.uF, 70'3-ay ` `y
519-7579
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� ARTICLE XI
Z C4NTRIBUTIONS
3 Each member organization shall pay into the treasury of the Authority, the sum of$2,500, or if it
a is greater, a sum deternuned according to a formula determined by the Executive Comnuttee.
s Such formula shall be reviewed annually and adopted in accordance with Article XVI. 'I1ie
6 initial formula determined by the Executive Committee is set forth in Exhibit C.
�
8 ARTICLE XII
9 PRNATE MEMBERSHIP AND ASSOCIATE MEMBE1ZSHIp
to There is hereby established a class of inembership designated"Private Member". Private
t� members shall be subject to approval of the Executive Committee, which shall set the fee for
�z such member. There is hereby established a class of inembership designated "Associate
,
13 Member". Any business entity that promotes visitors out of the men�ber city jurisdiction can not
�a be an "Associate Menlber". This includes lodging providers, attractions, restaurants and retail
�s establishments. The rights, duties and obligations of Private Members and Associate Members
i6 shall be provided in the bylaws.
i�
18 ARTICLE XIII
19 WIT�IDRAWAL OF MEMBER ORG.ANIZATION
?a A member organization may withdraw from participation in this Joint Powers Agreement subject
2� to the following conditions: .
2z 1. The effective date of withdrawal shall always be the last day of a Calendar Year;
z3 2. Current annual contribution to the Autl�ority must be paid in full;
2a 3. Annual contribution for the next following calendar year must be paid in the usual manner for
zs such pa}nnent. If ai� "Active Public Member" withdra�s during the 1995-1996 fiscal year,
'6
8
� prior to June l, 1996, the annual contribution for the next following fiscal year must be paid in
2 the usual manner for such payments.
3 4. Notice of withdrawal must be given not less than tlurteen months prior to the effective date of
a withdrawal. For exa.mple, notice must be given prior to January 1 to effect withdrawal at the
s end of the next following Calendar Yea.r. Notice given between January 1 and December 31
6 shall be effective at the end of the second following calendar year.
� 5. After giving notice of withdrawal, a withdrawing member shall not have voting privileges on
s the Executive Committee except for onerating budget item� during the next thirteen months.
9 6. A�vithdraaari�tlQ n,ember c,�may again become a participating member of this Joint
io Powers Agreement on condition that it pay to the treasury of the Authority an amount equal to
1� all contributions which the member organization would have paid if it had not withdrawn
i2 from participation. Private members may remain active members as long as the government
,
13 entity is a member and during the period of withdrawal from the Joint Powers Agreement.
14
1 s ARTICLE X1V
l6 APPROVAL OF NEW MEMBER ORGAI�IIZATION
I� A new member organization must be approved by vote of two-tlurds of the entire membership of
�s the Executive Committee and subsequent ratification by the governing bodies of two-thirds of the
�9 member organizations,provided that a Resolution outlining the jurisdiction, initial contribution
2o and continuing contribution be approved by both the applicant and two-thirds of the Executive
2� Committee.
22 APPROVAL OF "INACTNE MEMBER" ORGANIZATION
23 The City of Desert Hot Springs, as an inactive member organization since July l, 1992, must be
za approved by unanimous vote of the entire membership of the Executive Committee and
zs subsequent unanimous ratification by the governing boc�i�es of the meinber organization, provided
?6
9
i diat a Resolution be approved, outlining the payment schedule for all contributions wluch the
2 member organization would have paid if it had not withdrawn from participation, current
3 contribution and continuiilg contribution be approved by both the applicant and by a unanimous
a vote of the Executive Committee. This provision will ONLY be extended to tlie City of Desert
s Hot Springs for a"one-time-oniy"request for re-admission during the 1995-1996 fiscal year as
6 outlined in Resolution No. 5 authorizing said re-admission of the City of Desert Hot Springs.
�
8 ARTICLE XV
9 CONTRACT SERVICES
lo Nothing in this Agreement shall be deemed to prohibit a member organization from expending
i� additional efforts and resources or contracting with the Authority or other entities for additional
i2 services and benefits similar to those realized from participation in this A�eement. The
�
�3 Convention and Visitors Authority is authorized to seek, if necessary, and after careful review of
ia available funds, specialized outside legal counsel and/or assistance depending upon
ts circumstances andlor conditions regarding pending litigation,personnel or any other type of issue
t 6 where legal assistance and/or counsel is necessary.
17
i s AR.TICLE XVI
�9 AMENDMENTS TO JOINT POWERS AGREEMENT
2o This Joint Powers Ageement may not be aniended except by a vote of two-thirds of the entire
z� membership of the Executive Committee AND subsequent ratification by the governing bodies
z2 of two-thirds of the member organizations, provided further that any amendment of the amount
z3 of inember contributions, as stated in Article XI, shall require the unanimous vote of the entire
2a active membership of the Executive Committee and subsequent ratification by the governing
2s bodies of all active member organizations.
?6
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Tt): MuyuT and C'liy�'au�1Ci� - �'t.IE!vT-11�wT1f�R NU.: 7?500.0f171�
t'i:y��f Palm Dcscrr
FROM: David J. Erwin
Itk: Tha Palm Sprin�s t)r�er Rcs�rt� C�nv�.�ntion unc� Yisitors Authurity
S'�•ST�+?�`!P��s�:N�rs�:�
V1�'i-�:�t is the �tatu+nf th�C'�cy af?atrn J�c,..�r► �f'chz� �ive noticc ot'withdrawul from chi5
��r�a.li�at.on'% Wh:•,; :�nould :h�nt�:;ca rsc� •biv�r., and what wuuld be the eff�et�f the withdrawal
uI�tt�l'� �I.�IiCr:
'l`he issuc o�'�viii.drawal �� audra»ed in�.rticlL Xtli oFthc A�aamrnt which,ndicatCa
withurawa: n:ay �r�ivuc a� :'aiuw�
�•�.R"��It�Lt, Xlit
W1THt�RAW�L OF Mk:MB�R �RCANiZATiUN
A mrr.1nCr or�ani��tian may w�rh�raw ir��n ps�rti�ip�crion in this.Ioint P��w�rs A�ccm�� �uhjrct
t�� th�ti�liowia�.:unciit►o,���
.. Th�c:�s'�c:livc' :In[�ot'withcir.►w:s� .hall always b�the I$st ci:�y uf a Cal�.�nd�r yc�r:
3. �urrc;n� anr�ua! u�:�uik�uti;�n c�►il�c r,uthar,ty n�usc b�p�►��i in iull;
3 a�inu�l cu��u�buncc, t��r thc n�xr �uil��wjn� cal�ndar year rau�t be paid in the us�,�J
m;,nne< f�r su::h �ay�nti•nt. ii'�+n`•��ctiv�• t'ubl�c �vle,nbcr"withdraws ducing the �995-1 yyb 2'iscal
year, prior t� J unc- i, 1�►a6, :hc dnnual ;��ut�:hur�on iur tt��i�exc foUowing h�c:dl year musr be
pa�d �n th� u�uai m:inn�r fi�c Su.:h payr�iei►:s.
�. N�ii�C�,f wi�hciraw:.l mu�r b��v::n n��t less:han thirct�n moaths prior Yo thG�i��ctive
d:�tc c�t'withc�r�+���i r��� cx�m�i�, nut�c� must h: �;iven priur to January ! ta �ff�ct withdrawal ut
ctiC rnd ut rhe n�x: ic►il�win4 C.'ai:.r►:iar}ear ,'Vo��ee �iv�n bccween lanuary 1 and Aeecmbi:r�1
3hal! hc rffc�7tvc;ti ch��1!tt csf'[h.�concl fo:l�»vlfl};C81�rtd�r ycaT_
�. attcr xivi.i�;�:ut�c� s! wiih�#rawsi, � withuraw�n�r►t:.nnrr ah�ll Aoc hc�vr v��tir1�
�nvite�"��n tt,r Exe;:�t�v� Co:n;nlr_t-�wx«pr �ur��p�catin�; bu�tg�K itenls during thr n��t ihir�een
m��r.th>.
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YL�IJ�LYUC IY�IGYIn r1uN—vGJi vc�i nnicurn �v..���w. , ." • "'• "' • "'
L,I1W Cff�1Cf.$ OF
�E�T q�sT' � KR��6ER �.t..P
MayQr and City Council— City of Palm I]eserc
Octaber 21, 3Q05
b. A wichdrawing membcr arganization may again become a parcicipating member of�hi�
J�int Pawc�A�re�m�t on conditiun that i�pay tu th�trrasc�y of thc Authoriry ari arnaunt equal
t�dll con[ribuciona which rhe member organiza�i�n would have paid if it had noc withcirawn from
participation. Private membcrs may remain acrive mcmbCts as long�s[hc government rntity is a
mcmbcr artd during tha period of withdraw�l &'om the Point Pow�Agccement."
Pct th�$bav�langua�c,the wiihdtawai notice rnust be given prinr tu p�ccmb�r 1, 20U5 to be
cffcctive pec�mbcr 31, ZpUb.
Upon g�ving this Natice, vating ri�ttts �or city representatives will cease exc�at for oper�ting
bud�;et itrm�. It shUuld be rWt�d t�a[a�y ar�cnclm�ut of the member contribu[ions r�uire th�
unanimuu� vote�f the�x�:utiva C�miuittee�nd r�tifiratian by atl active member or�anizatians.
The�ssue aYthe City b�ir►g a withdtawing in�mbrr and[hat eft�.�t upon these provi�ion�i�not
�cidrex�cd dircctiy.
Thc abilicy ta return to aciive m�nber�bip i�addressr.d in nuTnber 6. Palm pe�rt would have
paid their nor�nal c�ntributian and if Notice af Withdrawal is canceiled,payment�s thc only
co�dinon�o returning to activc mcmbarship. VoUng sbould be restorod at that tim�.
!f tbcr�arc fiuthcr qucsuons,please let me kttow.
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