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HomeMy WebLinkAbout2012/09/11 Item 09CITY COUNCIL AGENDA STATEMENT ~~ CITY OF CHUTA VISTA SEPTEMBER 11, 2012, Item ITEM TITLE: RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ACKNOWLEDGING THE SUBMITTAL OF PETITIONS TO DISESTABLISH THE CHULA VISTA TOURISM AND MARKETING DISTRICT (CVTMD) FROM BUSINESS OWNERS WHO PAY 50 PERCENT OR MORE OF THE CVTMD ASSESSMENTS, DECLARING ITS INTENTION TO DISESTABLISH THE CVTMD, AND NOTICING A PUBLIC HEARING TO CONSIDER SAME FOR OCTOBER 16, 2012 AT 4:00 P.M. SUBMITTED BY: CITY MANAGER ~ T ~. T S FINANCE DIRECTOR/ TREASUREI~~)~ CITY CLERK ~/~ REVIEWED BY: ASSISTANT CITY MANAGER/ DIRECTOR OF DEVELOPMENT SERV,~CES FG ~ ~~ ~ CITY ATTORNEY liU 4/STHS VOTE: YES ~ NO ~X SUMMARY The Chula Vista Tourism and Marketing District ("CVTMD") was established in 2009 pursuant to the Property and Business Improvement District Law of 1994 (the "PBID Law"). The PBID Law provides that the CVTMD may be disestablished by petition of 50 percent or more of the assessed business owners. On June 12, 2012, the City Council adopted a resolution approving administrative procedures for the handling of petitions that might be submitted for disestablishment of the CVTMD. The 30-day petition period for 2012 commenced on July 14'" and ended on August 13`". During the petition period, petitions to disestablish the CVTMD were received from business owners who pay 53.37% of the CVTMD assessments. As required by the PBID Law, staff has prepared a resolution of intention to disestablish the CVTMD for City Council approval. As required by the PBID Law, the resolution states the reason for disestablishment, sets a public hearing date at which City Council will take testimony regarding the disestablishment and contains a proposal for disposition of assets acquired with CVTMD revenues. California Streets and Highways Code sections 36600, et seq. 9-1 SEPTEMBER 11, 2012, Item Page 2 of 5 ENVIRONMENTAL REVIEW The Environmental Review Coordinator has reviewed the proposed action for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity is not a "Project" as defined under Section 15378(b)(4) of the State CEQA; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines the activity is not subject to CEQA. Thus, no environmental review is necessazy. RECOMMENDATION That Council adopt the resolution. BOARDS/COMMISSION RECOMMENDATION Not applicable. DISCUSSION The CVTMD is a business improvement district established under the PBID Law. The PBID Law allows disestablishment of the district by resolution upon submittal of a petition (or petitions) by a majority of the owners of businesses in the district who, in aggregate, pay 50 percent or more of the assessments levied.Z The period for presenting such a petition is the 30-day period commencing each year on the anniversary of the establishment of the district 3 The CVTMD was established on July 14, 2009. The petition period for 2012 commenced on July 14`h and ended on August 13th. In January 2012 a number of the hotel/motel owners assessed under the TMD submitted petitions to disestablish the CVTMD. These petitions were not submitted during the time period provided by state law and raised other questions regarding the petition process. Because of this, the City Attorney's Office identified the need for procedures to supplement the State code in this area. After extensive outreach and input from stakeholders and City Council, the Council requested that draft procedures be brought back in April for Council's input. Those draft procedures were submitted to the Council on April 24, 2012. Subsequently, staff met with, and presented draft procedures to: Chamber of Commerce representatives; the Chamber's TMD Boazd (May 2"d); and the Chamber's Hotel/Motel Committee (May 8th). Draft procedures, along with a request for comments, were also transmitted directly to the CVTMD hotel/motel owner/operators in advance of the May 8th Hotel/Motel Committee meeting. Additional direction was received from the City Council at its May 22, 2012 meeting. On June 12, 2012, the City Council adopted a resolution approving administrative procedures for the handling of any future petitions that might be submitted for disestablishment of the CVTMD. The procedures are consistent with the PBID Law. On June 20, 2012 the Director of Finance/City Treasurer notified all members of the TMD of the commencement of the petition period and provided them with a copy of the adopted administrative procedures and a sample petition form. On the same day, copies z California Streets and Highways Code §36670(a)(2). ' California Streets and Highways Code §36670. 9-2 SEPTEMBER 11, 2012, Item Page 3 of 5 of the notice, administrative procedures, and sample petition form were also made available at the Finance Department's public counter and on the City's website. During the petition period, petitions to disestablish the CVTMD were received from twelve (12) members of the CVTMD. Per the adopted administrative procedures, these petitions were reviewed by Finance Department staff to confirm business ownership or authorization to act on behalf of owner by petitioners. This confirmation included review of business entity information on file with the California Secretary of State, the City's business license data, the City's Transient Occupancy Tax (TOT) certificate data, and historic TOT and TMD return filings. A review performed by Finance Department staff has determined that all petitions received meet the business ownership and/or authorized agent requirements of the administrative procedures. The next step in the Finance Department's review was confirmation that all businesses submitting petitions aze current on all amounts due and payable. This. review considered assessments due for the period July 1, 2011 through June 30, 2012. As of the August 30`h deadline established in the administrative procedures, all twelve businesses submitting petitions are current on their assessments for the subject period. The final step in the Finance Department's review was to determine whether petitions were submitted by TMD member business owners who pay 50 percent or more of the assessments levied in the CVTMD. For purposes of this calculation, the Finance Director is directed by the administrative procedures to utilize the CVTMD revenue and assessment data for the 12-month period ending on the preceding June 30`h. A review performed by Finance Department staff determined that petitions to disestablish the CVTMD have been received from business owners representing 53.37% of the total CVTMD assessments for the subject period ($484,775). Following the Finance Director's confirmation of business ownership and/or agent authorization for petitioners, and the receipt of petitions representing more than 50 percent of the CVTMD assessments, the administrative procedures require that the Finance Director forward the petitions to the City Clerk for verification that the petitions submitted comply with the requirements of the policy. The petitions were forwarded to the City Clerk on August 29th, and the City Clerk has made the required verification. The results were then forwarded to the City Manager on August 30`h. Accordingly, the requirements of Section 36670(a)(2), allowing for disestablishment by petition, have been met. Once the requisite petitions have been submitted, Section 36670(b) requires thatthe City adopt a resolution of intention to disestablish the CVTMD. Section 36670(b) specifically provides that the City Council shall pass a resolution of intention to disestablish the district and then notice a hearing on disestablishment. The resolution of intention to disestablish the district must:4 1. State the reason for the disestablishment. California Streets & Highways Code §36670(b). 9-3 SEPTEMBER I ], 2012, Item Page 4 of 5 2. Contain the time and plane of the public hearing before the City Council when disestablishment will be considered. 3. Include a proposal to dispose of any assets acquired with the revenues of the assessments levied within the district. The resolution of intention to disestablish the district before the Council today meets all of the above requirements. Pursuant to Section 36670(b), notice of the heazing to consider disestablishment shall be given by mail to the owner of each business subject to the assessment. This mailing will occur this week, following adoption of the resolution of intention and noticing of the public hearing. The public hearing must be conducted within 60 days of the adoption of the resolution of intent, but no sooner than 30 days after the mailing of the notice. At the public hearing, the public will have the opportunity to protest the validity of one or more petitiohs or to challenge the determination that the 50% threshold was reached. Staff proposes holding the public hearing to consider disestablishing the district on Tuesday, October 16, 2012 at 4:00 pm. The City Attorneys office is currently researching the extent of discretion the City Council may have at this hearing. A report that outlines the parameters of this discretion for both the City Council and the public will be provided as soon as possible, well before the October hearing. The City Attorney will also be providing the City Council with a report in response to its referral regarding the application of Section 36670(a)(1) - disestablishment based on City Council findings - in light of the May 2012 Grand Jury Report. In accordance with Section 33670(b), the resolution of intention includes a proposal to dispose of any assets acquired with the revenues of the assessments levied within the district. Staffs recommended disposition proposal is as follows: (i) any assets acquired using the revenues of the assessments levied within the district be liquidated by the City following disestablishment of the district; (ii) the annual financial audit required by the adopted Agreement for Tourism Marketing District Management Services ("Agreement') be used to identify the assets to be liquidated; (iii) the audit for fiscal yeaz 2011-12, to be submitted to the City no later than September 30, 2012, for the period July 1, 2011 through June 30, 2012 pursuant to the Agreement, be extended to cover activity through the date of disestablishment; and (iv) all revenues from the liquidation be distributed in accordance with Section 36671. DECISION MAKER CONFLICT Staff has reviewed the decision contemplated by this action and has determined that it is not site specific Consequently the 500-foot rule found in California Code of Regulations section 18704.2(a)(1) is not applicable to this decision. Staff is not aware and has not been informed by any City Councilmember of any basis for adecision-maker conflict. CURRENT YEAR FISCAL IMPACT Staff time related to administering the disestablishment petition process for the Chula Vista Tourism and Marketing District (CVTMD) will be reimbursed from the TMD 9-4 SEPTEMBER 11, 2012, Item Page 5 of 5 contractor per the adopted Agreement for Tourism Marketing District Management Services, which obligates the TMD contractor to reimburse the City for all actual operational costs associated with administrative services provided by the City to the CVTMD. This reimbursement is capped at 3% of TMD revenues received on an amiual basis. Any costs incurred for administrative support by the City above the 3% cap will be considered in-kind services. ONGOING FISCAL IMPACT Staff time related to administering the disestablishment petition process for the Chula Vista Tourism and Marketing District (CVTMD) will be reimbursed from the TMD contractor per the adopted Agreement for Tourism Mazketing District Management Services, which obligates the TMD contractor to reimburse the City for all actual operational costs associated with administrative services provided by the City to the CVTMD. This reimbursement is capped at 3% of TMD revenues received on an annual basis. Any costs incurred for administrative support by the City above the 3% cap will be considered in-kind services. ATTACHMENTS 1. Adopted Procedures for Administration of Any Petitions That Might be Submitted by Hotel/Motel TMD Members Proposing Disestablislunent of the Chula Vista Tourism and Marketing District ("CVTMD") Prepared by: Tiffarry Allen, 77•easury Manager, Finance Department 9-5 COUNCIL RESOLUTION NO. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ACKNOWLEDGING THE SUBMITTAL OF PETITIONS TO DISESTABLISH THE CHULA VISTA TOURISM AND MARKETING DISTRICT (CVTMD) FROM BUSINESS OWNERS WHO PAY 50 PERCENT OR MORE OF THE CVTMD ASSESSMENTS, DECLARING ITS INTENTION TO DISESTABLISH THE CVTMD, AND NOTICING A PUBLIC HEARING TO CONSIDER SAME FOR OCTOBER 16, 2012 AT 4:00 P.M. WHEREAS, the Chula Vista Tourism and Marketing District ("CVTMD") was established in 2009 pursuant to the Property and Business Improvement District Law of 1994 (the "PBID Law"); and WHEREAS, the PBID Law provides that the CVTMD may be disestablished by petition of business owners who pay 50 percent or more of the district assessments; and WHEREAS, on June 12, 2012 the City Council adopted a resolution approving administrative procedures for the handling of petitions that might be submitted for disestablishment of the CVTMD; and WHEREAS, the 30-day petition period for 2012 commenced on July 14th and ended on August 13th; and WHEREAS, during the petition period, the City received petitions to disestablish the CVTMD from twelve members of the CVTMD; and WHEREAS, the Finance Director has reviewed the petitions submitted pursuant to the criteria established in the adopted administrative procedures; and WHEREAS, the Finance Director has determined that valid petitions to disestablish the CVTMD have been submitted by business owners or authorized representatives who pay more than 50 percent of the CVTMD assessment; and WHEREAS, the City Clerk has verified the finding of the Finance Department; and WHEREAS, Section 36670(a)(2) of the Streets and Highways Code and the adopted administrative procedures require that upon written petition of the business owners or authorized representatives who pay 50 percent or more of the district assessments, the City Council adopt a resolution of intention to disestablish the district and notice a hearing on disestablishment; and 9-6 Resolution No. Page 2 WHEREAS, Section 36670(a)(2) of the Streets and Highways Code and the adopted administrative procedures requires that the resolution of intention to disestablish the district state the reason for the disestablishment, state the time and place of the public hearing to consider disestablishment, and contain a proposal to dispose of any assets acquired with the revenues of the assessments levied within the district; and WHEREAS, the disestablishment is under consideration pursuant Section 36670(a)(2) of the Streets and Highways Code and the adopted administrative procedures and the receipt of petitions to disestablish the district received from business owners or authorized representatives paying 50 percent or more of the annual CVTMD assessments which meet all criteria outlined in the administrative procedures; and WHEREAS, the public hearing to consider disestablishment of the CVTMD shall be held at 4:00 p.m. on Tuesday, October 16, 2012 in Council chambers; and WHEREAS, the City proposes to dispose of any CVTMD assets as follows: (i) any assets acquired using the revenues of the assessments levied within the district be liquidated by the City following disestablishment of the district; (ii) the annual financial audit required by the adopted Agreement for Tourism Marketing District Management Services ("Agreement") be used to identify the assets to be liquidated; (iii) the audit for fiscal year 2011-12, to be submitted to the City no later than September 30, 2012,for the period July 1, 2011 through June 30, 2012 pursuant to the Agreement, be extended to cover activity through the date of disestablishment; and (iv) all revenues from the liquidation be distributed in accordance with Section 36671. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista, that it acknowledges the submittal of petitions to disestablish the Chula Vista Tourism and Marketing District (CVTMD) from business owners who pay 50 percent or more of the CVTMD assessments, declares its intention to disestablish the CVTMD and notices a public hearing to consider same on October 16, 2012 at 4:00 p.m. Presented by Maria Kachadoorian Finance Director/ Treasurer Approved as to form by en . Googins ~GYiti City Attorney 0 9-7 ATTACFIME.NT1 ~~1f/ ri~i. an of CHUTA VISTA OFFICE OF THE CITY ATTORNEY PROCEDURES FOR ADMINSTRATION OF ANY PETITIONS THAT MIGHT BE SUBMITTED BY HOTEL/MOTEL TMD MEMBERS PROPOSING DISESTABLISHMENT OF THE CHULA VISTA TOURISM AND MARKETING DISTRICT ("CVTMD") June 12, 2012 Annual Notification. The City Manager, or designee, shall notify the CVTMD Members on or before June lst, that written petitions for disestablishment may be submitted during the 30-day petition period commencing on July 14th and ending on August 12th. This notice shall be given both by mail or electronically to the addresses provided by the CVTMD Members. 2. Petition Contents and Timine. a. Petitions must contain 1. TMD Member(s) business name. 2. Printed name and signature of the current business owner, or an authorized agent. 3. A written statement of ownership or agency signed under penalty of perjury. 4. Date of signing; petitions must be dated no earlier than June 1st and no later than August 12t~'. b. If the signator of a submitted petition no longer owns the business as of August 12a' of the petition year, the petition shall not be considered; however, the current owner may submit a petition in its place, up until August 12th. c. Petitions must be delivered in person to City Hall at the Finance Department's Service Center at 276 Fourth Avenue, Chula Vista, CA, 91910. d. Petitions shall be accepted for submission during the period July 14~' through August 12th (or the next business day, if the 12th falls on a holiday or weekend). e. Petitions meeting the above requirements will be accepted for review by the Finance Director and need not be in a specified format. However, a 9-8 ATTACtIMENT 1 form petition will be available through the City's website, on the City Clerk and Finance Department pages. f. Any petition submitted shall be a public document available for public review. 3. Finance Review. a. The Finance Director shall review all petitions submitted for the following: 1. Confirmation of business ownership by petitioners by reference to City business license data and other available information; in the event of any discrepancy, the Finance Director shall follow up with the petitioner for clarification and/or additional information; 2. Determination of whether petitions were submitted by TMD Members business owners who pay 50 percent or more of the assessments levied in the CVTMD. For purposes of this calculation, the Finance Director shall utilize CVTMD revenue and assessment data for the 12 month period ending on the preceding June 30`h b. The Finance Director, or designee, may contact any of the petitioners, as needed, to obtain information necessary to conducting the above review. Failure of a petitioner to provide the requested information may result in rejection of that petitioner's submittal. c. To be counted, a petition must be submitted by a TMD Member who is current on all amounts due and payable as assessments under the CVTMD for the 12 month period ending on the preceding June 30th. Notice of any delinquency will be sent by on or before August 15`h. Full payment of any outstanding amounts owed for this time period must be received by no later than August 30th. d. The Finance Director shall forward the petitions to the City Clerk for verification that the petitions submitted comply with the requirements of this policy. After verification by the City Clerk, the City Finance Director shall forward the results of the review to the City Manager, by August 31st. 4. City Manager Action. a. If the Finance Director review confirms and the City Clerk verifies that the business owners who pay 50 percent or more of the CVTMD assessments submitted petitions, the City Manager shall schedule a resolution of intention to disestablish the CVTMD at the next City Council meeting. 2 9-9 ATTACt-ID~NT 1 b. If the Finance Director review determines that the petition was not submitted on behalf of assessees who pay at least 50 percent of the assessments, the Finance Director shall send notice thereof to each party submitting a petition, notifying such parties that they have a period of 30 days to protest such determination. Upon completion of this process, the City Manager shall report the results to the City Council during his comments at the next scheduled City Council meeting. 5. City Council Action. If a resolution of intention to disestablish is brought forth to the City Council, the Council shall proceed pursuant to Streets and Highways Code section 36670 as follows: a. Upon submission of a petition, the Council shall first pass a resolution of intention to disestablish the district and then notice a hearing on disestablishment. b. The resolution of intention to disestablish the district shalL• 1. State the reason for the disestablishment 2. Contain the time and place of the public hearing before the City Council when disestablishment will be considered. 3. Include a proposal to dispose of any assets acquired with the revenues of the assessments levied within the district. c. The notice of the hearing on disestablishment shall be given by mail to the owner of each business subject to the assessment. d. The public hearing shall be conducted not less than 30 days after mailing the notice to the business owners. e. The public hearing shall be held not more than 60 days after adoption of the resolution of intention. f. Any protest to the validity of one ore more petitions, the validity of the Finance Director's determination that the 50% threshold has been reached, or any other matter must be submitted to the City Attorney, in writing, after August 12`h in the petition year, but prior to (1) the date provided by the Finance Director in Section 4.b., above, if the protest relates to a determination of the invalidity of one or more petitions or the failure to reach the 50% threshhold; or (2) the close of the public hearing at which City Council considers disestablishment in the event the protest relates to the validi of one or more petitions or challenges the determination that the 50% threshhold was reached. 9-10