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HomeMy WebLinkAbout2012/09/20 Item 01~~(1~ ~~ CHUL4VISTA Finance Department TO: Mayor and City Council FROM: City Attorney C-~'tc1~s- Finance Directo~ DATE: September 19, 2012 RE: Chula Vista Tourism and Marketing District -Amended Resolution of Intention to Disestablish the CVTMD Setting a New Public Hearing Date of October 23, 2012 In response to petitions from Chula Vista Tourism & Marketing District (CVTMD) members, on September 11, 2012 the City Council approved a Resolution of Intention to disestablish the CVTMD and set a public hearing to consider such action for October 16, 2012. A copy of the staff report for this item is attached for your information. In order to implement this action, state law also required that written notice of this public hearing be mailed to CVTMD members within 30 days of the scheduled hearing date. Unfortunately, as a result of a miscommunication among City staff, this notice was not sent in a timely manner. In order to correct this mistake, City staff is recommending that the City Council adopt a revised version of the Resolution of Intention that changes the date for the public hearing to October 23, 2012. This resolution (attached) is otherwise the same as the original. The required notice has been prepared. With City Council approval of this item, this notice will be mailed out to all CVTMD members on Friday, September 21st. 276 Fourth Avenue, Chula Vista, CA 91910 www.chulavistaca.gov (619) 691-5051 fax (619) 585-5685 COUNCIL RESOLUTION NO. 2012- 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, NOTICING A PUBLIC HEARING TO CONSIDER SAME FOR OCTOBER 23, 2012 AT 4:00 P.M.; AND REPEALING AND REPLACING RESOLUTION N0.2012-172 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 1-2 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 23, 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; and WHEREAS, in order to ensure adequate notice of the public hearing is provided in accordance with California Streets and Highways Code section 36670, the City Council is adopting this new Resolution, repealing and replacing Resolution No. 2012-172, to change the public hearing date from October 16,_ 2012 at 4:00 p.m., to October 23, 2012 at 4:00 p.m; and WHEREAS, this Amended Resolution No. 2012-172 supersedes, repeals and replaces the original Resolution No. 2012-172, dated September 11, 2012. 1-3 Resolution No. Page 3 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, notices a public hearing to consider same on October 23, 2012 at 4:00 p.m., and repeals and replaces Resolution No. 2012- 172 with this Resolution. Presented by Approved as to form by Maria Kachadoorian letx ~R. G~ Finance Director/ Treasurer '~id~Attorney 1-4 CITY COUNCIL AGENDA STATEMENT =~~ CITY OF CHULA VISTA SEPTEMBER 11, 2012, Item 9 ITEM TITLE: RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ACKIv'OWLEDGING 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 S T ~ S S FINANCE DIRECTOR/ TREASUREI~^ CITY CLERK ~~ REVIEWED BY: ASSISTANT CITY MANAGER/ DIRECTOR OF DEVELOPMENT SERV CES 6G ~ ~ ~' CITY ATTORNEY 4lSTHS 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 14a' and ended on August 13a'. 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. 1-5 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, pursuv~t 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 ~ The period for presenting such a petition is the 30-day period commencing each yeaz on the anniversary of the establishment of the district 3 The CVTMD was established on July 14, 2009. The petition period for 2012 cornrnenced on July 14`h and ended on August 13th. In January 2012 a number of the hoteUmotel 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 regazding the petition process. Because of this, the City Attorney's Office identified the need for procedures to supplement the State code in this azea. 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"°); and the Chamber's Hotel/Motel Committee (May 8th). Draft procedures, along with a request for comments, were also transmitted directly to the CVTMD hoteUmotel owner/operators in advance of the May 8`h HoteUMotel Coaunittee 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 Cahfornia Streets and Highways Code §36670(a)(2). 3 California Streets and Highways Code §36670. ~_6 SEPTE)\QBER 11, 2012, Item I Page 3 of 5 of the notice, administrative procedures, and sample perition 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 detetmine 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 30th. 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(6) requires thafthe City adopt a resolution of intention to disestablish the CVTMD. Section 36670(6) 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:° 1. State the reason for the disestablishment. "California Streets & Highways Code §36670(6). -~ SEPTEMBER I1, 2012, Item Page 4 of 5 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. 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 hearing 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. A[ 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 reseazching 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 Mazketing 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 ~-$ 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 annual 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 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 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 HotellMotel TMD Members Proposing Disestablishment ofthe Chula Vista Tourism and Marketing District ("CVTMD") Prepared by: T~any Allen, Treasury Manager, Finance Department ~-9