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HomeMy WebLinkAbout2012/10/23 Item 11CITY COUNCIL AGENDA STATEMENT -1 1 ~`1/~ CITY OF ~` CHULA VISTA OCTOBER 23, 2012, Item ITEM TITLE: PUBLIC HEARING ON DISESTABLISHMENT OF THE CHULA VISTA TOURISM AND MARKETING DISTRICT, PURSUANT TO STREETS AND HIGHWAYS CODE SECTION 36670, BASED ON PETITIONED REQUEST BY BUSINESS OWNERS WHO PAY MORE THAN FIFTY PERCENT OF THE CVTMD ASSESSMENTS RESOLUTION OF THE CITY COUNCIL OF CHULA VISTA DISESTABLISHING THE CHULA VISTA TOURISM AND MARKETING DISTRICT AND DIRECTING THE DIRECTOR OF FINANCE TO DISTRIBUTE ANY REMAINING CVTMD REVENUES AND ASSETS PURSUANT TO STREETS AND HIGHWAYS CODE SECTIONS 36670-36n67~1-~ SUBMITTED BY: CITY ATTORNEYC FINANCE DIRECTOR/ REASURER ~ ~~1L MIL REVIEWED BY: CITY MANAGER UU 4/STHS VOTE: YES ~ NO SUMMARY The Chula Vista Tourism and Marketing District ("CVTMD") was established pursuant to state law, the Property and Business' Improvement District Law of 1994' (the "PBID Law"), in 2009. Pursuant to the PBID Law, the CVTMD can 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 14th and ended on August 13th. During the petition period, petitions to disestablish the CVTMD were received from business owners who pay 50 percent or more of the CVTMD assessments. In accordance with the PBID Law, on September 20, 2012, the City Council adopted a resolution of intention to disestablish the CVTMD, and set the public hearing for October 23, 2012. Tonight, the City Council is being asked to hold that public hearing and determine if the CVTMD should be disestablished. Aresolution of disestablishment has been provided for the City ' California Streets and Highways Code sections 36600, et seg. 11-1 OCTOBER 23, 2012, Item 1 Page 2 of 6 Council's consideration, in the event the City Council decides to disestablish the CVTMD. 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 necessary. RECOMMENDATION Staff recommends that the City Council hold the public hearing, consider the testimony presented and determine, in its discretion, whether or not to proceed with CVTMD disestablishment and the distribution of CVTMD assets. BOARDS/COMMISSION RECOMMENDATION Not applicable. DISCUSSION L BACKGROUND 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.2 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 14th 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 did not contain all the information necessary to process. Because of this, the City Attorney's Office identified the need for procedures to supplement the State code in this area. At the City Council meeting on March 13, 2012, 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 Board (May 2°a); and the Chamber's HoteUMotel Committee (May Stn) 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 ~ California Streets and Highways Code §36670(a)(2). s California Streets and Highways Code §36670. ~~-2 OCTOBER 23, 2012, Item ~~ Page 3 of 6 administrative procedures for the handling of petitions that might be submitted for disestablishment of the CVTMD. 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 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 are current on all amounts due and payable. This review considered assessments due and payable 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 were 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, per the adopted administrative procedures, the Finance Director utilized 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 has determined that petitions to disestablish the CVTMD were 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 forwazd 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. 11-3 OCTOBER 23, 2012, Item ~f Page 4 of 6 When the petition requirements have been met, Section 36670(b) requires that the City adopt a resolution of intention to disestablish the CVTMD and notice a heazing on disestablishment. The resolution of intention to disestablish the district must a 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 proposalto dispose of any assets acquired with the revenues of the assessments levied within the district. The resolution of intention to disestablish, meeting the above requirements, was adopted by the City Council on September 20, 2012. The City Council also set the public hearing for October 23, 2012. Notice of the hearing was given by mail to the owner of each business subject to the assessment, in accordance with the PBID Law. II. PUBLIC HEARING At the public hearing, the City Council will take public testimony related to the requested disestablishment of the CVTMD. The public will have the opportunity to protest the validity of one or more petitions, challenge the determination that the 50% threshold was reached, weigh-in on the proposed distribution of assets and provide input on any other matter related to the requested disestablishment. A. City Council Discretion The City Attorney's Office has previously advised the City Council, both verbally and in writing, regarding the extent of the City Council's discretion in this matter. Based on the plain language and regulatory framework of the PBID Law that advice was, and is, that the petitions to disestablish submitted constitute a valid request of the' City Council to disestablish the CVTMD. In response to this request, based on evidence in the record at the public hearing, the City Council has the discretion to either disestablish the CVTMD, or to leave the CVTMD in tact. This basic legal framework has also been described to the CVTMD Board at their public meeting ion October 3rd. Notice of that meeting was also provided to the full CVTMD membership. If the City Council decides to disestablish the CVTMD, it should adopt the resolution and provide direction to City staff regazding disbursement of the CVTMD assets and remaining revenues. B. Disposition of Assets The PBID Law requires that the resolution of intention contain a proposal to dispose of any assets acquired with the revenues of the assessments levied within the property and business improvement district. The resolution of intention adopted by the ° California Streets & Highways Code §36670(b). 11-4 OCTOBER 23, 2012, Item ~/ Page 5 of 6 City Council on September 23rd contained such a proposal. That proposal was prepared by the Director of Finance and recommended in the event of disestablishment, the liquidation of CVTMD assets. The proposal further recommended that 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. Per the terms of the Agreement, the audit for fiscal year 2011-12 was to be submitted to the City no later than September 30, 2012, for the period July 1, 2011 through June 30, 2012. Staff recommended that the audit period be extended to cover activity through the date of disestablishment. Under the disestablishment procedures established in the PBID Law [Section 36671(a)], all revenues remaining after payment of outstanding debts shall be refunded to the district members using the same basis that was used to calculate the assessments levied. The revenues to be refunded in this manner include both assessments levied and funds derived from the sale of assets. If disestablishment is implemented staff recorunends that all funds on account with the CVTMD operator be turned over to the City within 1 week of the disestablishment of the district. Any expenditure of these funds would then be made by the City after confirming the expense was an existing obligation at the time of disestablishment. Following the payment of all verified debts, the City would refund the funds on account and the proceeds of the asset sale to the district members based upon their proportionate weight of the total CVTMD assessments levied in fiscal year 2011-12. Any additional assessments collected by the district members and remitted to the City subsequent to disestablishment of the district would be refunded directly to the payer. DECISION MAKER CONFLICT Staff has reviewed the decision contemplated by this action and has determined that it is not site specific and consequently the 500-foot rule found in California Code of Regulations section 18704.2(a)(1) is not applicable to this decision. CURRENT YEAR FISCAL IMPACT No fiscal impacts to City funds are anticipated to result from disestablishment of the Chula Vista Tourism and Marketing District (CVTMD) in the current fiscal year. All CVTMD assessments collected by the City are remitted to the Chamber of Commerce (district owners' association). No assessments are retained by the City. The Agreement for Tourism Marketing District Management Services between the City and the Chula Vista Chamber of Commerce requires the Chamber to reimburse the City for all operating costs incurred providing services to the CVTMD. Under this agreement, the General Fund will be reimbursed for all costs associated with the preparation of this report. If the Council disestablishes the CVTMD, the General Fund would similarly be reimbursed for all staff costs associated with the disposition of district assets, including refunds to district members. The reimbursement to the City for supporting the CVTMD is capped at 3 percent of annual TMD revenues. Any reimbursement in excess of this amount requires mutual 11-5 OCTOBER 23, 2012, Item Page 6 of 6 agreement of the Chamber of Commerce and the City. Given this reimbursement mechanism, no fiscal impacts to the City are anticipated to result from administration of the disestablishment and disposition of district assets. Disestablishment of the district eliminates the levy of the CVTMD assessment (2.5%) on transient occupancies throughout the City. RV parks and campgrounds are excluded from the CVTMD, and are not impacted by disestablishment of the district. ONGOING FISCAL IMPACT No ongoing fiscal impacts to City funds are anticipated to result from disestablishment of the CVTMD. Prepared by: Jill D. S Maland, Assistant City Attorney 11-6 RESOLUTION NO. 2012- RESOLUTION OF THE CITY COUNCIL OF CHULA VISTA DISESTABLISHING THE CHULA VISTA TOURISM AND MARKETING DISTRICT AND DIRECTING THE DIRECTOR OF FINANCE TO DISTRIBUTE ANY REMAINING CVTMD REVENUES AND ASSETS PURSUANT TO STREETS AND HIGHWAYS CODE SECTIONS 36670-36671 WHEREAS, the CVTMD is a business improvement district established under the PBID Law; and WHEREAS, 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; and WHEREAS, the period for presenting such a petition is the 30-day period commencing each year on the anniversary of the establishment of the district; and WHEREAS, the CVTMD was established on July 14, 2009; and WHEREAS, the petition period for 2012 commenced on July 14`h and ended on August 13`h and WHEREAS, in January 2012 a number of the hotel/motel owners assessed under the TMD submitted petitions to disestablish the CVTMD, although these petitions were not submitted during the time period provided by state law and did not contain all the information necessary to process; and WHEREAS, the City Attorney's Office identified the need for procedures to supplement the State code in this area; and WHEREAS, at the City Council meting on March 13, 2012, the Council requested that draft procedures be brought back in April for Council's input, and those draft procedures were submitted to the Council on Apri124, 2012; and WHEREAS, staff met with, and presented drafr procedures to: Chamber of Commerce representatives; the Chamber's TMD Board (May 2"a); and the Chamber's Hotel/Motel Committee (May 8"'); and WHEREAS, draft procedures, along with a request for comments, were also transmitted directly to the CVTMD hotel/motel owner/operators in advance of the May 8`h Hotel/Motel Committee meeting; and 11-7 Resolution No. Page 2 WHEREAS, additional direction was received from the City Council at its May 22, 2012 meeting; 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, 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, and copies 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; and WHEREAS, during the petition period, petitions to disestablish the CVTMD were received from twelve (12) members of the CVTMD; and WHEREAS, a review performed by Finance Department staff has determined that al] petitions received meet the business ownership and/or authorized agent requirements of the administrative procedures, and WHEREAS, as of the August 30th deadline established in the administrative procedures, all twelve businesses submitting petitions were current on their assessments for the subject period; and WHEREAS, a review performed by Finance Department staff has determined that petitions to disestablish the CVTMD were received from business owners representing 53.37% of the total CVTMD assessments for the subject period ($484,775); and WHEREAS, the petitions were forwarded to the City Clerk on August 29th, and the City Clerk has made the required verification; and WHEREAS, the requirements of Section 36670(a)(2), allowing for disestablishment by petition, have been met; and WHEREAS, when the petition requirements have been met, Section 36670(b) requires that the City adopt a resolution of intention to disestablish the CVTMD and notice a hearing on disestablishment; and WHEREAS, the resolution of intention to disestablish, meeting the above requirements, was adopted by the City Council on September 20, 2012; and WHEREAS, the City Council also set the public hearing for October 23, 2012, and notice of the hearing was given by mail to the owner of each business subject to the assessment, in accordance with the PBID Law; and 11-8 Resolution No. Page 3 WHEREAS, the PBID Law requires that the resolution of intention contain a proposal to dispose of any assets acquired with the revenues of the assessments levied within the property and business improvement district; and WHEREAS, the resolution of intention adopted by the City Council on September 23rd contained such a proposal which was prepared by the Director of Finance and recommended in the event of disestablishment, the liquidation of CVTMD assets; and WHEREAS, the proposal further recommended that 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; and WHEREAS, per the terms of the Agreement, the audit for fiscal year 2011-12 was to be submitted to the City no later than September 30, 2012, for the period July 1, 2011 through June 30, 2012; and WHEREAS, staff recommended that the audit period be extended to cover activity through the date of disestablishment; and WHEREAS, under the disestablishment procedures established in the PBID Law [Section 36671(a)], all revenues remaining after payment of outstanding debts shall be refunded to the district members using the same basis that was used to calculate the assessments levied; and WHEREAS, the revenues to be refunded in this manner include both assessments levied and funds derived from the sale of asset; and WHEREAS, if disestablishment is implemented staff recommends that all funds on account with the CVTMD operator be tamed over to the City within 1 week of the disestablishment of the district; and WHEREAS, any expenditure of these funds would then be made by the City after confirming the expense was an existing obligation at the time of disestablishment; and WHEREAS, following the payment of all verified debts, the City would refund the funds on account and the proceeds of the asset sale to the district members based upon their proportionate weight of the total CVTMD assessments levied in fiscal year 2011-12; and WHEREAS, any additional assessments collected by the district members and remitted to the City subsequent to disestablishment of the district would be refunded directly to the payer; and WHEREAS, a public hearing was held on October 23, 2012 and evidence and testimony was presented with respect to the requested disestablishment. 11-9 Resolution No. Page 4 NOW, THEREFORE, BE IT RESOLVED, based on information provided by staff and testimony and evidence presented at the public hearing that the City Council of the City of Chula Vista does hereby confirm the validity of disestablishment petitions presented, disestablish the Chula Vista Tourism Mazketing District and direct the Director of Finance to distribute any remaining CVTMD revenues and .assets pursuant to staffs recommendation and Streets and Highways Code Sections 36670-36671. Presented by len R: Googins ey Approved as to form by /, ~1 ~G1en R/T`-G`~o'o(_g/in City Att ey 11-10 /1Ti~~/.~ u TGd ~% ~u-~~c:/L ~ee~~N~ ~o~-3~z CVTMD KEY DOCUMENTS OCTOBER 23, 2012 TABLE OF CONTENTS 1. Report Regarding City/CVTMD Contract March 13, 2012 2. final City/CVTMD Management Contract 3. Grand Jury Report and Responses 4. Administrative Procedures for Disestablishment June 12, 2012 5. Resolution of Intention to Disestablishment September 20, 2012 6. PBID Law 7. CVTMD Management District Plan -April 28, 2009 ~~: . , ~-~_ s r ~ ~' CITY COUNCIL ~~ _ AGENDA STATEMENT m^-~---~ ,~~~.- ;I ~ ~\I/~ CITY OF "~"CIiULAVISTA MARCH 13, 2012, Item ITEM TITLE: RESOLUTION OF- THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING AN AGREEMENT BETWEEN THE CHAMBER OF COMMERCE, ACTING AS THE DESIGNATED OWNER'S ASSOCIATION FOR THE TOURISM AND MARKETING DISTRICT, AND THE CITY OF CHULA VISTA FOR THE ADMINISTRATION AND IMPLEMENTATION OF ACTIVITIES DESCRIBED IN THE MANAGEMENT DISTRICT PLAN SUBMITTED BY: • REVIEWED BY: DIRECTOR OF ECON MIC DEVELOPMENT CITY MANAGER 4/STHS VOTE: YES ~ NO SUMMARY Under the Tourism and Mazketing District Plan (Plan}, the Owners Association is required to prepare and submit an Annual Report to the City Council The Plan appoints the Chamber of Commerce as the Owners Association. The Chamber submitted the Tourism acid Marketing District, (TMD) Annual Report to staff in August of 2011 and presented the Annual Report to City Council on November 15, 2011. The City Council accepted the report on January 10, 2012. Staff worked with the Chamber to prepare a draft Agreement (Attachment A-1) between the Chamber of Commerce and the City for City Council's review and considerafion on November 15, 2011 and January l0, 2012. The Chamber has worked with staff to develop the forms and standards that provide structure for future Annual Reports as well as the transpazency and clarity previously requested by the City Manager's Office, and City Council. The proposed Agreement accomplishes the following: 1) clazifies the relationship between the City and the Chamber/Owners Association, 2) incorporates the Annual Financial Report Form, and the Program Status Report (Attachments B and C), 3) establishes an annual audit of the TMD finances, and 4) establishes the terms for reimbursement to the City for actual costs of collecting and remitting TMD payments to the Owner's Association as requirements under the proposed Agreement. 19-1 i~~ Item No• '': Meeting Date: 03-13-12 • Page 2 of 5 The Agreement also incorporates requirements for: 1) the TMD boazd membership to consist of a majority of hotel/motel representatives elected by the hotel/motel owners, 2) that the Annual Financial and Program Status Reports be approved by the newly constituted TMD board with a majority of hotel/motel owners, and 3) that the TMD Board develop and approve a process for measuring the impact of the activities and improvements proposed in the Annual Report and incorporate that process into their Annual Report to City Councih If adopted, the proposed Agreement provides clarity and structure for the relationship between the City and TMD, and between the TMD and hotel/motel owners that was not in the previously adopted Plan or the Streets and Highways Code. It provides that an audit of the financial operations of the TMD be made available to the City. ENVIRONMENTAL REVIEW The Environmental Review Coordinator has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity is not a Project as defined under Section 15378 of the CEQA Guidelines; therefore pursuant to Section • 15060(c)(3) of the State CEQA Guidelines the activity is not subject to CEQA. Thus no environmental review is necessary. RECOMMENDATION That City Council adopt the resolution. BOARDS/COMMISSION RECOMMENDATION Not applicable. DISCUSSION Staff is submitting a revised Agreement between the City and the Owner's Association as described in the TMD Plan adopted in 2008. Attached for your convenience is a strike out underline version of the revised Agreement that highlights the revisions (Attachment A-2). These revisions focus on the intent and spirit of the Crty Councils comments and direction to staff on January 10, 2012. The revisions incorporate the requirement: 1) For hotel/motel owners to constitute a majority of the TMD Board, 2) That before each new year, the Goals and Objectives, and Financial Report be adopted by the TMD Board, and a documented effort be made to reach all Board members, giving them • ample time to attend and participate in that vote, and 19-2 Item No• ~ r~ Meeting Date: 03- 3 2 Page 3 of 5 3) That the TMD Board establish a means to evaluate the benefits to the hotel/motel owners and incorporate that evaluation in future Annual Reports to the City Council. With these additions, the proposed Agreement provides structure for the relationship between the City and TMD, and between the TMD and hotel/motel owners that is not provided by the Streets and Highways Code. The proposed Agreement provides clarity and accountability that was not . included in the TMD Plan adopted in 2009. It also provides hotellmotel owners and the City with an annual financial audit performed by an independent Certified Public Accountant, and a consistent set of forms and standards to monitor and evaluate the program and financial activities of the TMD as approved by a majority of hotel/motel owners. Furthermore, the proposed Agreement requires that the hotel/motel owners have a democratic opportunity to control the investment of TMD funds in Activities and potential Improvements that they have a majority stake in selecting before they come to City Council for review and consideration. The proposed Agreement provides the framework for ali stakeholders to participate democratically and collaboratively for the prosperity of the Chula Vista hotel/motel industry, with the transparency, clarity and promise that a healthy TMD can provide the community. Legal Analysis 1. The Agreement As stated above, the TMD Plan identifies the Chamber as the Owners' Association. Streets and Highways Code section 36651 states that, when a management district plan designates an owners' association, the city and the owners' association shall enter into a contract to provide the .services required of the owners' association in the plan. No formal, written agreement was entered into when the District was formed in 2009. Accordingly, the City and the Chamber have negotiated the terms of an agreement thaf is presented for your consideration tonight. Prior versions of this agreement were presented to the Council on November 15, 2011 and January 10, 2012. This proposed final version has been revised consistent with the Council's direction at the January 10, 2012 meeting. As presented, the agreement provides several benefits to the City, including: • Annual Reporf. The Streets and Highways Code requires that the Chamber submit an annual report to the Council. The agreement adds specificity to this requirement,. including a requirement that the proposed budget be reported in two formats: (i) by major financial category; and {ii) by activity. (Agreement Exhibit A, section 4.a.) • Make-up of Governing Body. As previously requested by the Council, the agreement has been amended to establish a TMD Committee, a majority of the members of which shall be hotel/motel ~ owner assessee's. The Committee must approve all major decisions; including the Annual Report {containing the budget, work plan, and goals and objectives for each year) and the TMD Committee policies. (Agreement Exhibit A, section 8.) • Audit Requirements. The agreement also imposes an audit requirement on the Chamber, which is not included in the Streets and Highways Code. Specifically, the Chamber must annually enlist the services of an independent, licensed, certified public accountant to • conduct a fiscal year financial audit of the CVTMD finances, and provide a copy of the audit to the City Council. (Agreement Exhibit A, section 7.) 19-3 rt Item No:_ Meeting Date: 03-13-12 • Page 4 of 5 • Disestablishment. The Streets and Highways Code allows the City to initiate disestablishment proceedings if the City Council finds there has been misappropriation of funds, malfeasance, or a violation of law in connection with the management of the district and a noticed hearing on disestablishment is held. The agreement defines "malfeasance" to include (with opportunities to cure) the Chamber's failure to comply with the agreement. (Agreement, section 17.) • Payment of Operatintr Costs. The agreement provides that the Chamber will pay operational costs associated with services provided by the City to the CVTMD. Those services include: collecting assessments, remitting funds to the Chamber and staff time and other resources spent assisting the Chamber in preparing and submitting the Annual Report to the City Council. (Agreement, section 8.) • Indemnifrcation. The agreement requires that the Chamber indemnify the City for any loss or damage that may occur as a result of the Chamber's performance of its obligations with respect to the TMD. • Insurance. The agreement requires that the Chamber maintain minimum insurance coverage, including general liability, workers' compensation and directors' and officers' liability. (Agreement, section 5.) • Reservation of Rights. The City retains all rights it currently has under the Streets and Highways Code to suspend, terminate and dissolve the District. The agreement also expands on the dissolution right by including breach of the agreement as a basis for dissolution. (Agreement, section 17(a).] The above provisions are highlighted to provide the Council with a summary of some of the terms of the agreement which provide protections and benefits to the City, over and above what is provided in the Streets and Highways Code. The entire agreement is attached to the Agenda Statement for the Council's review and consideration. 2. Disestablishment Options The Council has requested additional information regarding potential disestablishment of the CVTMD. Pursuant to the Streets and Highways Code, the City Council may disestablish the district by resolution, after a public hearing, in either of two circumstances: (i) The City Council finds there has been misappropriation of funds, malfeasance, or a violation of law in connection with the management district plan; or (ii) Submission, during the 30-day period beginning July 14~h of each year that the district is in operation, of the written petition of the business owners ~vho pay 50 percent or more of the assessments levied. Under either option above, the Council would be required to first adopt a' resolution of intention to disestablish the district. That resolution would state the reason for the disestablishment, the time and place of the public hearing and a proposal to dispose of assets acquired with the revenues of the assessments levied within the district. Notice of the hearing must be given by mail to each business owner subject to district assessment. The public hearing . must be held at least thirty days after mailing the notices and at least sixty days after adoption of the resolution of intention. (Cal. Sts. & High. Code §36670.) 13-4 ;, Item No: Meeting Date: 63-13-12 • Page 5 of 5 Also, City legal, finance and business staff aze working to develop administrative procedures and guidelines to be followed in the event petitions for disestablishment aze submitted during the upcoming cycle. This process will address issues such as, necessary components of the petitions, who must sign them, and when and to whom they must be submitted. Staff intends to present draft procedures to the TMD Committee and interested hoteUmotel owners for their input before they are finalized. They will then be presented to the Council. DECISION MAKER CONFLICT Staff has reviewed the decision contemplated by this action and has determined that it is not site specific and consequently the 500 foot rule found in California Code of Regulations Section 18704.2(a)(1) is not applicable to this decision. CURRENT YEAR FISCAL IMPACT As part of the proposed Agreement, the TMD Owners Association will be reimbursing the City for current operational costs for assisting the TMD with collecting and remitting TMD fees from local hotels and motels. Staff estimates that to be approximately $6,300 for the remainder of the fiscal year. Therefore, as a result of this action, there will be a small positive fiscal impact to the City's General Fund in this current fiscal year. Since the CVTMD was established, the TOT revenue in the last reportable fiscal year, 2010 has increased by approximately $200,000. • Additionally, the public-private partnership between the CVTMD and the City has made it possible to retain a Senior Graphic Designer, at a savings of $50,000 to the City's General Fund. The partnership serves both agencies and helps maintain a high quality and consistency of message design at a lower annual cost to each agency. ONGOING FISCAL IMPACT As a result of this action, the City will be reimbursed for any costs associated with collecting and remitting TMD fees through the remaining term of the TMD Plan. Therefore, there will be a small positive fiscal impact to the City's General Fund over each year of the TMD operation. Furthermore, a successful CVTMD effort will foster a higher occupancy rate that will in turn generate greater Transient Occupancy Taxes, as well as sales tax increases and local jobs creation associated with higher volume of visitor stays and purchases during those stays. The City's TOT is collected at a corresponding rate of 10%. The General Fund receives $10,000 for each additional $100,000 in hotel and motel occupancy generated within the City. An increasingly successful CVTMD will result in a positive impact to the General Fund in future fiscal years. ATTACHMENTS A-l. Proposed CVTMD Agreement A-2. Strike-out/underline CVTMD Agreement B Annual Financial Report . C Program Status Report Prepared by: Michael T d4eacham, Director ofEconom is Development and Craig Ruiz, Principal Economic Development Specialist 7 9-5 • -THE ATTACHED AGREEMENT HAS' BEEN REVIEWED AND APPROVED AS TO FORM BY THE CITY ATTORNEY'S OFFICE AND WILL BE FORMALLY SIGNED UPON APPROVAL BY THE CITY COUNCIL City Attorney Dated: 2u -~~ / Z- AGREEMENT FOR TOURISM MARKETING DISTRICT MANAGEMENT SERVICES BETWEEN THE CITY OF CHULA VISTA, AND THE CHULA VISTA CHAMBER OF COMMERCE 19-6 Attachment A-1 AGREEMENT FOR TOURISM MARKETING DISTRICT MANAGEMENT SERVICES This Agreement for Tourism Marketing District Management services {the "Agreement"), dated is by and between the City of Chula Vista, hereinafter referred to as the "City;' and the Chula Vista Chamber of Commerce, hereinafter referred to as "Contractor," collectively referred to as the "parties." RECITALS A. The City is a California municipal corporation and charter city; Contractor is a private, non- profitentity. B. In April 2009, the Chula Vista Chamber of Commerce {"CVCC")and the Chula Vista Convention and Visitors Bureau ("CVCVB") submitted to the City a petition and Management District Plan ("MDP") for establishment of the Chula Vista Tourism Marketing District ("CVTMD"), proposing assessments on all lodging businesses in the City, in accordance with the Property and Business Improvement District Law of 1994, California Streets and Highways Code section 36600, et seq. (the "1994 Law'). C. On May 12, 2009, the City Council adopted Resolution No. 2009-115, accepting the petition and declaring its intent to initiate proceedings to establish the CVTMD, in accordance with the 1994 Law. • D. On July 14, 2009, the City adopted Resolution number 2009-177, hereinafter the "Resolution;' establishing the CVTMD, and providing that assessments be levied as described in the MDP. E. Contractor was designated in the MDP as the Owners' Association in accordance with Streets and Highways Code section 36614.5. As a result, Streets and Highways Code section 36651 authorizes the City to contract with the Owners' Association for provision of CVTMD services. F. Under the 1994 Law, funds raised by the CVTMD must be spent for the purposes specified in the Resolution: sales promotions and marketing programs to market Chula Vista as a tourist, meeting and event destination, and other improvements as set forth in Streets and Highways Code §36610; funds cannot be diverted to government programs. G. Contractor is willing to provide services to the City on the terms and conditions set forth in this Agreement. AGREEMENT Now, therefore, the parties agree as follows: 1. Engagement. City hereby retains Contractor to provide the services described in Exhibit . A, and Contractor accepts such engagement. 79-7 • 2. Term. The term of this Agreement shall begin on September 1, 2011 and end on July 31, 2014. If the CVTMD is disestablished prior to July 31, 2014, this Agreement shall terminate on the effective date of CVTMD disestablishment, except as provided in sections 23 and 25. 3. Independent Contractor. Na relationship of employer and employee is created by this Agreement; it being understood and agreed that Contractor is an Independent Contractor. Contractor is not the agent or employee of the City in any capacity whatsoever, and City shall not be liable for any acts or omissions by Contractor nor for any obligations or Iiabifities incurred by Contractor. A. Contractor shall have no claim under this Agreement or otherwise, for seniority, vacation time, vacation pay, sick leave, personal time off, overtime, health insurance, medical care, hospital care, retirement benefits, social security, disability, Workers' Compensation, unemployment insurance benefits, civil service protection, or employee benefits of any kind. B. Contractor shall be solely liable for and obligated to pay directly all applicable payroll taxes (including federal and state income taxes} or contributions for unemployment insurance or old age pensions or annuities which are imposed by any governmental entity in connection with labor used or which are measured by wages, salaries or otfier remuneration paid to its officers, agents or employees and agrees to indemnify and hold City harmless from any and all liability which City may incur because of Contractor's failure #o pay such amounts. C. In carrying out the work contemplated herein, Contractor shall comply with all . applicable federal and state workers' compensation and liability laws and regulations with respect to the officers, agents and/or employees conducting and participating in the work; and agrees that such officers, agents, and/or employees will be considered Independent Contractors and shall not be treated or considered in any way as officers, agents and/or employees of City. D. Contractor agrees to perform its work and functions at all times in strict accordance with all applicable federal; state, county and city laws, resolutions, regulations, titles, departmental procedures and currently approved methods and practices in the field; and that the sole interest of City is to ensure that said service shall be performed and rendered in a competent, efficient, timely and satisfactory manner and in accordance with standards required by the City. E. Notwithstanding the foregoing, if the City determines that pursuant to state and federal law Contractor is an employee for purposes of income tax withholding, City may upon two (2) weeks' written notice to Contractor, withhold from payments to Contractor hereunder federal and state income taxes and pay said sums to the-federal and state governments. 4. 'Indemnification. To the maximum extent allowed by law, Contractor shat! defend, indemnify, protect, defend and hold harmless the City, its elected and appointed officers, agents and employees, from and. against any and all claims, demands, causes of action, costs, expenses, liability, loss, damage or injury, in law or equity, to property or persons, including wrongful death, in any manner arising out of or incident to any alleged acts, omissions, negligence, or willful . misconduct of Contractor, its officials, officers, employees, agents, and contractors, arising out of or in connection with the performance of its obligations under this Agreement. This indemnity provision does not include any claims, damages, liability, costs and expenses 19-8 • (including without limitations, attorneys' fees) arising from the sole active negligence or sole willful misconduct of the City, its officers, agents or employees. Also covered is liability arising from, connected with, caused by or claimed to be caused by the active or passive negligent acts or omissions of the City, its agents, officers, or employees which maybe in combination with the active or passive negligent acts or omissions of the Consultant, its employees, agents or officers, or any third party. This indemnity shall survive the termination ofthis Agreement. 5. Insurance. Contractor must procure insurance against claims for injuries to persons or damages to property that may arise from or in connection with the performance of the work under this Agreement and fhe results of that work by Contractor, its agents, representatives, employees or subcontractors and provide documentation of same prior to commencement of work. The insurance must be maintained for the duration of the Agreement. Minimum Scope of Insurance Coverage must be at least as broad as: 1. Insurance Services Office Commercial General Liability coverage (occurrence Form 000001) 2. Workers' Compensation insurance as required by the State of California and Employer's Liability Insurance. 3. Professional Liability or Errors & Omissions Liability insurance appropriate to Contractor's profession. Architects' and Engineers' coverage is to be endorsed to include contractual liability. Minimum Limits of Insurance Contractor must maintain limits no less than: 1. General Liability: $1,OOD,000 per occurrence for bodily injury, personal injury and (Including operations, property damage. !f Commercial General Liability insurance products and completed with a general aggregate limit is used, either the general operations, as applicable.) aggregate limit must apply separately to this project/location or the general aggregate limit must be twice the required occurrence limit. 2. Workers' Compensation Statutory Employer's Liability: $1,000,000 each accident $1,000,000 disease-policy limit $S,000,OOp disease-each employee 3. Directors and Officers $500,000.00 each occurrence • Liability: 19-9 Deductibles and Self-Insured Retentions Any deductibles orself-insured retentions must be declared to and approved by the City. At the option of the City, either the insurer will reduce or eliminate such deductibles or self-insured retentions as they .pertain to the City, its officers, officials, employees and volunteers; or Contractor will provide a financial guarantee satisfactory to the City guaranteeing payment of losses and related investigations, claim administration, and defense expenses. Otherlnsurance Provisions The general liability, and where appropriate, the worker's compensation policies are to contain, or be endorsed to contain, the following provisions: 1. The City of Chula Vista, its officers, officials, employees, agents, and volunteers are to be named as additional insureds with respect to liability arising out of work or operations performed by or on behalf of Contractor including providing materials, parts or equipment furnished in connection with such work or operations. The general liability additional insured coverage must be "primary' and must not exclude products / completed operations. 2. The contractor's General Liability insurance coverage must be primary insurance as it pertains to the City, its officers, officials, employees, agents, and volunteers. Any insurance or self-insurance maintained by the City, its officers, officials, employees, or volunteers is wholly separate from the insurance of Contractor and in no way relieves Contractor from its responsibility to provide insurance. 3. Each insurance policy required by this clause must be endorsed to state that coverage will not be canceled by either party, except after thirty (30} days' prior written notice to City by certified mail, return receipt requested. 4. Coverage shall not extend to any indemnity coverage for the active negligence of the additional insured in any case where an agreement to indemnify the additional insured would be invalid under Subdivision (b) of Section 2782 of the Civil Code. 5. Contractor's insurer will provide a Waiver of Subrogation in favor of the City for each required policy providing coverage during the life of this contract. If General Liability, Pollution and/or Asbestos Pollution Liability and/or Errors & omissions coverage are written on aclaims-made form: 1. The "Retro Date" must be shown, and must be before the date of the Agreement or the beginning of work pursuant to the Agreement. 2. Insurance must be maintained and evidence of insurance must be provided for ai least five (5) years after completion of work under the Agreement. 3. If coverage is canceled or non-renewed, and not replaced with another • claims-made policy form with a "Retro Date" prior to the Agreement effective date, Contractor must purchase "extended reporting" coverage for a minimum of five (5} years after completion of work under the Agreement. 19-10 4. A copy of the claims reporting requirements must be submitted to City for review. Acceptability of Ensurers Insurance is to be placed with licensed insurers admitted to transact business in the State of California with a current A.M. Best's rating of no less than AV. If insurance is placed with a surplus lines insurer, insurer must be listed on the State of California Lisi of Eligible Surplus Lines Insurers (LESLI) with a current A. M. Best's rating of no less than A X. Exception may be made for the State Compensation fund when not specifically rated. Verification of Coverage Contractor shall furnish the City with original certificates and amendatory endorsements effecting coverage required by this clause. The endorsements should be on insurance industry forms, provided those endorsements or policies conform to the contract requirements. All certificates and endorsements are to be received and approved 6y City before work commences. The City reserves the right to require, at any time, complete, certified copies of all required insurance policies, including endorsements evidencing the coverage required by these specifications. Subcontractors for each subcontractor that Contractor may utilize to perform work required by this Agreement, Contractor must include the subcontractor as an insured under its policies, or furnish separate • certificates and endorsements for each such subcontractor. All coverage for subcontractors is subject to all of the requirements included in these specifications. 6. [Not Used.] 7. Conformity with Law. A. In performing services under this Agreement, Contractor shall observe and comply with all applitable laws, resolutions, codes and regulations of governmental agencies, including federal, state, municipal, and local governing bodies, having jurisdiction over the scope of services, including all applicable provisions of the California Occupational Safety and Health Act. Contractor shall indemnify and hold City harmless from any and all liability, fines, penalties and consequences from any of Contractor's failures to comply with such laws, Resolutions, codes and regulations. B. If a death, serious personal injury or substantial property damage occurs in connection with Contractor's performance of this Agreement, Contractor shall immediately notify the City. Contractor shall promptly submit to City a written report, in such form as may be required by City of all accidents which occur in connection with this Agreement. This report must include the following information: (1) Name and address of the injured or deceased person(s); (2) Name and address of Contractor's sub-contractor, if any; (B) Name and address of Contractor's liability insurance carrier; and (4) A detailed description of the accident and whether any of City's equipment, tools, material, or staff were involved. • C. Contractor further agrees to take all reasonable steps to preserve all physical evidence and information which may be relevant to the circumstances surrounding a potential 19-11 claim, while maintaining public safety, and to grant to the City the opportunity to review and inspect such evidence, including the scene of the accident. 8. Assessments, Costs and Payment. The City shall collect the assessments in accordance with the 1994 Law, the Resolution antl the MDP. City shall forward to Contractor all CVTMD assessment funds collected, within thirty-days of collection. The City shall not be responsible or liable for determining the accurary or adequacy of the amount of funds remitted to the City 6y the assessees. The City's only responsibility shall be to forward the funds remitted to the Contractor. Contractor shall account for all CVTMD funds separately from all other funds, in order to provide a transparent audit traiC. Beginning January 2012, Contractor will pay the City for all actual operational costs associated with services provided by the City to the CVTMD. Those services include: collecting assessments, remitting funds to Contractor and staff time and other resources spent assisting Contractor in preparing and submitting the Annual Report to the City Council ("Standard Services"). The amount billed to Contractor for such services shall be capped at 3 percent of annual'TMD revenues received by Contractor for on-going services on a fiscal year basis; it is currently estimated to total $6,300 for January through June 2012. Should the Parties agree that - the City will perform additional services for the CVTMD beyond the scope of the Standard Services described in this Agreement, the Contractor will pay the City for the cost of those additional services and the three percent annual cap shall not apply to those services. The City will invoice Contractor quarterly for all City services performed relating to the CVTMD. Contractor shall pay the City in-full, within 30 days of the date of the invoice. If the City does not • receive payment within 30 days, the City shall deduct the amount owed from the assessments collected in the following month. The City will then remit the monthly assessments, less any amounts past due, to the Chamber. In the event that bonds are issued pursuant to the MDP, the City and Contractor shall meet and confer to determine how the City's costs shall be allocated. 9. Taxes. Payment of all applicable federal, state and local taxes shall be Contractor's sole responsibility. 10. Conflicts of Interest. Contractor covenants that neither it nor any of its principals or members of its Board of Directors presently has an interest, and shall not have any interest, direct or indirect, which would conflict in any manner with performance of services required under this Agreement. The Parties understand that members of Contractor's Board of Directors are business owners who will benefit from the services provided by the CVTMD. Such benefit shall not be considered a direct or indirect interest for purposes of this Agreement. Contractor shall comply with all applicable conflicts of interest laws in performing its obligations under this Agreement. 11. Notices. All notices, requests, demands, or other communications underthis Agreement shall be in writing. Notices shall be given for all purposes as follows: A. Personal delivery: When personally delivered to the recipient, notices are effective on delivery. • 19-12 • B. First Class MaiL• Notice may be mailed first class to the recipient's address, set forth in section 11. E., below, in which case notice is effective three (3} mail delivery days after deposit in a United States Postal Service office or mailbox. Certified Mail: When mailed certified mail, return receipt requested, notice is effective on receipt, if delivery is confirmed by a return ,receipt; if it is not confirmed by a return receipt, notice will be effective on the third day after deposit in a United States Postal Service office or mailbox. C. Overnight Delivery: When delivered by overnight delivery with charges prepaid or charged to the sender's account, notice is effective on delivery, if delivery is confirmed by the delivery service; if delivery is not confirmed by the delivery service, notice will be effective two days after mailing. D. Facsimile transmission: When sent by facsimile to the facsimile number of the recipient, as provided in section 11.E., below, notice is effective on receipt. However, notice by facsimile can only be effected if: {aj a duplicate copy of the notice is promptly given by first-class or certified mail or by overnight delivery, or (b) the receiving party delivers a written confirmation of receipt. Any notice given by facsimile shall be deemed received on the next business day if it is received after 5:00 p.m. (recipient's time) or on anon-business day. E. Addresses and facsimile numbers for purpose of giving notice are as follows: To City: To Contractor: City of Chula Vista Chula Vista Chamber of Commerce 276 Fourth Avenue 233 Fourth Avenue Chula Vista, CA 91910 Chula Vista, CA 91910 Attn: City Manager 619-420-1269 • Facsimile:619-409-5884 12. Equal Employment Opportunity Practices Provisions. Contractor certifies that it is in ' compliance with the Equal Employment Opportunity Requirement of Executive Order 11246, as amended by Executive Order 11375 and supplemented 145CFR, Part 60, Title VII of the Civil Rights Act and any other federal or state taws pertaining to equal employment opportunity and that it shall not discriminate against any employee or applicant for employment on the basis of race, color, religion, age, sex, national origin, ancestry, marital status, political affiliation or physical or mental condition, in matters pertaining to recruitment, hiring, training, upgrading, transfer, compensation or termination. A. Contractor shall, in all solicitations or advertisements for applicants for employment placed as a result of this Agreement, state that it is an "Equal Opportunity Employer' or that all qualified applicants wilt receive consideration for employment without regard to their race,creed, color, disability,'sex, sexual orientation, national origin, age, religion, Vietnam era Veteran's.status, political affiliation, or any other non-merit factor. B. Contractor shall, if requested to so do by the City, certify that it has not, in the performance of this Agreement, discriminated against applicants or employees because of their race, creed, color, disability, sex, sexual orientation, national origin, age, religion, Vietnam era Veteran's status, political affiliation, or any other non-merit factor. C. If requested by the City, Contractor shall provide the City with access to copies of all of its records pertaining or relating to its employment practices, except to The extent such records or portions of such records are confidential or privileged under state or federal law. D. Nothing contained in this Agreement shall be construed in any. manner so as to • require or permit any act which is prohibited by law. E. Contractor shall include the provisions set forth. in this Section in each of its subcontracts. 19-13 13. Compliance with Licensing Requirements. Contractor shall comply with all necessary licensing requirements and shall obtain appropriate licenses and display the same in a location that is reasonably conspicuous, and file copies of same with the City. 14. Audits and Records Access. P,. Contractor shall make available to the City, its authorized agents, officers, or employees, for examination any and all ledgers, books of accounts, invoices, vouchers, cancelled checks, and other records or documents evidencing or relating to the expenditures and disbursement of CVTMD assessment funds, and shall furnish to the City, within sixty (60) days after examination, its authorized agents, officers or employees such other evidence or information as the City may require with regard to any such expenditure or disbursement charged by Contractor. 6. Contractor shall maintain full and adequate records in accordance with City requirements to show the actual costs incurred by the Contractor in the performance of this Agreement. If such books and records are not kept and maintaihed by Contractor within the City, Contractor'shall, upon request of the City, make such books and records available to the City for inspection at a location within City. Contractor shall provide such assistance as may be reasonably required in the course of such inspection. The City further reserves the right to examine and re-examine said books, records and data during the four (4) year period following termination of this Agreement or completion of all work hereunder, as evidenced in writing by the City, and Contractor shall in no event dispose of, destroy, alter, or mutilate said books, • records, accounts, and data in any manner whatsoever for four (4) years after the City makes the final or last payment or within four (4} years after any pending issues between the City and Contractor with respect to this Agreement are closed, whichever is later. [Remainder of Page Intentionally Left Blank.] 79-74 • C. Annually, at the conclusion of the fiscal year (the "audit year"), Contractor shall enlist the services of an independent, licensed, certified public accountant to conduct a fiscal year ' financial audit of the CVTMD finances for the audit year. The audit report shall include aline- item schedule detailing all expenditures, including a comparison of all expenditures with the specific amounts and activities, as proposed in the Annual Report. In addition, the audit shall verify that the activities on which the CVTMD funds were expended during the audit year comply with Street and Highways Code section 36613 and with the MDP. Contractor shall provide a copy of the audit to the Ciry Council each year within 90 days following the end of the audit year. Thus, Contractor shall submit an audit report for fiscal year 2011-2012 by September 30, 20i2; an audit report for fiscal year 2012-2013 by September 30, 2013; and an audit report for fiscal year 2013-2014 by September 30, 2014. 15. Documents and Materials. Contractor shall maintain and make available to City for its inspection and use during the term of this Agreement, all documents, materials relating to the CVTMD, including related electronic transmissions and data, that are in its possession or control ("Documents and Materials'). Contractor's obligations shall continue for four (4) years following termination or expiration of this Agreement, and Contractor shall in no event dispose of, destroy, alter or mutilate said Documents and Materials, for four (4) years following the City's last payment to Contractor under this Agreement. 16. Time of Essence. Time is of the essence in respect to all provisions of this Agreement that specify a time for performance; provided, however, that the foregoing shall not be • construed to limit or deprive a party of the benefits of any grace or use period allowed in this Agreement. 17. City's Reserved Rights. (a) Termination/Disestablishment. City has and reserves the right to suspend, terminate or abandon the execution of any work by Contractor upon adoption of a resolution disestablishing the CVTMD pursuant to Section 36670 of the 1994 Law. Per the 1994 Law a resolution to disestablish the CVTMD may only be adopted if (1) the City Council finds there has been misappropriation of funds, malfeasance, or a violation of law in connection with the management of the district and a noticed hearing on disestablishment is held, or (2) in the thirty-day period following the anniversary of the district's formation, businesses paying fifty percent or more of the assessment file a written protest with the city and a hearing on disestablishment is held. The failure of Contractor to comply with any material term of this Agreement shall constitute "malfeasance;' as that term is used in the 1994 Law and, as such, shall be grounds for the City to initiate disestablishment proceedings. Notwithstanding the foregoing City must first provide the Contractor with an opportunity to cure such failure and to comply with this Agreement, pursuant to section 25 hereof. If Contractor takes timely action to cure its default, City shall not proceed with disestablishment. In the event that Contractor commits in excess of two material breaches of the Agreement within any contract year, Contractor shall lose its Section 25 cure rights. In the event the City disestablishes the CVTMD, Contractor shall be entitled to retain CVTMD revenues only for paying the Contractor's then existing liabilities incurred consistent with the CVTMD Plan and a properly authorized budget of • the CVTMD. Pursuant to the 1994 Law, Contractor shall refund to City any remaining CVTMD revenues or any revenues derived from the sale of assets acquired with CVTMD revenues to enable distribution of the revenues to the businesses which paid the assessment. 19-15 (b) Modification of Annual Report and/or Improvements and Activities. City has and reserves the right to (1) modify Contractor's annual report in accordance with Section 3665D(c) of the 1994 Law; and/or (2) modify the improvements and activities to be funded in any given year, in each case after holding a public hearing in accordance with the procedures set forth in Section 36636 of the 1994 Law. If the City makes modifications that are cpntrary to the terms of the Management District Plan, the City shall comply with the Plan modifications provisions in Section 36636 of the 1994 Law. Any such modification that includes a levy of a new or increased assessment must also comply with the procedures set forth in Section 36623 of the 1994 Law. 18. Choice of Law. This Agreement, and any dispute arising from the relationship between the parties hereto, shall be governed by the laws of the State of California. 19. Advertising or Publicity. Contractor shall not use, reproduce or copy the seal of the City and shall not represent the City in an official capacity as spokesperson or officer or agent or use the name City of Chula Vista, or the names of the City's officers, directors, employees or agents, in advertising or publicity releases or otherwise without securing the prior written consent of the City in each instance unless set forth in this Agreement. (Nothing in this section prohibits Contractor from using the name Chula Vista Tourism Marketing District or City of Chula Vista for regional identification for promotion and marketing of the CVTMD. 20. Entire Agreement. This Agreement, including al! attachments, exhibits, and any other • documents specifically incorporated into this Agreement, shall constitute the entire agreement between City and Contractor relating to the subject matter of this Agreement. As used herein, Agreement refers to and includes any documents incorporated herein by reference and any exhibits or attachments. This Agreement supersedes and merges all previous understandings, and all other agreements, written or oral, between the parties and sets forth the entire understanding of the parties regarding the subject matter thereof. This Agreement may not be modified except by a written document signed by both parties. 21. Modification of Agreement. This Agreement may be supplemented, amended or modified only by mutual agreement of the parties; however, this Agreement shall be subject to any amendments to the CVTMD Management District Plan adopted by the City Council. No supplement, amendment or modification of this Agreement, except for a duly adopted amendment to the CVTMD Management District Plan, shall be binding unless it is in writing and signed by authorized representatives of both parties. 22. Subcontracting/Assignment. Contractor shall not subcontract, assign or delegate any portion of this Agreement or any duties or obligations hereunder without the City's prior written approval, and subject to City's sole discretion. A. Neither party shall, on the basis of this Agreement, contract on behalf of or in the name of the other party. Any agreement that violates this Section shalt confer no rights on any party and shall be null and void. B. Contractor shall remain fully responsible for compliance by its subcontractors with all the terms of this Agreement, regardless of the terms of any agreement between Contractor and its subcontractors 19-16 • 23. Survival. The obligations of this Agreement, which by their nature would continue beyond the termination or expiration of the Agreement, including without limitation obligations regarding indemnification, ownership of documents, and conflict of interest, shaft survive termination or expiration for two (2) years. 24. Severability. If a court of competent jurisdiction holds any provision of this Agreement to be illegal, unenforceable, or invalid in whole or in part for any reason, the validity and enforceability of the remaining provisions, or portions of them, will not be affected, unless an essential purpose of this Agreement would be defeated by the loss of the illegal, unenforceable, or invalid provision. 24. Severability. If a court of competent jurisdiction holds any provision of this Agreement to be illegal, unenforceable, or invalid in whole or in part for any reason, the validity and enforceability of the remaining provisions, or portions of them, will not be affected, unless an essential purpose of this Agreement would be defeated by the loss of the illegal, unenforceable, or invalid provision. 25. Termination for Cause. If, through any cause, Contractor shall fail to fulfill in a timely and proper manner Contractor's obligations under this Agreement, or if Cohtractor shall violate any of the covenants, agreements or stipulations of this Agreement, City shall have the right to terminate this Agreement by giving written notice to Contractor of such termination and specifying the effective date thereof at least fifteen days before the effective date of such termination. Contractor shall have ten days from the notice date to cure the violation(s). Upon a • showing of a good faith effort toward curing the violation(s), the City Manager may, in his or her sole discretion, extend the deadline by which the Contractor must cure. Any such extension shall be valid only if in writing and signed by the City Manager, or designee. If Contractor does not cure the violation(s) to the City's satisfaction, City shall be entitled to terminate the Agreement without further notice. In addition, such violation and failure to cure shall constitute "malfeasance;' pursuant to Section 17., above. 26. Attorneys' Fees. Should a dispute arising out of this Agreement result in litigation, it is agreed that the prevailing party shall be entitled to a judgment against the other for an amount equal to reasonable attorneys' fees and court costs incurred. The "prevailing party" shall be deemed to be the party who is awarded substantially the relief sought. 27. Capacity of Parties. Each signatory and party to this Agreement warrants and represents to the other party that it has legal authority and capacity and direction from its principal to enter into this Agreement, and that all necessary resolutions or other actions have been taken so as to enable it to enter into this Agreement. [Remainder of Page Intentionally Left Blank.] ~J 19-17 • h b f City of Chula Vista Commerce am er o Chul Vi C - By ~oo-- By L'~s~. Cohe r James Sandoval ~"'"` "a"1ei Title: C.~O M Ci Date:3 ~ 701 a anager ty Title: Date: • C~ 79-16 EXHIBIT A Scope of Services Contractor shall provide the following services: 1. Contractor shall cooperate with City and City staff in the performance of all work hereunder. 2. Contractor will provide projects, programs and activities that benefit lodging establishments within the CVTMD in accordance with the CVTMD Management District Plan attached hereto and any subsequent amendments thereto. 3. Contractor will provide and fund such additional projects, programs and activities to promote tourism in Chula Vista as may be made possible through other non-assessment funding sources. These otherfunds must be accounted for separately from assessment funds. 4. Contractor shall perform responsibilities under the Property and Business Improvement District Law of 1994 (the "Law') including but not limited to: a. Preparation of the Annual Report required by section 36650 of the Law. The Annual Report shall include any recommended changes to boundaries, the improvements and activities to be provided for that fiscal year, an estimate of cost for providing the improvements and activities, the method and basis of levying the assessment in sufficient detail to allow each business owner • to estimate the amount of the assessment to be levied against his/her business for that fiscal year, the amount of any surplus or deficit revenues to be carried over from a previous fiscal year, and the amount of any contributions to be made from sources other than assessments. The Annual Report shall also include the proposed budget for the upcoming fiscal year, describing the specific activities to be funded by TMD assessments. The proposed budget shall be reported in two formats: (i) by major financial category; and (ii) by activity. The proposed budget shall be in the format set forth in Exhibit B, with additional line items added, if appropriate. The Annual Report shall be filed with the City Clerk and presented to the City Council for approval. b. Seeking and retaining subcontractor(s) to prepare the Annual Report. c. Delivering the Annual Report at least thirty (30) days preceding the fiscal year for which assessments are to be levied and collected to pay the costs of the improvements. 5. Contractor shall develop and maintain financial records related to receipt and/or expenditure of all funds received from City. 6. Subject to the City's approval, Contractor may retain subcontractors to deliver the services herein; however, Contractor shall remain fully responsible for compliance by its contractors with all the terms of this Agreement, regardless of the terms of any agreement between the Contractor and its subcontractor. . 7. Annually, Contractor shall enlist the services of an independent, licensed, certified public accountant to conduct a fiscal year financial audit of the CVTMD finances. The audit report shall include a line-item schedule detailing al! expenditures, including a comparison of all 19-19 • expenditures with the specific amounts and activities designated in the MDP. In addition, the auditor shall verify that the CVTMD funds were used in accordance with the CVTMD Plan and the Annual Report to the City Council for the fiscal year which is the subject of the audit. Contractor shall provide a copy of the audit to the City Council each year within 90 days following the end of the fiscal year which is the subject of the audit. 8. TMD Committee. a. In General. Contractor shall form and maintain in effect throughout the existence of the CVTMD a committee (the "TMD Committee"). The TMD Committee shall include representatives from assessed hotels and motels ("Hotel/Motel Representatives"), in sufficient number to comprise a majority ofthe voting members of the committee at all times. b. Quorum Requirements. Attendance by a majority of the Hotel/Motel representatives shall be required for a quorum of the TMD Committee. Notwithstanding the foregoing, provided that Contractor's bylaws include provisions for adequate advance notice of committee meetings, in the event of repeat absences by one or more Hotel/Motel Representatives, such bylaws may also include reasonable provisions to allow for TMD Committee action notwithstanding the fact that a majority of Hotel/Motel representatives are not in attendance. For purposes of this Section, "adequate advance notice' shall mean notice by mail, email, or other electronic means at least three (3) days prior to the meeting. • c. Election of Hotel/Motel Representatives. Hotel/Motel Representatives shall be elected by vote of the assessed hotels/motels in accordance with a qualifications system and process that assures representation on the TMD Committee of across-section of Chula Vista hotel/motel industry types determined by using accepted industry standards (e.g., number of rooms, revenue per available room, average daily rate, and/or other industry relevant hotel/motel type indicators). One of the Hotel/Motel Representatives may be appointed by Contractor provided that such party is an authorized representative of at least one Chula Vista hotel/motel and the Chula Vista hotel(s)/motel(s) that such party represents is/are not also represented by a directly elected Hotel/Motel Representative. d. Required Approval of Maior Decisions TMD Committee approval shall be required, at a minimum, for the following: (1) prior to submittal to the City Council for consideration, each year's Annual Report, including, without limitation, the budget and description of that year's proposed improvements and/or activities, goals and objectives, and a mechanism for evaluating the benefits of such improvements and/or activities to the assessed hotels/motels.; and (2) TMD Committee policies, which shall include, at a minimum, provisions for the notice and conduct of meetings, and the Hotel/Mgtel Representatives election process, consistent with the terms of this Agreement. • 19-20 Chula Vista Tourism Marketing District Proposed Budget FY 2011-12 Revenues: Projected Assessments $420,764.49 Assessments Carried from Prior Years $444.80 Total Funds Available FY 2011-12 $421,209.29 Expenditures: Personnel Cost: (Programatic and Administrative) Salaries Benefits Payroll Taxes $195,662.33 $62,476.21 $19,065.04 Total Personnel Cost $277,203.58 Office/Formation: Business Costs $16,590.85 Formation Expense $50,000.00 Consultants - $0.00 E/0 and D/0 Insurance $4,583.47 • Attorney Services $9,535.00 City of CV Administrative Support $6,300.00 Total Office/Administrative $ 87,009.32 Advertising/Marketing: Parade Band Review Festival $5,000.00 Marketing Collaboration with City of Chula Vista $50,000.00 $ - TotalAdvertising $ 55,000.00 Total Proposed Expenses FY 2011-12 $ 419,212.90 Reserves/Contingencies • $ 1,996.39 19-21 Activities Prop BudEet FY 2011-12 Parade Band Review festival Marketing Senior Graphic Designer Visitor Center Operations Sales and Marketing Office /Administrative TotaiProposed Expenses FY 2011-12 Staffin City of Chula Vista Senior Graphic Designer CEO General Manager, Chula Vista Convention & Visitors Bureau Manager, Chula Vista Visitors Center Bookkeeper Information Specialist {2 positions) Secretary . Direct Indirect Total $5,000.00 $5,000.00 $50,000.00 $50,000.00 $151,377.52 $151,377.52 $ 125,826.06 $ 125,826.06 $ 87,009.32 $ $ 87,009.32 $ - $293,386.84 $°-125,82b.06 $419,212:90' Fu nded TM D 45% 33% 100% 100% 100% 100 Funded from Other Chamber Funds 09'0 67% 100 19-22 ~b-chwtwt{- Ik-z Amendments to CVTMD Contract -March 8, 2012 13~AT~ ~2~1:1-2 Body of Agreement 17, ~~-~„~.;..:. ;;~_;~^_,____i-'_°r_"_u,°~'Citv's Reserved Rights. (a) Tetmination/Disestablishment. City has and reserves the right to suspend, terminate or abandon the execution of any work by Contractor upon adoption of a resolution disestablishing the CVTMD pursuant to Section 36670 of -the 1994 Law. Per the 1994 Law ;-a resolution to disestablish the CVTMll may only be adopted if (I ) the City Council finds there has been misappropriation of funds, malfeasance, or a violation of law in connection with the management of the district and a noticed hearing on disestablishment is held, or (2) in the thirty-day period following the anniversary of the district's formation, businesses paying fifty percent or more of the assessment file a written protest wish the city and a hearing on disestablishment is held. The failure of Contractor to comply with this-any material term of this Agreement shall constitute "malfeasance," as that term is used in the ] 994 Law and, as such, shall be grounds for the n ~,.. ,,, City to initiate disestablishment proceedings. Notwithstanding the foreaoin;,>>-n;~-m ini~g-~uc~~h~_ City shall-must first provide the Contractor with an opportunity to cure such failure and to comply with this Agreement, pursuant to section 25 hereof. If Contractor takes timely action to cure its default, City shall not proceed with disestablishment. In the event that Contractor commits in excess of twohreewo material breaches of the Agreement within any contract year Contractor shall lose its Section 25 cure ri hg Ls._-In the event the City disestablishes the CVTMD, Contractor shall be entitled to retain CVTMD revenues only for paying the Contractor's ~rrer}t-then existing liabilities incurred consistent with the CVTMD Plan and a properly authorized buffet of the CVTMD. Pursuant to the 1994 Law, Contractor shall refund to City any remaining CVTMD revenues or any revenues derived from the sale of assets acquired with CVTMD revenues to enable distribution of the revenues to the businesses which paid the assessment. (b) Modification of Annual Report and/or hnrorovements and Activities. City has and reserves the right to (il modify Contractor's annual report in accordance with Section 36650(c) of the 1994 Law' and/or (21 modify the improvements and activities to be funded in any triven yeaz in each case after holding a public hearing in accordance with the rocedures set forth in Section 36636 of the 1994 Law. If the Ciri~ makes modifications thlt are contrary io the terms of the Management District Plan, the City shall comply with the Plan modifications provisions in Section 36636 of the 1994 Law. An such modification that includes a levy of a new or increased assessm__ent must also comply with the procedures set forth in Section 36623 of the ] 994 Law. • 1 19-23 Exhibit A Scope of Services TMD ^>~`dConmtittee. a. In General. Contractor shall form and maintain in effect tluout;hout the existence of the CVTMD a• ^''• ~°~.-r-"~^RrR committee (the "rMD A~i~r 1~earelCommittee") The TMD ^~',,~~^^~' ~oa+flCommittee shall include representatives from assessed hotels and motels ("Hotel/Motel Representatives") in sufficient number to comprise a majority of the voting members of the-lx~ar~ committee at all times. b Ouorum Requirements Attendance by a maiority of the 1-Iotel/M~tcl rl~epresentatives shall be required for a quormn of the TMD A~,tir~€3eai{1Commntec. Notwithstandint, the fore~oine provided that TA^^:=ti-'Contractor's bylaws include provisions for adequate advance notice ofcommittee-board meetmes m the event of repeat absences by one or more Hotel/Motel Representatives such bylaws may also include reasonable rovisions to allow for TMDa;R Committee xenon 1 notwithstandin>_ the fact that a majority of 1-Iotel/Motel rRepresentatives are. noi_ in attendance.agre ~ 1 eivrter~ For pumoses of this Section "adequate advance notice" shall mean email or other electronic means at least three (31 dlys prior to the meetine and posting notice of the meeunr m accordance with the provisions of the Ralph M Bro~em Act If no electronic means of nrovidm~, notice to a committee member are available personal delivery or overni;ht delivery service may be used in such cases the notice shall he delivered at least three (3) days pnor to the meeun~ 9; c )/lection of Hotel/Motel Representatives Hotel/Motel Representatives shall be elected by vote of the assessed hotels/motels in accordance with a Qualifications s stem and rocess that assures re resentation on the TMD ^~a^~r- ~~-Committee of a cross section of Chula Vista hotel/motel industry tunes determined by using accepted industry standards (e a number of rooms revenue per available room. averaee daily rate, b.. _., . . and/or other industry relevant hotel/mote] type indicators). C °^~:~: c^"'°°''-'ai early ldOar~l-trterrrber " «`' l;r .One of the HotellMote] Representativ-~es may=be appointed by Contractor provided that such party is an authorized representative of at least one Chula Vista hoteUmotel and the Chula Vista hotel(s)/motel(s) that such party represents is/are not also represented by a directly elected Hotel/Mote1 Renresentanve. . ~ d. Re uired A royal of Ma'or Decisions. TMD ^~.-rn~ry~~arcl-Committee ~proval shall be required at a minimum for the folloyvine' (1) prior to submittal to the CityCouncil far consideration each Year's Annual Report mcludme, without hmitah~ 2 19-24 • the budget and description of that year'sproposed improvements and/or activities, goals and objectives and a mechanism for evaluating the benefits of such improvements and/or activities to the assessed hotels/motels.~o=,~ora-b-re~~t~st~'~"~ozvaluate ~i, t, Fa !- 1 .7 + I F ~l,e Tell f.,.,.l~.l ., 0.41, c• a >, •a a a „ ~,. TT~II a.,,a~-t3rebt'aift5-. and ~2~ 11y1D o r _ ~~Committee kwlavvs-policies. which shall include, at a minimum, provisions for the notice and conduct of meetings and the Hotel/Motel Representatives election process consistent with the terms of this Agreement. • n 3~ 19-25 Attachment B r Chula Vista Tourism Marketing district Proposed Budget FY 2011-12 Revenues: Projected Assessments $420,764.49 Assessments Carried from Prior Years $444.80 Total Funds Available FY 2011-12 $421,209.29 Expenditures: Personnel Cost: (Programatic and Administrative) Salaries Benefits Payroll Taxes Office/Formation: Business Casts Formation Expense Consultants - E/0 and D/0 Insurance Attorney Services City of CV Administrative Support $195,662.33 $62,476.21 $19,065.04 Total Personnel Cost $277,203.58 $16,590.85 $50,000.00 $0.00 $4,583.47 $9,535.00 $6,300.00 Total Office/Administrative $ 87,009.32 Advertising/Marketing: Parade Band Review Festival Marketing Collaboration with City of Chula Vista $5,000.00 $50,000.00 $ - Total Advertising Total Proposed Expenses. FY 2011-12 Reserves/Contingencies • $ 55,000.00 $ 419,212.90 $ 1,996.39 19-26 Activities Prop Budget FY 2011-12 Parade Band Review Festival Marketing Senior Graphic Designer Visitor Center Operations Sales and Marketing Office /Administrative Total Proposed Expenses FY 2011-12 Staffing City of Chula Vista Senior Graphic Designer CEO General Manager, Chula Vista Convention & Visitors Bureau Manager, Chula Vista Visitors Center Bookkeeper Information Specialist (2 positions) Secretary • Direct Indirect Total $5,000.00. $5,000.00 $50,000.00 $50,000.00 $151,377.52 $151,377.52 $ 125,826.06 $ 125,826.06 $ 87,009.32 $ $ 87,009.32 $ - $293,386.84 $ 125,826.06 $419,212.90 Funded from Funded TMD Other Chamber Funds 45% 0% 33% 67% 100% 100% 100% 100 100% 79-27 Goal Objeriives Tar et .Status 1 Partnership vrith tllc San Collaboration with the City of Chula Vista to bring I To CouncilDec 13, ~ Approved! Diego Sports Commission visitors to our ci and fill up the hotels/motels. "I you ~ 2011 i 10096 goal play in Chula V siryta, stay in Chula Vista!° _ ~ achieved 1 would be the (November 2012 In Progress( 2 Annual Parade Band Review Fapand the festival to a 2-day event.. Day Cotrununiry Festival Parade Band review, and T)ay2 would bt the Field Band i a~hiegved review. Two-day event would invite people to stay in y Chula Vista's hotels/motels and shop and dint in our city The first year, l0 bands competed; the second yeaz, there ~ were 21 bands. Goal is 44 competing bands. I _ _-- 3 partnerships with the City of I Collaboration between the City of Chula Vista, the Chula f Ctaxent/Ongoing i In Progress/ Chula Vista for "one voice, one ~ Vista Chamber of Commerce and CONVIS for ` complete sound" consistent marketing I multimedia coverage to fvrthu marketer andxromotional ~ ~ efforts. i Vista,i.eptcss,radio,relevision,magazin p i ~ material. _ i .. - .... ¢ Workwith Hotds/Motels an bcmmtng verified Chula Vista Ci.EAN Busincssea. $ Visitorlnfo:matioaCenter Open7Days/Week (~ Visitors select Chula V'isra as a destination and maintain or lengthen the duration of their People aze looking for environmentally-friendly places to ~ CturentlOngoing i 3 br~ogress! nay. complete Males the Center a convenient resource for visitors and residents alike. _ ._ Add a pphone to make a reservation &ractlyyw~ith one of Chula Vista's hotds/motds (vmrkingwitlx.AA1'%S) Update hoteVmotel display unit. Cturent/Ongoitrg ; 100°!0 complete February 2012 i In Progress/ 2096 (Cuncatly, l4 hotelslmotols aze ! mmplcte signed up.) ~ The ultimate objective is to ensure that the Cliul? Vista Visitor Information Center (VIC) and Chula Vista Convention &.Visitors Bureau {CONVIS) supports and promotes Chula Vistas sales and marketing efforts by responding to visitor inquiries in a professional, friendly, accurate and timely manner'.. _ _ - -- l The VIC and CONVIS will be able to render valuable mformaton and services to visitors from around the world and project a positive image while mproscnting the City of Chula Vista, San Diego County &. Port of San Diego.. Current/Ongotng 10096 Complete 7 Fullystafl~VisitorCcntervvith I trained, friendly, pprofessional, I andbilingualstafE. $ Inrsease marketing materials {brochures, flyers, maps, etc.) n a regular' Update materials o ' basis. rj Providing pertinent information via the latest in multi-media technologgyy and I sodal marketing, including Facebook,Tvvitter, and Web. ~ Provide free Wi Fi at the . Visitor's Center. 11 Uppgg~r.a~~d~~e/Redcsinm the ~ CONVIS Websrte. March 20121 i In Progress/ Ongoing ~ 1096 i complete To maximize attendance at all of the attractions, ~ Cuaent/Ongoing ~ O~rogrtss/ accommodations and activiries in Chula Vista. ~ !complete With the intemet available to visitors, they can reseazch and diuoverwhat Cbula Vista has to offer (holds/motels, attractions, restaurants, shopping, etc J That the VIC becomes the primary resource for Chula Vista in order to assist and support local attractions, concierges, etc.. ~-~6 March 2012 3nly zolz i Platuvng Stages / ^"' complct: Planning Stages 1596 complete is-2a CHULAVIS"I'.ACONVENTION &VISITORS BUREAU (CONVIS) GoaT.,s & O~aJEC'rN~s u • FY 2071 - 2012 ' COk-vl5 1 OUAtSJI A1AAicET1NG D[iTA!CT ' GOALS S OSjeci7vE5 Canal Objectives Tartlet St21us -- Providing optional scNiccs , To maxrmrze revenue generation through retail sales, I Ongoing restaurant reservarions i tions aad tow ticket salts :Planning o ~ m such as access to the Intoner I and c-mail, and phone card , atCac and sponsorship opporttmitics. kt o P vending machine I _ July 2012 ~ Vista's visibility by rewiring l Ch Planning 13 Develop a formal volunteer I ro p gam' , , a u To fiuther inaeaso training,sch~dulingandmotrvaiingcommurat3'volunteers ' fn tion is a cndly and i di ;Stages/S% i Compute na ssem to assist with information unbiased manner and in a variety of foreign languages. ~4 Upgrades to items in and A ptofes_ional, friendly atmosphere will attract more I Feb 20191Ongoing li ~ ~O~rogress/ around Visitors Center > I (sib ?ve, display's, technology es. i visitors and fami _- ~ complete -----~-- j$ Provide a computer and printer People caa book a room, research atnactions and print ;March 2012 ~ romotions or tickets they purchase online. P~ ~ p~~ for guest use.. _ p -r--. -_ j{, ___ Play promotional loopprng I d TV Videos can include hoteUmotel ads, signature events, ~ Current/Ongoing exc. to spazk intezest. history z~ams :o j S l~annir P~ ~ ,_ . videos on overhea I t visitors to return to the . T _`_ , , g p By making the Center a destination in itself, pcople will I Current/Cngoing ~ i In Progress/ 17 o ge Information Center again and I i I come back more than one tune to keep informed ofwhats going on in Chula Vista or to be entertained. ' co.~nplac , n aga 1$ Host Mixers Introduce residents and businesses to what the Visitors March 2012 businesses/restaurantsmery thrnwant ff h i planning Stages / 10% er; as to o Centel to add thew brochures and other' appropriate promotional i complete f t materials to the rtsource collection. _ _ r _ _ j Put in a dcmonsuation garden I Cross promotion of the City's program efforts will help ~ March 2012 to visitors to ti f , PT arming ~ ~~ andpromote environmentally- including ractices friendl on orma jour envu-oameat, plus provide ia b:irrg home (wherever they live).. This additional feature i id co ~ to I P , y p providing classes (r.e- I e~~ will also increase appeal of the Visitors Center to ses ~ compostuag, recycling, etc.) i h I _ other month, hotek/motels have an Current meeting ever ~ B - ; In Progress / ZQ t nnggss Bi-monthly mecti w hotellmotel owners/managers y y I opportunity to gyve feedback and suggestions for l i i 10045 ~ complctc an.. ng p improvemrnts to the market k ti M 'I'o~k~ drtC'ouncil and ~ublic informed of'goals,progress, ~ ,Jan 10, 2012 i Ongoing 2 ] ng ar e Annual Tourism District presentation to Mayo: ~ mfo:mation, and fiaanctals. I Aug 14, 2012 ~ zepomng & Council - - z2 Tic in the azts ~ Schedule wader of art displays at the Visirors Center and ~ CurrentyOngoing uease attraction to the center I t i I Planning 1 Stages! 0% o n ecial Performances as well as visitors). srdenu and businesses f '~ complctc - , or re 23 TNID Minutes and Agendas ~ Monthly updates to the Chula Vista Chamber vvebsite i CuaendOagoag nc ~ tom%1_te P available online y i with up-to-date information for transpare Y ~ Accurate records andrepordng I Bookkeeping and fiscal planning to meet all the above i CurrendOngoing ': complctc goals and objectives ~ RESPONSIBLEPARIlES: Lisa Cohen, Chula Vista Chamber o[f, Clvo~m~msgerce CEO; Marcy Weaver, Chula Vista Convcnrion &.Visirors S~CCC~iSTScIc~nMi°p~Information5pcaalisrKimSclcram,CityoF£~:laVistasrSerOnGraphiBD ~CGer;JanattcMontano,Informadon 19-29 • RESOLUTIOIvT N0.2012-_ RESOLUTION APPROVING AN AGREEMENT BETWEEN THE CHULA VISTA CHAMBER OF COMMERCE/ CONVENTION AND VISITORS BUREAU, ACTING AS THE DESIGNATED OWNERS' ASSOCIATION FOR THE TOURISM AND MARKETING DISTRICT, AND THE CITY OF CHULA VISTA FOR THE ADMINISTRATION AND IMPLEMENTATION OF ACTIVITIES AND IMPROVEMENTS DESCRIBED IN THE MANAGEMENT DISTRICT PLAN WHEREAS, the Property and Business Improvement District (BID) Law of 1994 (Streets and Highways Code 36600 et. seq.) authorizes cities to establish property and business improvement districts upon petition by a weighted majority of the lodging business owners located within the boundaries of the district; and WHEREAS, a majority of the lodging business owners subject to assessment within the boundaries of the Chula Vista Tourism and Marketing District (CVTMD) petitioned the City Council to establish the CVTMD; and • WHEREAS, the CVTMD was established to provide marketing and promotion activities to attract additional visitors to local hotels and motels and to market opportunities for those visitors to use the products and services of additional local businesses which will contribute to local business prosperity, the creation of jobs and a sustainable local economy that funds local community services; and Wl-IEREAS, included with the petitions was a management district plan summary that described the proposed assessment to be levied on lodging businesses within the CVTMD to pay for operation of the Chula Vista Visitor Information Center, sales, promotion and marketing activities, and those other improvements set forth in Streets and Highways Code 36600 et. seq.; and WHEREAS, on July 14, 2009 the City Council of the City of Chula Vista approved the (CVTMD) for a five year term; and WHEREAS, Property and Business Improvement District {BID) Law of 1994 also requires that an agreement be in place between the City and the owners association for the administration and implementation of the activities specified in the management district plan; and WI-IEREAS, based on City Council direction, City staff has negotiated the terms of an agreement with the Chamber of Commerce, the CVTMD Owners' Association; and . WHEREAS, the agreement complies with the Streets and Highways Code and also provides for an Administration Fee to fund the City Finance Department's costs to perform 19-30 Resolution No. Page 2 • operations related to the collection and transmittal of CVTMD taxes collected by the City to the Chamber of Commerce, collection follow up, the annual review of the report to City Council, response to public information requests, responding to inquiries from the Chamber and other parties. WHEREAS, approval of the administration and implementation agreement is exempt from the California Environmental Quality Act ("CEQA") pursuant to Section I5060(c)(3) of the State CEQA Guidelines. NOW THEREFORE BE IT RESOLVED that the City Council of the City of Chula Vista does hereby approve the agreement between the Chula Vista Chamber of Commerce and the City of Chula Vista, as presented to the Council a copy of which is on file in the office of the City Clerk, for the administration and implementation of the activities and improvements described in the Management District Plan. Presented by James D. Sandoval • City Manager • Approved as to 19-31 ~c~,~,t'er"Sl ~YrtUrt~J.cy~'Ct 3/, Z 1-~,-, tq Exhibit B Chula Vista Tourism Marketing District Proposed Budget FY 2011-12 • Revenues: - Projected Assessments s _ $ Assessments Carried from Prior Years $ Total Funds Available FY 2011-12 Expenditures: . Personnel Cost: $ Salaries 5 - Benefits $ Payroll Taxes Total Personnel Cost $ _ Office/Administrative: S Office Supplies $ Formation Fxpense Consultants- $ IndependentAUdit Attorney Services s $ City of CV Administrative Support Total Office/Administrative $ Advertising/Marketing: S List by Payee S S - TotalAdvertising $ S Reserves/CO nti ngencl es TMD Activities Prof Budget FY 2011-12 List of Activities {ex. Parade of Bands, Star News Advertising- Shop/Dine) Staffinz Fug TMD (Example -Graphics Designer) DireR Indirect Total $ $ $ - 5 5 $ - $ 5 S - $ $ $ - $ $ $ - S s $ 1i Funded from % Funded TMD Other Chamher FUnds 45% 0% Noses: TMD Activities should correlate to Goals & Objectives included in Exhlhit B. . Direct COSts include expenses incurred Eor paying vendors, advertisln& registration fees etc. supporting TMD activities or improvements. Indirect Cost include personnel, consultant and administrative expenses allocated proportionally based on direct cost or % of time spent on activity. SAMPLE DRAFT 2011-2012 CVTMD Activities Goals & Objectives EXHIBIT B (Cont.) LESTONESJ STATUS TARGET larch Done iary April Done h to Aprif Done :h April -June Done In progress, staff trained contact with businesses begun Businesses 33%of goal achieved ostings per 50% of goal achieved : iesses per th ' 40% of goal achieved, iOngoing, per month AGREEMENT FOR TOURISM MARKETING DISTRICT MANAGEMENT SERVICES This Agr m Cit for Tourism Marketing District Management services (the "Agreement"), dated _ y- is by and between the City of Chula Vista, hereinafter referred to as the "City;' and the Chula Vista Chamber of Commerce, hereinafter referred to as "Contractor," collectively referred to as the "parties:' RECITALS A. The City is a California municipal corporation and charter city; Contractor is a private, non- profitentity. B. In April 2009, the Chula Vista Chamber of Commerce ("CVCC")and the Chula Vista Convention and Visitors Bureau ("CVCVB") submitted to the City a petition and Management District Plan ("MDP") for establishment of the Chula Vista Tourism Marketing District ("CVTMD"), proposing assessments on all lodging businesses in the City, in accordance with the Property and Business Improvement District Law of 1994, California Streets and Highways Code section 36600, et seq. (the "1994 Law"). C. On May 12, 2009, the City Council adopted Resolution No. 2009-115, accepting the petition and declaring its intent to initiate proceedings to establish the CVTMD, in accordance with the i 1994 Law. ! • D. On July 14, 2009, the City adopted Resolution number 2009-177, hereinafter the "Resolution;' establishing the CVTMD, and providing that assessments be levied as described in ~., the MDP. E. Contractor was designated in the MDP as the Owners' Association in accordance with Streets and Highways Cade section 36614.5. As a result, Streets and Highways Code section 36651 authorizes the City to contract with the Owners' Association for provision of CVTMD services. F. Under the 1994 Law, funds raised by the CVTMD must be spent for the purposes specified in the Resolution: sales promotions and marketing programs to market Chula Vista as a tourist, meeting and event destination, and other improvements as set forth in Streets and Highways Code §36610; funds cannot be diverted to government programs. G. Contractor is willing to provide services to the City on the terms and conditions set forth in this Agreement. AGREEMENT Now, therefore, the parties agree as follows: 1. Engagement. City hereby retains Contractor to provide the services described in Exhibit A, and Contractor accepts such engagement. • ~' 02o1~-~f~~ l i ~, 2. Term. The term of this Agreement shall begin on September 1, 2011 and end on July 31, , 2014. If the CVTMD is disestablished prior to July 31, 2014, this Agreement shall terminate on ~ the effective date of CVTMD disestablishment, except as provided in sections 23 and 25. 3. Independent Contractor. No relationship of employer and employee is created by this Agreement; it being understood and agreed that Contractor is an Independent Contractor. Contractor is not the agent or employee of the City in any capacity whatsoever, and City shall not be liable for any acts or omissions by Contractor nor for any obligations or liabilities incurred by Contractor. A. Contractor shall have no claim under this Agreement or otherwise, for seniority, vacation time, vacation pay, sick leave, personal time off, overtime, health insurance, medical care, hospital care, retirement benefits, social security, disability, Workers' Compensation, unemployment insurance benefits, civil service protection, or employee benefits of any kind. B. Contractor shall be solely liable for and obligated to pay directly all applicable payroll taxes (including federal and state income taxes) or contributions far unemployment insurance or old age pensions or annuities which are imposed by any governmental entity in connection with labor used or which are measured by wages, salaries or other remuneration paid to its officers, agents or employees and agrees to indemnify and hold City harmless from any and all liability which City may incur because of Contractor's failure to pay such amounts. C. In carrying out the work contemplated herein, Contractor shall comply with all applicable federal and state workers' compensation and liability laws and regulations with respect to the officers, agents and/or employees conducting and participating in the work; and agrees that such officers, agents, and/or employees will be considered Independent Contractors and shall not be treated or considered in any way as officers, agents and/or employees of City. D. Contractor agrees to perform its work and functions at all times in strict accordance with all applicable federal, state, county and city laws, resolutions, regulations, titles, departmental procedures and currently approved methods and practices in the field; and that the sole interest of City is to ensure that said service shall be performed and rendered in a competent, efficient, timely and satisfactory manner and in accordance with standards required by the City. E. Notwithstanding the foregoing, if the City determines that pursuant to state and federal law Contractor is an employee for purposes of income tax withholding, City may upon two (2) weeks' written notice to Contractor, withhold from payments to Contractor hereunder federal and state income taxes and pay said sums to the federal and state governments. 4. Indemnification. To the maximum extent allowed by law, Contractor shall defend, indemnify, protect, defend and,hold harmless the City, its elected and appointed officers, agents and employees, from and against any and all claims, demands, causes of action, costs, expenses, liability, loss, damage or injury, in law or equity, to property or persons, including wrongful death, in any manner arising out of or incident to any alleged acts, omissions, negligence, or willful misconduct of Contractor, its officials, officers, employees, agents, and contractors, arising out • of or in connection with the performance of its obligations under this Agreement. This indemnity provision does not include any claims, damages, liability, costs and expenses i i i 1 i i I li, • (including without limitations, attorneys' fees) arising from the sole active negligence or sole ~ willful misconduct of the City, its officers, agents or employees. Also covered is liability arising ; from, connected with, caused by or claimed to be caused by the active or passive negligent acts or omissions of the City, its agents, officers, or employees which may be in combination with the I active or passive negligent acts or omissions of the Consultant, its employees, agents or officers, i or any third party. This indemnity shall survive the termination of this Agreement. 5. Insurance. Contractor must procure insurance against claims for injuries to persons or damages to property that may arise from or in connection with the performance of the work under this Agreement and the results of that work by Contractor, its agents, representatives, employees or subcontractors and provide documentation of same prior to commencement of work. The insurance must be maintained for the duration of the Agreement. Minimum Scope of Insurance Coverage must be at least as broad as: 1. Insurance Services Office Commercial General Liability coverage (occurrence Form CG0001) , Z. Workers' Compensation insurance as required by the State of California and ! Employer's Liability Insurance. ~ • 3. Professional Liability or Errors & Omissions Liability insurance appropriate to Contractor's profession. Architects' and Engineers' coverage is to be endorsed to include contractual liability. I Minimum Limits of Insurance Contractor must maintain limits no less than: 1. General Liability: $1,000,000 per occurrence for bodily injury, personal injury and (Including operations, property damage. If Commercial General Liability insurance products and completed with a general aggregate limit is used; either the general operations, as applicable.) aggregate limit must apply separately to this project/location or 1 the general aggregate limit must be twice the required occurrence limit. I i - 2. Workers' Compensation Statutory i Employer's Liability: $1,000,000 each accident j $1,OD0,000diseose-policy limit i, $1,000,000 disease-each employee 1 I 3. Directors and Officers $500,000.00 each occurrence ~, Liability: ~ I i i '.. Deductibles and Self-Insured Retentions Any deductibles orself-insured retentions must be declared to and approved by the City. At the option of the City, either the insurer will reduce or eliminate such deductibles or self-insured retentions as they pertain to the City, its officers, officials, employees and volunteers; or Contractor will provide a financial guarantee satisfactory to the City guaranteeing payment of losses and related investigations, claim administration, and defense expenses. Otherlnsurance Provisions The general liability, and where appropriate, the worker's compensation policies are to contain, or be endorsed to contain, the following provisions: 1. The City of Chula Vista, its officers, officials, employees, agents, and volunteers are to be named as additional insureds with respect to liability arising out of work or opefations performed by or on behalf of Contractor including providing materials, parts or equipment furnished in connection with such work or operations. The general liability additional insured coverage must be "primary' and must not exclude products / completed operations. 2. The contractor's General Liability insurance coverage must be primary insurance as it pertains to the City, its officers, officials, employees, agents, and volunteers. Any insurance or self-insurance maintained by the City, its officers, officials, employees, or volunteers is wholly separate from the insurance of Contractor and in no way relieves ~ Contractorfrom its responsibility to provide insurance. 3. Each insurance policy required by this Clause must be endorsed to state that coverage will not be canceled by either party, except after thirty (30) days' prior written notice to City by certified mail, return receipt requested. ' i 4. Coverage shall not extend to any indemnity coverage for the active negligence of the additional insured in any case where an agreement to indemnify the additional insured , would be invalid under Subdivision (b) of Section 2787of the Civil Code. 5. Contractor's insurer will provide a Waiver of Subrogation in favor of the City far each required policy providing coverage during the life of this contract. ~, If General Liability, Pollution and/or Asbestos Pollution Liability and/or Errors & Omissions coverage are written on a claims-made form: 1. The "Retro Date" must be shown, and must be before the date of the Agreement or the beginning of work pursuant to the Agreement. 2. Insurance must be maintained and evidence of insurance must be provided for at least five (5) years after completion of work under the Agreement. 3. If coverage is canceled or non-renewed, and not replaced with another claims-made policy form with a "Retro Date" .prior to the Agreement effective date, Contractor must purchase "extended reporting' coverage for • a minimum of five (SJ years after completion of work under the Agreement. • 4. A copy of the claims reporting requirements must be submitted to City for r review. I Acceptability of Insurers ~ Insurance is to be placed with licensed insurers admitted to transact business in the State of California with a current A.M. Best's rating of no less than AV. If insurance is placed with a ~ surplus lines insurer, insurer must be listed on the State of California list of Eligible Surplus Lines Insurers (LESLI) with a current A.M. Best's rating of no less than A X. Exception may be made for I the State Compensation Fund when not specifically rated. I Verification of Coverage I Contractor shall furnish the City with original certificates and amendatory endorsements effecting coverage required by this clause, The endorsements should 6e on insurance industry forms, provided those endorsements or policies conform to the contract requirements. All certificates and endorsements are to be received and approved by City before work 'commences. The City reserves the right to require, at any time, complete, certified copies of all ' required .insurance policies, including endorsements evidencing the coverage required 6y these ~ specifications. r Subcontractors -For each subcontractor that Contractor may utilize to perform work required by this Agreement, Contractor must include the subcontractor as an insured under its policies, or furnish separate certificates and endorsements for each such subcontractor. All coverage for subcontractors is subject tq all of the requirements included in these specifications. 6. [Not Used.] 7. ConformitywithLaw, j A. In performing services under this Agreement, Contractor shall observe and comply 1 with all applicable laws, resolutions, codes and regulations of governmental agencies, including j federal, state, municipal, and local governing bodies, having jurisdiction over the scope, of services, including all applicable provisions of the California Occupational Safety and Health Act. Contractor shall indemnify and hold City harmless from any and all liability, fines, penalties and I consequences from any of Contractor's failures to comply with such laws, Resolutions, codes and regulations. B. If a death, serious personal injury or substantial property damage occurs in ;. connection with Contractor's performance of this Agreement, Contractor shall immediately j notify the City. Contractor shall promptly submit to City a written report, in such form as may be required by City of all accidents which occur in connection with this Agreement. This report ~ must include the following information: i (1) Name and address of the injured or deceased person(s); (2) Name and address of Contractor's sub-contractor, if any; ; (3} Name and address of Contractor's liability insurance carrier; and (4) A detailed description-of the accident and whether any of City's equipment, tools, material, or staff were involved. ] C. Contractor further agrees to take all reasonable steps to preserve all physical ' • evidence and information which may be relevant to the circumstances surrounding a potential claim, while maintaining public safety, and to grant to the City the opportunity to review and inspect such evidence, including the scene of the accident. g. Assessments, Costs and Payment. The City shall collect the assessments in accordance ~ with the 1994 Law, the Resolution and the MDP. City shall forward to Contractor all CVTMD assessment funds collected, within thirty-days of collection. The City shall not be responsible or l liable for determining the accuracy or adequacy of the amount of funds remitted to the City by j the assessees. The City's only responsibility shall be to forward the funds remitted to the Contractor.' Contractor shall account for all CVTMD funds separately from all other funds, in I order to provide a transparent audit trail. ' Beginning January 2012, Contractor will pay the City far all actual operational costs i associated with services provided by the City to the CVTMD. Those services include: collecting assessments, remitting funds to Contractor and staff time and other resources spent assisting , Contractor in preparing and submitting the Annual Report to the City Council ("Standard Services"). The amount billed to Contractor for such services shall be capped at 3 percent of ~ annual TMD revenues received by Contractor for on-going services on a fiscal year basis; it is currently estimated to total $6,300 for January through June 2012. Should the Parties agree that 1 the Lity will ..perform additional services for the CVTMD beyond the scope of the Standard ; Services described in this Agreement, the Contractor will pay the City for the cast of those additional services and the three percent annual cap shall not apply to those services. The City i will invoice Contractor quarterly for all City services performed relating to the CVTMD. Contractor shall pay the City in-full, within 30 days of the date of the invoice. If the City does not ~ • receive payment within 30 days, the City shall deduct the amount awed from the assessments collected in the following month. The City will then remit the monthly assessments, less any amounts past due, to the Chamber. In the event that bonds are issued pursuant to the MDP, the City and Contractor shall ; meet and confer to determine how the City's costs shall be allocated. 9. Taxes. Payment of all applicable federal, state and local taxes shall be Contractor's sole responsibility. 10. Conflicts of Interest, Contractor covenants that neither it nor any of its principals or members of,its Board of Directors presently has an interest, and shall not have any interest, direct or indirect, which would conflict in any manner with performance of services required under this Agreement. The Parties understand that members of Contractor's Board of Directors are business owners who will benefit from the services provided by the CVTMD. Such benefit shall not be considered a direct or indirect interest for purposes of this Agreement. Contractor shall comply with all applicable conflicts of interest laws in performing its obligations under this Agreement. 11. Notices. All notices, requests, demands, or other communications under this Agreement shall be in writing. Notices shall be given for all purposes as follows: A. Personal delivery: When personally delivered to the recipient, notices are effective on delivery. ~. !~ B. First Class Mail: Notice may be mailed first class to the recipient's address, set forth in section 11. E., below, in which case notice is effective three (3j mail delivery days after deposit in a United States Postal' Service office or mailbox. Certified Mail: When mailed certified mail, return receipt requested, notice is effective on receipt, if delivery is confirmed by a return receipt; if it is not confirmed by a return receipt, notice will be effective on the third day after deposit in a United States Postal Service office or mailbox. C. Overnight Delivery: When delivered by overnight delivery with charges prepaid or charged to the sender's account, notice is effective on delivery, if delivery is confirmed by the ; delivery service; if delivery is not confirmed by the delivery service, notice will be effective two days after mailing. D. Facsimile transmission: When sent by facsimile to the facsimile number of the recipient, as provided in section 11. E., below, notice is effective on receipt. However, notice by ~ facsimile can only be effected if: (a) a duplicate copy of the notice is promptly given by first-class ~ or certified mail or by overnight delivery, or (b) the receiving party delivers a written confirmation of receipt. Any notice given by facsimile shall be deemed received on the next r - business day if it is received after 5:00 p.m. (recipient's time) or on anon-business day. ~ E. Addresses and facsimile numbers for purpose of giving notice are as follows: ' To City: To Contractor: City of Chula Vista Chula Vista Chamber of Commerce i 276 Fourth Avenue 233 Fourth Avenue ' Chula Vista, CA 91910 Chula Vista, CA 91910 ' Attn: City Manager 619-420-1269 • Facsimile:619-409-5884 1 12. Equal Employment Opportunity Practices Provisions. Contractor certifies that it is in t compliance with the Equal Employment Opportunity Requirement of Executive Order 11246, as amended by Executive Order 11375 and supplemented 145CFR, Part 60, Title VII of the Civil Rights Act and any other federal or state laws pertaining to equal employment opportunity and that it shall not discriminate against any employee or applicant for employment on the basis of j race, color, religion, age, sex, national origin, ancestry, marital status, political affiliation or physical or mental condition, in matters pertaining to recruitment, hiring, training, upgrading, transfer, compensation or termination. A. Contractor shall, in all solicitations or advertisements for applicants for employment placed as a result of this Agreement, state that it is an "Equal Opportunity Employer' or that all qualified applicants will receive consideration for employment without regard to their race,creed, color, ' disability, sex, sexual orientation, national origin; age, religion, Vietnam era Veteran's status, ` political affiliation, or any other non-merit factor. B. Contractor shall, it requested to so do by the City, certify that it has not, in the performance of this Agreement, discriminated against applicants or employees because of their race, creed, color, disability, sex, sexual orientation, national origin, age, religion, Vietnam era Veteran's status, political affiliation, or any other non-merit factor. C. If requested by the City, Contractor shall provide the City with access to copies~of all ' of its records pertaining or relating to its employment practices, except to the extent such records or portions of such records are confidential or privileged under state or federal law. ~ ~ D. Nothing contained in this Agreement shall be construed in any manner so as to require or permit any act which is prohibited bylaw. • E. Contractor shall include the provisions set forth. in this Section in each of its ; subcontracts. I 13. Compliance with Licensing Requirements. Contractor shall comply with all necessary licensing requirements and shall obtain appropriate licenses and display the same in a location that is reasonably conspicuous, and file copies of same with the City. 14. Audits and Records Access. A. Contractor shall make available to the City, its authorized agents, officers, or employees, for examination any and all ledgers, books of accounts, invoices, vouchers, cancelled checks, and other records or documents evidencing or relating_to the expenditures and disbursement of CVTMD assessment funds, and shall furnish to the City, within sixty (60] days after examination, its authorized agents, officers or employees such other evidence or information as the City may require with regard to any such expenditure or disbursement charged by Contractor. B. Contractor shall maintain full and adequate records in accordance with City requirements to show the actual costs incurred by the Contractor in the performance of this Agreement. If such books and records are not kept and maintained by Contractor within the City, Contractor shall, upon request of the City, make such books and records available to the City for inspection at a location within City. Contractor shall provide such assistance as may 6e reasonably required in the course of such inspection. The City further reserves the right to examine and re-examine said books, records and data during the four (4] year period following termination of this Agreement or completion of all work hereunder, as evidenced in writing by the City, and Contractor shall in no event dispose of, destroy, alter, or mutilate said hooks, • records, accounts, and data in any manner whatsoever for four (4} years after the City makes the final or last payment or within four (4) years after any pending issues between the City and Contractor with respect to this Agreement are closed, whichever is later. [Remainder of Page Intentionally Left Blank.] C. Annually, at the conclusion of the fiscal year (the "audit year'), Contractor shall enlist the services of an independent, licensed, certified public accountant to conduct a .fiscal year financial audit of the CVTMD finances for the audit year. The audit report shall include aline- item schedule detailing all expenditures, including a comparison of all expenditures with the specific amounts and activities, as proposed in the Annual Report. In addition, the audit shall verify that the activities on which the CVTMD funds were expended during the audit year comply with Street and Highways Code section 36613 and with the MDP. Contractor shall provide a copy of the audit to the City Council each year within 90 days following the end of the audit year. Thus, Contractor shall submit an audit report for fiscal year 2011-2012 by September 30, 2012; an audit report for fiscal year 2012-2013 by September 30, 2013; and an audit report for fiscal year 2013-2014 by September 3D, 2014. 15. Documents and Materials. Contractor shall maintain and make available to City for its inspection and use during the term of this Agreement, all documents, materials relating to the CVTMD, including related electronic transmissions and data, that are in its possession or control ("Documents and Materials"). Contractor's obligations shall continue for four (4) years following termination or expiration of this Agreement, and Contractor shall in no event dispose of, destroy, alter or mutilate said Documents and Materials, for four (4) years following the City's last payment to Contractor under this Agreement. 16. Time of Essence. Time is of the essence in respect to all provisions of this Agreement that specify a time for performance; provided, however, that the foregoing shall not be • construed to limit or deprive a party of the benefits of any grace or use period allowed in this Agreement. 17. City's Reserved Rights. (a) Termination/Disestablishment. City has and reserves the right to suspend, terminate or abandon the execution of any work by Contractor upon adoption of a resolution disestablishing the CVTMD pursuant to Section 36670 of the 1994 Law. Per the 1994 Law a resolution to disestablish the CVTMD may only be adopted if (1) the City Council finds there has been misappropriation of funds, malfeasance, or a violation of law in connection with the management of the district and a noticed hearing on disestablishment is held, or {2) in the thirty-day period following the anniversary of the district's formation, businesses paying fifty percent or more of the assessment file a written protest with the city and a hearing on disestablishment is held. The failure of Contractor to comply with any material term of this Agreement shall constitute "malfeasance," as that term is used in the 1994 Law and, as such, shall be grounds for the City to initiate disestablishment proceedings. Notwithstanding the foregoing City must first provide the Contractor with an opportunity to cure such failure and to comply with this Agreement, pursuant to section 25 hereof. If Contractor takes timely action to cure its default, City shall not proceed with disestablishment. In the event that Contractor commits in eiccess of two material breaches of the Agreement within any contract year, Contractor shall lose its Section 26 cure rights. In the event the City disestablishes the CVTMD, Contractor shall be entitled to retain CVTMD revenues only for paying the Contractor's then existing liabilities incurred consistent with the CVTMD Plan and a properly authorized budget of the CVTMD. Pursuant to the 1994 Law, Contractor shall refund to City any remaining CVTMD . revenues or any revenues derived from the sale of assets acquired with CVTMD revenues to enable distribution of the revenues to the businesses which paid the assessment. Contractor n u shall not continue to incur liabilities after the date of disestablishment. CVTMD revenues may only be used to pay for liabilities incurred or services performed up to the date of disestablishment and shall not be used to pay far liabilities incurred or services performed subsequent to that date. (b) Modification of Annual Report and/or Improvements and Activities. City has and reserves the right to (lj modify Contractor's annual report in accordance with Section 36660(c) of the 1994 Law; and/or (2} modify the improvements and activities to be funded in any given year, in each case after holding a public hearing in accordance with the procedures set forth in Section 36636 of the 1994 Law. If the City makes modifications that are contrary to the terms of the Management District Plan, the City shall comply with the Plan modifications provisions in Section 36636 of the 1994 Law. Any such modification that includes a levy of a new or increased assessment must also comply with the procedures setforth in Section 36623 of the 1994 Law. 18. Choice of Law. This Agreement, and any dispute arising from the relationship between the parties hereto, shall be governed by the laws of the State of California. 19. Advertising or Publicity. Contractor shall not use, reproduce or copy the seal of the City and shall not represent the City in an official capacity as spokesperson or officer or agent or use the name City of Chula Vista, or the names of the City's officers, directors, employees or agents, in advertising or publicity releases or otherwise without securing the prior written consent of the City in each instance unless set forth in this Agreement. Nothing in this section prohibits • Contractor from using the name Chula Vista Tourism. Marketing District or City of Chula Vista for regional identification for promotion and marketing of the CVTMD. 20. Entire Agreement. This Agreement, including all attachments, exhibits, and any other documents specifically incorporated into this Agreement, shall constitute the entire agreement between City and Contractor relating to the subject matter of this Agreement. As used herein, Agreement refers to and includes any documents incorporated herein by reference and any exhibits or attachments. This Agreement supersedes and merges all previous understandings, and all other agreements, written or oral, between the parties and sets forth the entire understanding of the parties regarding the subject matter thereof. This Agreement may not be modified except by a written document signed by both parties. 21. Modification of Agreement. This Agreement may be supplemented, amended or modified only by mutual agreement of the parties; however, this Agreement shall be subject to any amendments to the CVTMD Management District Plan adopted by the City Council. No supplement, amendment or modification of this Agreement, except for a duly adopted amendment to the CVTMD Management District Plan, shall be binding unless it is in writing and signed by authorized representatives of both parties. 22. Subcontracting/Assignment. Contractor shall not subcontract, assign or delegate any portion of this Agreement or any duties or obligations hereunder without the City's prior written approval, and subject to City's sole discretion. A. Neither party shall, on the basis of this Agreement, contract on behalf of or in the name of the other party. Any agreement that violates this Section shall confer no rights on any • party and shall be null and void • e. Contractor shall remain fully responsible for compliance by its subcontractors with all the terms of this Agreement, regardless of the terms of any agreement between Contractor and its subcontractors. 23. Survival. The obligations of this Agreement, which by their nature would continue beyond the termination or expiration of the Agreement, including without limitation obligations regarding indemnification, ownership of documents, and conflict of interest, shall survive termination or expiration for two {2) years. 24. Severability. If a court of competent jurisdiction holds any provision of this Agreement to be illegal, unenforceable, or invalid in whole or in part for any reason, the validity and enforceability of the remaining provisions, or portions of them, will not be affected, unless an essential purpose of this Agreement would be defeated by the loss of the illegal, unenforceable, or invalid provision. 24. Severability. If a court of competent jurisdiction holds any provision of this Agreement to 6e illegal, unenforceable, or invalid in whole or in part for any reason, the validity and enforceability of the remaining provisions, or portions of them, will not be affected, unless an essential purpose of this Agreement would be defeated by the loss of the illegal, unenforceable, or invalid provision. 25. Termination for Cause. If, through any cause, Contractor shall fail to fulfill in a timely and proper manner Contractor's obligations under this Agreement, or if Contractor shall violate any of the covenants, agreements or stipulations of this Agreement, City shall have the right to • terminate this Agreement by giving written notice to Contractor of such termination and specifying the effective date thereof at least fifteen days before the effective date of such termination. Contractor shall have ten days from the notice date to cure the violation(s). Upon a showing of a good faith effort toward curing the violation(s), the City Manager may, in his or her sole discretion, extend the deadline by which the Contractor must cure. Any such extension shall be valid only if in writing and signed by the City Manager, or designee. If Contractor does not cure the violation(s) to the City's satisfaction, not to be unreasonably withheld, City shall be entitled to terminate the Agreement without further notice. In addition, such violation and failure to cure shall constitute "malfeasance," pursuant to Section 17., above. Z6. Attorneys' Fees. Should a dispute arising out of this Agreement result in litigation, it is agreed that the prevailing party shall be entitled to a judgment against the other for an amount equal to reasonable attorneys' fees and court costs incurred. The "prevailing party" shall be deemed to 6e the party who is awarded substantially the relief sought. 27. Capacity of Parties. Each signatory and party to this Agreement warrants and represents to the other party that it has legal authority and capacity and direction from its principal to enter into this Agreement, and that all necessary resolutions or other actions have been taken so as to enable it to enter into this Agreement. [Remainder of Page Intentionally Left Blank.] • City of Chula Vista g~ SEE ATTAC1~fENT James Sandoval Title: City Manager Date: Chul Vi Chamber ofCommer~~ ce By P~pn-- c.=S~^~----- L'~sa Co1~e.-~ (Print Name) (+~- Title: CLO Dater Ci 701 a I ~_ i i I i I • • ATTACHMENT Signature Page To Agreement for Tourism Marketing District Management Services Between City of Chula Vista and Chula Vista Chamber of Commerce Citv of Chula Vista ~ n ~ `, i By Cheryl Cox, M or Attest: t,~t~i Donna Norris, ity Clerk • Approved as to form: ~~ ~ Gl~ Googin,~,CtpAt4orne~ ~J EXHIBIT A Scope of Services Contractor shall provide the following services: 1. Contractor shall cooperate with City and City staff in the performance of all work hereunder 2. Contractor will provide projects, programs and activities that benefit lodging establishments within the CVTMD in accordance with the CVTMD Management District Plan attached hereto and any subsequent amendments thereto. 3. Contractor will provide and fund such additional projects, programs and activities to promote tourism in Chula Vista as may be made possible through other non-assessment funding sources. These other funds must be accounted for separately from assessment funds. 4. Contractor shall perform responsibilities under the Property and Business Improvement District Law of 1994 (the "Law') including but not limited to: a. Preparation of the Annual Report required by section 36550 of the Law. The Annual Report shall include any recommended changes to boundaries, the improvements and activities to be provided for that fiscal year, an estimate of cost for providing the improvements and activities, the method and basis of levying the assessment in sufficient detail to allow each business owner to estimate the amount of the assessment to be levied against his/her business for that fiscal year, the amount of any surplus or deficit revenues to be carried over from a previous fiscal year, and the amount of any contributions to be made from sources other than assessments. The Annual Report shall also include the proposed budget for the upcoming fiscal year, describing the specific activities to be funded by TMD assessments. The proposed budget shall be reported in two formats: (i) by major financial category; and (ii) by activity. The proposed budget shall be in the format set forth in Exhibit B, with additional line items added, if appropriate. The Annual Report shall be filed with the City Clerk and presented to the City Council for approval. b. Seeking and retaining subcontractor(s) to prepare the Annual Report. c. Delivering the Annual Report at least thirty (30) days preceding the fiscal year for which assessments are to be levied and collected to pay the costs of the improvements. 5. Contractor shall develop and maintain financial records related to receipt and/or expenditure of all funds received from City. 6. Subject to the City's approval, Contractor may retain subcontractors to deliver the services herein; however, Contractor shall remain fully responsible for compliance by its contractors with all the terms of this Agreement, regardless of the terms of any agreement between the Contractor and its subcontractor. 7. Annually, Contractor shall enlist the services of an independent, licensed, certified public • accountant to conduct a fiscal year financial audit of the CVTMD finances. The audit report shall include a Tine-item schedule detailing all expenditures, including a comparison of all expenditures with the specific amounts and activities designated in the MDP. In addition, the auditor shall verify that the CVTMD funds were used in accordance with the CVTMD Plan and the Annual Report to the City Council for the fiscal year which is the subject of the audit. Contractor shall provide a copy of the audit to the City Council each year within 90 days following the end of the fiscal year which is the subject of the audit. • S. TMD Committee, a, In General. Contractor shall form and maintain in effect throughout the existence of the CVTMD a committee (the "TMD Committee"). The TMD Committee shall include representatives from assessed hotels and motels ("Hotel/Motel Representatives'), in sufficient number to comprise a majority of the voting members of the committee at all times. The TMD Committee shall be formed and the Hotel/Motel Representatives shall be in place by June 15, 2012. b. Quorum Requirements. Attendance by a majority of the Hotel/Motel representatives shall be required for a quorum of the TMD Committee. Notwithstanding the foregoing, provided that Contractor's bylaws include provisions for adequate advance notice of committee meetings, in the event of repeat absences by one or more Hotel/Motel Representatives, such bylaws may also include reasonable .provisions to allow for TMD Committee action notwithstanding the fact that a majority of Hotel/Motel representatives are not in attendance. For purposes of this Section, "adequate advance notice' shall mean email or other electronic means at least three (3) days prior to the meeting and posting notice of the meeting in accordance with the provisions of the Ralph M. Brown Act. If no electronic means of providing notice to a committee member are available, personal delivery or overnight delivery service may be used; in such cases the notice shall be delivered at least three (3) days prior to the meeting. c. Election of Hotel/Motel Representatives.. Hotel/Motel Representatives shall be elected by vote of the assessed hotels/motels in accordance with a qualifications system and process that assures representation on the TMD Committee of across-section of Chula Vista hotel/motel industry types determined by using accepted industry standards (e.g., number of rooms, revenue per available room, average daily rate, and/or other industry relevant hotel/motel type indicators). One of the Hotel/Motel Representatives may be appointed by Contractor provided that such party is an authorized representative of at least one Chula Vista .hotel/motel and the Chula Vista hotel(s)/motel(s) that such party represents is/are not also represented by a directlyelected Hotel/Motel Representative. d. Required Approval of Maior Decisions. TMD Committee approval shall be required, at a minimum, for the following: (1) prior to submittal to the City Council for consideration, each year's Annual Report, including, without limitation, the budget and description of that year's proposed improvements and/or activities, goals and objectives, and a mechanism for evaluating the behefits of such improvements and/or activities to the assessed hotels/motels.; and (2) TMD Committee policies, which shall include, at a minimum, provisions for the notice and conduct of meetings, and the Hotel/Motel Representatives election process, consistent with the terms of this Agreement. i i Exhibit B Chula Vista Tourism Marketing District Proposed Budget FY 2011-12 Revenues: Projected Assessments $ ~- Assessmen[sCarriedfromPriorYears S - TotalFUndsAVailableFY2011-12 $ - , Expenditures: PersonneiCOSt: Salaries $ - Benefits $ Payroll Taxes $ To[al Personnel Cost $ Off i ce/Qdml nistrative: Office Supplies $ - Formation Expense $ consultants- _ Independent Audit $ - AttorneyServices $ - M City of CV Administrative Support $ - Total Office/Administrative $ Reserves/Contingencies $ TMD Activities Prop Budget FY 2011-12 Direct Indirect Total List of Activities iex. Parade of Bands, $ $ $ , Star News Advertising-Shop/Dine] $ $ $ $ _ $ $ $ $ $ $ - . $ $ $ - % Funded from StaffinuF ded by TMD %Funded TMD Other Chamber Funds (Example-Graphics Designer) 45% 0% Notes: TMD Activities should correlate to Goals &Objectives included in Exhibit B. Direct Costs indude expenses incurred for paying vendors, advertising, registration fees etc. supportingTMD activities orimprovements. Indirect Cost include personnel, consultant and administrative expenses allocated proportionally based on direct cost or % of time spent on activity. , ; r i I I i I i i • SAMPLE DRAFT 2011-2012 CVTMD Activities Goals & Objectives EXHIBIT B (Cont.) i i i -MILESTONES/ ## GOAL OBIECTIVES TARGET STATUS Develop Contract for Site and Launch lan March Done Develop Draft Agreement for Business February April Done participation Coordinate w/City Service Based Effort March to April Done Obtain Board approval and Sign Contract March April Done In progress, staff trained contact with Train Staff and Launch with contractor April -June businesses begun 100 businesses 33%of goal achieved '1 Social Media Program Initiate Business contacts and provide 30 postings per 50% of goal achieved sample tweet and Facebook postings businesses per month TMD/Chamber postings-event, hotel, 40% of goal achieved, Ongoing, restaurant and business support 120 per month Record and Monitor Posting Response Volume and qualit ~. CONFIDENTIAL GRAND .TRY County.of San Diego Hall of Justice 330 V1/. Broadway, Suite 477 San Diego, CA 92101-3830 619-515-8707 FAX 619-515-8696 http: //www. sd co u ntv. ca. q ov/q ra n d i u rv JAMES R. LEWIS, Foreman Honorable Cheryl Cox, Mayor City of Chula Vista 246 Fourth Avenue Chula Vista, CA 91910 Chula Vista City Council City of Chula Vista 246 Fourth Avenue Chula Vista, CA 91910 May 18, 2012 James Sandoval, City Manager City of Chula Vista 246 Fourth Avenue Chula Vista, CA 91910 Lisa Cohen, CEO Chula Vista Chamber of Commerce 233 Fourth Avenue Chula Vista, CA 91910 • Re: Grand Jury Report: "City of Chula Vista Tourism Markefing District" Dear Ladies and Gentlemen: The 2011!2012 San Diego County Grand Jury herewith provides the referenced report for your review and comment to the Presiding Judge of the Superior Court in compliance with the Penal Code of California §933{c). This report was prepared pursuant to §925a of the Penal Code. In accordance with Penal Code §933.05(e), a copy of this report is being provided to affected agencies at least two working days prior to its public release and after being approved by the Presiding Judge of the Superior Court. Please note that §933.05(e) specifies that no officer, agency, department, or governing body of a-public agency shall disclose any contents of the report prior to its public release. This report will be filed with the Clerk of the Court and released to the public on Wednesday, May 23, 2012. Sincerely, -~ JAMES R. LEWIS, Foreman 2011/2012 SAN DIEGO COUNTY GRAND JURY • JRL:In enc. ~. ~ -. CITX OF CIY~ILA VISTA TOITRISM[ 1VIA.ItI~]CTING DISTRICT A ReporE by tie ~ , 201.1:/2012 Sin Diego County Grand .Ti~xy ~ _.._._ 1VIay 23, 2012 ?;:..--- CITY ~r ~x~~ti~vISTA TOiTRISIVI 1VIARKETIIVG l)~STR~CT SUMMfIRY The City of Chula Vista approved the formation of a Tourism Marketing District (TMD) iri July 2009. The TMD proposal originated with the Chula Vista Hotel/Motel Association and is fimded by a 2.5 percent assessrnent on local room rents.' The Management District Plan that gover~rs TMD activities specifies the funds are to be spent on operation of the Chula Vista Visitor Information Center, and on advertising and other activities to promote the city as a meeting, event and toruist destination to increase hoteUanotel occupancy. The Chula Vista Chamber of Commerce administers the TMp. In response to a citizen complaint, the 2011/2012 San Diego County Grand Jury evaluated TMD operations and finances. Initially, the Grand Jury was concenred that the City had not.established sufficient oversight of TMD operations. There was no contract between the City and the Chamber, no requirement for qn independent audit, no measurable performance objectives, and insufficient hotellmotel representation on the TMD Board. Further, the Grand Jury questioned the TMD accounting practices; and whether some expenses were consistent with the Management District Plan mandate. 0 Since the Grand Jury began its'investigation, the City and the Chamber entered into a formal written agreement.. This contract, adopted by the City Council in March 2012, remedies many of the deficiencies the Grand Jury identified. However, there are outstanding issues. The TMD should standardize its accounting practices in accordance with Government Accounting Starrdards Board rules. The TMD Cormrrittee should establish measurable performance goals to ei>sme.funds are spent in accordance with the Management District Plan. INTRODUCTION The Grand Jury received a citizen complaint about potential misuse of revenues generated by Chula Vista's Tourism Marketing District. Afterrnaknrg initial inquiries, the Grand Jury decided to investigate the TMD and its relationship with the City of Chula Vista. PROCEDURE The Grand Jury interviewed representatives of Chula Vista city government and TMD members, and exarnhred TMD and Visitor Information Center financial statements. The Grand Jury also reviewed reports to and minutes of Chula Vista City Council meetings where the TMD was on fhe agenda. Finally, fhe Grand Jury read meeting minutes for the TMD Board of Directozs and the Chula Vista Hotel/Motel Association. -- 1 2011/2012 SAN DIEGO COUNTY GRAND JURY (filed May 23, 2012) l~ • DXSCUSSION -' Historically, the City of Chula Vista budgeted an amtual grant of around $150,000- $200,000 to support the Chula Vista Convention and Visitors }3urean (CONVIS - a division of the Chamber). The City also passed to CONVIS a $45,000 grant from the San Diego Mehopolitatt Transit System (MTS), which funded the Chula Vista Visitor Information Center. The City ended the general fund grant in March 2008 due to declining revemtes, and the C~antber assumed responsibility for funding CONVIS, The Hotel/Motel Association of Chula Vista (part of the Chamber) then proposed a'fourism Marketing District to be funded witira 2.5 percent assessment ou hotel/mote] room rents.l TMDs are authorized by ilto California Streets artd Highways Code (section 36600 et seq). They may be operated by a private non-profit orgatuzation under conhact with a city. 'flte law requires atmual reports to ilte City showutg proposed activities and budget for the coming year. The City Council approved the TIvID and the Management District Plan that governs its activities in July 2009. Tho Chamber administers the TMD, with their Chief Executive Officer responsible for day-to-day operations. The City collects the 2.5 percent TMD assessment from the hotels/motels and sends a check to the Chamber. The revenues support the Visitor Information Center.as well as sates and marketing programs to. promote the city as a tourist, meeting and event destination to improve hotellmotel • occupancy. The City dzd not have a conhact with the Chantber covering the TMD until March 2012. Consequently, the only accountability in the fust two years was the annual report to the City Council. In addition, the TMD gives regular status reports on their budget and marketing efforts to their Board and that of the klote]/Motel Association. As the TMD was preparing its 2010-2011 amoral report to the City, concerns were raised about the lack of a formal written contract gtivertilng TMD activities. During Fa112011, city staff worked with the TMD Board to. develop such alt agreement; which.the City Council approved in March 2012. T1tat agreement addresses many of the issues the Grand Jury identified. I-Iowever, measurable perforfnancc objectives still have to be developed and there are questions remaining about TMD spending and activities that do not appear to be consistent with tite IVJattagement District Plan. _ The March 2012 agreement requires annual independent audits beginning with the 2011- 2012 fiscal year. Iu the absence of audit reports for the previous two fiscal years, the Grand Jtuy examined TMD fuiancial statements? From its formation in July 2009 This Is in addition to the existing 10 percent Transient Occupancy Taz on room rent, which goes to the city's general fund. :Some TMD financial sG~tements examined accounted for revenues and expanses on a cash basis (i.c,, assessments received &otu the City beforo the Jime 30 end of the fiscal year) and some.were on an accrual • bads (included the Juno assessmout, which Was not received until July). Ttie Grand Jury based its evaluation on the cash acco~wting. 2 2011/2012 SAN DI)'uG0 COUNTY GRAND JURY (filed May 23, 2012) tluough~rifute 3'0, 20I1, TMD income from the assessment was $693,4ff7. Dm•ing that period, the TMD spent $681,869 as follows: o $489,331 (72 percent) for staff expenses; a $99,628 (15 percent) to recoup legal expenses to form the TMD ($26,000) and to partially reimburse the Chamber for Visitor Information Center operating costs from January 2008, when City funding ended, through Juue 2009, when the TMD was,established (see further discussion, below); ® $69,345 (10 percent) for marketing; o $18,941 (3 percent) in administrative expenses (janitorial services at the Visitor Information Center, outside bookkeeping, and office supplies); and o $4,625 (1 percent) for consulting services. Chart! TNID Revenue aud.l!;xpenses July 2009 -June 2011 Staff $489>331, 72% Totalrovenue: $693,487 Formation & Reimbursement $99,628,14% Marketing $69,344,10% Administrative $18,941,3% • Consultant $4,625,1% Total expenses: $681,689 For t}ie first two years; the Chamber Executive Committee also served as the TMD . Board: This resulted in some blurring of responsibility and accountability, which was noticeable in spending, advertising and operational decisions. The Management pistrict Plan specifies that TMD services: ...are tailored not to serve the general public, but rather to serve the specific lodging businesses within the Dishict, e.g,, the proposed activities are specifically targeted to increase room nights for assessed lodging businesses..., and are narrowly tailored, Q 0 3 .2011!2012 SAN D11;G0 COUNTY GRAND Ji1RY (!;-ed May 23, 2012) At the May 2009'`City Council meeting where the TMD was fast pioposed,'a representative of the Hotel Motel Association told the Council that Chula Vista's primary tourism markets are Los Angeles, Arizona and Nevada. Most of the TMD marketing efforts to date have promoted spending locally in two local publications -The Star News and My Flometown Chula Vista. The Grand Jury does not believe these advertisements are narrowly tailored to increase lodging occupancy. Another spending issue relates to Uze formation and reimbursement expenses TMD pays the Chamber to cover legal fees and the cost of operating the Visitor Information Center from January 2008 through June 2009. These total $219,000, and the TMD budgeted $49,628 in 2009-2010, and plans to give the Chamber $50,000 in each succeeding year mztil fully reimbwsed. The Grand Jury could find no record of the City Council discusshrg this rehnbursement during subsequent budget approval, nor was any breakdowiz of the costs included in the $219,000 in any TMD fmancial report. The TMD Board approved the formation and reimbursement budget at their January 6, 2010 meeting = six monttrs aRer the City Council approved the TMD and its proposed first year budget (which included a single line item of $50,000 titled "Repayment of Formation Expense"): At least one TMD Board member expressed concern about a possible wnflict of interest because the people voting represented both the TMD and the • Chamber. Other TMD financial issues regarding reimbursement for the Visitor' hifonnation Center costs the Grand Jwy identified are: o The Visitor Infornation Center is fmzded entirely by the TMD. Their financial reports supporting reirribrirseinentirrclude only expenses, and do not show any revenue from sales. ® The Visitor Information Center expense report for January 2008 -June 2009 shows $167,043, yet the ,TMD Board voted to reimbruse the Chamber $219;000 for that period {including $26,000 in legal fees). o Nine percent of the Visitor Information Center expenses are for employee "auto allowance" and "phone allowance" ($14,260 and $1,080, respectively). There is no discussion of wkry these expenses are necessary, to whom they were paid, or how they were arrived at. a As a new program, the TMD hired staff, but the TMD Board uevcr discussed what expertise should be sought, nor did they approve the payroll costs and subsequent pay raises. Also, TM15 staff is also showrr as Chamber staff on the Chamber's web site. 4 2011/2012 SAN DILGO COUNTY GRAND JURY (filed rimy 23, 2012) o There are two accounting reports for operation of the Visitor Tnformatiori Center - onefor the TMD and one for CONVIS. These should be consolidated. The March 2012 agreement between the city and the Chamber requires a new TMD Committee with eight hoteUmotel owners or operators (elected by representatives of all . the Chula Vista hotels/motels) and seven Chamber Executive Cornmittee members. This newly constituted TMD Committee will be the primary decisiomnaking body for TMD activities and finances; they need to ensure that programs and finances are targeted to TMD goals and they should develop performance measures to ensure progress in meeting those goals. FACTSAND FINDINGS Facf: The Hotel/Motel Association of Chula Vista (part of the Chamber) proposed a Tourism Marketing District to be funded with a 2.5 peicerrt assessment on hoteUmotel roorn rents. Fact: TMD activities are governed by a Management District Plan. Fact: The Management District Plaa specifies that TMD services must be narrowly targeted to increase room nigtrts for assessed hotel/motels. fact: TMD advertising in the first two' years was primarily in local periodicals and featured local dining, shopping and lodging options. finding Ol: Many TMD activities are not in compliance with the Management District Plan. Fact: Ttrere has not been a clear division of funding and responsibility behveeu the Chamber, CONVIS and TMD. ' Fact: TMD staffmembers are shown as part of the Chamber Team on the Chamber Web site. Fact: Neither the staff positions nor their salaries arrd benefrts were ever approved by the TMD Board. Fact: The TMD is reimbursing the Chamber for costs of operating the Visitor Infornration Center from Jarmary 2008 through Juna 2009. i Facl: Neither the reimburserrrentltself nor its component costs were approved by the City Comrcil. , ISnding 02: The blurring of accountability and responsibility makes it difficult to determine how staff and funding are allocated among the Chamber, TMD and CONVTS. S 201112012 SAN DIEGO COUNTY GRAND JURX (filed Nlay 23, 2012) X%act: Some TMD financial stafements are prepared usuzg cash accounfing and some use accrual accounting. Finding 03: The'TMD's varied reporting of its revenue is confusing to observers. ItECOMMENDATXONS The 2011/2012 San Diego County Grand Juty recoWntends the City Manager of the City of Chula Vista and the Mayor and City Cowreil of the City'of Chula Vista: 12-36: Closely monitor implementatiou.of the March 2012 contract berivicen the City and Chamber for TMD operations and the independent audit it requires to ensure the finances aucl activities are targeted to the purposes required by the Management District Plan. The 201I/2012 San Diego County Grand Jury recommends the Chula Vista Towzsm Marketing District Comm[ttee: 12-37: Require the TMD staff to standardize its accounting methods in accordance with Governmental Accounting Standards Board rules. 12-38: Require the TMD to provide an ifemized accounting for the $219,000 reimbursemenf expense (in the Visitor Tnformafion. Center expense report for January 2008 -June 2009) and present it to the City Council for.formal approvah 12-39: lJstabiish goals and performance measures consistent with the Management District Plan. 12-40: Adopt written personnel politics and procedures, including performance evahratious and salary review. REQUIREMENTSAND INSTRUCTIONS The California Penal Code §933(c) requires any public agency which the Grand Jury has reviewed, and about which it has issued a final report, to comment to the Presiding Judge of the Superior Cocut on the findings and reconunendationspertaming to matters under the conhol of the agency. Such coiiuncnt shall be made rro laterlha~r 90 days afler.the Grand Jury publishes its report (filed with the Clerk of the Court); except that in the case of a report cattaining findings and recommendations pertaining to a deputmerit or agency headed by au elected County ofi'icial (e.g. District Attorney, Sheriff, etc.), such comtneut shall be made tvithirr60 days to the Presiding Judge with an ittforntation copy sent to the Board of Supervisors. Furthermore, California Penal Code §933.05(x), (b), (c), details, as follows; the manner hr • which such cormnent(s) are to be made: - 20).1/2012 SAN DIEGO COUNTX GIiANI) JURY (filed May 23, 2012) (a) As to each grand jwy finding; the responding person or entity shall indicate one of the following: . (1) The respondent agrees with the findutg (2) The respondent disagrees wholly or partiaily'with the finding, in which case the response shall specify the portion of the fiuduig that is disputed and shall include an explanation of the reasons therefor. (b) As to each grand jury recommendafiou, the responding person or entity shall report one of the following actions: (1}The recommendation has been implemented, with a summary regarding the implemented action. (2) The recouunendation has not yet been implemented,. but will be implemented in the fuhue, with a time frame for implementation. (3) The recoimriendation requires further analysis, with an explanation and the scope and parameters of an analysis or study, and a time fi~ame for the matter to be prepared for discussion by the officer or head of the agency or departmeut being investigated or reviewed, including the govemhrg body of the public agency when applicable. This time fra~ue shall not exceed six months from the date of publication of the grand jury report. (4) The reeornniendation will not be implemented because it is not . wan•anted or is not reasonable, with an explanation • therefor. (c) If a findurg or recommendation of the grand jury addresses budgetary or personnel matters of a county agency ox department headed by a<i elected of&cor, both the agency or department head and the Board of Supervisors • shalt rirspond if requested by the grand jury, but the response of the Board of Supervisors shall address only those budgetary or personnel matters over which it has some decision making authority. The response of the . elected agency or department head shall address all aspects of the findings or recornmendatio~us affecting his or her agency or deparment. Comments to the Prosiding Judge of ttie Superior Court' in compliarrce with the Penal Code§933.05 are required fiom the: Chula Vista City Manager 12-36 $/21%12 Chula Vista Mayor• 12-36 8/21!12 Clrula Vista City Council 12-36 ~ 8/21/12 Chula Vista ~'ourism 12-37 fhrough 12-40 8121112 Marketing Aistrict Committee 7 2011/2012 SAN AIEGO COUNTY GRA.IVA'JURX (filed May'23, 2012) `I _- a;-:' ~., ~r ~' T~..~O` ' ~ .. 'L. . OFFICE OFTHE CITY MANAGER June 4, 2012 The Honorable Robert J. Trentacosta Presiding Judge Superior Court of California, County of San Diego Main Courthouse THIRD FLOOR 220 W. Broadway San Diego, CA 92101 Dear Judge Trentacosta: RE: Grand July Report: "City of Cl:ula Vista Tourism Marketing District" Dated May 23, 2012 • Pursuant to the Grand Jury Report Requirements and Instructions: Section (b): As to each grand jury recommendation, the responding person or entity shall report one of the followine actions: (2) The recommendation has not yet been implemented, but will be implemented in the future, with a time frame for implementation. Recommendation 12-36: Closely monitor implementation of the March 2012 contract between the City and Chamber for TMD operations and the independent audit it requires to ensure the fnances and activities are targeted to the purposes required by the Management District Plan. The contract between the City of Chula Vista and the Chula Vista Chamber of Commerce for the TMD also addresses/clarifies the following issues: • Annual Report • Make-up of Governing Body • Audit Requirements • Disestablishment • Payment of Operating Costs • Indemnification • Insurance • Reservation of Rights • Through the contract, we will continue to closely monitor the contract and ensure the objectives of the conditions therein are met. 276 FOURTH AVENUE • CHULA VISTA • CALIFORNIA 91910 • (619) 691-5031 • FAX (619) 409-5884 The Honorable Robert J. Trentacosta Presiding Judge • June 4, 2012 Page 2 In that spirit, the City recently reminded the Chanrber of Commerce of the requirement to submit an Annual Report at least thirty days before the beginning of the fiscal year. The Contract requires an audit for the current fiscal yeu• be performed and submitted to the City within 90 days of the end of the fiscal year. Ninety days from the end of the f scal year for which the assessment is levied will be October 15, 2012, so the City will be monitoring that Contract requirement, and the intent is that the recommendation will be met on or before that date. The Contract further requires that the Annual Report include standard report formats for a financial report, budget and written goals, objectives and status for proposed activities and improvements that would implement the District Plan. That report is due within the nest few weeks, so the City is monitoring that condition within the Contract, and the intent is that this portion of the recomrendation will be completed this June. Prior to these deadlines, and for almost a year, I have had one or more senior staff members attend the Chamber of Commerce Board, TMD Board and Hotel/Motel Sub-Committee meetings on a regular basis. City staff has also been available to individual hotel/motel owner operators • upon request and worked with the City Council and City Attorney's Office to include the individual hotellmotel owners in the distribution of any information pertaining to the TMD. We are appreciative of the Grand Jury's interest and attention to this matter. The City of Chula Vista shared some of your concerns that lead us to work with the Chamber of Commerce on a contract over the last year. It is in this spirit of cooperation and full disclosure that I respectfully submit these requested comments. Sincerely, s D. Sandoval Manager Attachment cc: Foreman James R. Lewis and Members of the Grand Jury San Diego County Board of Supervisors Honorable Mayor and Council of the City of Chula Vista Glen Googins, Chula Vista City Attorney • Lisa Johnson, Chula Vista Chamber of Commerce Chair Nicole Hoenstein, Chair of the Chula Vista Hotel/Motel Subcommittee J:V~dminSup\Sandoval\Grand JurylComments Re Grand Jury Report on Chula Vista Tourism Marketing District.doc CITY OF CHULA VISTA • AGREEMENT FOR TOURISM MARKETING DISTRICT MANAGEMENT SERVICES This Agr m t for Tourism Marketing District Management services (the "Agreement"), dated ~ is by and between the City of Chula Vista, hereinafter referred to as the "City;' and the Chula Vista Chamber of Commerce, hereinafter referred to as "Contractor," collectively referred to as the "parties." RECITALS A. The City is a California municipal corporation and charter city; Contractor is a private, non- profitentity. B. In April 2009, the Chula Vista Chamber of Commerce ("CVCC") and the Chula Vista Convention and Visitors Bureau ("CVCVB") submitted to the City a petition and Management District Plan ("MDP") for establishment of the Chula Vista Tourism Marketing District ("CVTMD"), proposing assessments on all lodging businesses in the City, in accordance with the Property and Business Improvement District Law of 1994, California Streets and Highways Code section 3660D, et seq. (the "1994 Law"). C. On May 12, 2009, the City Council adopted Resolution No. 20D9-115, accepting the petition and declaring its intent to initiate proceedings to establish the CVTMD, in accordance with the • 1994 Law. D. On July 14, 2009, the City adopted Resolution number 2009-177, hereinafter the "Resolution," establishing the CVTMD, and providing that assessments be levied as described in the MDP. E. Contractor was designated in the MDP as the Owners' Association in accordance with Streets and Highways Cade section 36614.5. As a result, Streets and Highways Cade section 36651 authorizes the City to contract with the Owners' Association for provision of CVTMD services. F. Under the 1994 Law, funds raised by the CVTMD must be spent for the purposes specified in the Resolution: sales promotions and marketing programs to market Chula Vista as a tourist, meeting and event destination, and other improvements as set forth in Streets and Highways Code §36610; funds cannot be diverted to government programs. G. Contractor is willing to provide services to the City on the terms and conditions set forth in this Agreement. AGREEMENT Now, therefore, the parties agree as follows: • 1. Engagement. City hereby retains Contractor to provide the services described in Exhibit A, and Contractor accepts such engagement. 2. Term. The term of this Agreement shall begin on September 1, 2011 and end on July 31, 2014. If the CVTMD is disestablished prior to July 31, 2014, this Agreement shall terminate on the effective date of CVTMD disestablishment, except as provided in sections 23 and 25. 3. Independent Contractor. No relationship of employer and employee is created by this Agreement; it being understood and agreed that Contractor is an Independent Contractor. Contractor is not the agent or employee of the City in any capacity whatsoever, and City shall not 6e liable for any acts or omissions by Contractor nor for any obligations or liabilities incurred by Contractor. , A. Contractor shall have no claim under this Agreement or otherwise, for seniority, vacation time, vacation pay, sick leave, personal time off, overtime, health insurance, medical care, hospital care, retirement benefits, social security, disability, Workers' Compensation, unemployment insurance benefits, civil service protection, or employee benefits of any kind. B. Contractor shall be solely liable for and obligated to pay directly all applicable payroll taxes (including federal and state income taxes) or contributions for unemployment insurance or old age pensions or annuities which are imposed by any governmental entity in connection with labor used or which are measured by wages, salaries or other remuneration paid to its officers, agents or employees and agrees to indemnify and hold City harmless from any and all liability which City may incur because of Contractor's failure to pay such amounts. C. In carrying out the work contemplated herein, Contractor shall comply with all /~ applicable federal and state workers' compensation and liability laws and regulations with ~•J respect to the officers, agents and/or employees conducting and participating in the work; and agrees that such officers, agents, and/or employees will be considered Independent Contractors and shall not 6e treated or considered in any way as officers, agents and/or employees of City. D. Contractor agrees to perform its work and functions at all times in strict accordance with all applicable federal, state, county and city laws, resolutions, regulations, titles, departmental procedures and currently approved methods and practices in the field; and that the sole interest of City is to ensure that said service shall be performed and rendered in a competent, efficient, timely and satisfactory manner and in accordance with standards required by the City. E. Notwithstanding the foregoing, if the City determines that pursuant to state and federal law Contractor is an employee for purposes of income tax withholding, City may upon two (2) weeks' written notice to Contractor, withhold from payments to Contractor hereunder federal and state income taxes and pay said sums to the federal and state governments. 4. Indemnification. To the maximum extent allowed by law, Contractor shall defend, indemnify, protect, defend and hold harmless the City, its elected and appointed officers, agents and employees, from and against any and all claims, demands, causes of action, costs, expenses, liability, loss, damage or injury, in law or equity, to property or persons, including wrongful death, in any manner arising out of or incident to any alleged acts, omissions, negligence, or willful O misconduct of Contractor, its officials, officers, employees, agents, and contractors, arising out of or in connection with the performance of its obligations under this Agreement. This indemnity provision does not include any claims, damages, liability, costs and expenses • (including without limitations, attorneys' fees} arising from the sole active negligence or sole willful misconduct of the City, its officers, agents or employees. Also covered is liability arising from, connected with, caused by or claimed to be caused by the active or passive. negligent acts or omissions of the City, its agents, officers, or employees which may be in combination with the active or passive negligent acts or omissions of the Consultant, its employees, agents or officers, or any third party. This indemnity shall survive the termination of this Agreement. 5. Insurance. Contractor must procure insurance against claims for injuries to persons or damages to property that may arise from or in connection with the performance of the work under this Agreement and the results of that work by Contractor, its agents, representatives, employees or subcontractors and provide documentation of same prior to commencement of work. The insurance must be maintained for the duration of the Agreement. Minimum Scope of Insurance Coverage must be at least as broad as: 1. Insurance Services Office Commercial General Liability coverage (occurrence Form CG0001) 2. Workers' Compensation insurance as required by the State of California and Employer's Liability Insurance. • 3. Professional Liability or Errors & Omissions Liability insurance appropriate to Contractor's profession. Architects' and Engineers' coverage is to be endorsed to include contractual liability. Minimum Limits of Insurance Contractor must maintain limits no less than: 1. General Liability: $1,000,000 per occurrence for bodily injury, personal injury and (Including operations, property damage. If Commercial General Liability insurance products and completed with a general aggregate limit is used; either the general operations, as applicable.) aggregate limit must apply separately to this project/location or the general aggregate limit must be twice the required occurrence limit. 2. Workers' Compensation Statutory Employer's Liability: $1,000,000 each accident $1,000,000 disease-policy limit $1,000,000 disease-each employee • 3. Directors and Officers $500,000.00 each occurrence Liability: Deductibles and Self-Insured Retentions Any deductibles orself-insured retentions must be declared to and approved by the City. At the option of the City, either the insurer will reduce or eliminate such deductibles or self-insured retentions as they pertain to the City, its officers, officials, employees and volunteers; or Contractor will provide a financial guarantee satisfactory to the City guaranteeing payment of losses and related investigations, claim administration, and defense expenses. Otherlnsurance Provisions The general liability, and'where appropriate, the worker's compensation policies are to contain, or be endorsed to contain, the following provisions: 1. The City of Chula Vista, its officers, officials, employees, agents, and volunteers are to be named as additional insureds with respect to liability arising out of work or operations performed by or on behalf of Contractor including providing materials, parts or equipment furnished in connection with such work or operations. The general liability additional insured coverage must be "primary' and must not exclude products / completed operations. 2. The contractor's General Liability insurance coverage must be primary insurance as it pertains to the City, its officers, officials, employees, agents, and volunteers. Any O insurance or self-insurance maintained by the City, its officers, officials, employees, or volunteers is wholly separate from the insurance of Contractor and in no way relieves Contractorfrom its responsibility to provide insurance. 3. Each insurance policy required by this clause must be endorsed to state that coverage will not be canceled by either party, except after thirty (30) days' prior written notice to City by certified mail, return receipt requested. 4. Coverage shall not extend to any indemnity coverage for the active negligence of the additional insured in any case where an agreement to indemnify the additional insured would be invalid under Subdivision (b) of Section 2782 of the Civil Code. s. Contractor's insurer will provide a Waiver of Subrogation in favor of the City for each required policy providing coverage during the life of this contract, If General Liability, Pollution and/or Asbestos Pollution Liability and/or Errors & Omissions coverage are written on a claims-made form: 1. The "Retro Date" must be shown, and must be before the date of the Agreement or the beginning of work pursuant to the Agreement. 2. Insurance must be maintained and evidence of insurance must be provided for atleast five (5}years after completion of work under the Agreement. 3. If coverage is canceled or non-renewed, and not replaced with another claims-made policy form with a "Retro Date" prior to the Agreement effective date, Contractor must purchase "extended reporting" coverage for a minimum of five (5) years after completion of work under the Agreement. 4. A copy of the claims reporting requirements must be submitted to City far review. Acceptability of Insurers Insurance is to be placed with licensed insurers admitted to transact business in the Stata of California with a current A.M. Best's rating of no less than AV. If insurance is placed. with a surplus lines insurer, insurer must be listed on the State of California List of Eligible Surplus Lines Insurers (LESLI) with a current A.M..Best's rating of no less than A X. Exception may be made for the State Compensation Fund when not specifically rated. Verification of Coverage Contractor shall furnish the City with original certificates and amendatory endorsements effecting coverage required by this clause. The endorsements should 6e on insurance industry forms, provided those endorsements or policies conform to the contract requirements. All certificates and endorsements are to be received and approved by City before work commences. The City reserves the right to require, at any time, complete, certified copies of all required insurance policies, including endorsements evidencing the coverage required by these specifications. Subcontractors For each subcontractor that Contractor may utilize to perform work required by this Agreement, • Contractor must include the subcontractor as an insured under its policies, or furnish separate certificates and endorsements for each such subcontractor. All coverage for subcontractors is subject to all of the requirements included in these specifications. 6: [Not Used.] 7. Conformity with Law. A. In performing services under this Agreement, Contractor shall observe and comply with all applicable laws, resolutions, codes and regulations of governmental agencies, including federal, state, municipal, and local governing bodies, having.jurisdiction over the scope of ' services, including all applicable provisions of the California Occupational Safety and Health Act. Contractor shall indemnify and hold City harmless from any and all liability, fines, penalties and consequences from any of Contractor's failures to comply with such laws, Resolutions, codes and regulations, B. If a death, serious personal injury or substantial property damage occurs in connection with Contractor's performance of this Agreement, Contractor shall immediately notify the City. Contractor shall promptly submit to City a written report, in such form as may be required by City of all accidents which occur in connection with this Agreement. This report must include the following information: (1) Name and address of the injured or deceased persons}; (2) Name and address of Contractor's sub-contractor, if any; (3} Name and address of Contractor's liability insurance carrier; and 'led descri tion of the accident and whether any of City's equipment, tools, material, (4} A detai p • or staff were involved. C. Contractor further agrees to take all reasonable steps to preserve all physical evidence and information which may be relevant to the circumstances surrounding a potential claim, while maintaining public safety, and to grant to the City the opportunity to review and inspect such evidence, including the scene of the accident. 8. Assessments, Costs and Payment. The City shall collect the assessments in accordance with the 1994 Law, the Resolution and the MDP. City shall forward to Contractor all CVTMD' assessment funds collected, within thirty-days of collection. The City shall not be responsible or liable for determining the accuracy or adequacy of the amount of funds remitted to the City by the assessees. The City's only responsibility shall be to forward the funds remitted .to the Contractor. Contractor shall account for all CVTMD funds separately from all other funds, in order to provide a transparent audit trail. Beginning January 2012, Contractor will pay the City for all actual operational costs associated with services provided by the City to the CVTMD. Those services include: collecting assessments, remitting funds to Contractor and staff time and other resources spent assisting Contractor in preparing and, submitting the Annual Report to the City Council ("Standard Services"). The amount billed to Contractor for such services shall be capped at 3 percent of annual TMD revenues received bj+ Contractor for,on-going services on a fiscal, year basis; it is currently estimated to total $6,300 for January through June 2012. Should the Parties agree that the City will perform additional services for the CVTMD beyond the scope of the Standard Services described in this Agreement, the Contractor will pay the City for the cost of those additional services and the three percent annual cap shall not apply to those services. The City will invoice, Contractor quarterly for all City services performed relating to the CVTMD. Contractor shalt pay the City in-full, within 3D days of the date of the invoice. If,the City does not O receive payment within 30 days, the City shall deduct the amount owed from the assessments collected in the following month. The City will then remit the monthly assessments, less any amounts past due, to the Chamber. In the event that bonds are issued pursuant to the MDP, the City and Contractor shall ' meet and confer to determine how the City's costs shall be allocated. 9. Taxes. Payment of all applicable federal, state and local taxes shall be Contractor's sole responsibility. ~ ' 10. Conflicts of Interest. Contractor covenants that neither it nor any of its principals or members of its Board of Directors presently has an interest, and shall not have any interest, direct or indirect, which would conflict in any manner with performance of services required under this Agreement. The Parties understand that members of Contractor's Board of Directors are business owners who will benefit from the services provided by the CVTMD. Such benefit shall not be considered a direct or indirect interest for purposes of this Agreement. Contractor shall comply with all applicable conflicts of interest laws in performing its obligations under this Agreement. 11. Notices. All notices, requests, demands, or other communications under this Agreement shall be in writing.. Notices shall be given for all purposes as follows: A. Personal delivery: When personally delivered to the recipient, notices are effective on delivery. ' • B. First Class Mail: Notice may be mailed first class to the recipient's address, set forth in section 11. E., below, in which case notice is effective three (3) mail delivery days after deposit in a United States Postal Service office or mailbox. Certified. Mail: When mailed certified mail, return receipt requested, notice is effective on receipt, if delivery is confirmed by a return receipt; if it is not confirmed by a return receipt, notice will be effective on the third day after deposit in a United States Postal Service office or mailbox. C. Overnight Delivery: When delivered by overnight delivery with charges prepaid or charged to the sender's account, notice is effective on delivery, if delivery is confirmed by the delivery service; if delivery is not confirmed by the delivery service, notice will be effective two days after mailing. D. Facsimile transmission: When sent by facsimile to the facsimile number of the recipient, as provided in section 11.E., below, notice is effective on receipt. However, notice by facsimile can only be effected if: (a) a duplicate copy of the notice is promptly given byfirst-class or certified mail or by overnight delivery, or (b) the receiving party delivers a written confirmation of receipt. Any notice given by facsimile shall be deemed received on the next business day if it is received after 5:00 p.m. (recipient's time) or ono non-business day. E. Addresses and facsimile numbers for purpose of giving notice are as follows: To City: To Contractor: City of Chula Vista Chula Vista Chamber of Commerce 276 Fourth Avenue 233 Fourth Avenue Chula Vista, CA 91910 Chula Vista, CA 91910 • Attn: City Manager 619-420-1269 Facsimile: 619-409-5 884 12. Equal Employment Opportunity Practices Provisions. Contractor certifies that it is in compliance with the Equal Employment Opportunity Requirement of Executive Order 11246, as amended by Executive Order 11375 and supplemented 145CFR, Part 60, Title VII of the Civil Rights Act and any other federal or state laws pertaining to equal employment opportunity and that it shall not discriminate against any employee or applicant for employment on the basis of race, color, religion, age, sex, national origin, ancestry, marital status, political affiliation or physical or mental condition, in matters pertaining to recruitment, hiring, training, upgrading, - transfer, compensation or termination. A. Contractor shall, in all solicitations or advertisements for applicants for employment placed as a result of this Agreement, state that it is an "Equal Opportunity Employer" or that all qualified applicants will receive consideration for employment without regard to their race,creed, color, disability, sex, sexual orientation, national origin, age, religion, Vietnam era Veteran's status, political affiliation, or any other non-merit factor. B. Contractor shall, if requested to so do by the City, certify that it has not, in the performance of this Agreement, discriminated against applicants or employees because of their race, creed, color, disability, sex, sexual orientation, national origin, age, religion, Vietnam era Veteran's status, political affiliation, or any other non-merit factor. C. If requested by the City, Contractor shall provide the City with access to copies of all of its records pertaining or relating to its employment practices, except to the extent such records or portions of such records are confidential or privileged under state or federal law. D. Nothing contained in this Agreement shall be construed in any manner so as to • require or permit any act which is prohibited bylaw. E. Contractor shall include the provisions set forth in this Section in each of its subcontracts. 13. Compliance with Licensing Requirements. Contractor shall comply with all necessary licensing requirements and shall obtain appropriate licenses and display the same in a location that is reasonably conspicuous, and file copies of same with the City. 14. Audits and Records Access. A. Contractor shall make available to the City, its authorized agents, officers, or employees, for examination any.and all ledgers, books of accounts, invoices, vouchers, cancelled checks, and other records or documents evidencing or relating_to the expenditures and disbursement of CVTMD assessment funds, and shall furnish to the City, within sixty (60) days after examination, its authorized agents, officers or employees such other evidence -or information as the City may require with regard to any such expenditure or disbursement charged by Contractor. B. Contractor shall maintain full and adequate records in accordance with City requirements to show the actual costs incurred by the Contractor in the performance of this Agreement. If such books and records are not kept and maintained by Contractor within the City, Contractor shall, upon request of the City, make such books and records available to the City for inspection at a location within City. Contractor shall provide such assistance as may be reasonably required in the course of such inspection. The City further reserves the right to examine and re-examine said books, records and data during the four (4) year period following termination of this Agreement or completiortof all work hereunder, as evidenced in writing by the City, and Contractor shall in no event dispose of, destroy, alter, or mutilate said books, records, accounts, and data in any manner whatsoever for four (4) years after the City makes the final or last payment or within four (4) years after any pending issues between the City and Contractor with respect to this Agreement are closed, whichever is later. [Remainder of Page Intentionally Left Blank.] C. Annually, at the conclusion of the fiscal year (the "audit year"), Contractor shall enlist the services of an independent, licensed, certified public accountant to conduct a fiscal year financial audit of the CVTMD finances for the audit year. The audit report shall include aline- item schedule detailing all expenditures, including a comparison of all expenditures with the specific amounts and activities, as proposed in the Annual Report. In addition, the audit shall verify that the activities on which the CVTMD funds were expended during the audit year comply with Street and Highways Code section 36613 and with the MDP. Contractor shall provide a copy of the audit to the City Council each year within 90 days following the end of the audit year. Thus, Contractor shall submit an audit report for fiscal year 2011-2012 by September 30, 2012; an audit report for fiscal year 2012-ZD13 by September 3D, 2013; and an audit report for fiscal year 2013-2014 by September 30, 2014. 15. Documents and Materials. Contractor shall maintain and make available to City for its inspection and use during the term of this Agreement, all documents, materials relating to the CVTMD, including related electronic transmissions and data, that are in its possession or control {"Documents and Materials"). Contractor's obligations shall continue far four (4) years following termination or expiration of this Agreement, and Contractor shall in no event dispose of, destroy, alter or mutilate said Documents and Materials, for four (4) years following the City's last payment to Contractor under this Agreement. 16. Time of Essence. Time is of the essence in respect to all provisions of this Agreement • that specify a time for performance; provided, however, that the foregoing shall not be construed to limit or deprive a party of the benefits of any grace or use period allowed in this Agreement. 17. City's Reserved Rights. (a) Termination/Disestablishment. City has and reserves the right to suspend, terminate or abandon the execution of any work by Contractor upon adoption of a resolution disestablishing the CVTMD pursuant to Section 36670 of the 1994 La~v. Per the 1994 Law a. resolution to disestablish the CVTMD may only be adopted if (1) the City Council finds there has been misappropriation of funds, malfeasance, or a violation of law in connection with the management of the district and a noticed hearing on disestablishment is held, or (2) in the thirty-day period following the anniversary of the district's formation, businesses paying fifty percent or more of the assessment file a written protest with the city and a hearing on disestablishment is held. The failure of Contractor to comply with any material term of this Agreement shall constitute "malfeasance,' as that term is used in the 1994 Law and, as such, shall be grounds for the City to initiate disestablishment proceedings. Notwithstanding the foregoing City must first provide the Contractor with an opportunity to cure such failure and to comply with this Agreement, pursuant to section 25 hereof. If Contractor takes timely action to cure its default, City shall not proceed with disestablishment. In the event that Contractor commits in excess of two material breaches of the Agreement within any contract year, Contractor shall lose its Section 25 cure rights. In the event the City disestablishes the CVTMD, Contractor shall be entitled to retain CVTMD revenues only for paying the Contractor's then • existing liabilities incurred consistent with the CVTMD Plan and a properly authorized budget of the CVTMD, Pursuant to the 1994 Law, Contractor shall refund to City any remaining CVl-MD revenues or any revenues derived from the sale of assets acquired with CVTMD revenues to enable distribution of the revenues to the businesses which paid the assessment. Contractor shall not continue to incur liabilities after the date of disestablishment. CVTMD revenues may only be used to pay for liabilities incurred or services performed up to the date of disestablishment and shall not 6e used to pay for liabilities incurred or services performed subsequent to that date. (b) Modification of Annual Reoort and/or Improvements and Activities. City has and reserves the right to (1) modify Contractor's annual report in accordance with Section 36650(c) of the 1994 Law; and/or (2) modify the improvements and activities to be funded in any given year, in each case after holding a public hearing in accordance with the procedures set forth in Section 36635 of the 1994 Law. If the City makes modifications that are contrary to the terms of the Management District Plan, the City shall comply with the Plan modifications provisions in Section 36636 of the 1994 Law. Any such modification that includes a levy of a new or increased assessment must also comply with the procedures set forth in Section 35623 of the 1994 Law. 18. Choice of Law. This Agreement, and any dispute arising from the relationship between the parties hereto, shall be governed by the laws of the State of California. 19. Advertising or Publicity. Contractor shall not use, reproduce or copy the seal of the City and shall not represent the City in an official capacity as spokesperson or officer or agent or use the name City of Chula Vista, or the names of the City's officers, directors, employees or agents, in advertising or publicity releases or otherwise without securing the prior written consent of the City in each instance unless set forth in this Agreement. Nothing in this section prohibits Contractor from using the name Chula Vista Tourism Marketing District or City of Chula Vista for regional identification for promotion and marketing of the CVTMD. 20. Entire Agreement. This Agreement, including all attachments, exhibits, and any other documents specifically incorporated into this Agreement, shall constitute the entire agreement between City and Contractor relating to the subject matter of this Agreement. As used herein, Agreement refers to and includes any documents incorporated herein by reference and any exhibits or attachments. This Agreement supersedes and merges all previous understandings, and all other agreements, written or oral, between the parties and sets forth the entire understanding of the parties regarding the subject matter thereof. This Agreement may not be modified except by a written document signed by bath parties. 21. Modification of Agreement. This Agreement may be supplemented, amended or modified only by mutual agreement of the parties; however, this Agreement shall be subject to any amendments to the CVTMD Management District Plan adopted by the City Council. No supplement, amendment or modification of this Agreement, except for a duly adapted amendment to the CVTMD Management District Plan, shall be binding unless it is in writing and signed by authorized representatives ofboth parties. 22. Subcontracting/Assignment. Contractor shall not subcontract, assign or delegate any- portion of this Agreement or any duties or obligations hereunder without the City's prior written approval, and subject to City's sole discretion. A. Neither party shall, on the basis of this Agreement, contract on behalf of or in the name of the other party. Any agreement that violates this Section shall confer no rights on any party and shall be null and void. B. Contractor shall remain fully responsible for compliance by its subcontractors,with all the terms of this Agreement, regardless of the terms of any agreement between Contractor and its subcontractors. 23. Survival. The obligations of this Agreement, which by their nature would continue beyond the termination or expiration of the Agreement, including without limitation obligations regarding indemnification, ownership of documents, and conflict of interest, shall survive termination or expiration for two {2) years. 24. Severability. If a court of competent jurisdiction holds any provision of this Agreement to be illegal; unenforceable, or invalid in whole or in part for any reason, the validity and enforceability of the remaining provisions, or portions of them, will not be affected, unless an essential purpose of this Agreement would be defeated by the loss of the illegal, unenforceable, or invalid provision. 24. Severability. If a court of competent jurisdiction holds any provision of this Agreement to be illegal, unenforceable, or invalid in whole or in part for any reason, the validity and enforceability of the remaining provisions, or portions of them, will not be affected, unless an essential purpose of this Agreement would be defeated by the loss of the illegal, unenforceable, or invalid provision. 25. -Termination for Cause. If, through any cause, Contractor shall fail to fulfill in a timely and proper manner Contractor's obligations under this Agreement, or if Contractor shall violate • any of the covenants, agreements or stipulations of this Agreement, City shall have the right to terminate this Agreement by giving written notice to Contractor of such termination and specifying the effective date thereof at least fifteen days before the effective date -of such termination. Contractor shall have ten days from the notice date to cure the violation(s). Upon a showing of a good faith effort toward curing the violation(s), the City Manager may, in his or her sole discretion, extend the deadline by which the Contractor must cure. Any such extension shall be valid only if in writing and signed by the City Manager, or designee. If Contractor does not cure the violation(s) to the City's satisfaction, not to be unreasonably withheld, City shall be - entitled to terminate the Agreement without further notice. In addition, such violation and failure to cure shall constitute "malfeasance," pursuant to Section 17., above. 26. Attorneys' Fees. Should a dispute arising out of this Agreement result in litigation, it is agreed that the prevailing party shall be entitled to a judgment against the other for an amount equal to reasonable attorneys' fees and court costs incurred. The "prevailing party" shall be deemed to be the party who is awarded substantially the relief sought. 27. Capacity of Parties. Each signatory and party to this Agreement warrants and represents to the other party that it has legal authority and capacity and direction from its principal to enter into this Agreement, and that all necessary resolutions or other actions have been taken so as to enable it to enter into this Agreement, • [Remainder of Page Intentionally Left Blank.] City of Chula'Vista By SEE ATTACffi~7T James Sandoval Title: City Manager Date: Chul Vi Chamber of Commerce L°s0. Co+~.ea, (Print Name) ~ , _ Title: C.~O Date:3 C3 X01 a • ATTACHMENT Signature Page To Agreement for Tourism Marketing District Management Services Between City of Chula Vista and Chula Vista Chamber of Commerce City of Chula Vista ~ 1, By Cheryl Cox, Ma~or ' . Attest: u~ ~ ~ Dohna Norris, ity Clerk • Approved as to form: ~~ Glen Googin ~, CifpAt orne~ ' I j .I EXHIBITA Scope of Services Contractor shall provide the following services: 1. Contractor shall cooperate with City and City staff in the performance of all work hereunder. 2. Contractor will provide projects, programs and activities that benefit lodging establishments within the CVTMD in accordance with the CVTMD Management District Plan attached hereto and any subsequent amendments thereto. 3. Contractor will provide and fund such additional projects, programs and activities to promote tourism in Chula Vista as may be made possible through other non-assessment funding sources. These other funds must be accounted for separately from assessment funds. 4. Contractor shall perform responsibilities under the Property and Business Improvement District Law of 1994 (the "Law") including but not limited to: a. Preparation of the Annual Report required by section 36650 of the Law. The Annual Report shall include any recommended changes to boundaries, the improvements and activities to be provided for that fiscal year, an estimate of cost for providing the improvements and activities, the method and basis of levying the assessment in sufficient detail to allow each business owner /~ to estimate the amount of the assessment to be levied against his/her business for that fiscal ~l year, the amount of any surplus or deficit revenues to be carried over from a previous fiscal year, and the amount of any contributions to be made from sources other than assessments. The Annual Report shall also include the proposed budget' for the upcoming fiscal year, describing the specific activities to be funded by TMD assessments. The proposed budget shall be reported in two formats: (i} by major financial category; and (ii) by activity. The proposed budget shall be in the format set forth in Exhibit B, with additional -line items added, if appropriate. The Annual Report shall be filed with the City Clerk and presented to the City Council for approval. b. Seeking and retaining subcontractor(s) to prepare the Annual Report. c. Delivering the Annual Report at least thirty (30) days preceding the fiscal year for which assessments are to be levied and collected to pay the costs of the improvements. 5. Contractor shall develop and maintain financial records related to receipt,and/or expenditure of all funds received from City. 6. Subject to the City's approval, Contractor may retain subcontractors to de(ivdr the services herein; however, Contractor shall remain fully responsible for compliance by its contractors with all the terms of this Agreement, regardless of the terms of any agreement between the Contractor and its subcontractor. 7. Annually, Contractor shall enlist the services of an independent, licensed, certified public accountant to conduct a fiscal year financial audit of the CVTMD finances. The audit report shall include a line-item schedule detailing all expenditures, including a comparison of all expenditures with the specific amounts and activities designated in the MDP. In additioh, the auditor shall verify that the CVTMD funds were used in accordance with the CVTMD Plan and the Annual Report to the City Council for the fiscal year which is the subject of the audit. Contractor shall provide a copy of the audit to the City Council each year within 90 days following the end of the fiscal year which is the subject of the audit. 8. TMD Committee, a. In General. Contractor shall form and maintain in effect throughout the existence of the CVTMD a committee (the "TMD Committee'). The TMD Committee .shall include representatives from assessed hotels and motels ("Hotel/Motel Representatives"), in sufficient number to comprise a majority of the voting members of the committee at all times. The TMD Committee shall be formed and the Hotel/Motel Representatives shall be in place by June 15, 2D12. b. Quorum Requirements. Attendance by a majority of the Hotel/Motel representatives shall be required for a quorum of the TMD Committee. Notwithstanding the foregoing, provided that Contractor's bylaws include provisions for adequate advance notice of committee meetings, in the event of repeat absences by one or more Hotel/Motel Representatives, such bylaws may also include reasonable provisions to allow far TMD Committee action notwithstanding the fact that a majority of Hotel/Motel representatives are not in attendance. For purposes of this Section, "adequate advance notice' shall mean email or other electronid means at least three (3) days prior to the meeting and posting notice of the meeting in accordance with the provisions of the Ralph M. Brown Act. )f no electronic means of providing notice to a committee member are available, personal delivery or overnight delivery service may be used; in such cases the notice shall be delivered at least three (3) days prior to the meeting: . c. Election of Hotel/Motel Representatives. Hotel/Motel Representatives shall be elected by vote of the assessed hotels/motels in accordance with a qualifications system and process that assures representation on the TMD Committee of across-section of Chula Vista hotel/motel industry types determined by using accepted industry standards (e.g., number of rooms, revenue per available room, average daily rate, and/or other industry relevant hotel/motel type indicators). One of the HotelJMotel Representatives maybe appointed by Contractor provided that such party is an authorized representative of at least one Chula Vista hotel/motel and the Chula Vista hotel(s)/motel(s) that such party represents is/are not also represented by a directly elected Hotel/Motel Representative. d. Required Approval of Maior Decisions. TMD Committee approval shall be ' required, at a minimum, for the following: (1) prior to submittal to the City Council for consideration, each year's Annual Report, including, without limitation, the budget and description of that year's proposed improvements and/or activities, goals and objectives, and a mechanism for evaluating the benefits of such improvements and/or activities to the assessed hotels/motels.; and (2) TMD Committee policies, which shall include, at a minimum, provisions ' for the notice and conduct of meetings, and the Hotel/Motel Representatives election process, . consistent with the terms of this Agreement. Exhibit B Chula Vista Tourism Marketing District Proposed Budget FY 2011-12 Revenues: Projected Assessments ~ $ - ~ Assessments Carried from Prior Years $ - TotalFUndSAVallableFY2011-12 $ - Expenditures: Personnel Cost: Salaries $ - Benefits $ - Payroll Taxes $ - ' Total Personnel Cost $ - " Off1 ce/Adml nlstrative Office Supplies 5 - Formation Expense $ - consultants - " IndependentAUdit $ - AttorneyServices $ - CityofNAdministrativeSUpport $ - . Total Office/Administrative ~ ~ $ - A dve riffs ingJ Ma rketi ng List by Payee $ - $ - $ - Total Advertising $ - Reserves/Contingencies $ TMD Activities Proo. BUdRet Y2011-12 Direct Indirect ~ Total ~ListofActiviti es (ex. Parade of Bands, $ $ $ - StarNewsAdvertising-Shop/Dine) ~ $ $ $ - $ $ $ - $ $ $ - $ $ $ - $ $ ~ $ ;3 % Funded from Staffine Funded.hy TMD %Funded TMD Other Chamber Funds (Example-Graphics Designer) 45% D% " Notes; TMD Activities should correlate to Goals&Objectives Included In Exhibit 6, Direct Casts include expenses incurred for paying vendors, advertising, registration fens etc, supporting7MD activities orimprovements. Indirect Cost Include personnel, consultant and administrative expenses allocated proportionally haled on direct rost or % of time spent on activity,.. SAMPLE DRAFT 2011-2012 CVTMD Activities Goals & Objectives EXHIBIT B (Cont.} MILESTONES/ # GOAL OBJECTIVES STATUS TARGET Develop Contract for Site and Launch Jan March Done Develop Draft Agreement for Business February April Done participation Coordinate w/City Service Based Effort March to Aprii Done Obtain Board approval and Sign Contract March April Done Train Staff and Launch with contractor April -June In progress, staff trained contact with Businesses begun 1 Social Media Program 100 businesses 33%ofgoal achieved Initiate Business contacts and provide 30 postings per 50% ofgoal achieved sample tweet and Facebook postings businesses per month TMD/Chamber postings-event, hotel, 40% of goal achieved, Ongoing, restaurant and Business support 120 per month Record and Monitor Posting Response Volume and quality. ~~Q ~~ ~_ ~~ cC~-i1~J~ d0~~ OFFICE OF THIE MAYOR July 10, 2012 The Honorable Robert J. Trentacosta, Presiding Judge Superior Court of California, Comtty of San Diego Main Courthouse, 3`a Ploor 220 West Broadway San Diego, CA 92101 RE: Grand Jury Report: "City of Chula Vista Tourism Marketing District" Dear Judge Trentacosta, As Mayor of Chula Vista and on behalf of the City Council per Council action at its regular meeting on July l0, 2012, please know that the Chula Vista City Comtci] received the above-named report. The City Council and I take seriously Recommendation 12-36 of the San Diego County Grand Jury: Closely monitor implementation of the March 2012 contract behveen the City and Chamber for TD1D operations and the independent audit it requires to ensure the finances and activities are targeted to the purpose required by the Management District Plan. We appreciate the attention that the Grand Jury gave to addressing their concern. ~r working with the board of the Tourism Marketing District (TMD) for a period of several months, the City Manager's staff and the City Attorney recommended and the City Council adopted a contract with the Chula Vista Chamber of Conmterce to administer a Tourism Marketing District. `fhe contract calls for an annual financial report, budget and written goals, objectives and status for proposed activities and improvements to implement the conh'act to be submitted in June and an audit performed and submitted Yo the City in September. The City fidly intends to monitor the Chamber's implementation and compliance with this contract. Representatives from the Chamber of Cormnerce, including Executive Director Lisa Cohen and their counsel have attended publicly- noticed and televised Council meetings over the past several months. Conversations held in public resulted in TMD improving outreach to its members and a renewed commitment that members be made aware of TMD operations decisions. 1'he City Manager has assured the public and the City Council that his staff is available to work with individual and collected hotel/motel owners upon request. The City Attm aey has made his office avai]able as well. We anticipate that the TMD will meet the demands of its contract with the City of Chula Vista, hicluding that the audit requhed be delivered to our staff prior to October 15. We have also reviewed each of the Grand Jury's findings enumerated in the Report. It is om~ understandutg that the responding entity for each of these findings is the Chula Vista Tourism Marketing District Committee. Accordingly, [his letter does not include a specific response to those items. The City Council and I recognize the economic value in promoting Chula Vista as a destination and in increashtg hote]/motel occupancy. Respectfully, Cheryl Coz ~r Cc: Jim Sandoval, City Manager Lisa Cohen, Executive Duector, Chula V ista Chamber of Commerce Lisa Johnson, President, Chula Vista Chamber of Commerce 276 Tourth Avenue ^ Chula Vista ^ Califm~nia 91910 = (619) 691-5044 ~ Gax (619) 476-5379 ~ranca~:~me~ xerrv~ea r,re. ~CHUI~\VISTA CHAMBER OF COMMERCE (' `'; Chul`a~ista Convention &VisitorsBureao ... - - TOURISM 1VlARK.ETI1vG DISTRICT August 21, 2012 The Honorable Robert J. Trentacosta, Presiding Judge Superior Court of California, County of San Diego Main Courthouse, 3`d Floor 220 West Broadway San Diego, CA 92101 ~~~~ ~~~D faUG 212012 ~+G~1 V 6 ._----- vF'~GCG Re: Response to Grand Jury Report, "City of Chula Vista Tourism Marketing District" Hon. Judge Trentacosta: I am writing in response to the Grand Jury report filed on May 23, 2012, regarding the Chula Vista Tourism.Marketing District (TMD). The Grand Jury mistakenly purports that the Chula Vista Chamber of Commerce (Chamber) is a responding agency within the meaning of Penal Code section 925a. Section 925a applies to incorporated cities and joint powers agencies. The Chamber is neither an incorporated city nor a joint powers agency. The Chamber serves as the Owners' Association for the TMD in accordance with Streets and Highways Code section 36614.5, which states, "An owners' association is a private entity a_nd may not be considered a public entity for any purpose, nor may its board memhers or staff be considered to be public officials for any purpose." Despite this, we have addressed each finding and recommendation below. FINDINGS Finding 01: Many TMD activities are not in compliance with the Management District Plan. Disagree. All activities are in compliance with the Management District Plan. Finding 02; The blurring of accountability and responsibility makes it difficult to determine how staff and funding are allocated among the Chamber, TMD and ConVis. Disagree. The accountability is clear. The TMD is not an entity, it is a funding stream managed by the Chamber. The Chamber must present an annual report on TMD funds and programs, which is reviewed and approved by the City Council on an annual basis. ~~3 Fourth Avznue Chula Viata, CA 9I 910 619.420.6603 fax 619.420.1269 ~nvn-.chula~istachamber.ore ~~'s~-w.chulavis[acouvis.com Honorable Robert J. Trentacosta, Presiding.ludge August 21, 2012 Page 2 of 2 Finding 03: The TMD's varied reporting of its revenue is confusing to observers. Disagree. Although the grand jury was confused, the reporting is clear and consistent RECOMMENDATIONS Recommendation 12-37: Require the TMD staff to standardize its accounting methods in accordance with Governmental Accounting Standards Board rules. Implemented. The Chamber has followed the Generally Accepted Accounting Principles propounded by the Governmental Accounting Standards Board in its management of the TMD funds. Additionally, an Rr-P was issued on April 25, 2012 for an accountant to examine the Chamber's financial records in accordance with GAAP; proposals were received and reviewed, and an accountant, Ronald E. Grund, was hired on May 9, 2012. The audit is in process and is expected to be submitted to the City prior to October 15. Recommendation 12-38: Require the TMD to provide an itemized accounting for the $219,b00 reimbursement expense (in the Visitor Information Center expense report forlanuary 2008 -June 2009) and present it to the City Council for formal approval. . ~ Implemented..An itemized accounting was provided to City staff in 2009. It will 6e re-submitted to the City Council with the 2012 annual report. Recommendation 12-39: Establish goals and performance measures consistent with the Management District Plan. Irnplemenied. Goals and performance measures have been in place, and are submitted to the City Council yearly as part of the annual report. Recommendation 12-40: Adopt written personae! policies and procedures, including performance evaluations and salary review. Implemented. The Chamber has had such policies in place throughout the term of the TMD. An employee handbook is utilized. salary reviews are conducted by staff, reviewed by the finance committee, and approved by the Board as part of the annual budget. Performance evaluations are conducted annually with staff. Policies for salary and performance reviews are delineated in the employee handbook. For your information, enclosed is a copy of our initial response to the Grand Jury regarding technical inaccuracies in the report- Thank you for your attention to this matter. Regards, Lisa Cohen, Chief Executive Officer • Grand.Jury County of San Diego 330 W. Broadway, Suite 477 San Diego, CA 92101-8696 Re: Grand Jury Report: City of Chula Vista Tourism Marketing District Dear Sirs: We are in receipt of the above-mentioned report. I am writing to address technical inaccuracies in the report. Entity Status Throughout the report, the TMD is referred to as if it is an entity. Some examples of this include: • Grand Jury evaluated TMD operations and finances... e The TMD should standardize its accounting practices... The TMD gives regular status reports... • As the TMD was preparing its 2010-2011 annual report ... The TMD, however, is not an entity; it is merely a funding stream which is managed by an entity. As such it does not conduct operations, give reports, etc. Streets and Highways Code section 36614.5 provides detail on the entity, known as the owners' association, which is to manage the funding produced by the TMD: "Owners' association" means a private nonprofit entity that is under contract with a city to administer or implement activities and improvements specified in the management district plan. An owners' association maybe an existing nonprofit entity or a newly formed nonprofit entity. An owners' association is a private entity and may not be considered a public entity for any purpose, nor may its board members or staff be considered to be public officials for any purpose. All references to the TMD as an entity should be updated to refer to the appropriate element of the Chula Vista Chamber of Commerce and Visitors Bureau, which is the private nonprofit entity appointed by the city to act as the owners' association per section 36614.5 above. 233 Fourth Avenue Chula Vista, CA 91910 619.420.6603 fax 619.420.1269 www.chttlavist:tchambcr.org San Diego County Grand Jury May 22, 2012 Page 2 of 2 eudpet and Accountinp Methods The budget chart shown on page 3 of the report is grossly misleading. The chart indicates that only 10% of the TMD funds was spent on marketing; what it does not say is that most of the funding allocated to staff actually provided marketing efforts. The chart was taken from a standardized form which does not adequately reflect the efforts undertaken with TMD funding. The form did not reflect Generally Accepted Accounting Principles (GAAP), which state in standard 4s-8, "If such staff spend a portion oftheir time directly supervising program services or categories of other supporting services...theirsglaries and expenses shall be allocated among those functions" Much of the staff allocation is more appropriately categorized as marketing expenses -those staff are directly engaged in undertaking and implementing marketing programs. Finding 01 This finding is disputed as it is based on inaccurate information. TMD funds have been used to provide marketing programs in accordance with the Management District Plan. • Reimbursement of Visitor Center Costs Visitor center costs were approved by Council as part of the Management District Plan. The Plan, on page 9 under Communications and Public Relations, refers to "visitor information center / servicing:' Thank you for your time and efforts in this matter. Please do not hesitate to contact me if I can be of further assistance in clarifying these items. Regards, ~.~~, ~-- Lisa Cohen CEO 233 Fourth Avenue Chula Vista, CA 91910 619.'420.6603 fax 619.420.7269 wwN.chulavistachambcr.org \I/~ .±~. an of CHULA VISTA OFFICE OF THE CITY ATTORNEY PROCEDURES FOR ADMINSTRATION OF ANY PETITIONS 1'1-1AT MIGHT BE SUBMITTED BY HOTEL/MOTEL TMD MEMBERS PROPOSING DISESTABLISHMENT OF THE CI-IULA VISTA TOURISM AND MARKETING DISTRICT ("CVTMD") June°l 2, 2012 Annual Notification. The Ciry Manager, or designee, shall notify the CVTMD Members on or:.before June 151, that written petitions for disestablishment may be submitted during the 30-day petition period commencing on July 14`~ and ending on August 12th. This notice shall be given both by mail or electronically to the addresses provided by the CVTMll Members. 2. Petition Contents and Timing. • 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 ls` and no later than August 12`h b. If the signator of a submitted petition no longer owns the business as of August 12`h of the petition year, The petition shall not be considered; however, the current owner may submit a petition in its place, up until August 12`h. 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`h through August 12`h (or the next business day, if the 12~h 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 form petition will be available through the City's websitc, 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: l . 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 clarif cation 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 30`h. Notice of any delinquency will be sent by on or before August 15°i. 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 3 I st. 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. • 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. 1f 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 disestablishmentwill 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 ~0% threshold has been reached, or any other matter must be submitted to the City Attorney, in writing, after August 12`~ 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 invalidi 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 validity of one or more petitions or challenges the determination that the 50% threshhold was reached. • 3 ,, ~~tr~ r:.~.:. c1TVOF Finance Department ~UTAVISTA TO: Mayor and City Council FROM: City Attorney C,StcL~`--" 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. 1n 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 21s` • 276 Fourth Avenue, Chula Vista, CA 91910 I www.chulavistaca.gov I (619) 691.5051 ~ fax (619) 585-5685 • COUNCIL RESOLUTION N0. 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 ASSESSMEl~TTS, 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 ofthe CVTMD; and WHEREAS, the 30-day petition period for 2012 commenced on July ~14`h 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 ar 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 C~ 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 heazing to consider disestablishment of t_he CVTMD shall beheld 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 A'o. 2012-172 supersedes, repeals and replaces the original Resolution No. 2012-172, dated September 11, 2012. 1-3 Resolution No. Page 3 LJ 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 ~ leri . Gc~og Finance Director/ Treasurer ~~ Attorney • • 1-4 ~ - ~- ~. CITY COUNCIL - AGENDA STATEMENT ~~~ CITY OF CHULA VISTA SEPTEMBER 11, 2012, Ttem -/ 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, AIvTD NOTICING A PUBLIC HEARING TO CONSIDER SAME FOR OCTOBER 16, 2412 AT 4:40 P.M. SUBMITTED BY: CITY MAI~TAGER S T ~ S S FINANCE DIREC~~TREASUREmw try ® CITY CLERK REVIEWEll BY: ASSISTANT CITY MANAGER/ DIRECTOR OF DEVELOPMENT SERV CES FG ~' ~' p' CITY ATTORNEY 4/STNS VOTE: YES ^ NO ^X SUMMARY The Chula Vista Tourism aad Marketing District ("CVTMD") was established in 2009 pursuant to the Property and Business Improvement District Law of 1994 (the '`PBID LawT'). The PBID Law provides that the CVTMD may be disestablished by petition of 50 percent oz more of the assessed business owners. Or. 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 14ei 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 heazing 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, pursuaz~t to Section 15060(c)(3) of the State CEQA Guidelines the activity is not subject to CEQA. Thus, no environmental review is necessazy. RECOiviMENDATION 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 - `fhe period for presenting such a petition is the 30-day period commencing each yeaz on the anniversary of the . establishment of the district a The CVTMD was established on July 14, 2009. The petition period for 2012 commenced on July l4i° and ended on August 13'". 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. Beczuse of this, the City Attorney's Office identified the need for procedures to supplement the State code in this azea. Afrer extensive outreach and input fcom 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 8'''). Draft procedures, along with a request for comments, were also transmitted directly to the CVTMD hoteUmotel owner/operators in advance of the May 8`" HoteUMotel 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 • ~ California Streeu and Highways Code §36670(a)(2). 3 California Streets and Highways Code §36670. 7-6 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 I, 2011 through June 30, 2012. As of the August 30'n 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`n. A review performed by Finance Department staff determined that petittons to disestablish the CVTMD have been received from business owners representing 5337% of the total CVTMD assessments for the subject period ($484,770. 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 Clezk 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 that the 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 Sneeze & Highways Code §36670(6). 1-7 SEPTEMBER I1, 2012, Item q Page 4 of 5 2. Contain the time and place of the public hearing before the City Council when disestablishment will be considered. 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 ail 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. Phis 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 afrer 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 reseazching the extent of discretion the City Council may have at this hearing. A report that ouflines the parameters of this discretion for both the City Council and the public will be provided as soon as possible, well before the October • heating. The City Attorney will also be providing the City Council with a report in response to its referral regazding 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 36672. 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 disestablishmert petition process for the Chula Vista Tourism and Mazketing District (CVTMD) will be reimbursed from the TMD 1-8 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 incun•ed 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 Disestablishment ofthe Chula Vista Tourism and Mazketing District ("CVTMD") Prepared by: T~any rillen, Treasury Manager, Finance Department ~-9 APPENDIX 1-THE PROPERTY AND BUSIIV"ESS IMPROVEMENT DISTRICT LAW OF 1994 STREETS AND HIGHWAYS CODE SECTION' 36600 et seq. As Amended Janumy I, 2009 Declazaaons 36600. This part shall be known and may be cited as the "Property and Business Improvement District Law of 1994." 36601. The Legislature finds and declares all of the following: {a) Businesses located and operating within the business districts of this state's communities are economically disadvantaged, are underutilized, and are unable to attract customers due to inadequate facilities, services, and activities in the business districts. (b) It is in the public interest to promote the economic revitalization and physical maintenance of the business distracts of its tides in order to create jobs, attract new businesses, and prevent the erosion of the business districts. (c) It is of particulaz local benefit to allow tides to fund business related improvements, • maintenance, and activities through the levy of assessments upon the businesses or real property that benefits from those improvements. (d) Assessments levied for the purpose of providing improvements and promoting actinides that benefit real property or businesses aze not taxes for the general benefit of a city, but aze assessments foz [he improvements and activities which confer special benefits upon the real property or businesses foz which the improvements and actic~ties aze provided. 36602. The purpose of this part is to supplement previously enacted provisions of law that authorize cities to levy assessments within a business improvement azea. This part does not affect or limit any other provisions of law authorizing or providing for the furnishing of improvements or activities or the raising of revenue for these purposes. 36603. Nothing in this part is intended to preempt the authority of a charter city to adopt ordinances providing for a different method of levying assessments for similar or additional purposes from those set forth in this part. A property and business improvement district created pursuant to this part is expressly exempt from the provisions of the Special Assessment Invesrigation, Limitation and Majority Protest Act of 1931 (Division 4 (commencing with Section 2800)). 36603.5. Any provision in this part that conflicts with any other provision of law shall prevail over the other provision of law. 36604. This part is intended to be construed liberally and, if any provision is held invalid, the S remaining provisions shall zemain in full force and effect. Assessments levied under this par, aze not special taxes. Chula Vista Tourism Marketing District Management District Plan Page 11 18-16 Definirions 36606. "Assessment' means a levy fo: the purpose of acquiring, constructing, installing, or maintaining improvements and promoting activities which will benefit the properties or businesses located within a propene- and business improvement district 36607. "Business" means all types of businesses and includes finandal institutions and professions. 36608. "City" means a city, county, city and county, of an agenry or entity created pursuant to Article 1 (commencing with Section 6500) of Chapter 5 of Divtsion 7 of Tide 1 of the Government Code, the public member agenaes of which includes only cities, counties, or a city and county. ~~ 36609. "City council means the city council of a city ox the board of supervisors of a county, or the agency, commission, or board created pursuant to a joint powers agreement and which is a city within the meaning of this part 36610. "Improvement" means the acquisition, construction, installation, or maintenance of any tangib]e propene oath an estimated useful life o£ five years or more including, but not limited to, the following: (a) Parking facilities. (b) Benches, booths, kiosks, airplay cases, pedestrian shelters and signs. (c) Trash receptacles and public xeswooms. • (d) Iaghting and heating facilities. (e) Decorations. (f) Pazks. (g) Fountains. (h) Planting areas. (i) Closing, opening, widening, or nauowing of existing sweets. (j) Facilities or equipment, or both, to enhance secuntj~ of persons and propert~~ writhia thearea. (k) Ramps, sidewalks, plazas, and pedestrian malls. (1) Rehabilitation or removal of existing structures. 36611. "Property and business improvement district," or "district," means a propext~ and business improvement district established pursuant to this pan. 36612. "Property" means real property situated within a distract. 36613. "Activities" means, but is not limited to, all of the following: (a) Promotion of public events which benefit businesses or real property in the distract. (b) Furnishing of music in any public place within the district. (c) Promotion of tourism within the district. (d) Mazketing and economic development, including retail retention and recruitment. (e) Providing security, sanitation, graffiti removal, street and sidewalk cleaning, and other municipal services supplemental to those normaIIy provided by the municipality. (~ Acuviries which benefit businesses and real property located in the district. • 36614. "_Vanagement district plan" or "plan" means a proposal as defined in Section 36622. Chula Vista Tourism Marketing District Management District Plan 'Page 12 18-17 366145. "Owners' association" means a private nonprofit entity that is under contract with a city to • administer or unplement activities and improvements specified is the management distract plan. An owners' association may be an eadsting nonprofit entty or a newly formed nonprofit entity. An owners' association is a private entity and may not be considered a public entity- for any purpose, nor max its board members or staff be considered to be public officials fox any purpose. I~Sotwithstanding this section, an owners' association shall comply w2th the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2 of Tide 5 of the Government Code), at all times when matters within the subject matter of the district are heazd, discussed, or deliberated, and with the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code}, for all documents relating to activities of the distract. 36615. "Property owner" ox "owner" means any person shown as the ownez of land on the last equalized assessment roll or otherwise known to be the owner of land by the city council. The city council has no obligation to obtain other information as to the ownership of land; and its determination of ownership shall be final and conclusive for the purposes of this pan. Whenever this subdivision requires the signature of the property owner, the signature of the aurhovzed agent of the property owner shall be sufficient. 3661 G. "Tenant" means an occupant pursuant to a lease of couv~nercial space or a dwelling unit, ocher than an owner. Prior Law 36617. This part provides an alternative method of financing certain improvements and activities. The pro~tisions of this part shall not affect or limit any other provisions of law authorizing or providing for the furnishing of improvements or activities or the raising of revenue for these purposes. Every improvement azea established pursuant to the Pazking and Business Improvement Area Law of 1989 (Part 6 (commencing with Section 36500) of this division) is valid and effective and is unaffected by this part. Establishment 36620. A property and business unprovement district may be established as provided is this chapter. 36620.5. A county tray not form a distact within the tezr[orial jurisdiction of a city without the consent of the city council of that city. A city may not form a district within the unincorporated tecitore of a county without the consent of the board of supervisors of that county. A city may not form a district within [he territorial jurisdiction of another city without the consent of the city council of the other city. 36621. (a) Upon the submission of a written petition, signed by the property oz business owners in the proposed district who will pap more than SO percent of the assessments proposed to be levied, the tits council mac initiate proceedings to form a district by the adoption of a resolution expressing • its intenrion to form a district. The amount of assessment attributable to property of a business owned by the same property or business owner that is in excess of 40 pezcent of the amount of all Chula Vista Tourism Marketing District Management District Plan Page 13 18-18 • assessments proposed to be levied, shall not be included in detem+ining whether the petition is signed by propem or business owners who will pap more than SO percent of the total amount of assessments proposed to be levied. (b) The petition of property or business owners required under subdi~rision (a) shall include a sum**~a*c of the management district plan. That summary shall include all of the following: (1) A map showing the boundaries of the district. (2) Information specifying where the complete management distract plan can be obtained. (3) Information specifying that the complete management district plan shall be famished upon request. (c) ine resolution of intention described in subdivision (a) shall contain all of the following: (1) A brief description of the proposed activities and improvements, the amount of the proposed assessment, a statement as to whether the assessment will be levied on property or businesses within the cLst-ict, a statement as to whether bonds will be issued, and a description of the exterior boundaries of the proposed district. The descriptions and statements do not need to be detailed and shall be sufficient if they enable an owner to generall} identify the nature and extent of the improvements and activities and the location and extent of the proposed district. (2) A tune and place for a public hearing on the establishment of the property and business improvement district and the levy of assessments, which shall be consistent with the requirements of Section 36623. 36622. The management district plan shall contain all of the following: (a) A map of the distract in sufficient detail to locate each parcel of property and, if businesses aze to be assessed, each business within the district. (b) The name of the proposed district. • (c) A description of the boundaries of the district, including the boundaries of benefit zones, proposed for establishment or extension in a manner suffident to identify the affected lands and businesses included. The boundaries of a proposed property assessment district shall not overlap with the boundaries of another existing property assessment district created pursuant to this part. This part does not prohibit the boundaries of a district created pursuant to this pazt to overlap with other assessment districts established pursuant to ocher provisions of law, including, but not limited ro, the Parltirtg and Business Improve tent 'area Lzw of 1989 (Part 6 (commencing with Section 36500)). Ties part does not prohibit the boundaries of a business assessment district created pursuant to this part to overlap with another business assessment district created pursuant to this part. This pare does not prohibit the boundaries of a business assessment distract seated pursuant to this part to overlap with a property assessment district created pursuant to this part. (d) T1ze improvements and activities proposed for each yeaz of operation of the district and the maximum cost thereof. (e) The total annual amount proposed to be expended for vnprovements, maintenance and operations, and debt serc-ice in each peaz of operation of the distract. (~ The proposed source or sources of financing, including the proposed method and basis of lev~~ing the assessment in suffiaent detail to allow each property or business owner to calculate the amount of the zssessment to be levied against his or her property or business. The plan also shall state whether bonds will be issued to finance improvements. (g~ the tune and manner of collecting the assessments. (h) The specific number of yeazs in which assessments will be levied. In a new district, the maximum cumber of years shall be five. Upon renewal, a district shall have a te_~m not to exceed ID yeazs. Notwrithstanding these limitations, a district created pursuant to this part to finance capital • improvements with bonds may levy assessments until the maximum maturity of the bonds. The management district plan map set forth specific increases in assessments for each yeaz of operation of the distract. Patre 14 ~ Chula Vista Tourism Marketing District Management District Plan a ~ 18-19 (i) The proposed time for implementation and completion of the management district plan. • (j) Any proposed rules and remilations to be applicable to the district. (k) A list of the properties or businesses to be assessed, including the assessoi s pazcel numbers for properties to be assessed, and a statement of the method or methods by which the expenses of a distract will be Imposed upon benefited real property or businesses, in proportion to the benefit received by the properrc~ or business, to defray the cost thereof, including operation and maintenance. The plan may provide that all or anv class or categorc of real property which is exempt by law from real property taxation mac nevertheless be included within the boundaries of the district but shall not be subject to assessment on real property. (1) Any other item or matter required to be incorporated therein by the city council. 36623. (a) If a dry council proposes to le~~}- a new or increased property assessment, the notice and protest and hearing procedure shall comply with Section 53753 of the Government Code. (b) If a tit}' council proposes to lev}' a new or increased business assessment, the notice and protest and hearing procedure shall comply with Section 54954.6 of the Government Code, except that notice shaIl be mailed to the owners of the businesses proposed to be assessed. A protest may be made orally or in venting by any interested person. Every written protest shall be filed with the Berk at ox before the time fixed for the public hearing. The vin' council may waive ant irregularity in the form or content of anv written protest. A written protest tray be withdrawn in venting at any time before the conclusion of the public hearing. Each vrntten protest shall contain a description of the business in which the person subscribing the protest is interested sufficient to identify the business and, if a person subscribing is not shown on the offiaal records of the city as the owner of the business, [he protest shall contain or be accompanied by written evidence that the person subscribing is the ou-ner of the business. A written protest which does not comply with this section • shall aot be counted in determ;n;ng a majority protest. If uwritter. protests aze received from the owners of businesses in the proposed district which will pap 50 percent or more of the assessments proposed to be levied and protests are not withdrawn so as to reduce the protests to less than 50 percent, no further proceedings to levy the proposed assessment against such businesses, as contained in the resolution of intention, shall be taken for a period of one yeaz from the date of the finding of a majorit}- protest by the cite council. 36624. At the conclusion of the public hearing to establish the district, the city council may adopt, rep-ire, change, reduce, or modify the proposed assessment or the type or types of improvements and activities to be funded with the revenues from the assessments. Proposed assessments may only be reused by reducing anp or all of them. At the public hearing, the cite council may onl}• make changes in, to, or from the bounaaries of the proposed property and business improvement district that will exclude temtory that will not benefit from the proposed improvements or activities. Any modifications, re~sions, reductions, or changes to the proposed assessment dtstnct shall be reflected in The notice and map recorded pursuant to Section 36627. 36625. (a) If the city council, following the public heating, decides to establish the proposed property and business improvement district, the dey council shaIl adopt a resolution of formation that shall contain all of the following: (1) A beef description of the proposed activities and improvements, the amount of the proposed assessment, a statement as to whether the assessment will be levied on property or businesses within the district, a statement about whether bonds will be issued, and a description of the exterior boundaries of the proposed distract. The descriptions and statements do not need to be detailed and • shall be sufficient if thep enable an ourner to generally identify the nature and extent of the improvements and activities and the location and extent of the proposed district. Chula Vista Tourism Marketing District Management District Plan Page 15 18-20 • (2) The number, date of adoption, and tide of the resolution of intention. (3}The time and place where the pubfic hearing was held concerning the establishment of the distract. (4) A determination regarding any protests received. The cite shall not establish the district or levy assessments if a majority protest was received. (5) A statement that the properties or businesses in the district established by the resolution shat be subject to any amendments to this part. (6) A statement that the improvements and activities to be provided in the district will be funded by the le~~y~ of the assessments. The revenue from the levy of assessments within a distract shall not be used to protride improvements or activities outside the distact or for any purpose other than the purposes specified in the resolution of intention, as modified by the city council at the hearing concerning establishment of the district. (7) A finding that the property or businesses within the area of the property and business improvement district will be benefited by the improvements and activities funded by the assessments proposed to be levied. (o) The adoption of the resolurion of fommadon and recordation of the notice and map pursuant to Section 36627 shall constitute the lev5• of an assessment in each of the fiscal years referred to in the management distract plan. 36626. If the city council, following the public hearing, desires to establish the proposed property and business improvement district, and the city council has not made changes aursuant to Section 36624, or has made changes that do not substantially change the proposed assessment, the cite council shall adopt a resolution establishing the distract. The resolution shall contain aIl of the information specified in parab aphs (1) to (8), inclusive, of subdi~tision (b) of • Section 36625, but need not contain information about the pxeliminan- resolution if none has been adopted. 36627. Folloa-ing adoption of the resolution establishing the dis¢ct pursuant to Section 36625 or 36626, the clerk of the city shall record a notice and an assessment diagram pursuant to Section 3114. If the assessment is levied on businesses, the test of the recorded notice shall be modified to reflect that the assessment will be le~zed on businesses, or specified categories of businesses, within the azea of the distract. No other provision of Division 45 (commencing with Section 3100) applies to an assessment district created pursuant to this part. 36628. The city council may establish one or mote separate benefit zones within the district based upon the degree of benefit derived from the improvements or activities to be prorided azthin the benefit zone and may impose a different assessment within each benefit zone. If the assessment is to be levied on businesses, the city council ma5~ also define categories of businesses based upon the degree of benefit that each will derive from the improvements or activities to be provided within the district and may impose a different assessment or rate of assessment on each category of business, ox on each category of business within each zone. 36628.5. The city council may leve assessments on businesses or on propern~ owners, or a combination of the two, pursuant to this part. The city council shall structure the assessments in whatever manner if determines cosesponds with the distribution of benefits from the proposed improvements and activities. • 36629. Ali provisions of this pa_*t applicable to the es*ablishment, modification, or disestablishment of a property and business improvement district apply to the establishment, modification, or disestablishment of benefit zones or categories of business. The city council shall, to establish, ' Chula Vista Tourism Marketing District Management District Plan Page 16 18-21 modify, ox disestablish a benefit zone or category of business, follow the procedure to establish, • modify, or disestablish a parking and business improvement area. 36630. If a praperty and business improvement district expires due to the time limit set pursuant to subdivision (h) o£ Section 36622, a new management distract plan may be created and a new district established pursuant to this part. Assessments 36631. The collection of the assessments levied pursuant to this pan shall be made at the time and in the manner set forth by the uty council in the resolution establishing the management district plan described in Section 36622. Assessments levied on real property may be collected at the same time and in the same manner as fox the ad valorem propem tax, and map provide for the same lien priouty and penalties fox delinquent payment. All delinquent payments £or assessments levied pursuant to this part shall be chazged interest and penalties. 36632. (a) The assessments levied on real property pursuant to this pan shall be levied on the basis of the estimated benefit to the real properR' within the property and business improvement distract. The uty council may classify properties for purposes of deter**++n+ng the benefit to property of the improvements and activities provided pursuant to this part. (b) Assessments levied on businesses pursuant to this pan shall be levied on the basis of the estimated benefit to the businesses within the property and business improvement district. The city council may classify businesses for purposes of detP~ining the benefit to the businesses of the improvements and activities provided pursuant to this part. (c) Properties zoned solely for residential use, oz that are zoned for agricultural use, aze • conclusively pzesumed not to benefit from the improvements and service funded through these assessments, and shall not be subject to any assessment pursuant to this part. 36633. The validity of an assessment levied under this pan shall not be contested in any action or proceeding unless the action or proceeding is commenced within 30 davs after the resolution levlring the assessment is adopted pursuant to Section 36626. Ant appeal from a final judgment in an action or proceeding shall be perfected within 30 days after the entry of judgment 36634. The city council may execute baseline service contracts that would establish levels of city services that would continue after a property and business improvement district has been formed. 36635. The owners' association may, at any time, request that the city council modify the management district plan. Any modification of the management district plan shall be made pursuant to this chapter. 36636. (a) Upon the written request of the owners' association, the city council may modify the management district plan after conducting one public hearing on the proposed modifications. The city council may modify the improvements and activities to be funded with the revenue derired from the levy of the assessments by adopting a resolution dete***+~n~~g to make the modifications after holding a public hearing on the proposed modifications. If the modification includes the levy of a new or increased assessment, the city cotmcil shall comply with Section 36623. Notice of aIl other public meetings and public hearings pursuant to this section shall comply with both ofthe following: (1) Z'he resolution of intention shall be published in a newspaper of general dreulation in the dty .once at least seven days before the public meeting. Chula Vista Tourism Marketing District Management District Plan Page 17 18-22 (2) A complete copy of the resolution of intention shall be mailed by first class mail, at least 10 days • before the public meeting, to each business owner or property owner affected by the proposed modification. (b) The city council shall adopt a resolution of intention which states the proposed modification poor to the public hearing required by this section. The public hearing shall be held not more than 90 days after the adoption of the resolution of intention. 36637. Any subsequent modification of the resolution shall be reflected in subsequent notices and maps recorded pursuant to Dig-ision 4.5 (commencing with Section 3100), in a manner consistent with the pzovisions of Section 36627. Financing 36640. (a) The city council may, by resolution, determine and declare that bands shall be issued to finance the estimated cost of some or aIl of the proposed improvements described in the resolution of formation adopted pursuant to Section 36625, $ the resolution of fo_*mation adopted pursuant to chat section provides for the issuance of bonds, under the Improvement Bond Act of 1915 (Division 10 (commencing with Section 8500)) or in conjunction with Marks-Roos Local Bond Pooling Act of 1985 (Article 4 (commencing with Section 6584) of Chapter 5 of Division 7 of Title 1' of the Government Code). Either act, as the case may be, shall govern the proceedings relaying to the issuance of bonds, although proceedings under the Bond Act of 1915 maybe modified by the cit<• council as necessary to accommodate assessments levied upon business pursuant to this part. (b) The resolution adopted pursuant to subdivision (a) shall generally describe the proposed improvements specified in the resolution of formation adopted pursuant to Section 36625, set forth the estimated cost of those improvements, specify the number of annual installments and the fiscal • ' yeazs during which they aze to be collected. The amount of debt service to retire the bonds shall not exceed the amount of revenue estimated to be raised from assessments over 30 yeazs. (c) Notwithstanding any other provision of this part, assessments leaned to par the principal and interest on any bond issued pursuant to this section shall not be reduced or termumated if doing so would interfere with the timely retirement of the debt Governance 36650. (a) The owners' association shall cause to be prepared a report for each fiscal year, except the first year, For which assessments aze to be levied and collected to pay the costs of the improvements and activities described in the report. The owners' association's fast report shall be due after the first year of operation of the distract. The report ma~• propose changes, including, but not limited to, the boundaries of the propem and business improvement district or any benefit zones within the district, the basis and method of levying the assessments, and any changes in the classification of property, including any categoaes of business,'if a classification is used. (b) The report shall be filed with the clerk and shall refer to the pxopert5~ and business improvement distract by name, specify the fiscal yeai to which tlae report applies, and, arith respect to that fiscal yeaz, shall contain all of the following information: (1) Any proposed changes in the boundaries of the propem and business improvement distract or m any benefit zones on classification of properrj• or businesses within the district. (2) The improvements and activities to be provided for that fiscal yeaz. (3) An estimate of the cost of providing the vnpxovements and the acnviries for that fiscal yeaz. • (4) The method and basis of levying the assessment in sufficient detail to allow each real property or business ownei, as appropriate, to estimate the amount of the assessment to be levied against his or her property or business for that fiscal yeaz. CLula Vista Tourism Marketing District Management District Plan Page 18 18-23 (5).The amount of any surplus or deficit revenues to be carved over from a previous fiscal yeaz. • (G) The amount of any contributions to be made from souzces other than assessments levied pursuant to this part. (c) The city council may approve the report as filed by the owners' association or may modify, any particulaz contained in the report and approve it as modified. Any modification shall be made pursuant to Sections 36635 and 3663b. The city council shall not approve a change in the basis and method of levying assessments that would impair an authorized or executed contract . to be paid from the revenues derived from the levy of assessments, including any commitment to pay principal and interest on any bonds issued on behalf of the distract. 36651. The management district plan may, but is not required to, state that an owners' association will provide the improvements or activities described in the management district plan. If the management district plan designates an owners' association, the city shall contract with the designated nonprofit corporation to proczde services. Renewal 36660. (a) Any district previously established whose term has expired, may be renewed by following the procedures for establishment as provided in this chapter. (b) upon renewal, any remaining revenues derived from the levy of assessments, or any revenues derived from the sale of assets acquired with the revenues, shall be transferred to the renewed district. If the renewed district includes additional pazcels or businesses not included in the prior district, the remaining revenues shall be spent to benefit onlp the parcels or businesses in the prior distract. If the renewed district does not include pazcels or businesses included in the prior distract, the remaining revenues attmbutable to these pazcels shall be refunded to the owners of these parcels or businesses. (c) Upon • renewal, a district shall have a term not to exceed 10 yeazs, or, if the distract is authorized to issue bonds, until the maximum maturity of those bonds. 'T'here is no requirement that the boundaries, assessments, improvements, or activities of a renewed district be the same as the original or prior district Disestab3ishment 36670. (a) Any district established or extended pursuant to the provisions of this pare, where there is no indebtedness, outstanding and unpaid, incurred to accomplish any of the purposes of the district, may be disestablished by resolution by the dtp council in either of the following circumstances: (1) If the city council finds there has been misappropriation of funds, malfeasance, oz a czolation of law in connection with the management of the district, it shall notice a hearing on disestablishment. (2) During the operation of the distract, there shall be a 30-day period each }'ear in which assesses may request disestablishment of the district. The fizst such period shall begin. one year afrer the date of establishment of the district and shall continue for 30 daps. The next such 30-day period shall begin two yeazs after the date of the establishment of the district. Each successive yeaz of operation of the district shall have such a 30-day period. Upon the written petition of the owners of real property or of businesses in the area who pay 50 percent or more of the assessments levied, the tiro coundl shaIl pass a resolution of intention to disestablish the district. The city council shall notice a heating on disestablishment. (b) The city council shall adopt a resolution of intention to disestablish the district prior to the public hearing required by this section. The resolution shall state the reason foz the disestablishment, shall state the time and place of the public hearing, and shall contain a proposal to dispose of any assets acquired with the revenues of the assessments levied within the • property and business improvement district. The notice of rlre hearing on disestablishment required by this section shall be given by mail to the property owner of each parcel or to the owner of each Chula Vista Tourism Marketing District Management District Plan Page 19 18-24 business subject to assessment in the district, as appropriate. The city shall conduct the public • hearing not less than 30 days after trailing the notice to the property or business owners. The public hearing shall be held not more than. 60 days after the adoption of the resolution of intention. 36671. (a) Upon the disestablishment of adistract, any remaining revenues, after all outstanding debts are paid, derived from the levy of assessments, or derived from the sale of assets acquired with the zevenues, or from bond reserve or construction funds, shall be refunded to the owners of the property or businesses then located and operating within the district in which assessments were levied by apph~ing the same method and basis that was used to calculate the assessments le~~ied in the fiscal yeaz in which the district is disestablished. All outstanding assessment revenue collected after disestablishment shall be spent on improvements and activities specified is the management distract plan. (b) If the disestablishment occurs before an assessment is levied for the fiscal year, the method and basis that was used to calculate the assessments le~~ed in the immediate poor fiscal year shall be used to calculate the amount of any refund. Chula Vista Tourism Marketing District Management District Plan Page 20 18-25 [~ .~ Attachment 1 CIIULA VISTA TOURISM MARKETING DISTRICT 1VIANAGEMENT DISTRICT PLAN Submitted to-the Chula Vista Chamber of Commerce ~ And the Chula Vista Convention and Visitors Bureau April Z8, 2009 by Downtown Resources 18-5 CHULA VISTA TOURISM MARKETING DISTRICT MANAGEMENT DISTRICT PLAN TABLE OF CONTENTS I. INTRODUCTION AND OVERVIEW ...........................................................................2 II. WHY A TOURISM MARKETING DISTRICT FOR CHULA VISTA? .......................4 III. WHAT IS A TOURISM MARKETING DISTRICT? ....................................................5 IV. CHULA VISTA TOURISM MARKETING DISTRICT BOUNDARY ........................6 V. SERVICE PLAN AND BUDGET ..................................................................................7 VI. TOURISM MAKER"PING DISTRICT GOVERNANCE .............................................10 APPENDIX 1 -THE PROPERTY AND BUSINESS IMPROVEMENT DISTRICT LAW OF 1994 ..............................................................................................................1 1 APPENDIX 2 -LODGING BUSINESSES TO BE ASSESSED WITHIN CHULA VISTA TMD .........................................................................................................................................21 • Chula Vista Tourism Marketing District Management District Plan Page 1 18-6 T. INTRODtiCTION AND OVER~'TEW Developed by the Chula Vista Chamber of Commerce (CVCC) and the Chula Vista Convention and Visitors Bureau (CVCVB}, the Chula Vista Tourism Marketing District (CVTMD) is a benefit assessment district proposed to help fund mazketing and sales promotion efforts for Chula Vista lodging businesses, and to pay for capital infrastructure west of Highway 5 and within the Eastern Urban Center. This approach has been used successfully in other destination areas throu~?hout the country to improve tourism and drive additional room nights. Location: The proposed CVTMD includes all lodging businesses located within the boundaries of the city of Chula Vista. Services: Marketing and sales promotions to increase tourism and to market Chula Vista as a tourist, meeting and event destination. Budget: The total CVTMD budget for year one of its five (5) year operation is a base of approximately $b50,000. Cost: Annual assessment rates are 2.5% of gross short term (stays less than 31 days) room rental revenue on lodging businesses. The District shall have three zones. • Zone 1 shall include the area of Chula Vista east of Interstate 5 with the exception of the Eastern Urban Center. Zone 2 shall include all hotels and motels west of Interstate 5. Zone 3 shall include all hotels and motels in the Eastem Urban Center. The Eastern Urban Center is bound by State Route 125 to the west, Birch Road to the north, Eastlake Pazkway to the east and the future extension of Hunte Pazkway to the south. Bonds may be issued in Zone 2 and Zone 3. In Zone 1, the monies collected from the special assessment will go to the Owners' Association. In Zone 2 and Zone 3, 2.0% of the 2.5% collected will go towazds capital improvements, and the remaining 0.5% will go to Owners' Association. At the Council's discretion, this 2% in assessments collected in Zones 2 and 3 may be used to repay a capital infrastructure bond if Council chooses to~ issue bonds. Until and' unless bonds aze issued in Zones 2 and 3, azry funds collected in these zones will go to the CVCC and used in the same way as monies collected in Zone 1. Lodging business stays of 31 or more consecutive days shall not be assessed. Based on the benefit received, stays at RV pazks and campgrounds within the Boundaries of the CVTMD shall not be assessed. Formation: TMD formation requires submittal of petitions from lodging businesses .representing more than 50% of the total annual assessment followed by a City Council hearing and an opportunity for a written protest. The assessed lodging business owners will receive notice of the public hearing by mail. If there is a . majority written protest, the TMD will not be formed Chula Vista Tourism Markefing District Management District Plan Page 2 18-7 • Duration: The proposed District CVTMD will have afive-year life. The assessments used to repay bond debt shall have a term of 30 years. The CVTNID assessment wiIl be implemented beginning July 15, 2009. Once per yeaz there is a 30 day period in which owners paving more than 50% of the assessment may protest and terminate the district. • • Chula Vista Tourism Marketing District Management District Plan Page 3 18-8 II. R'HY A TOIIRISM MARKETING DTSTI2TCT FOR CHUI,A VISTA? There are several reasons why now is the right time to form a Tourism Mazketing District in Chula Vista; the most compelling reasons are as follows: 1. The Need to Increase Occupanc}~ The formation of the CVTMD is a proactive effort to provide supplemental funding beyond that provided by the City of Chula Vista. The funding ensures the CVCC and the CVCVB have adequate financing for the investment required to increase occupancy in the IodLing industry and reach competitive in the conference segment of the tourism mazket. The investment will cover an expanded marketing and promotional budget needed to reach this market segment. 2. An Opportunity for Increasing City Tax Revenues As occupancy rates increase, so too will the City's TOT revenue. With stable public/private funding for the CVCC and the CVCVB, annual occupancy rates should increase sitonificantly as the new marketing and sales promotion programs are implemented. Greater occupancy will also produce an increase in sales tax revenues from tourist spending. This represents a substantial return to the City. The formation of a • CVTMD in partnership with the CVCC and the CVCVB creates a stable funding source tied directly to tourism promotion 3. The Abilit)~ to Grow the Economp without Substantial Development The CVCC and the CVCVB expect to achieve the above levels of revenue growth without a proportionate increase in the "footprint` of the tourism industry infrastructure. Little or no development should be required to raise average occupancy rates. Any development required to raise occupancy rates even more should be relatively minor in scope compared to the existing facilities. 4. The Opportunity to Fund Infrastructure Gf'est of Highwuy S and within the Eastern Urban Center The CVTMD will utilize 2% of the total gross revenues to repay a capital infrastructure bond. These bond monies will be used to construct needed improvements west of Interstate 5 and within the Eastern Urban Center. L Ckuta Vista Tourism Marketing District Management District Pian Page 4 ' 18-9 • III. WHAT IS A TOURISM MARKETING DISTRICT:' Tourism Marketing Districts (TMDs) utilize the efficiencies of private sector operation in the market-based promotion of tourism districts. Tourism Mazketing Districts allow lodging and tourism-related business owners to organize their efforts to increase tourism. Tourism-related business owners within the district fund a TMD, and those funds aze used to provide services that the businesses desire and that benefit the lodging businesses within the District. Tourism Marketing District sen~ices may include, but are not limited to: - Operatioa of the Chula Vista Visitor Information Center Mazketing of the Area Tourism Promotion Activities 7 Sales Lead Generation i Infrastructure Financing In California, Tourism Mazketing Districts aze formed pursuant to the Property and Business Improvement District Law of 1994 (PBID Law). This law allow for the creation of a special • benefit assessment district to raise funds within a specific geographic azea. The key difference between TMDs and other special benefit assessment disn•icts is that funds raised are returned to the private non--profit corporation governing the district. There are many benefits to Tourism Marketing Districts: i Funds cannot be diverted for other government programs; i Tourism Marketing Districts are customized to fit the needs of each tourism district; - They allow for a wide range of services, including those listed above; Tourism Mazketing Districts aze designed, created and governed by those who will pay the assessment; ~ The statute requires petition support from lodging businesses paving over ~0% of the annual proposed assessments; - They provide a stable funding source for tourism promotion. The Property and Business Improvement District Law of 1994 (AB 3754), as amended January 1, • 2009, is provided in Appendix 1 of this document. Chula Vista Tourism Marketing District Management District Plan Page 5 18-10 . IV. CHLZA ~~ISTA TMD BOUItTD.~RY The Chula Vista TMD will include all lodging businesses, existing and in the future, available for public occupancy within the boundaries of the city of Chula Vista. The boundary currently includes 23 lodging business. Please see the map below. A larger map is available on request by calling (619) 420-6603. • .`A% ~J r~ ,-'rZ f s.awrr I L '~':/~• ~ ~ .~~_,~ }~ i ^' Zone 2 - ---~~ - ~ ' ~ , ~ ` ~ ~ ~ ~ t~ ~ ' nt y - _?.r, J '1 ~ / '~.- / ~ `.y ^ _ \ ~ ~ h J t . _. " -x ' i r ~ ~ r ~''~ ~-c ~ "~.. r : _ ~ / ~ ~ `J ~" ~ !t / j 4 y ~ `fie _ ,_ ~ Q i ~ ~ . - " .~ l , .. lv- ,'"' _ !~ s` , ;' ~`'' ~ ~" Zone 3 } ..~ ~". Zone , _-r , 1 e~ , •_ -- i F v ~ 1 t ~i w S - f i ~ ~ ~-- ^ uyC"+•s' ... ~ ~ - ~ M ~' ~, f '_.. ~ _.. ' I Chula Vista Tourism Marketing District Management District Plan Page G 18-11 SERVICE PLAN ANA BUDGET A. Assessment The Tourism Mazketing District annual assessment rates aze based upon ?.5% of gross short term (stays less than 31 days) room rental revenue per night for hotels or motels. Lodging business stays of 31 or more consecutive days shall not be assessed. Based on benefits received, stays at RV parks and campgrounds within the boundaries of the CVTMD shall not be assessed. Bonds may be issued. The amount of assessment,. if passed on to each transient, shall be sepazately stated from the amount of rent charged and any other applicable taxes, and each transient shall receive a receipt for payment from the business. B. Determination of Special Benetit State law provides that the expenses of the district shall be apportioned in proportion to the benefit received by assessed businesses. A special benefit is defined as a particular and distinct benefit over and above general benefits • conferred on the public at lazge. Conversely, a general benefit is a benefit to businesses in the surrounding community or a benefit to the public in general resulting from the improvement, activity or service to be provided by the assessment levied. Many general benefits to the public at large are conveyed by municipal services, such as fire protection, police services and public transit services. These services are targeted to serve the public at lazge and do not confer special benefits on particular businesses. The services in this Management District Plan aze designed to provide targeted services to lodging businesses. These services are tailored. not to serve the general public, but rather to serve the specific lodging businesses within the District, e.g'., the proposed activities are specifically targeted to increase room nights for assessed lodging businesses within the boundaries of the District, and are narrowly tailored. TMD funds will be used exclusively to benefit the assesses. The activities paid for from assessment revenue are lodging business services creating special benefit to those businesses. In addition, these activities are not for the benefit of the general public and do not provide general benefit as defined above. All general benefits (if any) to the surrounding community and general public are intangible and unquantifiable. It is appropriate that these special business-related benefits be funded through business assessments. C. Time and Manner for Collecting Assessments • The CVTMD assessment will be implemented beginning July 15, 2009 and will continue for five yeazs. The assessments used to repay bond debt shall have a term of 30 years. The City of Chula Chula Vista Tourism Marketing District Management District P-an Page 7 18-12 Vista will be responsible for collecting the assessment on a monthly basis (including any • delinquencies, penalties and interest) from each lodging business located in that the boundaries of the TMD. Assessments shall be collected monthly and the City shall take all reasonable efforts to collect the assessments from each lodging business. The City of Chula Vista shall fotwazd the assessments to the CVCC which will have the responsibility to manage the TMD programs as provided in the Management District Plan. D. Service Plan Budget and Programs to be Provided: Service Plan Budget Summary- Calendar Years 2009-2014 The summary of the calendaz yeaz 2009 (yeaz one) service plan budget for the CVTMD is provided on the following pages. The total five year improvement and service plan budget is projected at approximately $650,000 annually, or $3.25 million through 2014. E. Annual Service Plan: A service plan budget has been developed to deliver service levels throughout the District. An annual service plan and budget will be developed and approved by the CVCC Board. Please see the budget exhibit below. The budget also includes a portion for contingencies and renewal of the District. Should the CVCC Board approve, funds maybe appropriated for the renewal effort. • If there aze funds remaining at the end of the District term and lodging businesses choose to renew, these remaining funds could be transferred to the renewed District. If there are funds remaining at the end of the District and lodging businesses choose not to renew, any remaining funds will be spent consistent with this Plan Chula Vista Tourism Marketing District Management District Plan Page 8 18-13 Chula Vista Tourism Marketing District Management District Plan Page 9 18-14 • Chula Vista Tourism Marketing District Annual Budget, Year One 1 ~' • v. sIV GovEUlvANCE A. Chula Vista Tourism Marketing District Corporation Governance The CVCC will serve as the Owners Association for the CVTMD. The CEO of the CVCC will be charged with the day-to-day operations of the Tourism Marketing District. .~~ r • r Chula Vista Tourism Marketing District Management District Plan Page 10 18-15