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HomeMy WebLinkAbout2012/10/23 Item 12CITY COUNCIL AGENDA STATEMENT ~~~ CITY OF CHULA VISTA OCTOBER 23, 2012, Item C~ ITEM TITLE: PRESENTATION BY THE CHULA VISTA CHAMBER OF COMMERCE OF THE ANNUAL REPORT ON THE OPERATIONS, STRATEGIC GOALS AND OBJECTIVES, AND BUDGET OF THE CHULA VISTA TOURISM MARKETING DISTRICT FOR FISCAL YEAR 2012-13 SUBMITTED BY: MARKETING & CO UNICATIONS MANAGER ~ REVIEWED BY: CITY MANAG // 4/STHS VOTE: YES ~ NO SUMMARY On July 14, 2009 the City Council adopted a resolution that established the Chula Vista Tourism Marketing District (CVTMD). The CVTMD Owner's Association is required to prepare and submit an annual report to the City Council and the Plan appoints the Chamber of Commerce as the Owner Association. The Agreement for Tourism Marketing District Management Services between the City and the Chamber of Commerce requires the submission of an audit report to the City Council at the close of each fiscal year. The Chula Vista Chamber of Commerce will present the Annual Report on the operations, strategic goals and objectives, and budget for fiscal year 2012-13. 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 accept the annual report. BOARDS/COMMISSION RECOMMENDATION Not applicable. 12-1 Item No: ~ ~- Meeting Date: Page 2 of 4 DISCUSSION Background On July 14 2009, the City Council adopted a resolution that established the Chula Vista Tourism Marketing District (CVTMD). The CVTMD operates the Chula Vista Visitor Center and implements marketing and promotion activities to attract additional visitors to local hotels and motels. According to the California Property and Business Improvement District Law of 1994, Streets and Highways Code Sections 36600, through section 36671, (the "PBID Law") Business Improvement District (BID) Owners' Associations are required to prepare and submit an annual report to the City Council for each year following the first fiscal year of operation of a BID to outline the "improvements and activities," proposed by the TMD in the upcoming year. In addition to the annual report required by the PBID Law, the Agreement for Tourism Marketing District Management Services between the City and the Chamber of Commerce (the "Agreement") requires the inclusion of the proposed budget for the upcoming fiscal year in the annual report. The proposed budget must describe the specific activities to be funded by CVTMD assessments in two formats: by major financial category and by activity. The budget is to be provided in the format set forth in the agreement. The Agreement also requires the presentation of an annual financial audit to the City Council within 90 days following the end of each fiscal year. Per the Agreement, the audit report shall include: "...aline-item schedule detailing all expenditures, including a comparison of all expenditures with the specific amounts and activities designated in the MDP [Management District PIanJ. 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. " The CVTMD is in its fourth year of operation. The Chula Vista Chamber of Commerce, acting as the Owners' Association for the CVTMD, has created an annual report (Attachment A) and tonight will deliver the report and outline improvements and activities proposed for the coming year. Under the CVTMD, an assessment of 2.5% is levied on short-term gross room rental revenues for lodging businesses for each day of lodging up to 30 days. All hotels and motels in the City that serve transient occupancies of up to 30 days are subject to the assessment. The CVTMD consists of 23 motel/hotel properties (Attachment B). The CVTMD funds activities such as advertising in local and regional publications, search engine optimization (SEO) and Web site development efforts, participation in professional industry conferences, development of the Convention and Visitors Bureau website and e-newsletter, and the staffing and operation of the Visitor Center. The 12-2 Item No: ~ ~-- Meeting Date: Page 3 of 4 CVTMD may also fund improvements such as signs or other physical structures that contribute to the marketing of the District. As of October 31, 2012, the CVTMD no longer will fund Visitor Center operations. Chamber's Report on TMD Finances and Operations The CVTMD has been funded since Fiscal Year 2010 and $1.1 million has been allocated to support activities and operations. CVTMD Budget and Transient Occupancy Taxes (TOT) Fiscal Year Budget TOT 2010 $315,442 $2.03 million 2011 $414,347 $2.05 million 2012 $438,132 $2.3 million i. 1ne reiaaonsmp beweev t ~i revenues oeseo on ro.o enu uw n~ ~ ,.o n .m. u ~~~y a »., ~e~~~ ~«,~~~ .~~~~~ d~ a ~~...,,...„~~, ,...~, o, ,.~.~~e.,~„=~ . ~~.. ,. No... ,..o, o... subject to i0T but not Ttvm. 2 Pev audit submitted by CVTtvm to City of Chule Vista on September 30, 2012. For Fiscal Year 2013, the projected CVTMD budget for FY 2013 is $516,550 (Attachment C). The TMD Owners' Association and the City anticipate that room nights and average daily room rates will continue to show increases over 2012. Agreement with the TMD Owners' Association The CVTMD is a public financing mechanism proposed, developed and administered by the private sector, specifically by the motel and hotel operators that make up the members of the business improvement district and appointed the Chamber as their Owners' Association. The PBID Law provides for the City to enter into an agreement with the PBID Owners' Association. In March 2012, an Agreement formalized the relationship between the City and the Owners' Association established through the CVTMD Plan. The Agreement provides for minimum levels of insurance, indemnification, compliance with local, state and federal regulations, taxes, employment regulations and an independent audit. The financial audit report is attached (Attachment D). The Agreement also provides for an Administration Fee to fund the City Finance Department's costs to perform TMD operations related to the collection and transmittal of CVTMD taxes collected by the City to the Owners' Association, collection follow-up, the annual review of the report to City Council, response to public information requests, and responding to inquiries from the Owners' Association and other parties. 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. 12-3 Item No• C ~ti. Meeting Date: Page 4 of 4 CURRENT YEAR FISCAL IMPACT Beginning in March of 2012, the TMD Owners' Association began reimbursing the City for the operational costs of assisting the TMD with collecting and remitting TMD fees from local hotels and motels. In FY 2012, $3,019 was reimbursed to the City and $12,600 is expected to be reimbursed in FY 2013. Actual reimbursements will vary based upon the level of City staff support provided to the CVTMD. ONGOING FISCAL IMPACT The City will continue to be reimbursed for any costs associated with collecting and remitting TMD fees through the remaining term of the TMD Plan. The City also benefits from increased 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. ATTACHMENTS A. Chula Vista Tourism and Marketing District Annual Report B. Hotel /Motel List C. Chula Vista Tourism and Marketing District Proposed Budget FY 2013 D. Chula Vista Tourism and Marketing District Financial Audit Report Prepared by: Anne Steinberger, Marketing and Communications Manager 12-4 Attachment A Chula Vista TBID Year Three Annual Report July 1, 2012 Annual report from the 1994 Act. (a) The owners' association shall cause to be prepared a report for each fiscal year, except the first year, for which assessments are to be levied and collected to pay the costs of the improvements and activities described in the report. The owners' association's first report shall be due after the first year of operation of the district. The report may propose changes, including, but not limited to, the boundaries of the property 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 categories of business, if a classification is used. (b) The report shall be filed with the clerk and shall refer to the property and business improvement district by name, specify the fiscal year to which the report applies, and, with respect to that fiscal year, shall contain all of the following information: (1) Any proposed changes in the boundaries of the property and business improvement district or in any benefit zones or classification of property or businesses within the district. No Change. (2) The improvements and activities to be provided for that fiscal year. Sales and Marketing programs and activities will be designed to attract overnight groups. These activities may include: • Lead Generation • Trade Shows • Sales Blitzes • Familiarization Tours • Advertising • Collateral • Marketing Programs • Local Property Visits • Director of Sales Meetings • General Manager Meetings , Profess Iona I In d u stry Communications and Public Relations activities and services will build greater awareness of the Chula Vista businesses and the Chula Vista region as a tourism, meeting, and event destination. These activities may include: • Public, Community and Media Relations • Familiarizations Tours • CVB Events • Membership Solicitation /Maintenance • Local Trade Shows and Events • CVB Web Site and Electronic Newsletter • CVB Newsletter • Speaking Engagements • Visitor Information /Servicing • Staffing Costs 12-5 \ (3) An estimate of the cost of providing the iinproveinents and the activities for that fiscal year. See attached documents: 1) Chula Vista Tourism Marketing District Annual Budget Year Four. 2) Chula Vista Tourism Marketing District Year Three Actual July 1, 2011 - June 30, 2012 (4) The method and basis of levying the assessment in sufficient detail to allow each real property or business owner, as appropriate, to estimate the amount of the assessment to be levied against his or her property or business for that fiscal year. 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 (Millenia). Zone 2 shall include all hotels and motels west of Interstate 5. Zone 3 shall include all hotels and motels in the Eastern Urban Center. The Eastern Urban Center is bound by State Route 125 to the west, Birch Road to the north, Eastlake Parkway to the east and the future extension of Hunte Parkway 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 towards 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 repa}~ a capital infrastructure bond if Council chooses to issue bonds. Until and unless bonds are issued in Zones 2 and 3, any 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 parks and campgrounds within the Boundaries of the CVTMD shall not be assessed. (5) The amount of any surplus or deficit revenues to be carried over from a previous fiscal year. $33,313.41 surplus will be carried over. (6) The amount of any contributions to be made from sources other than assessments levied pursuant to this part. None. (c) The city council may approve the report as filed by the owners' association or may modify any particular contained in the report and approve it as modified. Any modification shall be made pursuant to Sections 36635 and 36636. 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 district. Respectfully submitted by; Lisa Cohen CEO, Chula Vista Chamber of Commerce. 12-6 Signature & Date Page 2 Attachment B Chula Vista Tourism and Marketing District HoteUMotel List Bay Cities Motel Best Choice Inn Best Western Chula Vista Best Western Plus Otay Valley Best Western South Bay Inn Big 7 Motel Days Inn EI Primero Boutique Hotel Good Nite Inn Chula Vista Harbor View Motel Hercor Hotel Highway Inn Holiday Inn Express La Quinta Inn Mote16 99 Motel Palomar Inn Palomar Motel Ramada -San Diego South Riviera Motel Travel Inn Chula Vista Traveler Inn & Suites Vagabond Inns 12-7 Attachment C Revenues: Chula Vista Tourism Marketing District Proposed Budget FY 2012-13 Projected Assessments $ - 500,623.45 Assessments Carried from Prior Years $ - 35,000.00 Total Funds Available FY 2011-12 $ 535,623.45 Expenditures: Personnel Cost: Salaries $ 178,229.76 Benefits $ 41,180.48 Payroll Taxes $ 16,040.68 Total Personnel Cost $ 235,450.92 Office/Administrative Office Supplies $ 5,632.60 Preformation Expense $ 50,000.00 Consultants - IndependentAudit $ 10,000.00 Attorney Services $ 22,535.00 City of CV Administrative Support/Ins. $ 26,117.47 Total Office/Administrative $ 114,285.07 Advertising/Marketing: Marketing Programs TBD Marketing Trade Shows California Magazine ad Milestone SEO Parade band Review Festival $ 89,814.72 $ 9,000.00 $ 25,000.00 $ 18,000.00 $ 25,000.00 Total Advertising $ 166,814.72 Total Proposed Expenses FY 2012-13 Reserves/Contingencies $ 516,550.71 $ 19,072.74 12-8 VID Activities Prop. Budget FY 2012-13 Parade Band Review and Festival California Magazine Ad Trade Shows Sales and Marketing office/Administration Milestone SEO Marketing Programs TBD Total Proposed Expenses FY 2011-12 Staffing Funded bvTMD CEO Chula Vista Chamber General Manager, Chula Vista Convention and Visitors Bur Manager Visitor Center Information Specialist Bookkeeper Secretary Direct Indirect Total 25,000 $ $ 25,000.00 25,000.00 $ $ 25,000.00 9,000.00 $ $ 9,000.00 235,450.92 $ 235,450.92 114,285.07 $ 114,285.07 18,000 $ $ 18,000.00 89,814.72 $ $ 89,814.72 $ $ $ - $ 281,099.79 $ 235,450.92 $ 516,550.71 Funded from Funded TMD Other Chamber Funds 33% 67% 100 33% 33% 100% 0% 100% Notes: TMD Activities should correlate to Goals & Objectives included in Exhibit B. Direct Costs include expenses incurred for paying vendors, advertising, 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. 12-9 Attachment D CHULA VISTA TOURISM MARKETING DISTRICT OWNERS ASSOCIATION - A DIVISION OF THE CHULA VISTA CHAMBER OF COMMERCE FINANCIAL STATEMENTS JUNE 30, 2012 WITH REPORT OF CE~2TIFIED PUBLIC ACCOUNTANT 12-10 RONALD E. GRUND, C.P.A., INC. P.O. BOX 420163 sAN DIEGO, CALIFORNIA 92142 INDEPENDENT AUDROR'S REPORT To the Board of Directors Chula Vista Tourism Marketing District Owners Association - A Division of the Chula Vista Chamber of Commerce ("Owners Association- CV TMD") 1 have audited the acwmpanying statement of balance sheet of the Owners Association-CViMD (a nonprofit organization) as of June 30, 2012, and the related statements of activities and cash flows for the year then ended. These financial statements are the responsibility of the Organization's management. My responsibilky is to report on these financial statemenrts based on my audit. 1 conducted my audit in accordance with auditing standards generally aaepted in the Unked States of America. Those standards require that 1 plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence wpporting the amoums and disclosures in the financial statements. An audit also includes assessing the accounting principles used and signlflcant estimates made by managemem, as well as evaluati~ the overall financial statement presentation. 1 believe that my audit provides a reasonable basis for my report. The accompanying financial statements have been prepared assuming that the Organisation will continue as a going concern. In view of the imminent City of Chula Vista Council meeting (scheduled for October 23, 2012) at which a hearing will be held to vote on the disestablishment of the Chula Vista Tourism Marketing District, there is substantial doubt as the Organization's ability to continue as a going concern. This factor is outside the control of management, however they plan to oppose the disestablishment. These financial statements do not include any adjustments that might result from the outwme of this uncertainty. Because of the uncertainty described in the preceding paragraph, I am unable to express, and 1 do not express , an opinion of the financial statements referred to in the first paragraph. My engagement's objective was to express an opinion on the financial statements of the Owners Association for the year ended June 30, 2012, thus my engagement was not specifically designed to report on the usage of funds in accordance wkh the Management District Plan nor the Annual Report to the City Council. These documents refer to "specific activities" engaged in by the Owners 12-11 Associatlon. As no contemporaneous written record of specific activities of Owners Association staff on a day to day and hour by hour basis was maintained for the year subject to my audit; l am not in a position to issue an opinion on the activities of such staff in conformity whh the referenced plans. However, in the course of my audit no matters came to my attention which would lead me to conclude that the "specific activities^ engaged in were not in aaordance with the referenced plans. In addition, the annual budget is not included in this financial report as that is a document for which no specific backup calculations exist and thus is not auditable. The notes to the financial statements refer the reader to the financial statements which are detailed by the budget line items to the extent feasible. RONALD E. GRUND, C.P.A., INC. September 30, 2012 12-12 CHULA VISTA TOURISM MARKETING DISTRICT OWNERS ASSOCIATION -A DIVISION OF THE CHULA VISTA CHAMBER OF COMMERCE STATEMENT OF FINANCIAL POSITION JUNE 30, 2012 ASSETS CASH IN BANK DUE FROM CITY OF CHULA VISTA - TMD ASSESSMENTS DEFERRED PREFORMATION COSTS -CHULA VISTA TMD TOTAL ASSETS LIABILITIES AND NET ASSETS ACCOUNTS PAYABLE DUE TO CHULA VISTA CHAMBER OF COMMERCE TMD PREFORMATION COSTS ACCRUED VACATION DEFERRED INCOME -TOURISM MARKETING DISTRICT FUNDS TOTAL LIABILITIES NET ASSETS TOTAL LIABILITIES AND NET ASSETS SEE NOTES TO FINANCIAL STATEMENTS $ 33,313. 41 38,449. 36 69,372. 34 $ 141,135. 11 $ 4,697. 74 69,372. 34 13,324. 00 53,741. 03 141,135. 11 $ 141,135. 11 12-13 CHULA VISTA TOURISM MARKETING DISTRICT OWNERS ASSOCIATION - A DIVISION OF THE CHULA VISTA CHAMBER OF COMMERCE STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2012 REVENUES CHULA VISTA TOURISM MARKETING DISTRICT ASSESSMENTS IN KIND RENTAL CONTRIBUTION-TOURIST VISITOR CENTER-CITY OF CHULA VISTA MTS FEE RECEIVED BY CHULA VISTA CHAMBER OF COMMERCE - REMITTED TO OWNERS ASSOCIATION OTHER, MISCELLANEOUS TOTAL REVENUE COSTS AND EXPENSES PERSONNEL COSTS AMORTIZATION OF PREFORMATION COSTS -CHULA VISTA TMD MARKETING COLLABORATION WITH THE CITY OF CHULA VISTA IN KIND RENTAL EXPENSE -TOURIST VISITOR CENTER - CITY OF CHULA VISTA BUSINESS COSTS PARADE BAND REVIEW FESTIVAL LEGAL AND ACCOUNTING INSURANCE OTHER COSTS TOTAL COSTS AND EXPENSES INCREASE IN NET ASSETS NET ASSETS, BEGINNING OF THE YEAR NET ASSETS, END OF THE YEAR SEE NOTES TO FINANCIAL STATEMENTS $ 438,132.38 19,200.00 25,000.00 75.00 482,407.38 296,877.25 sa,oa0.oo 50,000.00 1s,zoD.oo 15,928.64 5,000.00 27,577.42 4,590.47 13,233.60 482,407.38 12-14 CHULA VISTA TOURISM MARKETING DISTRICT OWNERS ASSOCIATION - A DIVISION OF THE CHULA VISTA CHAMBER OF COMMERCE STATEMENT OF CASH FLOWS FOR THE YEAR ENDED JUNE 30, 2012 CASH FLOWS FROM OPERATING ACTIVITIES: (Increase) tlecrease in operating assets: $ - Due from City of Chula Vista TMD 2,620.fi7 Deterred preformation costs -Chula Vista TMO (net of decrease in associatetl payable to Chula Vis1 - Increase (tlecrease) in operating liabilitles: Accounts payablelaccruetl liabilities (20,194.26) Defertetl income 37,9'14.56 NET CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES 20,340.97 CASH AND CASH EDUIVALENTS Beginning of [he year 12,972.44 End of [he year $ 33,313.41 SUPPLEMENTARY INFORMATION: INCOME TAXES PAID-NONE SEE NOTES TO FINANCIAL STATEMENTS 12-15 CHULA VISTA TOURISM MARKETING DISTRICT OWNERS ASSOCIATION - A DIVISION OF THE CHULA VISTA CHAMBER OF COMMERCE NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 NOTE 1. NATURE OF ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Chula Vista Tourism Marketing District (TMD) was established under the California Streets and Highways Code in July 2009. Under the Code an "Owners Association" is named to manage the district's operations. The Chula Vista Chamber of Commerce was named as the "Owners Association" and the Chamber established an independent division to receive the District's assessments and manage the operations of the TMD. The TMD was established to promote Chula Vista tourism thereby increasing the demand for hotel rooms. Hotel members of the District are assessed 2.5% of room revenues to fund the TMD's operations. The Owners Association's activities include operation of the Chula Vista Visitor Information Center and other promotional activities. A summary of the significant accounting policies of the Owners Association follows: Chula Vista Tourism Marketing District Assessments Revenues are recorded as income as the associated expenses are incurred. Deferred income is reflected as a liability for the portion of the revenues received in excess of expenses incurred. Cash and Cash Equivalents: For purposes of reporting cash, the Owners Association considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. Donated Facilities: The Chula Vista Visitor Information Center utilized by the Owners Association is provided without charge by the City of Chula Vista. The estimated fair rental value of $ 19, 200 annually is recorded as an in kind contribution with an offsetting entry to facilities rental expense in the accompanying statement of activities. In addition, the Owners Association shares facilities with the Chula Vista Chamber of Commerce for which the Chamber does not levy anif'charges. No estimate of the fair value of such facilities and services has been made in the accompanying financial statements. 12-16 Use of Estimates: The preparation of financial statements inconformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differfromthose estimates. Fair Value of Financial Instruments: The recorded value of the Owners Association's financial instruments approximates their fair values. Financial instruments include cash, accounts receivable and accounts payable. Economic Concentrations: The Owners Association's operations are concentrated in the City of Chula Vista. Management is not aware of the existence of any substantial cutbacks pending due to the described concentration of economic risk, except for the pending disestablishment hearing for the TMD scheduled for October 23, 2012 as discussed below. Subsequent Events: Management has evaluated subsequent events through September 30,2012 which is the date these financial statements were first available to be issued. Note 2. Temporarily/Permanently Restricted Net Assets At June 30, 2012 the Owners Association has no permanently or temporarily restricted net assets. Note 3. Pension Costs Employees of the Owners Association are not covered by a sponsored pension plan. Note 4. Income Tax Status A provision for income taxes has not been provided in the financial statements aJithe Chamber has qualified for exemption from income taxes under Internal Revenue Code Section 501 ©6 and as such is subject to income taxes on business income not exempted by the applicable statutes. As the Owners Association's only revenue is restricted for expenditures of the TMD is it not anticipated that the Owners Association will have any taxable income. Note 5. Comparison of Actual versus Budget The Owners Association and the City of Chula Vista entered into an "Agreement for Tourism Marketing District Management Services" in March 2012. Among other provisions this Agreement requires and annual audit to include a comparison of actual with budgeted revenues and expenditures. The accompanying Statement of Activities is formatted to correspond with the ~2-~~ budgeted categories to facilitate this comparison. In addition, the audited financials are required to include management's representation that the activities on which CVTMD funds were expended during the audit year to comply with the Street and Highways Code Section 36613 and the Management District Plan. Management believes that expenditures for the fiscal year are in compliance with the requirements stated above. Note 6. Grand Jury Proceedings The San Diego County Grand Jury has conducted an investigation of the Owners Association' s operations and finances. This investigation was instigated by a citizen complaint alleging misuse of revenues generated by the TMD. The Grand Jury issued its report in May 2012 and the Owners Association has responded. Management believes the Grand Jury has completed its proceedings with respect to the Owners Association. Note 7. City Council Hearing-DisestablishmentPetition A City of Chula Vista City Council hearing has been scheduled for October 23, 2012 to consider the petitions received by the City of Chula Vista signed by certain hotel owner members of the TMD requesting the disestablishment of the TMD. The Owners Association has no control over the results of the hearing although it plans to oppose the disestablishment. The ultimate outcome of this matter is not presently determinable. A vote for disestablishment would terminate the operations of the Owners Association. Thus, the ability of the Owners Association to continue as a going concern is in substantial doubt. 12-18 Chula Vista Tourism Marketing District Annual Budget, Year Four and MARKETING $166,814.72 Sales and Marketing programs and activities will be designed to attract overnight groups. Tbese activities may include: • Lead Generation • Trade Shows • Sales Blitzes • Familiarization Tours • Advertising • Collateral • Mazketing Programs - " • Local Property Visits • Director of Sales Meetings • General Manager Meetings • Professional Industry Conferences /Affiliation Events • Staffmg Costs COMMUNICATIONS and PUBLIC RELATIONS $235,450.92 Communications and Public Relations activities and services will build greater awazeness of the Chula Vista businesses and the Chula Vista region as a tourism, meeting, and event destination. These activities may include: • Public, Community and Media Relations • Familiarizations Tours • CVB Events • Membership Solicitation /Maintenance • Local Trade Shows and Events • CVB Web Site and Electronic Newsletter • CVB Newsletter • Speaking Engagements • Visitor Information /Servicing • Staffmg Costs ADMINISTRATIVE/OPERATIONS $64,285.07 • Office Administrative/Operntional Expenses • LegaUAccounting • Staffing Costs Pre-Formation Expense $50,000.00 Contingency /TMD Renewal $19,072.74 This pmdent fiscal reserve is to buffer the organization for any unexpected revenue changes and/or allow [he District to fund TMD modificationand/or renewal costs. Total Tourism District Budget $535,623.45 12-19