HomeMy WebLinkAboutStaff Report 4.B 10/15/2018Agenda Item #4.B
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DATE:
October 15, 2018
TO: Honorable Mayor and Members of the Ci Council
FROM: John C. Brown, City Manag
SUBJECT: Resolution Declaring the City Council's Intention to Form the Petaluma Tourism
Improvement District and Giving Notice of the Time and Place of a Public
Meeting and a Public Hearing on the Establishment of the District and the Levy of
Assessments
RECOMMENDATION
It is recommended the City Council adopt the attached Resolution Declaring the City Council's
Intention to Form the Petaluma Tourism Improvement District and Giving Notice of the Time
and Place of a Public Meeting and a Public Hearing on the Establishment of the District and the
Levy of Assessments.
BACKGROUND
The Property and Business Improvement District Law of 1994 (the 1994 Act) grants cities and
counties the authority to establish and renew business improvement districts. The purpose of
such districts is to levy assessments against property or businesses in the district, to raise funds
within a specific geographic region, and to pay for the cost of certain activities and
improvements benefitting property or businesses paying the assessment.
Tourism Improvement Districts (TIDs) allow lodging and tourism -related business owners to
organize their efforts to increase tourism. Lodging business owners within the district fund the
TID, and those funds are used to provide services that the businesses desire and that benefit the
lodging businesses within the TID. The key difference between TIDs and other special benefit
assessment districts is that funds raised are returned to the private non-profit corporation
governing the TID. TIDs:
• Provide a stable funding source for tourism promotion
• Are customized to fit the needs of each destination
• Allow for a wide range of services; including: Marketing of the Destination, Tourism
Promotion Activities and Sales Lead Generation
• Are designed, created and governed by those who will pay the assessment
• Protect funding from diversion to other uses
An adopted Management Plan governs the District and outlines boundaries, assessments,
improvements and activities to be funded, and the term of the District. Funds can be paid to the
City, and disbursed to an Owners' Association (OA), or the OA can collect funds directly. In
either alternative, funds are used to administer district activities per the Management Plan.
Funds cannot be redirected to other programs and must be utilized in conformance with the
Management Plan.
In March, 2018 Councilmembers received correspondence from representatives of the Petaluma
lodging industry and the Petaluma Downtown Association, encouraging the Council to establish
a benefit assessment district in Petaluma to support tourism marketing. The correspondence
offered to use some of the assessments to pay for the Petaluma Visitors Program, freeing up to
$248,000 annually for other City uses.
In June 2018, Vice Mayor Healy and Councilmembers Kearney and Miller requested discussion
and possible direction regarding the creation of a TID for the City of Petaluma be placed on an
upcoming agenda. Their request asked the Council to consider a TID that included the following
features:
1. TID to be comprised of all hotels and lodging establishments within the City of Petaluma,
created by their mutual consent.
2. Lodging establishments to fund TID with an assessment of 2.0% of room rental charges.
3. TID to be governed by a board of directors comprised of representatives of stakeholders,
including one representative from the City.
4. TID to fund the Petaluma Visitors Program in a minimum annual amount of $248,000,
relieving the General Fund of that responsibility.
5. TID to provide the. City with $100,000 annually dedicated to periodic dredging of the
Petaluma River; such funds to be used only for that purpose.
6. Remaining TID funds to be utilized for events, programs and improvements intended to
encourage visitors to Petaluma, in the discretion of the TID board.
7. TID to be modeled to the extent possible on the existing City of Healdsburg TID.
The matter was agendized for City Council action on July 16, 2018 and, after reviewing the staff
report and receiving comments from lodging industry and Downtown Association
representatives, the Council agreed to initiate the process of establishing a TID. The Council did
not reach a consensus on funding for river dredging, or other improvement alternatives discussed
by the Council. There was agreement, however, that some equivalent value should be received
by the City, in addition to the savings achieved by transferring funding responsibility for the
Petaluma Visitor's Program from the City to the OA. The Council also agreed with staff
recommendations to include in the TID Management Plan funding of five percent (5%) for City
administration, and that staff time spent on the formation process would be reimbursed from TID
proceeds.
Several process steps are required to establish a TID. These are discussed in greater detail in the
Discussion section of this report.
DISCUSSION
In July, 2018 City staff met with Petaluma Downtown Association (PDA) and local lodging
industry representatives, and Civitas, the firm selected by the local groups to assist them with
forming the Petaluma Tourism Improvement District (PTID). Discussed were the group's
reasons for wanting to establish a PTID, roles and responsibilities in the formation process,
timeline, estimates of City staff time and costs through the formation process, programs,
projects, any improvements the City would like to see the PTID fund, and limitations in law on
such programs, projects, and improvements. Agreement was reached on a timeline that would
establish the PTID on January 1, 2019, and inclusion in the Management Plan of funding for City
Administration and reimbursement of City staff time spent during formation. No specific set of
programs, projects or improvements to meet City needs was identified; the Management Plan
sets aside 17 percent of PTID proceeds for "Destination Development', which will be provided
the City each year and programmed as part of the City's annual budget process.
The lodging industry and the PDA propose a benefit assessment district to fund marketing and
sales promotion efforts for Petaluma lodging businesses. This approach has been used
successfully in other communities throughout the state to improve tourism and generate
additional room nights. The proposed PTID includes all lodging businesses with 10 or more
rooms located in the boundaries of the City of Petaluma. The PTID would, based on current
transient occupancy tax estimates, generate approximately $660,000 annually for promotion of
travel and tourism specific to Petaluma.
Pursuant to the 1994 Act, a petition asking the Council to form the TID is required of the lodging
owners who will pay more than 50 percent of the proposed assessment. A summary of the
district Management Plan must accompany the petition. The Management Plan will define the
boundaries of the district, the timing and method of assessments, improvements and activities to
be financed, the number of years for which the district levy will assessed, and include any rules
or regulations applicable to the district. The Plan must also identify the organization responsible
for managing funds, administering programs, and reporting to the City on behalf of the TID
Owner's Association. That organization must have legal status to enable the City to contract
with it, pursuant to the 1994 Act.
Civitas drafted The Management District Plan (The Plan, Attachment 2), which incorporates the
interests and intentions of lodging industry and PDA representatives, and addresses City
considerations. A draft Plan is required before approaching lodging owners with a petition. The
Plan was reviewed by City staff, and revised to address staff comments. The Plan includes the
proposed boundary of the PTID, a service plan and budget, quantifies an assessment, creates a
proposed means of governance and collections, and sets a term. The PTID is designed to provide
specific benefits directly to payers by increasing room night sales. Marketing, sales,
communications, and destination development programs will increase overnight tourism and will
market payers as tourist, meeting and event destinations.
As proposed, the PTID will include all lodging businesses with 10 or more rooms, existing and
in the future, available for public occupancy within the boundaries of the City of Petaluma.
The total PTID annual budget for the initial year, of its five (5) year operation, is estimated at
$660,000. The budget is expected to fluctuate with room rentals, and as businesses open and
close. The budget is divided into the following categories and amounts:
Marketing, Research and Communications, 60 percent ($396,000). This category
includes the operation and maintenance of what is currently the Petaluma Visitors
Program. Responsibility for the program will transfer from the City to the PTID if the
District is formed.
Destination Development, 17 percent ($112,200). These funds will be directed to the
City of Petaluma to provide activities, projects, and improvements that will benefit
lodging businesses, promote tourism, and increase room rental, consistent with the 1994
Act. The City and the Petaluma Lodging Association will collaborate on the use of these
monies; final approval will rest with the City Council as part of the City's annual
budgeting process.
Administration/Advocacy, 16 percent ($105,600). These funds will support the
Lodging Association's costs of administering the program, which will be managed by the
Petaluma Downtown Association.
Contingency/Reserve, four (4) percent ($26,400). Initially these funds will provide an
offset against unpaid assessments, but can be used for other programmatic uses, renewal
of the PTID, and so forth.
City Administration, three (3) percent ($19,800). These funds reimburse the City for
its costs administering the agreement with the Petaluma Lodging Association, managing
the license for the Visitors Center location, and providing oversight and accountability
for the PTID. This amount is less than the five (5) percent discussed by the City Council
in July 2018, and recognizes that collection of assessments will be conducted by the
Lodging Association, and not the City.
The proposed annual assessment is two percent (2%) of gross room rental revenue. Based on the
benefit received, assessments will not be collected on: stays of more than thirty (30) consecutive
days; stays by any officer or employee of a Federal, State, or foreign government who is exempt
by reason of express provision of federal or state law or international treaty; and stays pursuant
to contracts executed prior to January 1, 2019.
The Petaluma Lodging Association will serve as the PTID's OA. The OA is charged with
managing funds and implementing programs in accordance with the 1994 Act. The Petaluma
Lodging Association will be responsible for contracting with a service for collecting the
assessment on a monthly basis (including any delinquencies, penalties and interest) from each
lodging business located in the boundaries of the PTID. The service will forward the
assessments to the Petaluma Lodging Association, which will have the responsibility of
managing PTID programs as provided in the Plan.
The proposed PTID will have a five (5) year life. The assessment would be implemented January
1, 2019. Once per year beginning on the anniversary of PTID formation, business owners paying
fifty percent (50%) or more of the assessment would have a thirty (30) day period in which they
may protest and begin proceedings to terminate the PTID.
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A petition and a copy of the proposed Plan were circulated to all lodging businesses with ten
rooms or more, in the bounds of the City of Petaluma, on October 4, 2018. Civitas, working
with the City on transient property tax information, determined each entity's proportionate share
of the proposed assessment for purposes of determining whether the simple majority threshold
had been reached. Petitions in favor of district formation were submitted by 7 hotels, which
represent 80.15% of the total PTID assessment. Copies of these petitions are incorporated as
Exhibit A, which accompanies the attached resolution. This majority allows the City Council to
initiate proceedings for PTID formation by taking action on the attached resolution of intention
to form the district, and set the time and date for a public meeting and a public hearing, where
the request to form a TID would be further considered. Adoption of the resolution of intention
will result in a public meeting on November 5, 2018 and a public hearing on December 3, 2018
on the formation of the Petaluma Tourism Improvement District and the levy of assessments on
lodging businesses. Further detail on the formation process follows:
October 15, 2018 RESOLUTION OF INTENTION HEARING
Upon the submission of a written petition, signed by the property or
business owners in the proposed district who will pay more than fifty
percent (50%) of the assessments proposed to be levied, the City Council
may initiate proceedings to form a district by the adoption of a resolution
expressing its intention to form a district.
October 16, 2018 NOTICE
The Property and Business Improvement District Act of 1994 requires the
City snail written notice to the owners of all businesses proposed to be
within the PTID. Mailing the notice begins a mandatory forty-five (45)
day period in which owners may protest PTID formation.
November 5, 2018 PUBLIC MEETING
Allow public testimony on the establishment of the PTID and levy of
assessments. No Council action required.
December 3, 2018 FINAL PUBLIC HEARING
If written protests are received from the owners of businesses in the
proposed PTID which will pay more than fifty percent (50%) of the
assessments proposed to be levied and protests are not withdrawn so as to
reduce the protests to less than fifty percent (50%), no further proceedings
to levy the proposed assessment against such businesses shall be taken for
a period of one (1) year from the date of the finding of a majority protest
by the City Council.
At the conclusion of the public hearing to establish the PTID, the City
Council may adopt, revise, 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 revised by reducing any or all of them. If the City Council,
following the public hearing, decides to establish the proposed PTID, the
City Council shall adopt a resolution of formation.
The City will need to enter into an agreement with an OA, pursuant to the 1994 Act. The 1994
Act requires that association to be incorporated as a non-profit. The Plan identifies the Petaluma
Lodging Association as the OA; the group is, as -of -yet, not an incorporated non-profit entity. It
will need to obtain recognition as a non-profit organization before the City can contract with it to
oversee the activities of the PTID, and status as an entity to meet the City's insurance and
indemnification requirements. The management agreement is not part of the Council's
consideration at the October 15, 2018 meeting, but will need to be finalized before the Council
adopts a resolution of formation, or is made a condition of that resolution before the PTID can go
into effect.
FINANCIAL IMPACTS
If the TID is approved, the largest financial benefit to the City of Petaluma is the shifting of
fiscal responsibility for funding the Petaluma Visitors Program from the City to the TID
Business Owner's Association. This results in annual savings up to $248,000, based on the
agreement with the Petaluma Downtown Association that is set to expire in June 2019. In
addition, the City will receive 17 percent of TID proceeds, for "Destination Development"
activities, to be consistent with the uses allowed by the Streets and Highway's Code. This is
presently estimated at $112,500 per year. The City will also receive three percent (3%) of the
amount collected by the TID to cover the cost of staff time spent on annual program
administration. This is currently estimated at $19,800. In the initial year of the TID, the City
will also receive a one-time reimbursement for staff time spent on the formation process,
amounting to approximately $18,800. Because the PTID programs are intended to increase
visitation to the City of Petaluma, the City may also benefit from an increase in transient
occupancy tax and sales tax collections.
ATTACHMENTS
1. Resolution of Intent with Exhibit A, Petitions
2. Proposed Management District Plan
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ATTACHMENT I
RESOLUTION NO. 2018 -
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
PETALUMA DECLARING THE CITY COUNCIL'S INTENTION TO
FORM THE PETALUMA TOURISM IMPROVEMENT DISTRICT AND
GIVING NOTICE OF THE TIME AND PLACE OF A PUBLIC MEETING
AND A PUBLIC HEARING ON THE ESTABLISHMENT OF THE
DISTRICT AND THE LEVY OF ASSESSMENTS
WHEREAS, the Property and Business Improvement Law of 1994, Streets and
Highways Code § 36600 et seq. ("Improvement Law"), authorizes the cities and other specified
entities to establish business improvement districts to levy assessments against businesses and/or
property within the district to fund various specified activities and improvements within the
district benefitting businesses and/or property owners subject to the levy; and
WHEREAS, in accordance with Section 36621, subdivision (a) of the Improvement
Law, the City Council may, upon submission of a written petition signed by the property or
business owners in a proposed district who will pay more than 50% of the assessments proposed
to be levied, initiate proceedings to form an improvement district by adoption of a resolution
expressing the City Council's intention to form the district; and
WHEREAS, in accordance with Section 36621, subdivision (a) of the Improvement
Law, the amount of assessment attributable to property or a business that is in excess of 40% of
the amount of all assessments proposed to be levied in a proposed district shall not be included in
determining whether the petition to form the district is signed by property or business owners
who will pay more than 50% of the total amount of assessments proposed to be levied; and
WHEREAS, in accordance with Section 36621, subdivision (b) of the Improvement
Law, the petition required to form a district must include a summary of the management district
plan for the district, including a map showing the district boundaries, information specifying
where the complete management district plan can be obtained, and information specifying that
the complete management district plan shall be furnished upon request; and
WHEREAS, in accordance with Section 3 662 1, subdivision (c) of the Improvement
Law, the resolution of intent required to initiate district formation proceedings must contain a
brief description of the proposed improvements, maintenance and activities to be funded, the
amount of the proposed assessment, a statement as to whether the assessment will be levied on
property or businesses within the district (or both), a statement as to whether bonds will be
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issued, and a description of the exterior boundaries of the proposed district, which may be made
by reference to any plan or map that is on file with the clerk, all sufficiently detailed to enable an
owner to generally identify the nature and extent of the improvements, maintenance and
activities and the location and extent of the proposed district, as well as a time and place for a
public meeting and a public hearing on the establishment of the district and the levy of
assessments consistent with the requirements of Section 36623 of the Improvement Law; and
WHEREAS, in accordance with Section 36622 of the Improvement Law, management
district plans required to form a district must include, but are not limited to: a map of the district
in sufficient detail to locate each parcel of property and, if businesses are to be assessed, that
identifies each business within the district and the district boundaries in sufficient detail to allow
a business owner to reasonably determine whether a business is located within the district; the
name of the proposed district; a description of the boundaries of the district sufficient to identify
the affected property and businesses included, which may be made by reference to any plan or
map on file with the cleric; the improvements, maintenance and activities proposed for each year
of operation of the district and their maximum cost; the total annual amount proposed to be
expended for improvements, maintenance or activities and debt service in each year of district
operation, which amount may be estimated based on the assessment rate if the assessment is to
be levied on businesses; the proposed source(s) of financing, including the proposed method and
basis of levying the assessment in sufficient detail to allow each property or business owner to
calculate the amount of the assessment to be levied against his or her property and/or business;
whether bonds will be issued; the time and manner of collecting assessments; the number of
years in which assessments will be levied (not to exceed 5 years for a new district); the proposed
time for implementation and completion of the management district plan; any proposed rules and
regulations to be applicable to the district; a list of the properties or business to be assessed,
including assessor's parcel numbers for properties to be assessed; and a statement of the method
or methods by which district expenses will be imposed upon benefited real property or
businesses, in proportion to the benefit received by the property or business; for property -based
districts, the proportionate special benefits to be derived by each parcel, the total amount of all
special benefits to be conferred within the district, the total amount of general benefits, and a
detailed engineer's report supporting all contemplated assessments; and any other item the city
council requires to be incorporated in the management district plan; and
WHEREAS, in accordance with Section 36623 of the Improvement Law, notice of new
business assessments must be mailed to the owners of the businesses proposed to be assessed;
protests may be made orally or in writing by any interested person; written protests must be filed
with the clerk at or before the time fixed for the public hearing; the city council may waive any
irregularity in the form or content of any written protest; written protests may be withdrawn in
writing at any time before the conclusion of the public hearing; each written protest shall contain
a description of the business in which the persons subscribing the protest is interested sufficient
to identify the businesses; written protests that do not satisfy Section 36623 requirements shall
not be counted in determining a majority protest; and if written protests are received from the
owners or authorized representatives of businesses in the proposed district that will pay 50% or
more of the assessments proposed to be levied and protests are not withdrawn so as to reduce the
protest to less than 50%, no further proceedings to levy the proposed assessment against such
business shall be taken for a period of one year from the date of the finding of a majority protest;
and
WHEREAS, in accordance with Section 36623 of the Improvement Law, notice, protest
and hearing procedures for proposed new business assessment districts must comply with the
requirements of Government Code section 54954.6, which requires: at least one public meeting
at which local officials shall allow public testimony regarding proposed new or increased general
taxes or assessments in addition to the noticed public hearing at which the legislative body
proposes to enact the tax or assessment; at least 45 days public notice given by mail of the public
hearing at which the legislative body proposes to enact the general tax or assessment; mailed
notice of the public meeting included with the notice of the public hearing; the mailed notice
envelope must include the public agency's name and return address; the mailed notice must be in
at least 10 point type and be given to all property owners or business owners proposed to be
subject to the assessment addressed to those persons whose names and addresses appear on the
last equalized county assessment role, the State Board of Equalization assessment roll, or the
local agency's records pertaining to business ownership; holding of the public meeting at least 10
days after mailed notice of the public hearing and meeting; and holding of the public hearing at
least 7 days after the public meeting; and
WHEREAS, in accordance with Section 54954.6 of the Government Code, the notice of
a meeting and hearing on a proposed new assessment must include the estimated amount of the
assessment per parcel or, in the case of proposed assessments on businesses, the proposed
method and basis of levying the assessment in sufficient detail to allow each business owner to
calculate the amount of assessment to be levied against each business; a general description of
the purpose or improvements that the assessment will fund; the address to which property owners
may snail a protest against the assessment; the telephone number and address of an individual,
office or organization that interested persons may contact to receive additional information about
the assessment; a statement that a majority protest will cause the assessment to be abandoned;
the dates, times and locations of the public meeting and hearing; and the proposed assessment
formula or range; and
WHEREAS, in accordance with Section 36624 of the Improvement Law, at the
conclusion of the public hearing to form the district, the city council may adopt, revise, change,
reduce or modify the proposed assessment or the type or types of improvements, maintenance
and activities to be funded with the revenue from the assessments, but may only revise proposed
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assessments by reducing them and may only change the boundaries of the proposed district that
will exclude territory that will not benefit from the proposed improvements, maintenance and
activities; and
WHEREAS, in accordance with Section 36625, subdivision (a) of the Improvement
Law, if, following the public hearing, the city council decides to form the proposed district, it
shall adopt a resolution of formation that includes but is not limited to: a brief description of the
proposed improvements, maintenance, and activities; the amount of the proposed assessment; a
statement as to whether the assessment will be levied on property, businesses or both within the
district; a statement on whether bonds will be issued; a description of the exterior boundaries of
the proposed district, which may be made by reference to any plan or map that is on file with the
clerk, such that an owner may generally identify the nature and extent of the improvements,
maintenance and activities and the location and extent of the proposed district; the number, date
of adoption and title of the resolution of intention to form the district; the time and place where
the public hearing was held concerning establishment of the district; a determination regarding
any protests received; a statement that the properties, business or properties and business in the
district established by the resolution shall be subject to any amendments to the Improvement
Law; a statement that the improvements, maintenance and activities to be conferred on
businesses and properties in the district will be funded by the levy of the assessments, and that
the revenue from the levy of assessments within the district shall not be used to provide
improvements, maintenance or activities outside the district 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; and a finding that the property or businesses with the
area of the district will be benefited by the improvements, maintenance and activities funded by
the proposed assessments; and
WHEREAS, in accordance with Section 36625, subdivision (b), of the Improvement
Law, adoption of the resolution of formation shall constitute the levy of an assessment in each of
the fiscal years referred to in the management district plan; and
WHEREAS, in March, 2018, Petaluma City Council members received correspondence
from representatives of the Petaluma lodging industry and the Petaluma Downtown Association
encouraging the City Council to establish a benefit assessment district to support tourism
funding, including an offer to use some of the assessment proceeds to fund the Petaluma Visitors
Center program; and
WHEREAS, the Petaluma lodging industry and the Petaluma Downtown Association
have proposed formation the Petaluma Tourism Improvement District ("PTID") to fund
marketing and sales promotion efforts for Petaluma lodging businesses; and
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WHEREAS, the proposed PTID would provide specific benefits to assessed lodging
businesses with 10 or more rooms by funding marketing and sales promotion programs that are
designed to increase room night sales for assessed lodging businesses, an approach that has been
successfully used in other destination areas throughout the country; and
WHEREAS, owners of lodging businesses in Petaluma with 10 or more rooms have met
to consider the formation of the PTID; and
WHEREAS, City of Petaluma staff have worked with lodging business owners to draft a
Management District Plan (Management Plan) which sets forth the proposed boundary of the
PTID, a service plan and budget, and proposed means of governance; and
WHEREAS, the proposed PTID would include all lodging businesses with 10 or more
rooms in the City of Petaluma and would levy assessments to fund the activities occurring within
the PTID to benefit the assessed businesses pursuant to the Management Plan, and levies to fund
the PTID pursuant to the Improvement Law would be imposed on covered businesses within the
PTID and not on real property; and
WHEREAS, in accordance with Section 36601, subdivision (d), of the Improvement
Law, assessments levied under the Improvement Law for the purpose of conferring specific
benefits upon the businesses in a business district are not taxes for the general benefit of a city,
even if property, businesses or persons not assessed receive incidental or collateral effects that
benefit them; and
WHEREAS, proposed assessments pursuant to the PTID would not be taxes as defined
in Section 1, paragraph (e) of Article XIIIC of the California Constitution ("Proposition 26")
because such assessments would be imposed for a,specific benefit conferred or privilege granted
directly to the payer that is not provided to those not charged, and which does not exceed the
reasonable cost of providing the services which the assessments would fund; and
WHEREAS, the proposed assessments pursuant to the PTID are not subject to the
requirements of Article XIIID of the California Constitution ("Proposition 218") concerning
property related assessments and fees pursuant to Apartment Association of Los Angeles County
v. City of Los Angeles (2001) 24 CalAth 830, because such assessments would not be imposed on
real property but rather on covered businesses, and such assessments would not be applicable to
incidents of property ownership; and
WHEREAS, in accordance with Section 36621 of the Improvement Law, lodging
businesses in Petaluma with 10 or more rooms who will pay more than fifty percent (50%) of the
proposed assessment under the PTID have signed petitions in favor of formation of the PTID
which petitions are attached to and made a part of this Resolution as Exhibit A; and
WHEREAS, in accordance with Section 36623 of the Improvement Law and Section
54954.6 of the Government Code; notices will be mailed to owners of businesses proposed to be
assessed pursuant to the PTID on October 16, 2018 regarding an upcoming public meeting to be
held on November 5, 2018, at least ten (10) days after the notice is mailed, at which meeting
lodging business owners with 10 or more rooms and other interested parties may comment, and
the same mailed notice will include notice of a public hearing to be held on December 3, 2018, at
least 45 days after the notice is mailed and at least 7 days after the public meeting; and
WHEREAS, if the City Council finds in accordance with Section 36623 of the
Improvement Law that there is no majority protest against formation of the proposed PTID, the
City Council may adopt a Resolution of Formation after the conclusion of the public hearing in
accordance with Section 36625 of the Improvement law;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Petaluma as
follows:
The recitals set forth in this resolution are hereby declared to be true and correct and
findings of the City Council.
2. The City Council finds that lodging businesses with 10 or more rooms that will pay more
than fifty percent (50%) of the assessment proposed in the Plan have signed and
submitted petitions in support of the formation of the PTID in accordance with petitions
attached as Exhibit A to this resolution. The City Council accepts the petitions and
adopts this Resolution of Intention to form the PTID and to levy assessments on certain
lodging businesses within the PTID boundaries in accordance with the Improvement
Law.
3. The City Council finds that the Management Plan, a complete copy of which is on file
with the City Clerk and which may be reviewed on request, satisfies all requirements of
Section 36622 of the Improvement Law.
4. In accordance with Section 36621 of the Improvement Law, the City Council declares its
intention to establish the PTID and to levy and collect assessments on lodging businesses
with 10 or more rooms within the PTID boundaries pursuant to the Improvement Law.
In accordance with Section 36621 of the Improvement Law, the City Council finds as
follows:
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a. The PTID shall include all lodging businesses with 10 or more rooms located within
the jurisdictional boundaries of the City of Petaluma, as shown on the map attached
to and made a part of this resolution as Exhibit B.
b. The name of the district to be formed pursuant to the Improvement Law shall be the
Petaluma Tourism Improvement District (PTID).
C. The annual assessment rate in the PTID shall be two percent (2%) of gross short-
term room rental revenue. Based on the benefit received, assessments will not be
collected on: stays of more than thirty (30) consecutive days; stays by any officer or
employee of a Federal, state, or foreign government who is exempt by reason of
express provision of federal or state law or international treaty; and stays pursuant
to contracts executed prior to January 1, 2019.
d. The assessments levied for the PTID shall be applied toward sales promotion and
marketing programs to market assessed lodging businesses in Petaluma as tourist,
meeting, and event destinations, as described in the Management Plan. Funds
remaining at the end of any year may be used in subsequent years in which PTID
assessments are levied as long as they are used consistent with the requirements of
this resolution and the Management Plan.
e. The proposed PTID will have a five (5) year term, beginning January 1, 2019
through December 31, 2023, unless renewed pursuant to Section 36660 of the
Improvement law.
f. Bonds shall not be issued to fund PTID programs or improvements.
g. The time and place for the public meeting to hear testimony on establishing the
PTID and levying assessments are set for November 5, 2018, at 6:45 PM, or as soon
thereafter as the matter may be heard, at the City Hall Council Chambers located at
11 English Streer, Petaluma, CA 94952.
h. The time and place for the public hearing to establish the PTID and the levy of
assessments are set for December 3, 2018, at 6:45 PM, or as soon thereafter as the
matter may be heard, at the City Hall Council Chambers located at 11 English
Street, Petaluma, CA 94952. The City Clerk is directed to provide written notice to
the lodging businesses with 10 or more rooms subject to assessment of the date and
time of the meeting and hearing, and to provide that notice as required by Section
36623 of the Improvement Law, no later than October 16, 2018.
13
At the public meeting and hearing the testimony of all interested persons for or
against the establishment of the PTID will be received. If at the conclusion of the
public hearing, there are of record written protests by the owners of the lodging
businesses within the proposed PTID that will pay more than fifty percent (50%) of
the estimated total assessment. of the entire PTID, no further proceedings to
establish the PTID shall occur for a period of one year.
6. If any section, subsection, sentence, clause, phrase or word of this resolution is for any
reason held to be unconstitutional, unlawful or otherwise invalid by a court of competent
jurisdiction or preempted by state legislation, such decision or legislation shall not affect
the validity of the remaining portions of this resolution. The City Council of the City of
Petaluma hereby declares that it would have passed and adopted this resolution and each
and all provisions thereof irrespective of the fact that any one or more of said provisions
be declared unconstitutional, unlawful or otherwise invalid.
7. , This resolution shall take effect immediately upon its adoption by the City Council.
THIS RESOLUTION was passed by the City Council of the City of Petaluma at a regular
meeting thereof held on October 15, 2018, by the following vote:
AYES:
NOES:
ABSENT OR NOT VOTING:
ATTEST:
City Clerk
By:
Claire Cooper David Glass, Mayor
APPROVED AS TO FORM;
City Attorney
Eric Danly
14
EXHIBIT A TO RESOLUTION
PETITION TO THE CITY COUNCIL OF THE CITY OF PETALUMA
TO FORM THE PETALUMA TOURISM IMPROVEMENT DISTRICT
We petition you to initiate proceedings to form a Tourism Improvement District in accordance with the
Property and Business Improvement District Law of 1994, Streets and Highways Code section 36600 et
seq., for the purpose of providing services as described in the summary of the Management District Plan
attached hereto as Exhibit A.
Lodging Establishment
Business Owner
Snit �'P�a/��., P2 101-04er�-1 LGA
Nr 0, x car 4A 6'e,,7 / r
Owner Representative/Owner Name (printed) Title
Owner/Representative Signature
"I 01-211-11f
Date
A complete copy of the Management District Plan will be furnished upon request. Requests for a
complete copy of the Management District Plan should be made to:
Carson Lambeth/Civitas
1102 Corporate Way
Sacramento, CA 95831
clambeth@civitasadvisors.com
(916) 437-4300
PETITION TO THE CITY COUNCIL OF THE CITY OF PETALUMA
TO FORM THE PETALUMA TOURISM IMPROVEMENT DISTRICT
We petition you to initiate proceedings to form a Tourism Improvement District in accordance with the
Property and Business Improvement District Law of 1994, Streets and Highways Code section 36600 et
seq., for the purpose of providing services as described in the summary of the Management District Plan
attached hereto as Exhibit A.
Lodging Establishment
San Francisco North/Petaluma KOA
Business Owner
San Francisco North/Petaluma Campgrounds Inc.
Vice President
Ownffr Representative/Owner Name (printed) Title
Owner/Representative Signature Date
A complete copy of the Management District Plan will be furnished upon request. Requests for a
complete copy of the Management District Plan should be made to:
Carson Lambeth/Civitas
1102 Corporate Way
Sacramento, CA 95831
clambeth@civitasadvisors.com
(916) 437-4300
PETITION TO THE CITY COUNCIL OF THE CITY OF PETALUMA
TO FORM THE PETALUMA TOURISM IMPROVEMENT DISTRICT
We petition you to initiate proceedings to form a Tourism Improvement District in accordance with the
Property and Business Improvement District Law of 1994, Streets and Highways Code section 36600 et
seq., for the purpose of providing services as described in the summary of the Management District Plan
attached hereto as Exhibit A.
Lodging Establishment Business Owner
Sheraton Sonoma County Marshall Young
745 Baywood Dr.
Petaluma, CA 94954
Marshall Young
Owner Representative/Owner Name (printed)
ner/Representativgnat`jre
Owner
Title
10/3/18
Date
A complete copy of the Management District Plan will be furnished upon request. Requests for a
complete copy of the Management District Plan should be made to:
Carson Lambeth/Civitas
1102 Corporate Way
Sacramento, CA 95831
clambeth@civitasadvisors.com
(916) 437-4300
PETITION TO THE CITY COUNCIL OF THE CITY OF PETALUMA
TO FORM THE PETALUMA TOURISM IMPROVEMENT DISTRICT
We petition you to initiate proceedings to form a Tourism Improvement District in accordance with the
Property and Business Improvement District Law of 1994, Streets and Highways Code section 36600 et
seq., for the purpose of providing services as described in the summary of the Management District Plan
attached hereto as Exhibit A.
Lodging Establishment
Hotel Petaluma
205 Kentucky Street
Petaluma, CA 94952
Dustin Groff
Owner Representative/Owner Name (printed)
Owner/Representative Signature
Business Owner
Dipak Patel
Satish Patel
General Manager
Title
9/28/2018
Date
A complete copy of the Management District Plan will be furnished upon request. Requests for a
complete copy of the Management District Plan should be made to:
Carson Lambeth/Civitas
1102 Corporate Way
Sacramento, CA 95831
clambeth@civitasadvisors.com
(916) 437-4300
PETITION TO THE CITY COUNCIL OF THE CITY OF PETALUMA
TO FORM THE PETALUMA TOURISM IMPROVEMENT DISTRICT
We petition you to initiate proceedings to form a Tourism Improvement District in accordance with the
Property and Business Improvement District Law of 1994, Streets and Highways Code section 36600 et
seq., for the purpose of providing services as described in the summary of the Management District Plan
attached hereto as Exhibit A.
Lodging Establishment
L r (j ^I ii i t I 1•�c� �� (1��
u, ) C/- 0 4 1) J Z
Business Owner
No (� -- C jr-
M
Owner Representative/Owner Name (printed) Title
er/Representative Signature
Date
A complete copy of the Management District Plan will be furnished upon request. Requests for a
complete copy of the Management District Plan should be made to:
Carson Lambeth/Civitas
1102 Corporate Way
Sacramento, CA 95831
clambeth@civitasadvisors.com
(916) 437-4300
t,�
PETITION TO THE CITY COUNCIL OF THE CITY OF PETALUMA
TO FORM THE PETALUMA TOURISM IMPROVEMENT DISTRICT
We petition you to initiate proceedings to form a Tourism Improvement District in accordance with the
Property and Business Improvement District Law of 1994, Streets and Highways Code section 36600 et
seq., for the purpose of providing services as described in the summary of the Management District Plan
attached hereto as Exhibit A.
Lodging Establishment
Oq (A- -TWV1 G4�RYKCf
�'K ( u 'hAa , �s
Owner Representative/Owner Name (printed)
Owner/Representative Signature
Business Owner
ow Kf V''
Title
Date
A complete copy of the Management District Plan will be furnished upon request. Requests for a
complete copy of the Management District Plan should be made to:
Carson Lambeth/Civitas
1102 Corporate Way
Sacramento, CA 95831
clambeth@civitasadvisors.com
(916) 437-4300
PETITION TO THE CITY OF PETALUMA
TO FORM THE PETALUMA TOURISM IMPROVEMENT DISTRICT
We petition you to initiate proceedings to form a Tourism Improvement District in accordance with the
Property and Business Improvement District Law of 1994, Streets and Highways Code section 36600 et
seq., for the purpose of providing services as described in the summary of the Management District Plan
attached hereto as Exhibit A.
I
Lodging Establishment Business Owner
A completr: copy of the Management District Plan will be furnished upon request. f2equests for a
complete copy of the lvlanagement District Plan should he made to.
Carson Lambeth/Civitas
1102 Corporate Way
Sacramento, CIS L-)5831
clari�beth�rcivitasadvisors.com
(916) 4.317 4300
A F
J ,,
CONTENTS
Prepared by
Civitas
CIVITAS
PARTNERSHIPS • PROGRESS • PROSPERITY
(800)999-7781
www.eivitasadvisors.com
CONTENTS............................................................................................................................ 1
I.
OVERVIEW........................................................................................................................................
2
II.
BACKGROUND................................................................................................................................3
III.
BOUNDARY.......................................................................................................................................
4
IV.
BUDGET AND SERVICES............................................................................................................. 5
A.
Annual Service Plan............................................................................................................ 5
B.
Annual Budget.................................................................................................................... 7
C.
California Constitutional Compliance................................................................................ 7
D.
Assessment..........................................................................................................................9.
E.
Penalties and Interest........................................................................................................
10
F.
Time and Manner for Collecting Assessments.................................................................
10
V.
GOVERNANCE...............................................................................................................................11
A.
Owners' Association.........................................................................................................
11
B.
Brown Act and California Public Records Act Compliance ............................................
11
C.
Annual Report ...................................................................................................................
11
APPENDIX1 —LAW ....................................................................................................................................12
APPENDIX 2 — ASSESSED BUSINESSES..........'...................................................................................23
Prepared by
Civitas
CIVITAS
PARTNERSHIPS • PROGRESS • PROSPERITY
(800)999-7781
www.eivitasadvisors.com
I. OVERVIEW
Developed by Petaluma Lodging Association (PLA), the Petaluma Tourism Improvement District
(PTID) is an assessment district proposed to provide specific benefits to payors, by funding marketing
and sales promotion efforts for assessed businesses. This approach has been used successfully in
other destination areas throughout the country to provide the benefit of additional room night sales
directly to payors.
Location: The proposed PTID includes all lodging businesses located within the boundaries of
City of Petaluma, as shown on the map in Section III.
Services: The PTID is designed to provide specific benefits directly to payors by increasing
room night sales. Marketing, sales, communications, and destination development
programs will increase overnight tourism and will market payors as tourist, meeting
and event destinations, thereby increasing room night sales.
Budget: The total PTID annual budget for the initial year, of its five (5) year operation, is
anticipated to be approximately $660,000. The budget is expected to fluctuate as room
sales do and as businesses open and close.
Cost: The annual assessment rate is two percent (2%o) of gross short-term room rental
revenue. Based on the benefit received, assessments will not be collected on: stays of
more than thirty (30) consecutive days; stays by any officer or employee of a Federal,
state, or foreign government who is exempt by reason of express provision of federal
or state law or international treaty; and stays pursuant to contracts executed prior to
January 1, 2019,
Collection: The Petaluma Lodging Asscociation will be responsible for contracting with a service
for collecting the assessment on a monthly basis (including any delinquencies, penalties
and interest) from each lodging business located in the boundaries of the PTID. The
service shall take all reasonable efforts to collect the assessments from each lodging
business.
Duration: The proposed PTID will have a five (5) year life, beginning January 1, 2019 through
December 31, 2023. Once per year, beginning on the anniversary of PTID formation,
there is a thirty (30) day period in which owners paying fifty percent (50%) or more of
the assessment may protest and initiate a City Council hearing on PTID termination.
Management: Petaluma Lodging Association will serve as the PTID's Owners' Association. The
Owners' Association is charged tivith managing funds and implementing programs in
accordance with this Plan, and in accordance with Streets and Highways Code Section
36600 et seq. The PLA is also required to enter into an agreement or agreements with
the City governing the administration of the PTID, and the activities specified in this
Management District Plan, including administration of the Petaluma Visitors Center.
The PLA must also provide annual reports to the City Council concerning the PTID
in accordance with the Streets and Highways Code.
PTID Management District Plan 2
September 27, 2018
II. BACKGROUND
TIDs are an evolution of the traditional Business Improvement District. The first TID was formed
in West Hollywood, California in 1989. Since then, over ninety California destinations have followed
suit. In recent years, other states have begun adopting the California model —Montana, South Dakota,
Washington, Colorado, Texas and Louisiana have adopted TID laws. Several other states are in the
process of adopting their own legislation. The cities of Wichita, Kansas and Newark, New Jersey used
an existing business improvement district law to form a TBID. And, some cities, like Portland,
Oregon and Memphis, Tennessee have utilized their home rule powers to create TIDs without a state
law.
100
80
60
40
20
Number of Districts Oneratine in California 95 99 100
California's TIDs collectively
raise over $250 million
annually for local destination
marketing. With competitors
raising their budgets, and
increasing rivalry for visitor
dollars, it is important that
Petaluma lodging businesses
invest in stable, lodging -
specific marketing programs.
0
TIDs utilize the efficiencies of
l0 l0 O O O O O O O O O O O O O O O O O O
W 0 0 0 0 0 0 0 M W o N N w 41 Ln M v private sector operation in the
market-based promotion of
tourism districts. TIDs allow lodging business owners to organize their efforts to increase room night
sales. Lodging business owners within the TID pay an assessment and those funds are used to provide
services that increase room night sales.
In California, TIDs are formed pursuant to the Property and Business Improvement District Law of
1994. This law allows for the creation of a benefit assessment district to raise funds within a specific
geographic area. The key dierence between TIDs and other benefit assessment districts is that funds raised are
returned to the Private non-hrofit corporation governing the district.
There are many benefits to TIDs:
• Funds must be spent on services and improvements that provide a specific benefit only to those
who pay;
® Funds cannot be diverted to general government programs;
• They ate customized to fit the needs of payors in each destination;
• They allow for a wide range of services;
•. They are designed, created andgoverned by those urho urillpaythe assessment; and
• They provide a stable, long-term funding source for tourism promotion.
PTID Management District Plan 3
September 27, 2018
III. BOUNDARY
The PTID will include all lodging businesses, existing and in the future, available for public occupancy
within the boundaries of the City of Petaluma.
Lodging business means: any structure or any portion of any structure which is occupied or intended
or designed for occupancy by transients for dwelling, lodging or sleeping purposes and includes any
hotel, inn, motel with 10 or more sleeping rooms. Lodging business also includes areas or places used
for a camp, for camping or for a camp meeting, or other similar structure or portion thereof.
The boundary, as shown in the map below, currently includes nine (9) lodging businesses. A complete
listing of lodging businesses within the proposed PTID can be found in Appendix 2.
Petaluma TID Boundaries
PTID Management District Plan
September 27, 2018
Petaluma TI D
M
IV. BUDGET AND SERVICES
A. Annual Service Plan
Assessment funds will be spent to provide specific benefits conferred or privileges granted directly to
the payors that are not provided to those not charged, and which do not exceed the reasonable cost
to the City of conferring the benefits or granting the privileges. The privileges and services provided
with the PTID funds are marketing, sales, communications, and destination development programs
available only to assessed businesses.
A service plan budget has been developed to deliver services that benefit the assessed businesses. A
detailed annual budget will be developed and approved by PLA. The table below illustrates the initial
annual budget allocations. The total initial budget is $660,000.
Initial Annual Budget - $660,000
Adminis
Advc
$105,6(
Destination
Developmenl
$112,200, 17
Contingency / City Admin Fee,
Reserve, $26,400, C1 q R n n Rai
Marketing,
Research, &
Communications,
$396,000, 60%
Although actual revenues will fluctuate due to market conditions, the proportional allocations of the
budget shall remain the same. However, the PLA board shall have the authority to adjust budget
allocations between the categories by no more than fifteen percent (15%) of the total budget per year.
A description of the proposed improvements and activities for the initial year of operation is below.
The same activities are proposed for subsequent years. In the event of a legal challenge against the
PTID, any and all assessment funds may be used for the costs of defending the PTID. In the first
year of operation, the costs of creating the PTID may be repaid by deducting repayment funds
proportionally from budget categories. The City will be reimbursed up to $19,000 dollars for their
work on formation and may be repaid by deducting repayment funds proportionally from budget
categories, excluding the City Admin fee, during the first year of operations.
Each budget category includes all costs related to providing that service, in accordance with Generally
Accepted Accounting Procedures (GAAP). For example, the sales and marketing budget includes the
cost of staff time dedicated to overseeing and implementing the sales and marketing program. Staff
time dedicated purely to administrative tasks is allocated to the administrative portion of the budget.
The costs of an individual staff member may be allocated to multiple budget categories, as appropriate
in accordance with GAAP. The staffing levels necessary to provide the services below will be
determined by the PLA on an as- needed basis.
PTID Management District Plan 5
September 27, 2018
Marketing, Sales, & Communications
A sales and marketing program will be sixty percent (60%) or $396,000 of the annual proposed budget
of $660,000 (which is the 2019 forecasted collections) and will promote assessed businesses as tourist,
meeting, and event destinations. The program will have the goal of increasing overnight visitation and
room night sales at assessed businesses, and may include the following activities:
• Conduct research to understand the Petaluma visitor experience, brand, primary motivators for
visiting and most importantly, to develop an overall strategic marketing plan that solidifies the
Petaluma brand in Sonoma County.
• Develop Return on Investment (ROI) analysis on effectiveness of TID funds to improve
effectiveness and increase overnight visitation at assessed businesses and tourism -related
businesses;
• Develop internet marketing efforts (including website and social media) to increase awareness
and optimize internet presence to drive overnight visitation and room sales to assessed
businesses;
• Proactively work with travel writers, social media influencers, bloggers and pursue other public
relations opportunities;
• Work closely with local businesses, organizations, associations and sports group to attract events
and meetings that drive overnight stays;
• Showcase Petaluma as a film and photography location with the goal of generating overnight
stays;
• Conduct familiarization tours of assessed businesses and visitor -related businesses;
• Expand out overnight demand from foreign and domestic inbound visitors from SFO
(recognizing SFO as the gateway for leisure and business travel), Oakland and Santa Rosa
airports;
• Work closely with other DMOs including Visit California, Sonoma County Tourism and SF
Travel to expand the reach of our brand message;
• Create television / radio ads targeted at potential visitors to drive overnight visitation and room
sales to assessed businesses;
• Create print ads in selected magazines and newspapers targeted at potential visitors to drive
overnight visitation and room sales to assessed businesses;
• Preparation and production of collateral promotional materials such as brochures, flyers and
maps featuring assessed businesses;
• Attendance of professional industry conferences and affiliation events to promote assessed
businesses;
• Lead generation activities designed to attract tourists and group events to assessed businesses;
• Director of Sales and General Manager meetings to plan and coordinate tourism promotion
efforts for assessed businesses;
• Development and implementation of a public relations and communications strategy, inclusive
of social media outlets and press release distribution designed to increase overnight visitation at
assessed businesses;
• Training and support of Visitors Center staff and volunteers;
• Fund operations and tenant improvements directly related to the operations of the Visitors
Center in accordance with the license agreement;
• Attendance of trade shows to promote assessed businesses and the Petaluma brand.
PTID Management District Plan 6
September 27, 2018
Destination Development
Destination Development (DD) projects will be designed to improve the visitor experience in an
effort to increase overnight visitation at assessed lodging businesses. These funds will be directed to
the City of Petaluma to provide activities, projects, and improvements that benefit lodging businesses,
promote tourism, and increase room rentals, consistent with the 1994 Act. The City and Petaluma
Lodging Association will collaborate on the use of these monies; final approval will rest with the City
Council as part of the City's annual budgeting process. As the total number of rooms sold and room
prices increase over time, die amount of available funds for DD projects will increase. DD projects
may include:
• Destination product development programs and improvements designed to drive overnight
visitation and room sales to assessed businesses;
• Services designed to improve the visitors experience;
• Other activities that increase die profile and notoriety of Petaluma as an overnight travel
destination and promote greater room night sales for assessed businesses.
Administration/Advocacy
The administration/advocacy portion of the budget shall be utilized for administrative staffing costs,
office costs, advocacy, and other general administrative costs such as insurance, legal, and accounting
fees.
City Administration Fee
The City of Petaluma shall be paid a fee equal to three percent (3%) of the amount of assessment
collected to cover its costs of administration related to the agreement with the PLA for administering
the PTID and agreements governing operation of the Visitors Center and other administrative
activities related to the PTID.
Contingency/Reserve
The budget includes a contingency line item to account for uncollected assessments, if any. If there
are contingency funds collected, they may be held in a reserve fund or utilized for other program,
administration or renewal costs at the discretion of the PLA Board. Policies relating to contributions
to the reserve fund, the target amount of the reserve fund, and expenditure of monies from the reserve
fund shall be set by the PLA Board. Contingency/reserve funds may be spent on District programs
or administrative and renewal costs in such proportions as determined by the PLA Board. The reserve
fund may be used for die costs of renewing die PTID.
B. Annual Budget
The total five (5) year improvement and service plan budget is projected at approximately $660,000
annually, or $3,300,000 through 2023. This amount may fluctuate as sales and revenue increase at
assessed businesses, but is not expected to change significantly over the tern.
C. California Constitutional Compliance
The PTID assessment is not a property -based assessment subject to the requirements of Proposition
218. Courts have found Proposition 218 limited the tern `assessments' to levies on real property.'
Rather, the PTID assessment is a business -based assessment, and is subject to Proposition 26.
1 Jarvis v. the City of San Diego 72 Cal App. 4th 230
PTID Management District Plan
September 27, 2018
7
Pursuant to Proposition 26 all levies are a tax unless they fit one of seven exceptions. Two of these
exceptions apply to the PTID, a "specific benefit" and a "specific government service." Both require
that the costs of benefits or services do not exceed the reasonable costs to the City of conferring the
benefits or providing the services.
1. Specific Benefit
Proposition 26 requites that assessment funds be expended on, "a specific benefit conferred or
privilege granted directly to. the payor that is not provided to those not charged, and which does not
exceed the reasonable costs to the local government of conferring the benefit or granting the
privilege."2 The services in this Plan are designed to provide targeted benefits directly to assessed
businesses, and are intended only to provide benefits and services directly to those businesses paying
the assessment. These services are tailored not to serve the general public, businesses in general, or
parcels of land, but rather to serve the specific businesses within the PTID. The activities described
in this Plan are specifically targeted to increase room night sales for assessed lodging businesses within
the boundaries of the PTID, and are narrowly tailored. PTID funds will be used exclusively to provide
the specific benefit of increased room night sales directly to the assessees. Assessment funds shall not
be used to feature non -assessed lodging businesses in PTID programs, or to directly generate sales for
non -assessed businesses. The activities paid for from assessment revenues are business services
constituting and providing specific benefits to the assessed businesses.
The assessment imposed by this PTID is for a specific benefit conferred directly to the payors that is
not provided to those not charged. The specific benefit conferred directly to the payors is an increase
in room night sales. The specific benefit of an increase in room night sales for assessed lodging
businesses will be provided only to lodging businesses paying the district assessment, with marketing,
sales and communications, and destination development programs promoting lodging businesses
paying the PTID assessment. The marketing, sales and communications, and destination development
programs will be designed to increase room night sales at each assessed lodging businesses. Because
they ate necessary to provide the marketing, research and communications, and destination
development programs that specifically benefit the assessed lodging businesses, the administration
and contingency services also provide the specific benefit of increased room night sales to the assessed
lodging businesses.
Although the PTID, in providing specific benefits to payors, may produce incidental benefits to non-
paying businesses, the incidental benefit does not preclude the services from being considered a
specific benefit. The legislature has found that, "A specific benefit is not excluded from classification
as a `specific benefit' merely because an indirect benefit to a nonpayor occurs incidentally and without
cost to the payor as a consequence of providing the specific benefit to the payor."'
2. Specific Government Service
The assessment may also be utilized to provide, "a specific government service or product provided
directly to the payor that is not provided to those not charged, and which does not exceed the
reasonable costs to the local government of providing the service or product.i' The legislature has
recognized that marketing and promotions services like those to be provided by the PTID are
government services within the meaning of Proposition 265. Further, the legislature has determined
that "a specific government service is not excluded from classification as a `specific government
2 Cal. Const. art XIII C § 1(e)(1)
3 Government Code § 53758(a)
4 Cal. Const. art XIII C § I(e)(2)
s Government Code § 53758(b)
PTID Management District Plan
September 27, 2018
service' merely because an indirect benefit to a nonpayor occurs incidentally and without cost to the
payor as a consequence of providing die specific government service to the payor."
3. Reasonable Cost
PTID services will be implemented carefully to ensure they do not exceed the reasonable cost of such
services. The full amount assessed will be used to provide the services described herein. Funds will
be managed by the PLA, and reports submitted on an annual basis to the City. Only assessed lodging
businesses will be featured in marketing materials, receive sales leads generated from PTID-funded
activities, be featured in advertising campaigns, and benefit from other PTID-funded services. Non -
assessed lodging businesses will not receive these, nor any other, PTID-funded services and benefits.
The PTID-funded programs are all targeted directly at and feature only assessed businesses. It is,
however, possible that there will be a spill over benefit to non -assessed businesses. If non -assessed
lodging businesses receive incremental room nights, that portion of the promotion or program
generating those room nights shall be paid with non-PTID funds. PTID funds shall only be spent to
benefit the assessed businesses, and shall not be spent on that portion of any program which directly
generates incidental room nights for non -assessed businesses.
D. Assessment
The annual assessment rate is two percent (2%) of gross short-term room rental revenue. Based on
the benefit received, assessments will not be collected on: stays of more than thirty (30) consecutive
days; stays by any officer or employee of a Federal, state, or foreign government who is exempt by
reason of express provision of federal or state law or international treaty; and stays pursuant to
contracts executed prior to January 1, 2019.
The term "gross room rental revenue" as used herein means: the consideration charged, whether or
not received, for the occupancy of a space in a lodging business, valued in money, whether to be
received in money, goods, labor or otherwise, including all receipts, cash, credits and property and
services of any kind or nature, without any deduction therefrom whatsoever. Gross room rental
revenue shall not include any federal, state or local taxes collected, including but not limited to
transient occupancy taxes.
The assessment is levied upon and a direct obligation of the assessed lodging business. However, the
assessed lodging business may, at its discretion, pass the assessment on to transients. The amount of
assessment, if passed on to each transient, shall be disclosed in advance and separately stated from the
amount of rent charged and any other applicable taxes, and each transient shall receive a receipt for
payment from the business. If die PTID assessment is identified separately it shallbe disclosed as die
"PTID Assessment." As an alternative, the disclosure may include the amount of the PTID
assessment and the amount of the assessment imposed pursuant to the California Tourism Marketing
Act, Government Code §13995 et seq. and shall be disclosed as the "Tourism Assessment." The
assessment is imposed solely upon, and is die sole obligation of the assessed lodging business even if
it is passed on to transients. The assessment shall not be considered revenue for any purpose,
including calculation of transient occupancy taxes.
Bonds shall not be issued.
6 Government Code § 53758(b)
PTID Management District Plan 9
September 27, 2018
E. Penalties and Interest
The PTID shall reimburse the Petaluma Lodging Association (PLA) for any costs associated with
collecting unpaid assessments. If sums in excess of die delinquent PTID assessment are sought to be
recovered in the same collection action by the PLA, die PTID shall beat its pro rata share of such
collection costs. Assessed businesses which are delinquent in paying the assessment shall be
responsible for paying:
1. Original Delirtquen y
Any lodging business that fails to remit any assessment imposed within die time required shall
pay a penalty of ten percent (10%) of the amount of the assessment in addition to the amount
of the assessment.
2. Coiathwed Delinguen y
Any lodging business that fails to remit any delinquent assessment on or before a period of
thirty (30) days following the date on which the assessment first became delinquent shall pay
a second delinquency penalty of ten percent (10%) of the amount of the assessment in addition
to the amount of the assessment and die ten percent (10%) penalty first imposed.
3. Fraud
If PLA determines that the nonpayment of any assessment is due to fraud, a penalty of twenty-
five percent (25%) of the amount of the assessment shall be added thereto in addition to the
penalties stated above.
4. hmefest
In addition to the penalties imposed, any lodging business that fails to remit any assessment
imposed shall pay interest at the rate of one-half of one percent (0.5%) per month or fraction
thereof on the amount of the assessment, exclusive of penalties, from the date on which the
assessment first became delinquent until paid.
5. Penalties Merged zvitb Assessment
Every penalty imposed and such interest as accrues under the provisions of subparagraphs 1-
4 of this subsection E, shall become a part of the assessment required to be paid.
F. Time and Manner for Collecting Assessments
The PTID assessment will be implemented beginning January 1, 2019 and will continue for five (5)
years through December 31, 2023. PLA will be responsible for contracting with a service for collecting
the assessment on a monthly basis (including any delinquencies, penalties and interest) from each
lodging business. The service shall take all reasonable efforts to collect the assessments from each
lodging business. The service shall fottivard the assessments collected to the Owners' Association,
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September 27, 2018
V. GOVERNANCE
A. Owners' Association
The City Council, through adoption of this Management District Plan, has the Light, pursuant to
Streets and Highways Code §36651, to identify the body that shall implement the proposed program,
which shall be the Owners' Association of the PTID as defined in Streets and Highways Code §36612.
The City Council has determined that Petaluma Lodging Association will serve as the Owners'
Association for the PTID. The PLA as Owners Association shall contract with the City regarding the
administration of the PTID and the Visitors Center.
B. Brown Act and California Public Records Act Compliance
An Owners' Association is a private entity and may not be considered a public entity for any purpose,
not may its board members or staff be considered to be public officials for any purpose. The Owners'
Association is, however, subject to government regulations relating to transparency, namely the Ralph
M. Brown Act and the California Public Records Act. These regulations are designed to promote
public accountability. The Owners' Association acts as a legislative body under the Ralph M. Brown
Act (Government Code §54950 et seq.). Thus, meetings of the PLA board and certain committees
must be held in compliance with the public notice and other requirements of the Brown Act. The
Owners' Association is also subject to the record keeping and disclosure requirements of the California
Public Records Act. Accordingly, the Owners' Association shall publicly report any action taken and
the vote or abstention on that action of each member present for the action.
C. Annual Report
The PLA shall present an annual report at the end of each year of operation to the City Council
pursuant to Streets and Highways Code §36650 (see Appendix- 1). The annual report shall include:
• Any proposed changes in the boundaries of the improvement district or in any benefit zones
or classification of businesses within the district.
• The improvements and activities to be provided for that fiscal year.
• An estimate of the cost of providing the improvements and the activities for that fiscal year.
• 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 or her business for
that fiscal year.
• The estimated amount of any surplus or deficit revenues to be carried over from a previous
fiscal year.
• The estimated amount of any contributions to be made from sources other than assessments
levied pursuant to this part.
PTID Management District Plan 11
September 27, 2018
APPENDIX 1- LAW
*** THIS DOCUMENT IS CURRENT THROUGH THE 2018 SUPPLEMENT ***
(ALL 2017 LEGISLATION)
STREETS AND HIGHWAYS CODE
DIVISION 18. PARKING
PART 7. PROPERTY AND BUSINESS IMPROVEMENT DISTRICT LAW OF 1994
CHAPTER 1. General Provisions
ARTICLE 1. Declarations
36600. Citation of part
This part shall be known and may be cited as the "Property and Business Improvement District Law of 1994."
36601. Legislative findings and declarations; Legislative guidance
The Legislature finds and declares all of the following:
(a) Businesses located and operating within business districts in some 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 business
districts in order to create jobs, attract new businesses, and prevent the erosion of the business districts.
(c) It is of particular local benefit to allow business districts to fund business related improvements,
maintenance, and activities through the levy of assessments upon the businesses or real property that receive
benefits from those improvements.
(d) Assessments levied for the purpose of conferring special benefit upon the real property or a specific
benefit upon the businesses in a business district are not taxes for the general benefit of a city, even if property,
businesses, or persons not assessed receive incidental or collateral effects that benefit them.
(e) Property and business improvement districts formed throughout this state have conferred special benefits
upon properties and businesses within their districts and have made those properties and businesses more
useful by providing the following benefits:
(1) Crime reduction. A study by the Rand Corporation has confirmed a 12 -percent reduction in the
incidence of robbery and an 8 -percent reduction in the total incidence of violent crimes within the
30 districts studied.
(2) Job creation.
(3) Business attraction.
(4) Business retention.
(5) Economic growth.
(6) New investments.
(f) With the dissolution of redevelopment agencies throughout the state, property and business improvement
districts have become even more important tools with which communities can combat blight, promote
economic opportunities, and create a clean and safe environment.
(g) Since the enactment of this act, the people of California have adopted Proposition 218, which added
Article XIII D to the Constitution in order to place certain requirements and restrictions on the formation of,
and activities, expenditures, and assessments by property -based districts. Article XIII D of the Constitution
provides that property -based districts may only levy assessments for special benefits.
(h) The act amending this section is intended to provide the Legislature's guidance with regard to this act, its
interaction with the provisions of Article XIII D of the Constitution, and the determination of special benefits
in property -based districts.
(1) The lack of legislative guidance has resulted in uncertainty and inconsistent application of this
act, which discourages the use of assessments to fund needed improvements, maintenance, and
activities in property -based districts, contributing to blight and other underutilization of property.
(2) Activities undertaken for the purpose of conferring special benefits upon property to be assessed
inherently produce incidental or collateral effects that benefit property or persons not assessed.
Therefore, for special benefits to exist as a separate and distinct category from general benefits, the
PTID Management District Plan 12
September 27, 2018
incidental or collateral effects of those special benefits are inherently part of those special benefits.
The mere fact that special benefits produce incidental or collateral effects that benefit property or
persons not assessed does not convert any portion of those special benefits or their incidental or
collateral effects into general benefits.
(3) It is of the utmost importance that property -based districts created under this act have clarity
regarding restrictions on assessments they may levy and the proper determination of special benefits.
Legislative clarity with regard to this act will provide districts with clear instructions and courts with
legislative intent regarding restrictions on property -based assessments, and the manner in which
special benefits should be determined.
36602. Purpose of part
The purpose of this part is to supplement previously enacted provisions of law that authorize cities to levy assessments
within property and business improvement districts, to; ensure that those assessments conform to all constitutional
requirements and are determined and assessed in accordance with the guidance set forth in this act. 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. Preemption of authority or charter city to adopt ordinances levying assessments
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 Investigation, Limitation and Majority Protest Act of 1931 (Division 4 (commencing with Section 2800)).
36603.5. Part prevails over conflicting provisions
Any provision of this part that conflicts with any other provision of law shall prevail over the other provision of law,
as to districts created under this part.
36604. Severability
This part is intended to be construed liberally and, if any provision is held invalid,.the remaining provisions shall
remain in full force and effect. Assessments levied under this part are not special taxes.
ARTICLE 2. Definitions
36606. "Activities"
"Activities" means, but is not limited to, all of the following that benefit businesses or real property in the district:
(a) Promotion of public events.
(b) Furnishing of music in any public place.
(c) Promotion of tourism within the district.
(d) Marketing 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 normally provided by the municipality.
(f) Other services provided for the purpose of conferring special benefit upon assessed real property or
specific benefits upon assessed businesses located in the district.
36606.5. "Assessment"
"Assessment" means a levy for the purpose of acquiring, constructing, installing, or maintaining improvements and
providing activities that will provide certain benefits to properties or businesses located within a property and business
improvement district.
36607. "Business"
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September 27, 2018
"Business" means all types of businesses and includes financial institutions and professions.
36608. "City"
"City" means a city, county, city and county, or an agency or entity created pursuant to Article 1 (commencing with
Section 6500) of Chapter 5 of Division 7 of Title 1 of the Government Code, the public member agencies of which
includes only cities, counties, or a city and county, or the State of California.
36609. "City council"
"City council" means the city council of a city or 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.
36609.4. "Clerk"
"Cleric" means the cleric of the legislative body.
36609.5. "General benefit"
"General benefit" means, for purposes of a property -based district, any benefit that is not a "special benefit" as defined
in Section 36615.5.
36610. "Improvement"
"Improvement" means the acquisition, construction, installation, or maintenance of any tangible property with an
estimated useful life of five years or more including, but not limited to, the following:
(a) Parking facilities.
(b) Benches, booths, kiosks, display cases, pedestrian shelters and signs.
(c) Trash receptacles and public restrooms.
(d) Lighting and heating facilities.
(e) Decorations.
(f) Parks.
(g) Fountains.
(h) Planting areas.
(i) Closing, opening, widening, or narrowing of existing streets.
0) Facilities or equipment, or both, to enhance security of persons and property within the district.
(k) Ramps, sidewalks, plazas, and pedestrian malls.
(1) Rehabilitation or removal of existing structures.
36611. "Management district plan"; "Plan"
"Management district plan" or "plan" means a proposal as defined in Section 36622.
36612. "Owners' association"
"Owners' association" means a private nonprofit entity that is under contract with a city to administer or implement
improvements, maintenance, and activities specified in the management district plan. An owners' association may be
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. Notwithstanding this section, an owners' association shall comply with the Ralph M. Brown Act
(Chapter 9 (commencing with Section 54950) of Part 1 of Division 2 of Title 5 of the Government Code), at all times
when matters within the subject matter of the district are heard, 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 records relating to activities of the district.
36614. "Property"
"Property" means real property situated within a district.
PTID Management District Plan 14
September 27, 2018
36614.5. "Property and business improvement district"; "District"
"Property and business improvement district," or "district," means a property and business improvement district
established pursuant to this part.
36614.6. "Property -based assessment"
"Property -based assessment" means any assessment made pursuant to this part upon real property.
36614.7. "Property -based district"
"Property -based district" means any district in which a city levies a property -based assessment.
36615. "Property owner"; "Business owner"; "Owner"
"Property owner" means any person shown as the owner of land on the last equalized assessment roll or otherwise
known to be the owner of land by the city council. `Business owner" means any person recognized by the city as the
owner of the business. "Owner" means either a business owner or a property owner. The city council has no obligation
to obtain other information as to the ownership of land or businesses, and its determination of ownership shall be final
and conclusive for the purposes of this part. Wherever this part requires the signature of the property owner, the
signature of the authorized agent of the property owner shall be sufficient. Wherever this part requires the signature
of the business owner, the signature of the authorized agent of the business owner shall be sufficient.
36615.5. "Special benefit"
"Special benefit" means, for purposes of a property -based district, a particular and distinct benefit over and above
general benefits conferred on real property located in a district or to the public at large. Special benefit includes
incidental or collateral effects that arise from the improvements, maintenance, or activities of property -based districts
even if those incidental or collateral effects benefit property or persons not assessed. Special benefit excludes general
enhancement of property value.
36616. "Tenant"
"Tenant" means an occupant pursuant to a lease of commercial space or a dwelling unit, other than an owner.
ARTICLE 3. Prior Law
36617. Alternate method of financing certain improvements and activities; Effect on other provisions
This part provides an alternative method of financing certain improvements and activities. The provisions 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 area established pursuant to the Parking
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.
CHAPTER 2. Establishment
36620: Establishment of property and business improvement district
A property and business improvement district may be established as provided in this chapter.
36620.5. Requirement of consent of city council
A county may not form a district within the territorial jurisdiction of a city without the consent of the city council of
that city. A city may not form a district within the unincorporated territory of a county without the consent of the board
PTID Management District Plan 15
September 27, 2018
of supervisors of that county. A city may not form a district within the territorial jurisdiction of another city without
the consent of the city council of the other city.
36621. Initiation of proceedings; Petition of property or business owners in proposed district
(a) Upon the submission of a written petition, signed by the property or business owners in the proposed
district who will pay more than 50 percent of the assessments proposed to be levied, the city council may
initiate proceedings to form a district by the adoption of a resolution expressing its intention to form a district.
The amount of assessment attributable to property or a business owned by the same property or business
owner that is in excess of 40 percent of the amount of all assessments proposed to be levied, shall not be
included in determining whether the petition is signed by property or business owners who will pay more
than 50 percent of the total amount of assessments proposed to be levied.
(b) The petition of property or business owners required under subdivision (a) shall include a summary 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 district plan can be obtained.
(3) Information specifying that the complete management district plan shall be furnished upon
request.
(c) The resolution of intention described in subdivision (a) shall contain all of the following:
(1) A brief description of the proposed improvements, maintenance, and activities, 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 as to whether bonds will be issued, and a description of
the exterior boundaries of the proposed district, which may be made by reference to any plan or map
that is on file with the clerk. The descriptions and statements do not need to be detailed and shall be
sufficient if they enable an owner to generally identify the nature and extent of the improvements,
maintenance, and activities, and the location and extent of the proposed district.
(2) A time 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. Contents of management district plan
The management district plan shall include, but is not limited to, all of the following:
(a) If the assessment will be levied on property, a map of the district in sufficient detail to locate each parcel
of property and, if businesses are to be assessed, each business within the district. If the assessment will be
levied on businesses, a map that identifies the district boundaries in sufficient detail to allow a business owner
to reasonably determine whether a business is located within the district boundaries. If the assessment will
be levied on property and businesses, a map of the district in sufficient detail to locate each parcel of property
and to allow a business owner to reasonably determine whether a business is located within the district
boundaries.
(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 sufficient to identify the affected property and businesses included,
which may be made by reference to any plan or map that is on file with the clerk. 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 part to overlap with other assessment districts established pursuant to other provisions of law,
including, but not limited to, the Parking and Business Improvement Area Law of 1989 (Part 6 (commencing
with Section 36500)). This 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
part does not prohibit the boundaries of a business assessment district created pursuant to this part to overlap
with a property assessment district created pursuant to this part.
(d) The improvements, maintenance, and activities proposed for each year of operation of the district and the
maximum cost thereof. If the improvements, maintenance, and activities proposed for each year of operation
are the same, a description of the first year's proposed improvements, maintenance, and activities and a
statement that the same improvements, maintenance, and activities are proposed for subsequent years shall
satisfy the requirements of this subdivision.
PTID Management District Plan 16
September 27, 2018
(e) The total annual amount proposed to be expended for improvements, maintenance, or activities, and debt
service in each year of operation of the district. If the assessment is levied on businesses, this amount may
be estimated based upon the assessment rate. If the total annual amount proposed to be expended in each year
of operation of the district is not significantly different, the amount proposed to be expended in the initial
year and a statement that a similar amount applies to subsequent years shall satisfy the requirements of this
subdivision.
(f) The proposed source or sources of financing, including the proposed method and basis of levying the
assessment in sufficient detail to allow each property or business owner to calculate the amount of the
assessment 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 time and manner of collecting the assessments.
(h) The specific number of years in which assessments will be levied. In a new district, the maximum number
of years shall be five. Upon renewal, a district shall have a term not to exceed 10 years. Notwithstanding
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 may set forth specific
increases in assessments for each year of operation of the district.
(i) The proposed time for implementation and completion of the management district plan.
0) Any proposed rules and regulations to be applicable to the district.
(k) (1) A list of the properties or businesses to be assessed, including the assessor's parcel numbers for
properties to be assessed, and a statement of the method or methods by which the expenses of a
district will be imposed upon benefited real property or businesses, in proportion to the benefit
received by the property or business, to defray the cost thereof.
(2) In a property -based district, the proportionate special benefit derived by each identified parcel
shall be determined exclusively in relationship to the entirety of the capital cost of a public
improvement, the maintenance and operation expenses of a public improvement, or the cost of the
activities. An assessment shall not be imposed on any parcel that exceeds the reasonable cost of the
proportional special benefit conferred on that parcel. Only special benefits are assessable, and a
property -based district shall separate the general benefits, if any, from the special benefits conferred
on a parcel. Parcels within a property -based district that are owned or used by any city, public
agency, the State of California, or the United States shall not be exempt from assessment unless the
governmental entity can demonstrate by clear and convincing evidence that those publicly owned
parcels in fact receive no special benefit. The value of any incidental, secondary, or collateral effects
that arise from the improvements, maintenance, or activities of a property -based district and that
benefit property or persons not assessed shall not be deducted from the entirety of the cost of any
special benefit or affect the proportionate special benefit derived by each identified parcel.
(1) In a property -based district, the total amount of all special benefits to be conferred upon the properties
located within the property -based district.
(m) In a property -based district, the total amount of general benefits, if any.
(n) In a property -based district, a detailed engineer's report prepared by a registered professional engineer
certified by the State of California supporting all assessments contemplated by the management district plan.
(o) Any other item or matter required to be incorporated therein by the city council.
36623. Procedure to levy assessment
(a) If a city council proposes to levy 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 city council proposes to levy 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 shall be
mailed to the owners of the businesses proposed to be assessed. A protest may be made orally or in writing
by any interested person. Every written protest shall be filed with the clerk at or before the time fixed for the
public hearing. The city council may waive any irregularity in the form or content of any written protest. A
written protest may be withdrawn in writing at any time before the conclusion of the public hearing. Each
Written 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 official records
of the city as the owner of the business, the protest shall contain or be accompanied by written evidence that
the person subscribing is the owner of the business or the authorized representative. A written protest that
does not comply with this section shall not be counted in determining a majority protest. If written protests
are received from the owners or authorized representatives of businesses in the proposed district that will pay
PTID Management District Plan 17
September 27, 2018
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 year from the date
of the finding of a majority protest by the city council.
(c) If a city council proposes to conduct a single proceeding to levy both a new or increased property
assessment and a new or increased business assessment, the notice and protest and hearing procedure for the
property assessment shall comply with subdivision (a), and the notice and protest and hearing procedure for
the business assessment shall comply with subdivision (b). If a majority protest is received from either the
property or, business owners, that respective portion of the assessment shall not be levied. The remaining
portion of the assessment may be levied unless the improvement or other special benefit was proposed to be
funded by assessing both property and business owners.
36624. Changes to proposed assessments
At the conclusion of the public hearing to establish the district, the city council may adopt, revise, change, reduce, or
modify the proposed assessment or the type or types of improvements, maintenance, and activities to be funded with
the revenues from the assessments. Proposed assessments may only be revised by reducing any or all of them. At the
public hearing, the city council may only make changes in, to, or from the boundaries of the proposed property and
business improvement district that will exclude territory that will not benefit from the proposed improvements,
maintenance, and activities. Any modifications, revisions, reductions, or changes to the proposed assessment district
shall be reflected in the notice and map recorded pursuant to Section 36627.
36625. Resolution of formation
(a) If the city council, following the public hearing, decides to establish a proposed property and business
improvement district, the city council shall adopt a resolution of formation that shall include, but is not limited
to, all of the following:
(1) A brief description of the proposed improvements, maintenance, and activities, the amount of
the proposed assessment, a statement as to whether the assessment will be levied on property,
businesses, or both within the district, a statement on whether bonds will be issued, and a description
of the exterior boundaries of the proposed district, which may be made by reference to any plan or
map that is on file with the clerk. The descriptions and statements need not be detailed and shall be
sufficient if they enable an owner to generally identify the nature and extent of the improvements,
maintenance, and activities and the location and extent of the proposed district.
(2) The number, date of adoption, and title of the resolution of intention.
(3) The time and place where the public hearing was held concerning the establishment of the
district.
(4) A determination regarding any protests received. The city shall not establish the district or levy
assessments if a majority protest was received.
(5) A statement that the properties, businesses, or properties and businesses in the district established
by the resolution shall be subject to any amendments to this part.
(6) A statement that the improvements, maintenance, and activities to be conferred on businesses
and properties in the district will be funded by the levy of the assessments. The revenue from the
levy of assessments within a district shall not be used to provide improvements, maintenance, or
activities outside the district 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.
Notwithstanding the foregoing, improvements and activities that must be provided outside the
district boundaries to create a special or specific benefit to the assessed parcels or businesses may
be provided, but shall be limited to marketing or signage pointing to 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, maintenance, and activities funded by
the proposed assessments, and, for a property -based district, that property within the district will
receive a special benefit.
(8) In a property -based district, the total amount of all special benefits to be conferred on the
properties within the property -based district.
(b) The adoption of the resolution of formation and, if required, recordation of the notice and map pursuant
to Section 36627 shall constitute the levy of an assessment in each of the fiscal years referred to in the
management district plan.
PTID Management District Plan 18
September 27, 2018
36626. Resolution establishing district
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 pursuant to Section 36624, or has made changes that do not
substantially change the proposed assessment, the city council shall adopt a resolution establishing the district. The
resolution shall contain all of the information specified in Section 36625.
36627. Notice and assessment diagram
Following adoption of the resolution establishing district assessments on properties pursuant to Section 36625 or
Section 36626, the clerk shall record a notice and an assessment diagram pursuant to Section 3114. No other provision
of Division 4.5 (commencing with Section 3100) applies to an assessment district created pursuant to this part.
36628. Establishment of separate benefit zones within district; Categories of businesses
The city council may establish one or more separate benefit zones within the district based upon the degree of benefit
derived from the improvements or activities to be provided within 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 may 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, or on each category of business within each zone.
36628.5. Assessments on businesses or property owners
The city council may levy assessments on businesses or on property owners, or a combination of the two, pursuant to
this part. The city council shall structure the assessments in whatever manner it determines corresponds with the
distribution of benefits from the proposed improvements, maintenance, and activities, provided that any property -
based assessment conforms with the requirements set forth in paragraph (2) of subdivision (k) of Section 36622.
36629. Provisions and procedures applicable to benefit zones and business categories
All provisions ofthis part applicable to the establishment, 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, modify, or disestablish a benefit zone or category of business, follow the
procedure to establish, modify, or disestablish a property and business improvement district.
36630. Expiration of district; Creation of new district
If a property and business improvement district expires due to the time limit set pursuant to subdivision (h) of Section
36622, a new management district plan may be created and the district may be renewed pursuant to this part.
CHAPTER 3. Assessments
36631. Time and manner of collection of assessments; Delinquent payments
The collection of the assessments levied pursuant to this part shall be made at the time and in the manner set forth by
the city council in the resolution levying the assessment. Assessments levied on real property may be collected at the
same time and in the same manner as for the ad valorem property tax, and may provide for the same lien priority and
penalties for delinquent payment. All delinquent payments for assessments levied pursuant to this part may be charged
interest and penalties.
36632. Assessments to be based on estimated benefit; Classification of real property and businesses; Exclusion
of residential and agricultural property
(a) The assessments levied on real property pursuant to this part shall be levied on the basis of the estimated
benefit to the real property within the property and business improvement district. The city council may
PTID Management District Plan 19
September 27, 2018
classify properties for purposes of determining the benefit to property of the improvements and activities
provided pursuant to this part.
(b) Assessments levied on businesses pursuant to this part 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 determining the benefit to the businesses of the improvements and activities
provided pursuant to this part.
(c) Properties zoned solely for residential use, or that are zoned for agricultural use, are conclusively
presumed 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. Time for contesting validity of assessment
The validity of an assessment levied under this part shall not be contested in any action or proceeding unless the action
or proceeding is commenced within 30 days after the resolution levying the assessment is adopted pursuant to Section
36626. Any appeal from a final judgment in an action or proceeding shall be perfected within 30 days after the entry
of judgment.
36634. Service contracts authorized to establish levels of city services
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. Request to modify management district plan
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. Modification of plan by resolution after public hearing; Adoption of resolution of intention
(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 derived from the levy of the assessments by
adopting a resolution determining 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 council shall
comply with Section 36623. Notice of all other public hearings pursuant to this section shall comply with
both of the following:
(1) The resolution of intention shall be published in a newspaper of general circulation in the city
once at least seven days before the public hearing.
(2) A complete copy of the resolution of intention shall be mailed by first class mail, at least 10 days
before the public hearing, 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 prior 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. Reflection of modification in notices recorded and maps
Any subsequent modification of the resolution shall be reflected in subsequent notices and maps recorded pursuant to
Division 4.5 (commencing with Section 3100), in a manner consistent with the provisions of Section 36627.
CHAPTER 3.5. Financing
36640. Bonds authorized; Procedure; Restriction on reduction or termination of assessments
(a)The city council may, by resolution, determine and declare that bonds shall be issued to finance the
estimated cost of some or all of the proposed improvements described in the resolution of formation adopted
pursuant to Section 36625, if the resolution of formation adopted pursuant to that section provides for the
issuance of bonds, under the Improvement Bond Act of 1915 (Division 10 (commencing with Section 8500))
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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 relating to the issuance of bonds, although proceedings under the Bond Act of 1915
may be modified by the city 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 years during which they are 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 years.
(c) Notwithstanding any other provision of this part, assessments levied to pay the principal and interest on
any bond issued pursuant to this section shall not be reduced or terminated if doing so would interfere with
the timely retirement of the debt.
CHAPTER 4. Governance
36650. Report by owners' association; Approval or modification by city council
(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, maintenance, 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.
(2) The improvements, maintenance, and activities to be provided for that fiscal year.
(3) An estimate of the cost of providing the improvements, maintenance, and activities for that fiscal
year.
(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.
(5) The estimated amount of any surplus or deficit revenues to be carried over from a previous fiscal
year.
(6) The estimated amount of any contributions to be made from sources 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 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.
36651. Designation of owners' association to provide improvements, maintenance, and activities
The management district plan may, but is not required to, state that an owners' association will provide the
improvements, maintenance, and 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 provide services.
CHAPTER 5. Renewal
36660. Renewal of district; Transfer or refund of remaining revenues; District term limit
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(a) Any district previously established whose term has expired, or will expire, 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 parcels or businesses not included in the prior district, the remaining revenues
shall be spent to benefit only the parcels or businesses in the prior district. If the renewed district does not
include parcels or businesses included in the prior district, the remaining revenues attributable to these parcels
shall be refunded to the owners of these parcels or businesses.
(c) Upon renewal, a district shall have a term not to exceed 10 years, or, if the district is authorized to issue
bonds, until the maximum maturity of those bonds. There is no requirement that the boundaries, assessments,
improvements, or activities of a renewed district be the same as the original or prior district.
CHAPTER 6. Disestablishment
36670. Circumstances permitting disestablishment of district; Procedure
(a) Any district established or extended pursuant to the provisions of this part, 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 city council in either of the following circumstances:
(1) If the city council fmds there has been misappropriation of funds, malfeasance, or a violation of
law in connection with the management of the district, it shall notice a hearing on disestablishment.
(2) During the operation of the district, there shall be a 30 -day period each year in which assessees
may request disestablishment of the district. The first such period shall begin one year after the date
of establishment of the district and shall continue for 30 days. The next such 30 -day period shall
begin two years after the date of the establishment of the district. Each successive year of operation
of the district shall have such a 30 -day period. Upon the written petition of the owners or authorized
representatives of real property or the owners or authorized representatives of businesses in the
district who pay 50 percent or more of the assessments levied, the city council shall pass a resolution
of intention to disestablish the district. The city council shall notice a hearing 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 for 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 the 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 business subject to assessment in the district, as appropriate. The city shall conduct the
public hearing not less than 30 days after mailing 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. Refund of remaining revenues upon disestablishment or expiration without renewal of district;
Calculation of refund; Use of outstanding revenue collected after disestablishment of district
(a) Upon the disestablishment or expiration without renewal of a district, 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 revenues, 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 applying the
same method and basis that was used to calculate the assessments levied in the fiscal year in which the district
is disestablished or expires. All outstanding assessment revenue collected after disestablishment shall be
spent on improvements and activities specified in the management district 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 levied in the immediate prior fiscal year shall be used to calculate the
amount of any refund.
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APPENDIX 2 - ASSESSED BUSINESSES
Business Name
Business Address
City, State ZIP
America's Best Value Inn &
Suites
5135 Montero Way
Petaluma, CA 94954
Best Western Petaluma Inn
200 S. McDowell Blvd.
Petaluma, CA 94954
Hotel Petaluma
205 Kentucky St.
Petaluma, CA 94952
Hampton Inn
450 Jefferson St.
Petaluma, CA 94952
San Francisco
North/Petaluma KOA
20 Rainsville Rd.
Petaluma, CA 94952
Metro, Hotel
508 Petaluma Blvd.. S.
Petaluma, CA 94952
Motel 6
1368 N. McDowell Blvd.
Petaluma, CA 94954
Quality Inn
5100 Montero Way
Petaluma, CA 94954
Sheraton Sonoma County —
Petaluma
745 Baywood Dr.
Petaluma, CA 94954
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