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HomeMy WebLinkAboutResolution 2018-179 N.C.S. 12/03/2018Resolution No. 2018-179 N.C.S. of the City of Petaluma, California A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PETALUMA DECLARING THE RESULTS OF MAJORITY PROTEST PROCEEDINGS AND AUTHORIZING FORMATION OF THE PETALUMA TOURISM IMPROVEMENT DISTRICT AND THE LEVY OF ASSESSMENTS IN ACCORDANCE WITH CALIFORNIA STREETS AND HIGHWAYS CODE SECTION 36600 ET. SEQ. AND AUTHORIZING THE CITY MANAGER TO EXECUTE ON BEHALF OF THE CITY A CONTRACT WITH THE PETALUMA LODGING ASSOCIATION CONDITIONED ON THE PETALUMA LODGING ASSOCIATION INCORPORATING AS A LEGAL ENTITY AND ENTERING A CONTRACT WITH THE CITY TO ADMINISTER THE DISTRICT WHEREAS, the Property and Business Improvement Law of 1994, Streets and Highways Code § 36600 et seq. ("Improvement Law"), authorizes 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 36621, 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 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 Resolution No. 2018-179 N.C.S. Page 1 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 clerk; 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 Resolution No. 2018-179 N.C.S. Page 2 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 mail 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 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 Resolution No. 2018-179 N.C.S. Page 3 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 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 Cal.41" 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; and Resolution No, 2018-179 N.C.S. Page 4 WHEREAS, in accordance with Section 36623 of the Improvement Law and Section 54954.6 of the Government Code, notices were mailed to owners of businesses proposed to be assessed pursuant to the PTID on October 16, 2018 regarding a meeting held on November 5, 2018, at least ten (10) days after the notice was mailed, at which meeting lodging business owners with 10 or more rooms and other interested parties could comment, and the same mailed notice included notice of a public hearing to be held on December 3, 2018, at least 45 days after the notice was 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; and WHEREAS, on October 15, 2018, the City Council adopted Resolution no. 2018-160 N.C.S, by a unanimous vote of the Council Members present (with Mayor Glass absent), accepting petitions to form the PTID from all 9 hotels proposed to be assessed, representing 100% of the total PTID assessment, and declaring the City Council's intention to form the Petaluma Tourism Improvement District in accordance with Section 36621 of the Improvement Law and to levy and collect assessments on lodging businesses with 10 or more roams within the PTID boundaries, 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; and WHEREAS, in adopting Resolution No. 2018-160 N.C.S., the City Council made the following findings: A. 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 the resolution; B. That the Management District Plan satisfies all requirements of Section 36622 of the Improvement Law; C. That in accordance with Section 36621 of the Improvement Law: i. 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 the resolution as Exhibit B. ii. The name of the district to be formed pursuant to the Improvement Law shall be the Petaluma Tourism Improvement District (PTID). iii. 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. iv. The assessments levied for the PTID shall be applied toward sales promotion and marketing programs to market assessed lodging businesses in Petaluma as tourist, Resolution No. 2018-179 N.C.S, Page 5 meeting, and event destinations, as described in the Management District 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. V, 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. vi. Bonds shall not be issued to fund PTID programs or improvements; and WHEREAS, Resolution no. 2018-160 N.C.S. provided notice of a public meeting to hear testimony on establishing the PTID and levying assessments on 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; and WHEREAS, Resolution no. 2018-160 N.C.S. provided notice of a public hearing to establish the PTID and the levy of assessments on 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, and directed that written notice be provided to the lodging businesses with 10 or more rooms subject to assessment of the date and time of the meeting and hearing, and that notice be provided as required by Section 36623 of the Improvement Law, no later than October 16, 2018; and WHEREAS, Resolution no. 2018-160 N.C.S. provided notice that at the public meeting and hearing on formation of the PTID the testimony of all interested persons for or against the establishment of the PTID will be received, and that 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; and WHEREAS, October 16, 2018, written notice was provided to the lodging businesses in the City of Petaluma with 10 or more rooms subject to assessment of the date and time of the meeting and hearing on formation of the PTID in accordance with Section 36623 of the Improvement Law; and WHEREAS, the City has received and the City Clerk has canvassed 0 written protests from owners of lodging businesses within the proposed PTID meeting the requirements of Section 36623 of the Improvement Law, and such protests represent lodging business that will pay a total of 0% of the estimated total assessment of the entire PTID, and therefore formation of the PTID may proceed in accordance with the Improvement Law; and WHEREAS, adoption of this resolution is exempt from the requirements of the California Environmental Quality Act ("CEQA"), because it can be seen with certainty that formation of the PTID and levying of assessments on lodging businesses within the PTID pursuant to this resolution to fund sales and marketing programs and other improvements and activities set forth in the Management District Plan in Exhibit B will not cause a direct physical change in the environment, or a reasonably foreseeable indirect change in the environment; Resolution No. 2018-179 N.C.S. Page 6 NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Petaluma as follows: 1. The recitals set forth in this resolution are hereby declared to be true and correct and findings of the City Council, 2, The PTID as depicted on the boundary map attached to and made a part of this resolution as Exhibit A is hereby established for a five (5) year term, beginning January 1, 2019 through December 31, 2023, subject to the conditions specified in 16, below, first being satisfied. 3. The Management District Plan for the PTID dated September 27, 2018 attached to and made a part of this resolution as Exhibit B is hereby adopted and approved. 4. The assessments levied for the PTID shall be applied towards sales and marketing programs to market Petaluma lodging businesses as tourist, meeting and event destinations, and other improvements and activities as set forth in the Management District 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 District Plan. 5. 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. The assessments for the entire PTID will total approximately $660,000 in year one (1). 6. Assessments imposed pursuant to the PTID are levied solely upon the assessed business, and the business owner is solely responsible for payment of the assessment when due. 7. Bonds shall not be issued to fund the PTID. The exterior boundaries of the PTID are as depicted on the boundary map in Exhibit A. The PTID shall include all lodging businesses with 10 or more rooms located within the jurisdictional boundaries of the the City of Petaluma. 9, The City Council adopted Resolution No, 2018-160 N.C.S. entitled "A Resolution 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" on October 15, 2018 giving notice of its intention to form the PTID. 10. The public hearing on formation of the PTID was held at 6:45 p.m. or as soon thereafter as that matter could be heard on December 3, 2018 in the Petaluma City Council chambers at Petaluma City Hall, 11 English Street, Petaluma, CA, 94952. 11. A majority protest was not received from owners of lodging businesses within the proposed PTID. Resolution No. 2018-179 N.C.S. Page 7 12. The businesses in the PTID and the PTLD established pursuant to this resolution will be subject to any amendments to the Improvement Law, Property and Business Improvement District Law of 1994, California Streets and Highways Code §36600 et. seq. 13. The activities to be provided to benefit businesses in the PTID will be funded by the levy of the PTID assessment. 14. The revenue from the PTID assessment levy shall not be used: to provide activities that directly benefit businesses outside the PTID; to provide activities or improvements outside the PTID; or for any purpose other than the purposes specified in this Resolution, the Resolution of Intention, and the Management District Plan. Notwithstanding the foregoing, improvements and activities that must be provided outside the PTID boundaries to create a specific benefit to the assessed businesses may be provided, but shall be limited to marketing or signage referring to the PTID. 15. If the owner chooses to collect any portion of the assessment from a transient, that portion shall be specifically called out and identified for the transient in any and all communications from the business owner as the "PTID Assessment" or "Tourism Assessment" as specified in the Management District Plan. 16. Assessments levied on lodging businesses within the PTID pursuant to this resolution to fund improvements, maintenance and activities in accordance with the Management District Plan will benefit the lodging businesses within the PTID and shall be levied on the basis of benefit. Because the services provided are intended to increase room rentals, an assessment based on room rentals is the best measure of benefit. 17. The assessments to fund the activities and improvements for the PTID will be collected by a contracted third -party, selected by the Petaluma Lodging Association, on a monthly basis, in accordance with Section 36631 of the Improvement Law and the contract between the Petaluma Lodging Association and the City providing for administration of the PTID. 18. In accordance with Section 36651 of the Improvement Law, the body that shall implement the PTID improvements and activities shall be Petaluma Lodging Association as the Owners' Association of the PTID as defined in Section 36612 of the Improvement Law and pursuant to the contract between the Petaluma Lodging Association and the City providing for administration of the PTID. 19. The Petaluma Lodging Association, pursuant to Section 36650 of the Improvement Law and the contract between the Petaluma Lodging Association and the City providing for administration of the PTID, shall cause to be prepared a report for each fiscal year, except the first year, for which assessments are to be levied and collected to pay the costs of the improvements and activities described in the report. The first report shall be due after the first year of operation of the PTID. 20. This resolution shall not be of any force or effect unless and until the following conditions precedent are satisfied, and once all of the conditions have been satisfied, this resolution shall become effective at that time without further action by the City Council: Resolution No. 2018-179 N.C.S. Page 8 a. The Petaluma Lodging Association has incorporated as a California corporation and provided the City its corporation number assigned by the Secretary of State's Office. b. The Petaluma Lodging Association has registered as a non-profit corporation with the state and federal government, and provided the City confirmation of its non- profit status under California and federal law. An authorized representative of the Petaluma Lodging Association has executed an agreement with the City substantially in accordance with the form agreement attached to and made a part of this resolution as Exhibit C providing for administration of the PTID in accordance with the Improvement Law and this resolution. d. The Petaluma Lodging Association has provided the City proof of insurance and endorsements as required by the agreement between the City and the PTID for administration of the PTID. 21. Upon satisfaction of all of the conditions precedent specified in 16, above, the City Manager is authorized and directed to execute on behalf of the City a contract with the Petaluma Lodging Association substantially in accordance with the form agreement attached to this resolution as Exhibit C providing for administration of the PTID. 22. 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. Under the power and authority conferred upon this Council by the Charter of said City. q REFERENCE: I hereby certify the foregoing Resolution was introduced and adopted by the pr ved as to Council of the City of Petaluma at a Regular meeting on the 31 day of December � �rm 2018, by the following vote: _ AYES: Albertson; Barrett; Vice Mayor Healy; Kearney; King; Miller City ttorney NOES: None ABSENT: Mayor Glass ABSTAIN: None ATTEST: City Clerk Vice Mayor Resolution No, 2018-179 N.C.S. Page 9