HomeMy WebLinkAbout14 - Conference and Visitor's Bureau AgreementJuly 8,1996
Council A end& No.: 14
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CITY of C+lEWPORT 13CACH
TO: MAYOR & CITY COUNCIL MEMBERS
FROM: Glen Everroad, Revenue Manager
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SUBJECT: CONFERENCE AND VISITORS BUREAU AGREEMENT
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Back rg ound
The City first entered into an agreement with the Conference and Visitors Bureau
(Bureau) in February of 1987, and the Visitor Service Fee (1% of the room rate)
was established to fund the program. The agreement identified the Bureau
responsibilities in developing and implementing a program to promote tourism,
established Bureau budget and marketing reporting requirements, and provided for
the City funding of the Bureau. Council approved modifications to the agreement
in May of 1989 which extended the term of the agreement to May of 1992,
established a requirement for an annual $50,000 transportation contribution by the
Bureau and changed the dates on which the Bureau was required to submit reports
to the City. The agreement was renewed in 1992, and the 1992 agreement was
amended in June of 1993 when the Transient Occupancy Tax (TOT) rate was
increased from 8% to 9%. The 1993 amendment provided for a percentage of
increased TOT be allocated to the Bureau for marketing services, eliminated the
annual $50,000 transportation contribution requirement and set the term of the
agreement to expire on September 1, 1996. Visitor Service Fees and the shared
portion of the TOT comprise 96% of the CVB's revenue stream.
The Bureau submitted a request for renewal of the agreement earlier this year, and
staff has been working with the Bureau since February to develop the structure of
a renewed agreement. In April, staff presented a proposed agreement to the
Conference and Visitors Bureau Board. The Board expressed concerns regarding
the Bureau's ability to compete with other tourist destinations in attracting tourists
based on the comparatively limited marketing budget of our Bureau. The Bureau's
proposed budgets for fiscal years 96/97 and 97/98 provide for a 33% and 71%
annual growth, respectively, in their total marketing budgets over last year.
The attached proposed agreement would renew the relationship with the CVB for
five years. The proposed agreement continues the Bureau's funding from Visitor
Service Fees and a percentage of the TOT. The shared portion of the TOT is
based on a percentage of the collections in excess of a threshold first established in
fiscal year 93/94 and annually adjusted by the change in the Consumer Price
Index. The funding portion of the proposed agreement would expire in August of
1998.
On July 3, 1996, the proposed agreement was reviewed and unanimously approved
by the City's Finance Committee.
A copy of the Bureau's revised budget for fiscal years 96/97 and target budget for
97/98 is attached. Also attached is a comparative revenue statement of Transient
Occupancy Taxes received by the City and Bureau compensation for the period of
fiscal year 92/93 through 97/98 (estimated for FY 96/97 & 97/98).
Recommendation
Staff recommends City Council approval of the attached proposed agreement with
the Conference and Visitors Bureau.
NE\VPORT BENCH CONFERENCE AND VISITORS BUREAU
RFVISET) BUDGET F1' 1996-1907
Line Item/Chart of
Accounts
Estimated Yr
Ends 95/96
Proposed Budget
96/97
f iraet Budget
97/98
REVENUE
Hotel TOT/400
812,565
907.500
1,155,290
Membership/402
40,728
47,728
44,000
Merchandise/406
500
1,000
3,000
Miscellaneous/435
0
0
0
TOTAL
(REVENUE)
853,293
951,228
1,202,290
EXPENSES
SALARY EXP.
Salaries/225
303,760
338,450
389,218
TOTAL SALARY
303,760
338,450
389,218
PERSONNEL
EXPENSES
Payroll Taxes/230
26,164
28,965
33,310
Benefits/508
28.980
34.485
39,858
Workers Comp./510
1,822
2.073
2,384
TOTAL
PERSONNEL
56,966
65,523
75,552
REVISED 4/30/96
tPFVICFr) 1111r)CF.T FY 96/97 cont.)
Line Item/Chart of
Accounts
Estimated Yr
End 95/96
Proposed Budget
96/97
Target Budget
97/98
MARKETING
Travel/Entert./602
3,856
5,832
8,423
Trade Shows/604
32,659
58,906
68,345
Prod./Publ./606
6,967
10,100
28,960
Visitors Guide/607
16,243
23,000
20,430
Printing/Publ/608
8,745
8,252
24,850
Advertize-Mtgs./610
42,506
70,000
129,648
Advert-Consumer/611
8,811
20,000
81,548
Advert-Tourism/612
12,391
30,000
86,448
Fam/Site Tours/614
7,781
7,000
9,310
Sales Blitz/615
1,000
9,000
13,000
Newsletter/616
5,872
7,500
9,000
Compt. Database/618
2,000
2,000
5,300
Telemarketing/620
12,702
15,000
18,000
Post/Dir. Mail/622
28,107
30,000
35,000
Media/Photo/PR/624
29,243
36,500
40,000
Prof. Memb/Subs/628
7,937
7,515
8,990
Research/630
3,500
3,000
5,900
Educ./Training/631
5,591
7,275
7,675
Gen. Marketing/632
455
1,000
2,000
Spec. Promotions/634
1,771
3,375
4,489
Community Relat/626
Toshiba Golf Classic*
*32,000
2,000
3,000
TOTAL
MARKETING
270,137
357,255
610,316
REVISED 4/30/96
(REVISED BUDGET FY 96/97 cont.)
Line Items/Chart of
Accounts
Estimated Yr
End 95/96
Proposed Budget
96/97
Target Budget
97\98
OPERATIONS
Rent/522
40,528
50,326
53,716
Moving Expenses/524
10,000
0
0
Legal/Account./526
11,852
13,100
13,000
Bank Charges/527
?62
525
600
COnlp. C011Sult./528
17,490
3,980
2,500
Repair/Maint./530
398
1,500
1,000
Maint. Contracts/532
2,322
4,170
4,500
Office Supplies/534
7,OSO
9,000
11,000
Insurance/536
3,150
3,330
3,500
Mtg./Event/Local/538
4,376
5,515
6.000
Equipment/540
13,281
2,550
3,000
Equipment Lease/542
11,285
12,119
13,000
Miscellaneous/548
0
500
1,000
Outside Services/554
2,179
2,812
3,000
Taxes/Licenses/556
667
1,765
1,800
Depreciation
7,500
7,500
7,500
TOTAL
OPERATIONS
132,370
118,692
125,116
REVISED 4/30/96
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OR
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AGREEMENT
This AGREEMENT, made and entered into this day of ,
1996, by and between the CITY OF NEWPORT BEACH, a municipal corporation
and charter city ("City"), and NEWPORT BEACH CONFERENCE & VISITOR'S
BUREAU, a non-profit corporation organized and existing under and by virtue of the
laws of the State of California ("Bureau") is made with reference to the following
facts:
A. The City, pursuant to the provisions of its City Charter and Section 37110 of
the Government Code of the State of California, has the power to expend
moneys accruing to the General Fund for the purpose of promoting
tourism and related activities;
B. The City has adopted Chapter 3.28 of Newport Beach Municipal Code which
authorizes the collection of a visitors service fee to offset the cost of providing
visitor services and promote tourism within the City.
C. The City Council has determined that the Bureau has special knowledge and
experience necessary to promote tourism in, and serve the needs of visitors
to, Newport Beach;
D. The City Council has determined that the Bureau's promotional activities are
likely to substantially increase transient occupancy tax revenue and sales tax
revenue; and
E. The City Council has determined that funding of Bureau activities will be a
significant benefit to the residents of, and visitors to, the City.
NOW., THEREFORE, the Parties agree as follows:
1. Term
This Agreement shall commence on the 1st day of September 1, 1996, and
shall continue through August 31, 2001, unless terminated as provided in Section 10.
2. Bureau Duties
Bureau shall develop, plan, carry out and supervise a program to promote
tourism in, and serve the needs of, visitors to the City. This promotional
program shall, at a minimum, include the following:
(a) The maintenance of suitable quarters and the employment of
competent personnel to properly carry out to promotional activities;
(b) The preparation of brochures, publications, guides and information that
inform prospective tourists and visitors of the recreational activities,
cultural assets, and natural beauty of the City of Newport Beach;
(c) The dissemination of the information described in subparagraph 2 (b)
by way of the media, direct mail, handout or other means of
distribution;
(d) The development and implementation of specific marketing programs
designed to increase business and visitor trade in the City of Newport
Beach.
3. City Funding
(a) City shall pay the Bureau:
(i) all funds received pursuant to the "Visitors Service Fee
Ordinance," (Chapter 3.28 of the Newport Beach Municipal
Code), less a sum equal to one (I%) of those revenues to defray
the City's administration costs.
a sum equal to 50% of the transient occupancy tax collections in
excess of $6,213,781 in 1996-97, not to exceed $400,000
annually. The $6,213,781 threshold and the $400,000 cap shall
be adjusted each year based on the change in the Consumer
Price Index - Los Angeles - Anaheim - Riverside - during the
previous twelve months. City's obligation to make payments to
Bureau under this subsection (ii) shall terminate on August 31,
1998, unless extended in writing by mutual agreement of the
Parties.
(b) City's obligation to pay bureau is limited by the following:
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(i) The City's obligation to pay Bureau any funds pursuant to
subparagraph 3 (a) (i) shall cease if the Visitor's Service Fee
Ordinance is repealed or ruled invalid. Bureau gives up any
right to seek any form of judicial relief or order based on repeal
of the Visitor's Service Fee Ordinance or the failure of City to
defend the Ordinance against a legal challenge.
(ii) The City's obligation to pay Bureau any funds pursuant to
Paragraph 3(a)(ii) shall cease if and when the City and its sole
discretion decides to place any previously adopted revenue
enhancing ordinance on the ballot for approval of the electorate
and the measure is defeated, or a Court of competent
jurisdiction enters an order invalidating any such revenue
enhancing ordinance. Bureau acknowledges and agrees that
this Agreement does not create any legal obligation on the part
of the City to defend any of its revenue enhancing ordinances
and that the City Council reserves the right, in its sole discretion,
to repeal any such ordinance in the event of a legal challenge.
(iii) If the City is required, by any validly issued Court Order, to
refund any portion of the transient occupancy taxes collected by
City, Bureau agrees that City may deduct from any payments
made pursuant to Paragraph 3(a)(i) the portion ; the amount
ordered to be refunded that was paid to Bureau.
4. Manner of Payment
(a) Funds due Bureau pursuant to the provisions of subparagraph 3 (a) (i)
shall be paid on a monthly basis, and on or before the 20th day of the
month subsequent to collection.
(b) Funds due Bureau pursuant to the provisions of subparagraph 3 (a) (ii)
shall be paid within sixty (60) days following the expiration of the
relevant 12 month period.
5. Bureau Reports
(a) Bureau shall provide City with a marketing plan and an annual budget
on or before June 5th of each year during the term of this agreement.
The Board of Directors of Bureau shall approve the budget before it is
submitted to the City. The marketing plan shall specify the goals and
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91
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objectives of Bureau during the upcoming fiscal year, as well as the
programs Bureau will implement to achieve those goals and objectives.
(b) Bureau shall, on or before the first City Council meeting in October
each year during the term of this agreement, submit to the City the
following:
(i) A report describing the services and programs offered by Bureau
during the preceding fiscal year and an evaluation of the extent
to which these services and programs have achieved the
Bureau's goals and objectives; and
an audit listing all revenues and expenses of the Bureau during
the proceedings fiscal year.
Expenditure of Funds By Bureau
Bureau shall expend funds provided by City in accordance with the budget
submitted to, and approved by, the City Council. Bureau may transfer funds,
or make expenditures, allocated for one element of the budget to another
element so long as the basic goals and objectives of the tourist development
program are not impaired.
Records
Bureau shall prepare and maintain, during the term of this Agreement, and for
twelve (12) months after its termination, complete and accurate books,
records and accounts showing the expenditures of all funds disbursed to it by
City pursuant to this Agreement. Bureau shall maintain all accounts, books
and records in ordinance with generally accepted accounting principles. The
City shall have the right, subject to reasonable written notice, and one time
each calendar year the term of this Agreement, to conduct an audit of the
accounts, books and records of the Bureau. Bureau shall fully cooperate with
City in the conduct of the audit. If, upon audit of the records, it is determined
that funds provided by the City have been utilized other than as provided in
the budget and as specified in this Agreement, Bureau shall reimburse City for
all such funds and the cost of the audit.
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8. Licenses and Permits
Bureau shall obtain and maintain any and all licenses and permits necessary
to conduct its activities, render the services required by this Agreement and
maintain its facilities.
9. Indemnification
Bureau shall defend, indemnify, and hold harmless City, and its officers,
employees agents and representatives from and against any and all claims,
losses, damage, liability, lawsuits, judgments, costs, fees and expenses that
may be claimed by any person or entity, or incurred by the City, and which
arise out of, or are in any way related to, the activities of Bureau, its agents,
employees, subcontractors, or representatives, pursuant to this Agreement,
whether or not there is concurrent, passive or active negligence on the party
of the City or its officers, agents or employees. However, Bureau's duties
under this section shall not extend to any claims, losses, damage liability,
lawsuits, judgments, costs, fees and expenses arising from the sole
negligence, fraud or willful misconduct of the City, its employees, officers,
agents or representatives.
10. Termination
(a) City Termination. City shall have the right to terminate this Agreement
upon thirty (30) days' written notice to Bureau in the event the City
Council determines, based upon substantial evidence, that:
(i) Bureau has improperly expended funds provided by the City
pursuant to this Agreement; or
(ii) Bureau has failed to perform the services required of it pursuant
to this Agreement.
(b) City/Bureau Termination. Either party shall have the right to terminate
this Agreement, without cause, by giving the other party three hundred
sixty-five (365) days' written notice of its intention to terminate.
(c) Automatic Termination. This Agreement shall terminate, without notice
to either party, within ninety (90) days after the repeal of, or a final court
order invalidating, the Visitor Service Fee Ordinance.
s
11. Independent Contractor
The parties agree that Bureau, and its officers, employees and
representatives, while engaged in performance of duties required by this
Agreement, is an independent contractor, and not an officer, agent or
employee of the City.
12. Assignment
Bureau shall not assign this Agreement, or the right to receive any moneys
pursuant to this Agreement, or the Visitors Service Fee Ordinance, without the
prior written consent of the City. Bureau acknowledges that the unique nature
of the services to be provided by the Bureau and nature of the funds
disbursed to Bureau by City provide legally adequate justification for any City
refusal to consent to an assignment of the rights and/or duties of this
Agreement.
13. Notices
All notices required to be given by this Agreement shall be in writing and
personally served or given by mail. Notice by mail shall be deemed to have
been given when deposited in the United States mail, certified and postage
prepaid, and addressed to the party to be served as follows:
TO CITY: City of Newport Beach
Attn.: City Manager's Office
3300 Newport Boulevard
P.O. Box 1736
Newport Beach, Ca 92659-1768
TO BUREAU: Newport Beach Conference & Visitor's Bureau
Attn: President/ CEO
3300 West Coast Highway
Newport Beach, Ca 92663
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14. Complete Agreement
This document represents the entire Agreement between the City and Bureau
and supersedes all prior negotiations, representations or agreements, either
oral or in writing. This Agreement may be amended only by a written
instrument signed by the City and the Bureau.
In Witness whereof, the Parties are deemed to have executed this Agreement
effective on the day and year first written above.
Conference and Visitors Bureau:
:A
Title
City of Newport Beach
Approved as to form: By
City Attorney
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