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HomeMy WebLinkAboutSS8 - Newport Beach Conference and Visitor's BureauSTUDY SESSION ITEM NO. 9 CITY OF NEWPORT BEACH OFFICE OF THE CITY MANAGER January 23, 1989 TO: MAYOR AND CITY COUNCIL FROM: City Manager SUBJECT: NEWPORT BEACH CONFERENCE & VISITOR'S BUREAU On February 9, 1987 the City entered into a contract with the Newport Beach Conference & Visitor's Bureau in which the City agreed to collect an additional 1% service fee along with the regular 8% transient occupancy tax from transient serving hotels and motels. The City would then remit the 1% service charge to the Conference & Visitor's Bureau minus a service collection fee of to to be retained by the City. Collections from the hotels and motels and disbursement to the Conference & Visitor's Bureau would be on a quarterly basis. Section 5 of the agreement provides "...in January and July of each year commencing with 1988, the Bureau shall submit a report to the City evaluating the success of the Bureau in increasing tourism and related activities during the preceding six months. Said report shall include, but not be limited to, a complete break- down on the expenditure of funds, a comparison of room occu- pancy rates for the prior six months as compared to other comparable periods, increased tax revenues which can be traced directly or indirectly to the promotion program and an analysis of costs or problems resulting from increased visitation as they relate to police, fire and other services provided by the City." Representatives of the Conference & Visitor's Bureau have requested that this report be placed on the Study Session agenda for January 23rd. This memo is being written.on January 10, 1989 prior to the receipt by this office of the Conference & Visitor's Bureau report, and this memo therefore will not analyze the Conference & Visitor's Bureau report. Inasmuch as this practice has been in operation for two years, probably sufficient time has elapsed to permit some evaluation of the impact or effectiveness of the Conference & Visitor's Bureau. To enable the Council to be familiar with the Agreement and the Ordinance, I am attaching hereto a copy of the full Agreement, a copy of Ordinance 86-5, and a copy of the February 9, 1987 minutes in which the Ordinance was discussed by the City Council and interested persons. -2 - One other item is the history of total collections from the transient occupany tax. The collections by quarter since January 1986 are as follows: QUARTER AMOUNT Jan. 1986 $ 726,750.88 Apr. 1986 689,231.16 Jul. 1986 556,279.20 Oct. 1986 950,408.02 Jan. 1987 768,308.25 Apr. 1987 1,003,055.91 Jul. 1987 915,505.53 Oct. 1987 1,021,552.36 Jan. 1988 1,258,733.02 Apr. 1988 849,021.70 Jul. 1988 992,062.86 Oct. 1988 1,669,564.73 The Marriott Suites in Santa Ana Heights containing 254 rooms opened on May 26, 1988 and will have some impact therefore on the quarterly report of October 188. The other newer hotel is the new tower in the Newport Center Marriott containing 229 rooms and it opened in October 186. This tower would impact the January 187 revenue. RLW:kf Attachments z/ tOBERT L. WY�N Money transmitted to the Conference & Visitor's Bureau since the inception of the 1% service fee. QUARTER MONTH TRANSMITTED AMOUNT Apr -May -Jun August 1987 $ 78,620.00 Jul -Aug -Sep November 1987 121,802.00 Oct -Nov -Dec February 1988 78,655.00 Jan -Feb -Mar May 1988 125,562.00 Apr -May -Jun August 1988 89,503.24 Jul -Aug -Sep November 1988 188,189.42 $404,639.00 $277,719.66 Af1D FAAA1r7A7T This Agreement, made and entered into this (I day of February, 1987, 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 of Newport Beach, 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 monies accruing to the General Fund for the purpose of promoting tourism and related activities; B. 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; C. 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 D. The City Council has determined that funding of Bureau activities will be a significant benefit to the City of Newport Beach. NOW, THEREFORE, the parties agree as follows: -1- and shall Agreement. 1. Term: This Agreement continue until shall commence on April 1, 1987, terminated as provided in this 2. Bureau Services: Bureau shall develop, plan, carry out and supervise a program to promote tourism in, and serve the needs of visitors to, the City of Newport Beach. Bureau, in implementing this plan, shall, at a minimum, do the following: A. Maintain suitable quarters and employ competent personnel to properly carry out the promotional activities; B. Prepare and distribute, by way of the media, direct mail or hand out, brochures, publications and guides that inform prospective tourists and visitors of the recreational assets of Newport Beach; C. Develop marketing programs with an emphasis on increasing business and visitor trade during the off-peak season (October through May). D. On or before May 1, 1987, Bureau will prepare a study designed to analyze the need for a trolly system to serve the City of Newport Beach. Although City desires to give Bureau considerable flexibility in preparing said study, it is the intent of City to require that the study is to address need, a pilot program if such a program is warranted, trolley size, routes, start up dates, schedules, advertising programs, management and budgets. It is further intended that the Bureau -2- 7 will be responsible for providing a minimum of $100,000.00, per annum, from direct contributions and advertising revenues and that City financial participation will be commensurate with services provided as determined by City. 3. City Funding: City shall pay the Bureau all funds received pursuant to the "Service Provision Fee Ordinance," less a sum equal to one 0%) percent of those revenues to defray the City's administrative costs. The City's obligation to pay Bureau any funds shall cease if the Service Provision Fee Ordinance is repealed or ruled to be invalid. Bureau acknowledges the City Council has the full discretion to repeal the Service Provision Fee Ordinance and, by this Agreement, gives up any right to contend that repeal of the Ordinance is prohibited for any reason, including, but not limited to, impairment of this Contract. 4. Manner of Payment: Funds due Bureau pursuant to this Agreement shall be paid on or before the thirty-fifth (35th) day following the close of each quarter during the fiscal year (quarter closure dates are September 30th, December 31st, March 31.st and June 30th). 5. Bureau Reports: In addition to the duties specified in Section 2 of this Agreement, Bureau shall provide the City with q marketing plan and annual budget on or before April 1st of each year. The budget shall first have been approved by the Board of Directors of Bureau. The marketing plan shall specify the goals and objectives of Bureau during the fiscal year, and the methods M -3- Bureau will use to achieve those goals and objectives. In addition, during January and July of each year commencing with 1988, the Bureau shall submit a report to the City evaluating the success of the Bureau in increasing tourism and related activities during the preceding six months. Said report shall include, but not be limited to, a complete breakdown on the expenditure of funds, a comparison of room occupancy rates for the prior six months as compared to other comparable periods, increased tax revenues which can be traced directly or indirectly to the promotion program and an analysis of costs or problems resulting from increased visitation as they relate to police, fire and other services provided by the City. 6. Expenditure of Funds by Bureau: Bureau shall expend funds provided by City in accordance with a budget submitted to, and approved by, the City Council. The City Council will not approve any budget that proposes to spend 30% or more of the funds received from the City for salaries or administrative expenses. With the prior approval of the City Manager, 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. 7. Records: Bureau shall prepare and maintain, during the term of this Agreement, and for 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 submit an audited report sixty (60) days following the close of a fiscal year listing all expenses of said Bureau. City shall, during Bureau's regular business hours, -4- have the right to audit and review all records maintained by the Bureau. 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. 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 part of the City or its officers, agents, or employees; provided., however, Bureau's duties under this paragraph shall not extend to any claims, losses, damage, liability, lawsuits, judgments, costs, fees and expenses arising from the sole negligence or wilful misconduct of the City, its employees, officers, agents or representatives. 10. Termination: In addition to the provisions of Paragraph 3: A. City shall have the right to terminate this -5- 110 Agreement, effective on the date written notice is given to Bureau, in the event of any of the following: 1. Bureau has improperly expended funds provided by the City pursuant to this Agreement; 2. Bureau has failed to perform the services required of it pursuant to this Agreement; - 3. Bureau has filed, or has taken or committed any act preparatory to filing, a petition in bankruptcy or for receivership or reorganization under the Bankruptcy Act. 4. Bureau has become insolvent or committed any act of insolvency. B. City shall have the right to terminate this. Agreement by giving ninety (90) days' written notice. 11. Independent Contractor: The parties agree that Bureau, and its officers, employees and representatives, while engaged in the 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, nor the right to receive any monies pursuant to this Agreement, without the prior written consent of the City. 13. Notices: All notices required to be given by this Agreement -6- 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 Attention: City Manager's Office 3300 Newport Boulevard Newport Beach, CA 92663 TO BUREAU: NEWPORT BEACH CONFERENCE & VISITOR'S BUREAU Attention: Executive Director 4340 Campus Drive Newport Beach, CA 92660 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. DATE: , 1987 NEWPORT BEACH CONFERENCE AND VISITOR'S BUREAU DATE: By: 1987 And: "Bureau" DATE: , 1987 CITY OF NEWPORT BEACH, a municipal corporation -7- 12 By: "City" APPROVED, AS TO FO�, NI THIS /'Z.,DAY OF , 1987. By. C'ty Attorney` -8- 11 ORDINANCE NO. 86-5 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH ADDING SECTION 3.28 ESTABLISHING A VISITOR'S SERVICE FEE. The City Council of the City of Newport Beach does hereby drd"ain as follows: Section 1: Section 3.28 is added to the Newport Beach Municipal Code as follows: Sections: Section 3.28.005 Findings and Purpose. Section 3.28.010 Definitions. Section 3.28.015 Visitor Services. Section 3.28.020 Service Fee. Section 3.28.025 Use of Service Fee. Section 3.28.030 Responsibility of the Operator. Section 3.28.035 Exemptions. Section 3.28.040 Reporting and Remitting. Section 3.28.045 Penalties and Interest. Section 3.28.050 Records. Section 3.28.055 Assessment Procedures. Section 3.28.060 Appeal. Section 3.28.065 Notice. Section 3.28.070 Fee Declared a Debt - Action to Collect. Section 3.28.075 Penalty for Violations. Section 3.28.005 Findings and Purpose. The City Council finds and declares as follows: (A) The natural, recreational and cultural resources of Newport Beach make it a popular destination for business travellers and vacationers; (B) Visitor serving businesses, such as hotels, restaurants and retail shops, comprise a large segment of the economy of the City of Newport Beach; ..a+r..ws,Mee,�yaK.*sA�'cPGv?8Y1NBc:4j1'A?' .t+�+�a fi•',+.7+n��y+3wr.ry:;w^�,•t�x i:".ry��.e�� w?MiE:�ri;,'n':��L�v�tt'wf,,ti+7.ei4 (C) The existing visitor serving businesses within Newport Beach are subject to increased competition due to the construction of numerous hotels and restaurants in cities near Newport Beach; (D) To maintain the economic viability of the existing visitors serving businesses it is necessary to provide those visitors with information about the resources and businesses available to serve their needs, and to encourage persons to visit Newport Beach during the off-season; .(E) Businesses that provide lodging for visitors will play a key role in dispensing information to visitors and the guests of hotels, motels and inns will be the principal beneficiary of the program; (F) The program for providing services to visitors and encouraging others to visit Newport Beach should be funded by fees charged to the guests of hotels and motels; (G) A program for providing services to visitors and inform potential visitors of the advantages of Newport Beach is likely to generate additional transient occupancy tax and sales tax revenues that can be used by the City to provide services and make improvements that will benefit residents and visitors alike; (H) The visitor service fee required by this ordinance is equivalent to the costs incurred by the City in providing services and is representative of the benefit to those visiting Newport Beach. Section 3.28.010 Definitions. Except where the context otherwise requires, the definitions given in this section shall govern the construction of this chapter: Person. The term "person" shall mean any individual, firm, partnership,'joint venture, association, social club, fraternal organization, joint stock company, corporation, estate, trust, business trust, receiver, trustee, syndicate, or group. Hotel. The term "hotel" shall mean any -2- structure, or any portion of any structure, which is occupied or intended or designed for occupancy by guests for dwelling, lodging or sleeping purposes, and includes any hotel, inn, tourist home or house, motel, studio hotel, bachelor hotel, lodging house, rooming house, apartment house, rental unit, dormitory, public or private club, mobile home or house trailer at a fixed location, or other similar structure or portion thereof. Occupancy. The term "occupancy" shall mean the use or possession, or the right to use or possession of any room or rooms or portion thereof, in any hotel for dwelling, lodging or sleeping purposes. Guest. The term "guest" shall mean any person who exercises occupancy or is entitled to occupancy by reason of concession, permit, right of access, license or other agreement for a period of thirty (30) consecutive calendar days or less, counting portions of calendar days as full days. Any such person so occupying space in a hotel shall be deemed to be a guest until the period of thirty (30) days has expired, unless there is an agreement in writing between the operator and the occupant providing for a longer period of occupancy. Rent. The term "rent" shall mean the consideration charged, whether or not received, for the occupancy of space in a hotel 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. Operator. The term "operator" shall mean the person who is proprietor of the hotel, whether in the capacity of owner, lessee, sublessee, mortgagee in possession, licensee, or any other capacity. Where the operator performs his functions through a managing agent of any type or character other than an employee, the managing agent shall also be deemed an operator for the purposes of this chapter and shall have the same duties and liabilities as the principal.. Compliance with the provisions of this chapter by either the principal or the managing agent shall, however, be considered to be compliance by both. Section 3.28.015. Visitor Services. The City, or an entity under contract to the City, shall develop, plan, carry -3- out and supervise a program to serve the needs of visitors to, and promote tourism in, the City of Newport Beach. The City, or the entity retained by the City, in implementing this plan shall, at a minimum: (A) Employ, and provide suitable quarters for, competent personnel to carry out the services described above; (B) Prepare and distribute information, by way of brochures, publications, guides, direct mail and the media that informs visitors, and prospective visitors, of the resources of Newport Beach and the businesses available to serve their needs; (C) Develop and implement marketing programs with an emphasis on increasing business and visitor trade during the off-peak season (October through May). Section 3.28.020. Service Fee. Each guest shall pay a fee of 1% of the rent charged by the operator as consideration for, and to defray the cost of, the services provided by City. The fee constitutes a debt owed by the guest to the City which is extinguished only by payment to the operator or directly to the City. The guest shall pay the fee to the operator of the hotel at the time the rent is paid. If the rent is paid in Installments, a proportionate share of the fee shall be paid with each installment. Any unpaid fee shall be due upon the guest's termination of tenancy. Section 3.28.025. Use of Service Fee. Funds received by the City pursuant to this chapter shall be used solely for the purposes described in Section 3.28.015. All fees received pursuant to this chapter shall be deposited into a special account designated the "Visitor's Service Fee Fund." Section 3.28.030. Responsibility of the Opera- tor. Each operator shall collect the fee imposed by this chapter to the same extent, and at *the same time, as rent is collected from each guest. The fee shall be separately stated from the amount of the rent charged, and each guest shall receive a receipt for payment from the operator. imposed upon: Section 3.28.035. Exemptions. No fee shall be -4- (A) Any person as to whom, or any occupancy as to which, it is beyond the power of the City to impose the fee required by this chapter. (B) Any federal or State of California officer or employee when on official business. (C) Any officer or employee of a foreign government who is exempt by reason of express provision of federal law or international treaty. No exemption shall be granted except upon a claim therefor made at the time rent is collected and under penalty of perjury upon a form prescribed by the Finance Director. Section 3.28.040. Reporting and Remitting. On or before the last day of the month following the close of each calendar quarter, or such different reporting period as may be established by the Finance Director, each operator shall make return to the Finance Director, on forms provided by the City, of the total rents charged and received, and the amount of the fees collected during the preceding three (3) months, together with such information as may be required by the Finance Director. The full amount of the fee collected shall be remitted to the Finance Director at the time the return is filed. A return must be filed, and payment of all fees must be made, within thirty (30) days from the date' any hotel ceases operation. All fees collected by operators pursuant to this chapter shall be held in trust for the account of the City until payment is made to the Finance Director. Section 3.28.045. Penalties and Interest. (A) Original Delinquency. Any operator who fails to remit any fee imposed by this chapter within the time required shall pay a penalty of 10% of the amount of the fee, this in addition to the amount of the fee. (B) Continued Delinquency. Any operator who fails to remit any delinquent remittance on or before a period of thirty (30) days following the date on which the remittance first became delinquent shall pay a second delinquency penalty of ten -5- 4 5- r44w'!;i'/AfM'.;:+.t^1+i,CxSeW*,.�P�?.T4fw`1.:�4.Jt`'+i4icw+�,�4t-+CX .. l?t!Ci 4vJ•u1.1: ,•'..wn r'; `^,? '"`At.h�t:Y. ° percent (10%) of the amount of the fee in addition to the amount of the fee and the ten percent (10%) penalty first imposed. (C) Fraud. If the Finance Director determines that the nonpayment of any remittance due under this chapter is due to fraud, a penalty of twenty-five percent (25%) of the amount of the fee shall be added thereto in addition to the penalties imposed by Subparagraphs A and B. (D) Interest. In addition to the penalties imposed, any operator who fails to remit any fee imposed by this chapter shall pay interest on the full amount of the fees unremitted, exclusive of penalties at the rate of one-half of one percent (1/2%) per month for each month or portion of a month that the fee is delinquent from the date on which the fee first became delinquent. The interest shall be computed on a monthly basis and shall not be subject to proration for any portion of a month. (E) Penalties Merged with Fee. Every penalty imposed and suQh interest as accrues under the provisions of this section shall become a part of the fee herein required to be paid. Section 3.28.050. Records. It shall be the duty of every operator to keep and preserve, for a period of three (3) years, all records necessary to determine the amount of such fee the operator should have collected and paid. The Finance Director shall have the right to inspect the records during business hours. Section 3.28.055. Assessment Procedures. The Finance Director shall Investigate any failure or refusal of any operator to collect the fee, or make any report or remittance of the fee, required by this chapter. The Finance Director, after Investigation, shall determine, and assess against the operator, the fees, interest and penalties provided by this chapter. Notice of the determination shall be given to the operator by the Finance Director. The operator may request a hearing before the Finance Director by filing a written application within ten (10) days from the date of notice of the determination. The decision of the Finance Director shall be final if the operator fails to f I I e a timely application for hearing. If the operator has requested a hearing, the Finance Director shall give the operator -6- /7 notice of the time and place of the hearing. The Finance Director shall consider all evidence, written or oral, offered by the operator at the hearing and give notice of the decision on the proper amount of the fees, interest and penalties within thirty (30) days after the hearing. The amount determined to be due shall be payable fifteen (15) days after the notice of decision unless the operator appeals to the City Council. Section 3.28.060. Appeal. Any operator aggrieved Uy a decision of the Finance Director with 'respect to the amount of fee, interest or penalties assessed may appeal to the City Council by filing a notice of appeal with the City Clerk within fifteen (15) days after notice of the decision of the Finance Director. The City Clerk shall fix the time and place for hearing and give notice to the Finance Director and the operator. The City Council may preside over the appeal, or may appoint a hearing officer to take evidence and submit proposed findings and recommendations to the City Council. The City Council shall render a final decision within thirty ( 30 ) days after the hearing, and any amount found to be due shall be payable within ten (10) days after service of notice of the decision. Section 3.28.065. Notice. Any notice required to be given pursuant to this chapter, shall be deemed given if personally served on the operator or the operator's representative, or if deposited in the United States mail, first class postage prepaid, and addressed to the operator at the address shown on the transient occupancy registration certificate. Section 3.28.070. Fee Declared a Debt - Action to Collect. Any fee collected by an operator pursuant to this chapter which has not been paid to the City shall be deemed a debt owed by the operator to the City and the operator shall be liable in an action brought in the name of the City of Newport Beach for the recovery of the unremitted fees. Section 3.28.075. Penalty for Violations. Any operator or other person who fails or refuses to register as .r• required herein, or to furnish any return required to be made, or who fails or refuses to furnish a supplemental return or other data required by the Finance Director, or who renders a false or fraudulent return or claim, is guilty of a misdemeanor, and is -7- 4x<:Yf,�t�R��V+1fiW?IFi3'!:��.�F�,::Sfi�l ,'!'3iw"�'h�XrT.��ht.� �].tv1i�W.it�Ak15R?a�ae.'Ww'f^�W'1•r2�W' i'^..'�r. ); .��,..,. �� ?: .T?i•' !. c,Y,w �. _ \ �.�y\�. punishable as provided in Section 1.04.010 of this Code. Any person required to make, render, sign or verify any report or claim who makes any false or fraudulent report or claim with intent to defeat or evade the determination of any amount due required by this chapter to be made, is guilty of a misdemeanor and is punishable as aforesaid. Section 2: The Mayor shall sign and the City Clerk shall attest to the passage of this Ordinance. The City Clerk shall cause the same to be published once in the official newspaper within fifteen (15) days after its adoption. The Ordinance shall become effective on the 11th day of March , 1987. Section 3: This Ordinance was introduced at a regular meeting of the City Council of the City of Newport Beach held on the 26th day of January, 1987 , and adopted on the 9th day of February , 1987, by the following vote, to -wit: ATTEST: City Clerk U AYES, COUNCILMEMBERS Cox, Maurer, Plummer, Turner NOES, COUNCILMEMBERS Hart, Sansone, Strauss ABSENT COUNCILMEMBERS 0 -8- +1'ne31.:zFwt+i�a�:�'c��.�..�s,.+"..�`id?v� 7ixwwv��!e m ..> ��7+�i!Md7p ., ... �.•. "'�.L!M.�;e.� �?"X. ,W±ta.,�. -..� .n.� �!Cti'v �X` COUNCIL MEMBERS Motion All Ayes Motion All Ayes ©1 E� uiTY OF NEWPORT BtAC Motion I I I I I I I x Ayes x x x x x x Abstain x Motion Ayes x x x x x x x Abstain x MINUTES February 9, 1987 Motion was made to refer the subject Ord 87-3 letter to the Pending Legislation and Business Procedural Ethics Committee, for more License/ information and report back on February Handbills 23, 1987. (27) 4. Report to the City Manager regarding Plannl.ng actions taken by the Planning Commission (68) on January 22, 1987, was presented. Motion was made to schedule a public U/P 3229/ hearing for February 23, 1987, on Use Trfc Stdy Permit No. 3229, Resubdivision No. 840, and related Traffic Study, regarding application of Harris Architects, on Finance/ property located at 3000 West Coast Conf/Vistrs Highway. Bureau H. ORDINANCES FOR ADOPTION: (40) 1. Proposed ORDINANCE NO. 87-2, being, Ord 87-2 Veh/Trfc AN ORDINANCE OF THE CITY OF NEWPORT Trailers BEACH REPEALING SECTION 12.40.050 (85) OF THE NEWPORT BEACH MUNICIPAL CODE PERTAINING TO TRAILERS ON BALBOA ISLAND, was presented with report from the Assistant City Attorney, dated January 8, 1987. Motion was made to adopt Ordinance No. 87-2. 2. Proposed ORDINANCE NO. 87-3, being, Ord 87-3 Business AN ORDINANCE OF THE CITY OF NEWPORT License/ BEACH AMENDING SECTION 5.40.060 OF Handbills THE NEWPORT BEACH MUNICIPAL CODE (27) PERTAINING TO HANDBILL EXCEPTIONS, was presented with report from the Assistant City Attorney, dated January 8, 1987. Motion was made to adopt Ordinance No. 87-3. I. CONTINUED BUSINESS: 1. Report from the City Manager, dated Finance/ February 9, 1987, regarding REQUEST OF Conf/Vistrs CONFERENCE AND VISITORS BUREAU, was Bureau presented. (40) Volume 41 - 68 COUNCIL MEMBERS G�y�`G�yPI G L CALL Ci FY OF NEWPORT BE.,� MINUTES February 9, 1987 Letter from Balboa Peninsula Point Association regarding comments made at the January 26, 1987 City Council meeting. The City Clerk advised that after the agenda was printed, three additional letters were received regarding this proposal from Bill Bennett, 218 Cedar Street and Walt McCarthy, 1906 Port Bristol Circle (in opposition), and Balboa Improvement Association (in support). The City Manager referred to his report noting that the proposed agreement has been modified as follows: 1) The effective date has been changed from March 1 to April 1, 1987. 2) The reporting period as specified in paragraph 5 requires reports every January and July of each year, commencing with 1988. Discussion ensued with regard to the termination clause set forth in the proposed agreement, wherein it was pointed out that the City shall have the right to terminate the agreement, effective on the date written notice is given to Bureau in the event of any of the occurrences enumerated in the agreement. The City shall also have the right to terminate the agreement by giving ninety days' written notice. The City Attorney also advised that there is a provision in said agreement which allows for termination if the visitor's service fee ordinance is repealed. Mayor Pro Tem Hart commented that she had received the current list of the Bureau's Board of Directors, as requested at the last Council meeting, but she had not yet received a copy of their budget or a report relative to hotel statistics. Jerry King, President, Conference and Visitors Bureau, addressed the Council and stated that the budget referred to by Mayor Pro Tem Hart was submitted some months ago in the Bureau's original packet to the Council. With regard to their budget, they do intend to continue to charge dues to its members and it's their hope, providing the visitor's Volume 41 - Page 69 'finance/ ,onf/Vistrs 3ureau t,ITY OF NEWPORT BEA(.., COUNCIL MEMBERS ���� February 9, 1987 LL CALL MINUTES service fee is approved, to increase that membership by some number. Their long-term hope is that those dollars would be both accounted for in the budget and available for a variety of undertakings by the Bureau. With respect to the hotel statistics referred to by Mayor Pro Tem Hart, he thought such figures were incorporated in the original agenda packet from the City's Finance Department. With regard to the Bureau's interest in the trolley, Mr. King stated that they are definitely in support of seeing the Newport Beach trolley remain, as they do consider it visitor -related and something they would benefit from. He stated that they have met with the staff and would like to make the following offer, should the City Council decide to adopt and approve the Bureau's proposal: That item 2-d of said agreement be added to read, "that in conjunction with the City, the Bureau will develop a plan for the reestablishment of the trolley system, and if the City decides to reestablish the trolley, the Bureau agrees to participate in the funding of that trolley by contributing $50,000 each year in two quarterly payments of $25,000 each from the visitor's service fee, and by guaranteeing to the trolley a minimum of $50,000 additional each year in revenue charters and advertising. Further, that the Bureau shall include, in each biannual report, a section analyzing the ridership and economics of the trolley system." In response to questions raised, Mr. King stated that the offer as made for a total of $100,000 includes $50,000 guaranteed by Bureau members. The members would provide the advertising and/or a combination of advertising and charter service. With respect to a feasibility study of the trolley system, he stated he was not sure how long the study would take, but they are hopeful to have the system in operation by May, 1987. Council Member Plummer, in reference to the trolley, stated it was her understanding that this was an issue the Off -Street Parking Committee was going Volume 41 - Page 70 Finance/ Cnf/Vistrs Bureau CITY OF NEWPORT BE,A;, COUNCIL MEMBERS \�o February 9, 1987e1 MINUTES to move ahead on, inasmuch as it affects all of Newport Beach. She stated she felt the trolley has been "studied to death," and should not be studied again, or the trolley will not be in operation by this Summer. She stated she felt that the proper course of action would be for the Council to direct the Off -Street Parking Committee to review this issue, and report back its recommendation at the earliest possible date. Council Member Turner stated that the trolley system which was terminated January 31, 1987, was not working and costing the City a considerable amount. Therefore, he feels the Council should "back off" and take a very thorough look at the "need" for a trolley system; determine just how effective it can and should be, and that the City possibly experiment at a lower cost. He feels this can be done on a pilot program, particularly on the Peninsula. He stated he was reluctant to purchase a trolley first, and then hope the system worked. Mayor Pro Tem Hart indicated she felt the Council should only consider the 1% visitors service fee at this time, and not the matter of the trolley. Mr. King addressed the Council again and stated that the additional language they are requesting be inserted in the agreement, requires the Bureau to report biannually regarding the economics and ridership of the trolley, which would include an opportunity for them to look at route proposals in addition to the concept of full-time service vs. charter service, etc. The Bureau feels they will be generating a great deal of information that has not been generated in the past which will serve as guidance for the Council to manage the trolley. Barbara Carver, 4510 Park Newport, Government Relations Coordinator for Park Newport, addressed the Council in support of a trolley system. She stated that approximately 2,200 persons reside at Park Newport, many of whom use the trolley two or three times a week, or on a daily basis as a result of a survey taken within Park Newport. She stated that Park Newport is a member of the Conference and Visitors Bureau and spent $4,800 to place an ad on the trolley. Volume 41 - Page 71 Finance/ .nf/Vistrs Bureau `,TY OF NEWPORT B, -AC COUNCIL MEMBERS MINUTES ti __ SGA % ALL\0�� February 9, 1987 They have also budgeted an approximate amount in this year's budget for a similar ad, should there be another trolley system. The following persons addressed the Council regarding the the proposed 1% visitor's service fee: In favor: Kevin Consey, Director, Newport Harbor Art Museum Bjorn Sedleniek, owner of POSH Mens Store, Fashion Island Werner Escher, ex -member of the Conference and Visitors Bureau, 205 40th Street In opposition: Lars DeJounge, 208 Marigold Avenue Mr. King, in his closing remarks, stated that the City has used businesses to help pay taxes, to fund road improvements, etc., and therefore, businesses have benefited from those decisions over the years. The City has provided the community with many fine restaurants, hotels, world class museum, etc., which brings people to Newport Beach on an annual basis. The City is totally surrounded by visiting serving uses. The Bureau is not asking for more hotel rooms and they are not asking for a handout from the City. The Bureau is willing to provide dollars out of their own pockets, collected by their own industries, for which the City should reap some benefit as a result of increased sales. Council Member Strauss stated that he viewed the last Council meeting on television when this issue was discussed and has also listened to the tape recording of the same meeting. He stated he was opposed to the proposal and feels very strongly that this is a bad idea for the City for two principal reasons. First, it violates the free enterprise stand, that as far as he knows, the City has always taken by acting as a collection agency for the hotel industry. He feels other industries will now have the right to expect the same treatment if their times "get tough," and he feels the Council will have crossed a line that the City should not have crossed if the Volume 41 - Page 72 -;�- 6 Finance/ Cnf/Vistrs Bureau CI fY OF NEWPORT BE.A� COUNCIL MEMBERS s \LL\ Fy February 9, 1987 MINUTES subject ordinance is adopted. Secondly, and as equally important, he feels it is a bad idea because it further changes the character of the City and makes it more of a tourist town. Most people don't want to see Newport Beach become a Miami Beach, or a Honolulu and when the hotels were built in this City everyone kept saying, "don't worry about that, it will never happen," yet somehow the City is going to undertake a program of nationwide advertising for tourists. He does not feel this is in the best interest or character of the City. Council Member Strauss continued further by stating that the proponents basically are saying that the City would gain by an increase in the hotel occupancy tax, but is that a good reason to change the character of the City, or to violate our firm stand on free enterprise? He does not think it is. He reminded the Council of the defeat of Measure A on November 25, 1986 which, according to the experts, would have made the City $1,000,000 per year, but instead the voters turned it down by convincing the majority that money isn't everything to the answers of our City. He urged the Council to vote down the subject proposal, but stated however, if it is approved, he would suggest the contract be amended to provide for a termination date after a two-year period. This does not mean the contract would be terminated, it only means that negotiations would take place to either renew the subject document, or write a new contract. Council Member Maurer stated he is always surprised when he hears people say that the City should not be involved with businesses. We are already involved in businesses in his opinion. Also, there is a difference between a visitor who comes to the City and pays his way and the visitor we refer to as our "beach -goer." He stated he would be opposed to the proposal if the Bureau were to promote the "beach -goer" type of visitor who uses the beach for the day and then returns home to another city. He feels there is a partnership between the City, the residents and the businesses, and he would be opposed to terminating the contract at the end of a two-year period, as proposed by Council Member Strauss. Volume 41 - Page 73 Finance/ Cnf/Vistrs Bureau CITY OF NEWPORT Br -AC COUNCIL MEMBERS �G�y��G��� LL CALL Motion 2 /� MINUTES February 9, 1987 Council Member Sansone stated that he Finance/ was opposed to the proposal and has been Cnf/Vistrs from its inception. He does not believe Bureau it is necessary for the City to get involved with the Bureau and act as a "money exchange outfit." He feels the hotel industry should collect the fees themselves and disburse the funds without the City becoming involved. He stated he does not want to see the City act as a "money laundry source." He stated he has looked into the possibility of anti-trust as referred to during the last Council meeting, but feels that is not possible. He reiterated that he was not opposed to the concept, but was strongly opposed to the City getting involved. Council Member Turner stated that he, too, is concerned with the possibility of mixing between private enterprise and the City; however, in this particular case, he does not feel the City is getting involved in "business," as he sees it. He stated that the Council is looking at a situation that provides the City with approximately one-half million dollars per year. He stated he will support the proposal, as he feels there are controls contained in the agreement to make sure that if the program goes awry the City can step in and terminate the contract. Council Member Turner stated that he also had some suggestions to "tighten" the agreement further, and therefore, moved to adopt proposed ORDINANCE NO. Ord 86-5 86-5, being, Visitor's Service Fee AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH ADDING SECTION 3.28 TO THE NEWPORT BEACH MUNICIPAL CODE, ESTABLISHING A VISITORS' SERVICE FEE; and authorize the Mayor and City Clerk to execute agreement between City C-2638 and Newport Beach Convention and (38) Visitors Bureau; and to add a Section 2.D to the agreement to read as follows: "On or before May 1, 1987, the Bureau will prepare a study designed to analyze the need for a trolley system to serve the City of Newport Beach. Although City desires to give Bureau considerable flexibility in preparing said study, it is the intent of the City Volume 41 - Page 74 L Ayes Noes COUNCIL MEMBERS ,.\0N\`A `O'f �q Motion All Ayes Ci fY OF NEWPORT BE,AC x x x x x x x x February 9, 1987 MINUTES to require that the study address Visitor's need, a pilot program if such a Service Fee program is warranted, trolley sizes, routes, start up dates, schedules, advertising programs, management and budgets. It is further intended that the Bureau will be responsible for providing a minimum of $100,000 per annum from direct contribution and advertising revenues, and that the City financial participation will be commensurate with services provided as determined by City." It was further moved that the following paragraph be added to Section 5: "Said report shall include, but not be limited to, a complete breakdown on the expenditure of funds, a comparison of room occupancy rates for the prior six months, as compared to other comparable periods, increased tax revenues which can be traced directly or indirectly to the promotion program and an analysis of costs or problems resulting from increased visitations as they relate to police, fire and other services provided by the City." Mayor Pro Tem Hart asked Council Member Turner if it was his intention, in changing a portion of the agreement relative to the trolley, that the City Council would still have the option as to whether a trolley system would actually go into operation, to which Council Member Turner replied in the affirmative. Mayor Pro Tem Hart stated that she will oppose the motion, and that she made her comments in this regard at the last Council meeting. She complimented the Bureau on their "dynamic" Board of Directors and stated she is sure they will do very well. She stated that her "no" vote is reflective only of the City's participation in this proposal, and not against the Bureau itself. The motion was voted on and carried. 2. BICYCLE TRAILS CITIZENS ADVISORY BT/CAC COMMITTEE: Motion was made to confirm (District 1) Council Member Strauss's reappointment Volume 41 - Page 75