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HomeMy WebLinkAbout19 - Conference and Visitor's Bureau (CVB) AgreementTO: FROM: CITY COUNCIL AGENDA ITEM 19 MAYOR AND CITY COUNCILMEMBERS Kevin J. Murphy, City Manager i JUN DATE: June 22, 1998 � a mei. 1— t"Y' Q, kcK); r-\ RE: CONFERENCE AND VISITORS' BUREAU (CVB) AGREEMENT RECOMMENDATION: The City Council approve the contract amendment and extension with the Conference and Visitors' Bureau extending their agreement from August 31, 2001 to August 31, 2003. DISCUSSION: In July 1996 the City Council approved a new agreement with the Newport Beach Conference and Visitors' Bureau which extends through August 31, 2001. Section 3 (a) (ii) of the agreement expires on August 31, 1998, unless the parties mutually agree to extend this provision of the agreement. Section 3 (a) (ii) provides for additional sharing of City transient occupancy revenues beyond the 1% Visitors' Service Fee. In 1993 when the City increased the transient occupancy tax from 8% to 9%, the CVB supported that effort, with the proviso that a portion of that revenue increase would be shared with the CVB. In July 1996 the sharing provision was modified and extended to August 31, 1998. City and CVB staff have met and discussed the various options available to the two parties and after extensive review concluded that the current formula works well for both parties. The concept of additional revenue sharing was intended to provide the CVB with a budget permitting adequate marketing of the Newport Beach hospitality community. Today the CVB's budget is approximately $1.1 million and by extending the sharing provisions of the agreement as proposed it can grow over r` time. The formula as proposed also provides the City and CVB with an easy means of projecting the future split of the revenues for budgeting purposes. Attached to this staff report is the proposed Amendment to the Agreement which not only extends the revenue sharing provisions, but also extends the underlying agreement five years or through 2003. Also attached is the agreement entered into on July 8, 1996. The CVB has demonstrated over the last few years a high degree of competence and success at marketing the community and increasing occupancy at our hotels. The extension of the agreement and revenue sharing are a means of formally acknowledging the successful work of the CVB and encouraging the continuation of their efforts. AGREEMENT This AGREEMENT, made and entered into this day of , 1998, 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 monies 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, 2003, 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 Fundinq (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 (1 %) of those revenues to defray the City's administration costs. (ii) 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. 2 (b) City's obligation to pay bureau is limited by the following: (i) The City's obligation to pay Bureau any funds pursuant to subparagraph 3 (a) (i) shall cease if and when 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 in its sole discretion decides to place any previously adopted revenue enhancing ordinance on the ballot for approval of electorate and the measure is defeated, or a Court of competent jurisdiction enters and 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 amount ordered to be transient occupancy taxes collected by City, Bureau agrees that City may* deduct from any payments made pursuant to Paragraph 3(a)(i) the portion of the refund 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. 3 5. Bureau Reports (a) Bureau shall provide City with a marketing plan and an annual. budget at the second Council Meeting in July 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 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 second City Council meeting in July 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 (ii) an audit listing all revenues and expenses of the Bureau during the proceedings fiscal year. 6. 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. 7. 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 4 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 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; or (iii) 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; or 5 (iv) Bureau has become insolvent or committed any act of insolvency. (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. 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 monies 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: 31 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 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: Title By Title Approved as to form: City Attorney City of Newport Beach: This AGREEMENT, made and entered into this ti day of , 1996, by and between the CITY OF NEWPORT BEACH, a municipal rpor tion 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: 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. I 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. (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 (1 %) 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: (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 of 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 3 Q 70 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 followings (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. 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. 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. 4 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. 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. U20MMMIUM •, (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 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. 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 6 14. 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. Ap e a o form: City Attorney cadpativisitorys.doc 7 Conferengo and Visitors Bureau: _ 'a //_ . City of Newport Beach By —\ Title m ' T