- Elizabeth Larson
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Lakeport City Council gets introduction to tourism improvement district proposal
LAKEPORT, Calif. – The Lakeport City Council heard a presentation on a proposal to create a tourism improvement district to help bolster the county’s economy and also approved the city’s new 2018-19 budget, a document which includes a number of big projects in the year ahead.
Rachael Taylor, project manager of Civitas Advisors, gave the Lakeport City Council a presentation at its June 5 meeting on a proposal to create the Lake County Tourism Improvement District.
That proposal also is due to go before the Board of Supervisors on Tuesday. If the board approves the required resolutions, the district’s formation will then go to the two cities for final approval.
At the June 5 council meeting, Taylor said Civitas Advisors is the leading consulting firm for forming special districts; it has formed 86 out of the 101 special districts in California.
Taylor said Civitas Advisors has formed tourism improvement districts in 12 states, and is working on legislation to get them in 14 more.
A tourism improvement district, as Taylor described it, is a stable source of funding for marketing efforts. It’s only for increasing occupancy and room rates for lodging businesses.
The funds are raised through a small assessment and are used to provide services desired by and directly benefiting the businesses that pay the assessment in the district, she said.
Taylor explained that hotels, motels and other accommodations pay the assessment, which is collected by the local jurisdiction – either the two cities or the county. The funds are then managed by a destination marketing organization, a nonprofit that the district already is forming.
She said that tourism improvement districts create a level playing field with no free riders, and also offer transparency and reliability, and a pass-through to guests. The Brown Act and the Public Records Act also apply to such districts.
The district’s revenue won’t go into the local governments’ general funds, as the money doesn’t belong to the government. Rather, it’s a pass-through to guests, just like transient occupancy tax, Taylor said.
Taylor showed a comparison of revenue for tourism improvement districts in other areas around California, among them, Humboldt County, $1.2 million; Marin County, $1.3 million; Mendocino County, $1.5 million; and Fairfield, $800,000.
The assessment proposed for Lake County is 3 percent, in addition to the 10 percent in transient occupancy tax, or TOT, paid in Lakeport, and the 9 percent TOT paid in the county and Clearlake, she said.
The Lake County Tourism Improvement District will be managed by a new nonprofit corporation called Visit Lake County California. Taylor said the new organization’s bylaws and members are still being worked out.
That organization must provide annual reports to the Board of Supervisors, and can also provide them to the cities, she said.
Taylor said the district’s plan is essentially a business plan which sets in line parameters for how the district must operate.
She said the county of Lake will be the lead jurisdiction, and it will be requesting consent from the two cities to proceed at its June 19 meeting. The two cities will need to grant consent to the county to let the district be operated in their jurisdictions. They will then be responsible for helping collect the 3-percent assessment.
In the city of Lakeport, businesses pay the TOT assessments monthly. Taylor said they will pay the new assessment at the same time. The cities and county will be able to keep 2 percent of what is collected in their area to cover their costs.
In explaining the rest of the district budget, Taylor said 20 percent will be set aside for administration and operations, advocacy, insurance, legal and accounting fee. Another 75 percent goes to sales and marketing, while 3 percent is set aside for contingency and reserve.
Taylor said the district can only be set up for a maximum initial term of five years, then it can be renewed up to 10 years. When it comes time for renewal, a process like the current one to form the district will be followed with a new plan for the destination marketing organization. At that point, there will be an opportunity to change the plan and operations.
When asked about the organization’s board, Taylor said it is expected to have between seven and nine board members, but could have up to 11. The majority of the board members have to be lodging business owners.
There also will be one seat for the tribes, which can’t be assessed as they’re not part of the district’s jurisdiction. However, Taylor said they have expressed interest in being part of a private contract.
Still another seat will be kept for a party interested in tourism, like the wine industry, she said.
Based on the figures given at the meeting, Lake County’s tourism improvement district is estimated to bring in about $340,000 a year. Taylor said the total number could change if private contracts are added.
Of that amount, 75 percent, or $255,000, will be used for marketing – establishing the brand, logo, Web site and photography – and sales. The plan includes large media buys, including billboards, radio and television, in the Bay Area, with district staff overseeing those efforts or a marketing firm hired to handle that aspect of operations.
The district also is expected to have a part-time or full-time staffer to handle daily operations, Taylor said.
Deputy County Administrative Officer Michelle Scully thanked the council for taking the time to hear about the district.
“It's a big, giant process to do this,” she said, explaining that the work had been going on since last April. She said it has been great to see the county and cities working together on something very forward-thinking and transformative.
Lynne Butcher, who along with husband Bernie owns the 17-room Tallman Hotel in Upper Lake, expressed her support for the district. “We have lots of rooms. We could take a lot more guests at our property.”
She said the only way to market the Tallman is to market the entire county. However, no single property has the resources to do that scale of marketing, which she pointed out is very expensive.
Butcher called the district a wonderful idea. “We wholeheartedly support it.”
Lisa Wilson, general manager of Clear Lake Campground, also offered her support.
“We have a great story to tell tourists about Lake County,” and a professional staff is needed to tell it, she said.
Wilson said she didn’t expect any pushback from guests about the 3-percent assessment, adding that Lake County needs to control its own destiny.
Taylor said there is a petition phase in which they have to have at least 50 percent plus one of hotel/motel owners, weighted for how much of the assessment they will pay, in order to move forward.
As of June 5, Taylor said they had about 46 percent.
As of this week, county staff’s report to the Board of Supervisors said 16 hotels representing 58.6 percent of the total assessment had submitted petitions in favor of the district formation, which allows the board to initiate the proceedings to form the district.
Once the Board of Supervisors approves the resolutions requesting consent from the cities to operate the district in their jurisdictions, Taylor said the matter will come back to the council for final approval.
She said a public meeting also is expected to take place in July to offer an open forum for comment on the district’s formation.
In other business at its June 5 meeting the Lakeport City Council also approved the city’s 2018 budget.
Finance Director Nick Walker said the budget included $13.1 million in revenues and $16.4 million in expenditures.
The difference between those numbers is project-related funds that primarily were received in prior years. He said the majority is $2.5 million for storm-related repairs.
Silveira said the funds are received this year but spent next year, which is why it looks like a deficit.
Lakeport Main Street Association President Barbara Breunig and Executive Director Panette Talia awarded the Business of the Quarter Award to Park Place restaurant, and presented checks totaling nearly $18,000, including $9,800 for the downtown tree project
The council also held a public hearing and authorized Silveira to submit an application to the US Department of Agriculture’s Community Facilities Loan and Grant Program in the amount of $495,000 to construct a sewer main extension to serve the proposed 24-unit affordable multi-family housing project located at 1255 Martin St., and held a public hearing for approval of required resolutions and legal documents regarding the city’s solar and energy efficiency retrofit project financing.
The council also awarded a construction contract to VSS International Inc. for the 2018 Pavement Preservation Program and nominated council delegates for the League of California Cities Annual Conference to be held Sept. 12 to 14 in Long Beach.
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