CITY OF ELK GROVE CITY COUNCIL STAFF REPORT
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1 AGENDA ITEM NO. 8.9 CITY OF ELK GROVE CITY COUNCIL STAFF REPORT AGENDA TITLE: Receive the Elk Grove Tourism Marketing District (EGTMD) Annual Report for Fiscal Year MEETING DATE: October 25, 2017 PREPARED BY: DEPARTMENT HEAD: Rachael Brown, Economic Development Manager Brandon Merritt, Finance Analyst Darrell A. Doan, Economic Development Director RECOMMENDED ACTION: Staff recommends that the City Council receive the Elk Grove Tourism Marketing District (EGTMD) Annual Report for Fiscal Year BACKGROUND INFORMATION: On February 11, 2015, the City Council adopted Resolution No establishing the Elk Grove Tourism Marketing District, a benefit assessment district to help fund marketing and sales promotion efforts for Elk Grove lodging businesses. The EGTMD currently includes certain existing and future lodging businesses located within the boundaries of the City of Elk Grove and a portion of unincorporated Sacramento County. On December 9, 2015, Council approved a Memorandum of Understanding (MOU) and Cooperative Agreement between the City of Elk Grove and Visit Elk Grove. The effect of this approval was to formally establish Visit Elk Grove (VEG) as the contracted non-profit entity responsible for administration of funds raised through the Elk Grove Tourism Marketing District (EGTMD). 1
2 Elk Grove City Council October 25, 2017 Page 2 of 2 The EGTMD and the VEG must prepare and deliver an annual report to the governing legislative body; in this case, that is the Elk Grove City Council. The attached report covers the fiscal year for the VEG and the EGTMD ending June 30, California Streets and Highways Code section and the adopted District Management Plan further outline certain requirements for the EGTMD report, including specific financial and performance indicators from the prior fiscal year. In addition, the VEG bylaws require basic financial statements such as a balance sheet, an income statement, and independent auditor s report. The attached EGTMD Annual Report for FY includes the required VEG Financial Statements. FISCAL IMPACT: There is no impact to the General Fund as a result of receiving this Report. Revenues for the Elk Grove Tourism Management District, which are administered by Visit Elk Grove, come from the Transient Occupancy Tax (TOT) assessed by certain lodging businesses in the City of Elk Grove and a portion of the unincorporated County of Sacramento. The estimated revenues are based on a proposed annual assessment rate on top of normal City transient occupancy tax, which amounts to 2% of gross shortterm (stays for a period of 30 days or less) room rental revenues located within the City of Elk Grove, and 1% for lodging businesses located within the unincorporated portion of Sacramento County. ATTACHMENT: 1. EGTMD Annual Report for FY
3 Elk Grove Tourism Marketing District Annual Report for FY
4 Table of Contents I. Boundaries and Business Classifications 3 II. Improvements and Activities 3 III. Annual Assessment Rate 4 IV. Surplus or Deficit Carried Over 4 V. Contributions from Other Sources 4 VI. Financial Statements for Visit Elk Grove 5 VII. Estimated Budget 12 VIII. Current Board of Directors 13 IX. Summary of Next Steps 13 4 Elk Grove Tourism Marketing District Report for
5 I. Boundaries and Business Classifications There are no proposed changes in the boundaries of the improvement district or in any benefit zones or classification of businesses within the district. II. Improvements and Activities Improvements and Activities to be provided for FY : Improvements are specified in Streets and Highways Code as any of the following: Parking facilities Benches, booths, kiosks, display cases, pedestrian shelters, and signs Trash receptacles and public restrooms Lighting and heating facilities Decorations Parks Fountains Planting areas Closing, opening, widening, or narrowing of existing streets Facilities or equipment, or both, to enhance security of persons and property within the area Ramps, sidewalks, plazas, and pedestrian malls Rehabilitation or removal of existing structures Activities are specified in Streets and Highways Code as any one of the following: Promotion of public events which benefit business or real property in the district Furnishing of music in any public place within the district As part of its Community Outreach goals, VEG will be partnering with several local events. Elk Grove Tourism Marketing District Report for
6 Promotion of tourism within the district Marketing and economic development, including retail retention and recruitment Providing security, sanitation, graffiti removal, street and sidewalk cleaning, and other municipal services supplemental to those normally provided by the municipality Activities which benefit businesses and real property located in the district A major portion of funding will be devoted to a comprehensive Community Brand Research effort. Promotional dollars will also be used to enhance social media channel establishment efforts, as well as, developing an inventory of high quality photos and video for use in future promotions. Other dollars will be use to prepare the organization for Year 3 and 4 strategic planning initiatives. VEG will prioritize its partnership with City s Department of Economic Development for the Brand Research effort and as other potential economic development opportunities arise. As a part of its Community Outreach Goals, VEG staff will be attending industry-related professional development and networking opportunities throughout the year. The goal is to develop relationships with local, regional, state and national partners in order to identify cost-saving joint ventures and pooling resources. III. Annual Assessment Rate The annual assessment rate is two percent (2%) of gross short term (stays for a period of 30 days or less) room rental revenue for lodging businesses in the City of Elk Grove, and one percent (1%) for lodging businesses in the unincorporated portion of Sacramento County. IV. Surplus or Deficit Carried over from FY As of June 30, 2017 there was $462,589 carried over into FY Elk Grove Tourism Marketing District Report for
7 V. Contributions to be made from sources other than assessments levied. There are no expected contributions from other sources. VI. Financial Statements Visit Elk Grove (begin on next page) Elk Grove Tourism Marketing District Report for
8 8 Elk Grove Tourism Marketing District Report for
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14 VII. Estimated Budget Below is the proposed budget that was adopted by the Board of Directors on July 25, FY17-18 Income TBID Assessment 354, Total Income 354, Gross Profit 354, Expenses Advertising 50, Dues & Subscriptions 12, Human Resources 1, Insurance Insurance - Liability 1, Legal & Professional Fees 3, Executive Director Contract 125, Marketing Contractors 55, Organizational Contractors 0.00 Meals and Entertainment Office Expenses 1, Other General and Admin Expenses Postage Printing 5, Professional Development/ Networking 3, Promotional 20, Shipping and delivery expense (deleted) 0.00 Supplies 0.00 Taxes & Licenses Travel 4, Travel Meals Website 45, Total Expenses 327, Net Operating Income 27, Net Income 27, Existings Funds 483, Funds to Carry over for FY , Elk Grove Tourism Marketing District Report for
15 VIII. Current Board of Directors REPRESENTATIVE HOTEL NAME ADDRESS Craig Munson, General Manger Kimberly Albright, General Manager Holiday Inn Express & Suites Hilton Garden Inn 9175 W. Stockton Boulevard Elk Grove, CA Laguna Springs Drive Elk Grove, CA Adolf Mondaca, General Manager VACANT VACANT Pratik Patel, General Manager Rachael Brown, Economic Development Manager Hampton Inn and Suites Holiday Inn Express Extended Stay America Fairfield Inn & Suites City of Elk Grove 2305 Longport Court Elk Grove, CA Maritime Drive Elk Grove, CA Longport Court Elk Grove, CA Orchard Loop Lane Sacramento, CA Laguna Palms Way Elk Grove, CA IX. Next Steps At the Visit Elk Grove (VEG) Board Meeting on July 5, 2017, the Board of Directors elected not to renew the contract for the Executive Director. The contract expired on July 31, 2017, and the role of Executive Director has been temporarily filled by the City of Elk Grove s Economic Development Department. During this time, VEG, in conjunction with the Economic Development Department, has completed the contract terms with Northstar for the branding research efforts. In August 2017, the VEG Board provided direction to move forward with the next phase of the brand development, which includes the creation of a logo, brand, and website, along with various marketing materials. In October 2017, VEG executed an agreement with Augustine Ideas, and work will commence in late October. In July 2017, the VEG Board provided direction to retain a recruitment firm to assist with finding a new Executive Director. In August 2017, the VEG Board reviewed five proposals and selected a recruitment firm that specializes in hiring destination marketing professionals. The recruitment efforts will commence in late October Elk Grove Tourism Marketing District Report for
16 Once the new Executive Director is on board, the new brand will be launched and the strategic plan will be reviewed, with appropriate adjustments made. At that time, VEG will provide an update to the City Council. In the meantime, Economic Development Department staff will continue to manage, in conjunction with the Board, the two contracts mentioned above, along with day-to-day management of the district. 16 Elk Grove Tourism Marketing District Report for
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