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HomeMy WebLinkAbout2025-032 - Declaring Results of Majority Protest Proceedings & Renewing the Santa Ana Tourism Marketing District RESOLUTION NO. 2025-032 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA DECLARING RESULTS OF MAJORITY PROTEST PROCEEDINGS AND RENEWING THE SANTA ANA TOURISM MARKETING DISTRICT (SATMD) WHEREAS, the City of Santa Ana (City) created the SATMD on November 17, 2020 by Resolution No. 2020-091; and WHEREAS, the SATMD was created for a five (5) year term which ends on December 31, 2025; and WHEREAS, the Property and Business Improvement Law of 1994, Streets and Highways Code § 36600 et seq., authorizes the City to renew business improvement districts upon petition by a weighted majority of the business owners located within the boundaries of the district; and WHEREAS, lodging business owners who will pay more than fifty percent (50%) of the proposed assessment, as weighted according to the amount of the assessment to be paid by the petitioner, within the boundaries of the SATMD have petitioned the City Council of the City of Santa Ana (Council) to renew the SATMD; and WHEREAS, included with the petitions was a Management District Plan (Plan) summary that describes the proposed assessment to be levied on lodging businesses, existing and in the future, within the SATMD to pay for Sales and Marketing programs, and other improvements and activities set forth in the Plan; and WHEREAS, the assessed lodging businesses within the SATMD will receive a specific benefit from the activities and improvements set forth in the Plan; and WHEREAS, on April 15, 2025 at 5:30 PM at the Council Chamber located at 22 Civic Center Plaza, Santa Ana, CA 92701, the Council adopted a Resolution of Intention, Resolution No. 2025-011; and WHEREAS, the public meeting and public hearing to consider the renewal of the SATMD have been properly noticed in accordance with Streets and Highways Code §36623; and WHEREAS, on June 3, 2025 at 5:30 PM at the Council Chamber located at 22 Civic Center Plaza, Santa Ana, CA 92701, the Council held a public meeting regarding the renewal of the SATMD, and the Council heard and received objections and protests, if any, to the renewal of the SATMD and the levy of the proposed assessment; and Resolution No. 2025-032 Page 1 of 6 WHEREAS, on July 1, 2025 at 5:30 PM at the Council Chamber located at 22 Civic Center Plaza, Santa Ana, CA 92701, the Council held a public hearing regarding the renewal of the SATMD, and the Council heard and received all objections and protests, if any, to the renewal of the SATMD and the levy of the proposed assessment; and WHEREAS, the Clerk has determined that there was no majority protest. A majority protest is defined as written protests received from owners of businesses in the renewed SATMD which would pay fifty percent (50%) or more of the assessments proposed to be levied. Protests are weighted based on the assessment proposed to be levied on each lodging business; and WHEREAS, the City bears the burden of proving by a preponderance of the evidence that an assessment imposed for a specific benefit or specific government service is not a tax, that the amount is no more than necessary to cover the costs to the City in providing the specific benefit or specific government service, and that the manner in which those costs are allocated to a payor bear a fair or reasonable relationship to the specific benefits or specific government services received by the payor. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS FOLLOWS: Section 1. The recitals set forth herein are adopted by the Council as findings and they are true and correct. Section 2. The SATMD is hereby renewed for a ten (10) year term, beginning January 1, 2026, or as soon as possible thereafter, and ending ten (10) years from its start date, unless renewed pursuant to Streets and Highways Code § 36660. Section 3. The Plan dated May 14, 2025 is hereby adopted and approved. Section 4. The activities to be provided to benefit businesses in the SATMD will be funded by the levy of the assessment. The revenue from the assessment levy shall not be used: to provide activities that directly benefit businesses outside the SATMD; to provide activities or improvements outside the SATMD; or for any purpose other than the purposes specified in this Resolution, the Resolution of Intention, and the Plan. Notwithstanding the foregoing, improvements and activities that must be provided outside the SATMD boundaries to create a specific benefit to the assessed businesses may be provided, but shall be limited to marketing or signage pointing to the SATMD. Section 5. The Council finds as follows: a) The activities funded by the assessment will provide a specific benefit to assessed businesses within the SATMD that is not provided to those not paying the assessment. Resolution No. 2025-032 Page 2 of 6 b) The assessment is a charge imposed for a specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of conferring the benefit or granting the privilege. c) The assessment is a charge imposed for a specific government service or product provided directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of providing the service or product. d) Assessments imposed pursuant to the SATMD are levied solely upon the assessed business, and the business owner is solely responsible for payment of the assessment when due. If the owner chooses to collect any portion of the assessment from a transient, that portion shall be specifically called out and identified for the transient in any and all communications from the business owner as the "SATMD Assessment" or "Tourism Assessment" as specified in the Plan. Section 6. The assessments levied for the SATMD shall be applied towards Sales and Marketing programs to market Santa Ana lodging businesses as tourist, meeting and event destinations, and other improvements and activities as set forth in the Plan. Section 7. Assessments levied on lodging businesses pursuant to this resolution shall be levied on the basis of benefit. Because the services provided are intended to increase sleeping room rentals, an assessment based on gross short-term sleeping room rental revenue is the best measure of benefit. Section 8. The annual assessment rate is two percent (2%) of gross short-term sleeping room rental revenue. Every two (2) years during the operation of the SATMD, the assessment rate may be increased by the Travel Santa Ana (TSA) Board to a maximum rate of four percent (4%) of gross short-term sleeping room rental revenue. If the assessment rate is increased, it may subsequently be decreased but shall not be decreased below a minimum of two percent(2%)of gross short-term sleeping room rental revenue. The maximum increase or decrease in any two-year period shall be one-half of one percent (0.5%). Based on the benefit received, assessments will not be collected on: stays of more than thirty (30) consecutive days; stays by any person as to whom, or any occupancy as to which, it is beyond the power of the City to impose the assessment herein provided; stays by any officer or employee of a foreign government who is exempt by reason of express provision of federal law or international treaty; and stays by any federal or state officer or employee while on official business only and when payment for such occupancy is made directly to the operator by duly authorized voucher payment from a governmental accounting office. This exemption does not exempt a transient who is employed by the United States government or the state or their respective instrumentalities from payment Resolution No, 2025-032 Page 3 of 6 of the assessment when the payment is later to be reimbursed by the United States government or the state or their respective instrumentalities. Section 9. The assessments for the entire SATMD will total approximately $1,600,000 in year one (1). Section 10. Bonds shall not be issued to fund the SATMD. TSA shall not issue debt of any kind; and shall only fund expenses with recurring assessment revenue collected or the reserve balance. Section 11. The SATMD shall include certain lodging businesses lo,gated within the City. A boundary map is attached hereto and incorporated herein by reference. Section 12. The assessments shall be used for the purposes set forth above and any funds remaining at the end of any year may be used in subsequent years in which the SATMD assessment is levied as long as they are used consistent with the requirements set forth herein. Section 13. The assessments to fund the activities and improvements for the SATMD will be collected by the the City on a monthly basis, and in accordance with Streets and Highways Code §36631. Section 14. The Council, through adoption of this Resolution and the Plan, has the right pursuant to Streets and Highways Code §36651, to identify the body that shall implement the proposed program, which shall be the Owners' Association of the SATMD as defined in Streets and Highways Code §36612. The Council has determined that TSA shall be the SATMD Owners' Association. Section 15. TSA, pursuant to Streets and Highways Code §36650, shall cause to be prepared a report for each fiscal year, except the first year, for which assessments are to be levied and collected to pay the costs of the improvement and activities described in the report. The first report shall be due after the first year of operation of the SATMD. Section 16. The SATMD renewed pursuant to this Resolution will be subject to any amendments to the Property and Business Improvement District Law of 1994 (California Streets and Highways Code §36600 et. seq.). Section 17. The City Clerk, or his or her designee, is directed to take all necessary actions to complete the renewal of the SATMD and to levy the assessments. Section 18. This Resolution shall take effect immediately upon its adoption by the Council. Resolution No. 2025-032 Page 4 of 6 ADOPTED this Ist day of July, 2025. j6f4ieAm ua APPROVED AS TO FORM: Sonia R. Carvalho, Cit, ttorney t � / 4 A 1 By.CA Andrea Garcia-ME er Assistant City Attorney AYES: Councilmembers Amezcua Bacerra Hernandez Lo ez Penaloza Phan Vazquez 7 NOES: Councilmembers None (0) ABSTAIN: Councilmembers None 0 ABSENT: Councilmembers None (0) CERTIFICATE OF ATTESTATION AND ORIGINALITY I, JENNIFER L. HALL, City Clerk, do hereby attest to and certify the attached Resolution No. 2025-032 to be the original resolution adopted by the City Council of the City of Santa Ana on July 1, 2025. 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