SR-071310-1Gc7®
~;,. o, City Council Report
Santa dlonica'°
City Council Meeting: July 13, 2010
Agenda Item: ~~~
To: Mayor and City Council
From: Elaine Polachek, Assistant City Manager
Subject: Agreement with the Convention and Visitors Bureau
Recommended Action
Staff recommends that the City Council authorize the City Manager to negotiate and execute
a three-year agreement with the Santa Monica Convention and Visitors Bureau to promote
travel and tourism in Santa Monica in the amount of $2,469,371 for fiscal year 2010-11.
Executive Summary
The Santa Monica Convention and Visitors Bureau (CVB) has been marketing the City as a
visitor destination since 1985. The majority of the CVB's funding has come from annual
appropriations from the City based on a 1985 agreement. Anew three-year contract is
recommended to continue the CVB's work promoting and cultivating tourism. An allocation of
$2,469,371 is recommended for FY10-11; funding for years two and three of the agreement
will be negotiated on an annual basis.
Background
In 1983, recognizing Santa Monica's potential as a regional, national, and international visitor
destination, and understanding the role of tourism in establishing a robust local economy, the
City participated in the formation of the 501 c4 non-profit Santa Monica Convention and
Visitors Bureau. Since then, the CVB has been an effective and efficient organization,
enhanced Santa Monica's profile as a destination and provided a range of services to visitors.
The City and its residents have realized financial benefit from the work of the CVB as
municipal services are supported by sales and transient occupancy tax. The CVB is funded
almost exclusively by the City. Annual allocations are included in the City's proposed budget,
and on occasion one-time funding has been granted for special projects. The current
agreement with the CVB, the Eighth Modification to the original 1985 agreement, expired on
June 30, 2010.
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Discussion
Tourism is a major local industry. Tourism activity supports nearly 12,000 jobs in Santa
Monica alone plus brings in 6 million visitors and over $1 billion dollars a year. The CVB
secures international and domestic tourism, partners widely on a local and regional level,
operates Visitor Centers, organizes summits, conferences and community events, and
promotes Santa Monica through an ever-evolving set of media tools. Investing in the
promotion and cultivation of tourism benefits the City's economic sustainability.
The current contract with the CVB was executed in 1985 and extended since then, with the
last extension approved by Council on July 14, 2009. Anew three-year agreement with the
CVB is recommended to .allow the CVB the opportunity to restate and update the
organization's role and services. Funding in the amount $2,469,371 is included in the FY10-
11 adopted budget. This represents a $26,372 or 1% decrease from the FY09-10 allocation.
The level of service to the City will not be affected. Expenditures have been aligned with
historic spending levels, efficiencies have been identified, and the hiring of administrative
support staff will be delayed. The City's allocation to the CVB for its services in FY11-12 and
FY12-13 will be negotiated on an annual basis. The City will endeavor to maintain stable
annual funding to the CVB, in recognition of the value of the organization and its endeavors.
However, annual funding will be considered in light of the state of tourism market, the City's
five-year financial forecast, and other factors.
Financial Impacts & Budget Actions
The FY10-11 allocation to the CVB is $2,469,371. Funds are available in 01274.566220.
Prepared by: Danielle Noble, Assistant to the City Manager -Management Services
Approved: Forwarded to Council:
Elaine Polachek Rod Gould -~
Assistant City Manager City Manager
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Reference Contract No.
9240 (CCS).