SR 06-25-2019 3C
City Council
Report
City Council Meeting: June 25, 2019
Agenda Item: 3.C
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To: Mayor and City Council
From: Andy Agle, Director, Housing and Economic Development, Economic
Development Division
Subject: SMTT FY19-20 Work Plan and Budget
Recommended Action
Staff recommends that the City Council receive and approve the Santa Moni ca Tourism
Marketing District Fiscal Year 2019-20 Annual Report.
Summary
The visitor industry has long been a cornerstone of Santa Monica’s economic diversity
and vitality and a major contributor to the tax base that supports services to the entire
community. Given the importance of branding and marketing in a competitive global
marketplace, local hotels, in partnership with Santa Monica Travel and Tourism (SMTT),
initiated efforts to establish the Santa Monica Tourism Marketing District (SMTMD) in
2012. Funding for the marketing programs and activities of the SMTMD are solely
derived from assessments and revenues collected from hotels operating within the
boundaries of the SMTMD. The attached 2019 -20 SMTMD Annual Report (Annual
Report) summarizes the SMTMD’s proposed programs and activities for FY 2019-20,
including the SMTMD budget, hotel report, and marketing plan. Staff recommends that
Council review and approve the Annual Report in accordance with State laws governing
tourism marketing districts.
Discussion
The SMTMD was formed pursuant to California law, which allows for the creation of
special-benefit assessment districts to raise funds within a specific geographic area to
achieve a number of objectives including stabilizing funding for tourism pr omotion,
increasing a city’s transient occupancy tax revenues, and remaining competitive by
growing market share of visitors. Under the Streets and Highway Code Section 36650,
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the SMTMD is required to prepare annual reports providing the following informat ion:
• Any proposed changes to the boundaries of the tourism marketing district or to
any benefit zones or classification within the district.
• The improvements, maintenance, and activities to be provided for that fiscal year.
• An estimate of the cost of providing the improvements, maintenance, and
activities for that fiscal year.
• The method and basis of levying the assessment in sufficient detail to allow each
real property or business owner, as appropriate, to estimate the amount of the
assessment to be levied against his or her property or business for that fiscal
year.
• The estimated amount of any surplus or deficit in revenues to be carried over
from a previous fiscal year.
• The estimated amount of contributions to be made from sources other than
assessments levied pursuant to this part.
In accordance with Section 36650, the SMTMD has submitted its FY 2019 -20 Annual
Report (Attachment A) including work plan and budget for Council approval. The
following overview summarizes the proposed expenditu res to be funded with SMTMD
assessments in the upcoming fiscal year.
SMTMD Reporting Year FY 2019-20
Revenues
Estimated TMD Assessments $5,490,703
Bank Interest 1,400
Total Revenues* $5,492,103
Expenditures
Cost of Programs $3,563,951
General and Administrative Services $ 582,000
Salaries and Benefits $1,071,617
Contingency Fund $ 274,535
Total Expenses $5,492,103
Estimated Carry-over from Previous Fiscal Year $ 151,515
Estimated In-Kind Contributions $ 335,000
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* This does not include $2,765,996 in City funding included in the FY 2019-20 Proposed Budget for a
services agreement with SMTT that the City provides SMTT annually to continue SMTT’s tourism and
marketing programs, operate Visitors Centers, produce collateral materials, create brand awareness, and
promote Santa Monica through print and social media.
The SMTMD expenditures and services focus on enhancing Santa Monica as a brand,
marketing and promoting Santa Monica as a tourism destination, increasing occup ancy
during soft seasons, establishing partnerships within the tourism community and with
private and government entities to position Santa Monica as a filming destination, and
expanding a presence in emerging markets such as India and China. The key
strategies and objectives are summarized in the Annual Report.
In accordance with the adopted SMTMD Management District Plan, the proposed
FY 2019-20 budget was approved by the Tourism Marketing District Committee on
March 4, 2019 and the SMTT Board of Directors on March 13, 2019. Council may
approve the annual report or may modify any particular section contained in the annual
report and approve it as modified. As the assessment formulas in the SMTMD remain
as approved in 2017, staff recommends Council ap proval of the attached FY 2019-20
SMTMD Annual Report.
Past Council Actions
Meeting Date Description
12/11/2012 Council adopted Resolution No. 10722 (CCS) establishing
the Santa Monica Tourism Marketing District (SMTMD).
11/1/2016 Council adopted Resolution 11005 (CCS) extending the
SMTMD by nine and one-half years beginning in January 1,
2018 through June 30, 2027.
12/12/17 Council approved the Annual Report for FY 2017-18
(Calendar Year 2018) representing the first report for the
SMTMD renewal term.
6/26/18 Council approved the Annual Report for FY 2018-19
(Calendar Year 2019) representing the second report for the
SMTMD renewal term.
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Financial Impacts and Budget Actions
There is no immediate financial impact or budget action necessary as a re sult of the
recommended action.
Prepared By: Nia Tang, Senior Development Analyst
Approved
Forwarded to Council
Attachments:
A. Attachment A - SMTMD 2019-20 Annual Report.