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February 28, 2016

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One can figure occupancy rate of 72.7% by calculating:


274 hotel rooms * 365 days * $1 per day tax
-------------------------------------------
$72,709 (Peter Loeb's calculation of the 12 individual BID checks)

The argument (that collecting the BID tax requires zero city resources while handing over the $73,000 BID to a PR company requires 55% of total BID resources) is flawed.

Someone asked: There are 274 hotel rooms in Pacifica, Holiday Inn Express is adding 35 as we speak, so there will be 309 when complete?

Not only that, the city imposes and collects a tax to fund a private business group from a certain class of businesses that may or may not support their being taxed for this purpose.

Such a deal.

Oh boy, free bookkeeping! Is this available to all businesses in Pacifica, or is it only for those with a sweetheart deal involving the Chamber of Commerce?

The city already has to administer the TOT tax funds, and I doubt that adding the BID tax requires much extra work beyond writing the check to the Chamber of Commerce.

As for why the hotels don't do it themselves, it's probably simpler to do this as a BID tax, rather than have the hotels collect and manage the funds.

By "wrong" I meant it is wrong for the city to be doing this gratis. I'm sure the office staff handling funds at Recology is not working for nothing.

"... that the city government, paid for by all Pacificans, is administering the funds without charge for the service is wrong..."

Should the city provide free accounting and/or administrative services to the Pacifica Chamber of Commerce?

Pacifica is in debt, and subsidizes childcare and some other services.

It's time to bill the chamber for services and processing (50 percent seems fair) or require the chamber to do its own accounting and, well, accounting!

One thing about the chamber's budgeting is peculiar.

Why would hotels pay this tax, only to have:

55.0% go to the Chamber of Commerce as a management fee.

1.4% go to advertising.

43.6% go to the PR agency Hook, Line & Thinker.

Why wouldn't the hotels simply take their money and double the size of their PR contract? Or go 43% PR agency, 57% advertising?

Seems like the hotels are subsidizing the Chamber of Commerce, which apparently decides only on what to do with an additional 1.4% in advertising, perhaps Fogfest or old-fashioned paper phone book.

http://www.pacifica.city/images/PAC_CHAMBER_bid_2015.jpg

Sorry, Dan. Forgot to add TAXES after the "used to be fuel tax" disclaimer. All the items listed under projected use of $86,000 are different types of PR and advertising, except the $35,000 for management. I don't see how assessing themselves $1 a room, sending the money to the city and the city being the processing vehicle can be considered a cushy deal. The advertising and PR done with this money through the chamber (Hook, Line and Thinker is the PR firm hired by the chamber) brings needed dollars into Pacifica, as evidenced by the increased TOT. This money is enjoyed by all Pacificans within the budget structure, so this seems to somewhat negate your preferential-treatment argument. I am no longer on the chamber board, so it is not my job to defend it, but it seems from these posts that there is limited knowledge of exactly what the chamber does in the community, and a quickness to blame anything that is problematic on the chamber.

What is good for the hotel owners is good for all of Pacifica? Maybe, maybe not. But a lot of one-sided assumptions that this is so make for an unconvincing argument. The fact that the city government, paid for by all Pacificans, is administering the funds without charge for the service is wrong on the surface and requires factual justification if the cushy deal for the hotels is to continue.

I suspect a number of us have been on the boards of nonprofits that accept grants from the state or federal government for specific projects. Integral to those grants is always an administrative charge, typically 10 percent of the total, that goes to the nonprofit for administering the grant; and this frequently amounts to nothing more than handling the grant monies. It essentially acknowledges the cost to the nonprofit for its part in accomplishing the project, which may be anything from a promotional or informational campaign to bricks and mortar. The BID monies are not the same thing as a grant from the government, but the cost of handling them is very similar.

I'm afraid you heard wrong, @Chris Porter. Property taxes are the largest contributor to the city budget and have been for a long time:

http://pacifica.city/images/PAC_BUDGET_CAFR_2015_exp_rev_pie_chart.jpg

As for advertising, the city has $28,160.90 listed as advertising expenses, while the chamber's "Report of Resources and Uses from June 2015" shows just $4,000 in advertising expenses.

Was some of the $27,349.04 paid to PR firm Hook Line & Thinker? (http://hooklineandthinker.com/)advertising

I do see it has a Twitter posting from two years ago mentioning Pacifica. Maybe that counts:

http://www.Pacifica.city/forms/PAC_CHAMBER_BID_2015_annual_report.pdf

$1,931.60
$2,701.07
$960.70
$1,522.88
$756.68
$1,734.91
$1,826.50
$950.02
$186.20
$99.00
$60.00
$60.00
$60.00
$5.00
$60.00
$949.62
$708.34
$3,589.84
$312.46
$283.40
$2,133.96
$6,494.40
$774.32
===========
$28,160.90

------------------------
"The City of Pacifica did not put one dime into advertising for the city, and the hotels worked with the chamber to make this happen. Not only the hotels (or strictly, chamber members) benefit from this $1-per-night-per-room BID assessment but every shop, gas station, or restaurant the tourists visit. I have heard that the TOT tax is now the top contributor to the city budget (used to be the fuel tax), so the advertising being done through the BID monies must be working." (Chris Porter)

I was on the Chamber of Commerce board when the BID was formed under then-CEO Don Eagleston. The BID was a self-imposed tax by mostly the Rockaway Beach hotels to be used for advertising Pacifica as a destination spot for vacationing. The City of Pacifica did not put one dime into advertising for the city, and the hotels worked with the chamber to make this happen. Not only the hotels (or strictly, chamber members) benefit from this $1-per-night-per-room BID assessment but every shop, gas station, or restaurant the tourists visit. I have heard that the TOT tax is now the top contributor to the city budget (used to be the fuel tax), so the advertising being done through the BID monies must be working. A BID must be approved by the city to be able to operate, so that is the reason why Don had to have approval by the then-City Council and then-city manager to go forward with the plan. The hotels can stop the self-assessment at any time by notifying the city. If new RFPs (mainly the old wastewater treatment plant on Palmetto) are requesting BID requirements, then perhaps this assessment will be used to help in the future costs and continuation of the revitalization needs and goals of the Palmetto Avenue streetscape. Again, as Mr. Loeb stated, the city does not subsidize the chamber and has not given any type of monies for at least the past two years. Another way of looking at the big picture is that maybe the city is helping out with advertising by not charging an administrative fee for being the clearinghouse for the BID funds. Again, a BID is not public money. It is a self-assessment on hotel visitors by the hotels themselves, which was approved by the City Council AFTER the BID was requested, and it is not imposed by any city body.

"The chamber is responsible for the bad decision to subsidize and permit the Fassler fiasco..." City Council member Mary Ann Nihart also supported the proposed Fassler project. Why did she and the rest of council not ask for due diligence on the proposal before approval and deeply discounted fees?

http://www.pacificariptide.com/pacifica_riptide/2014/09/harmony-one-multimillion-dollar-homes-on-roberts-road.html

Amen, Pacifica.city. Remember when Tinfow and Co. tried to use the excuse of overburdened staff as one of the reasons for trying to change the way items are put on the council agenda? I guess democracy is burdensome, but doing the chamber's bidding is so much fun that city staff does it for free.

The chamber's most recent public tax form, filed 11/17/2014, shows annual gross receipts of $372,893.

It's time for the chamber to fly on its own and the city to start charging the chamber for the actual costs of collecting this tax for the city.

www.pacifica.city/forms/PAC_CHAMBER_IRS_990_2014.pdf

It's codified as City of Pacifica law, so it's no longer a voluntary self-assessment any business could opt out of, but rather a tax it must pay, and apparently a prerequisite in the RFQ for any developers who want to bid on the Beach Boulevard project:

"8. Do you commit to supporting the existing Hotel Business Improvement District (BID) and a potential BID on Palmetto Avenue?"

The city has talked a big game of matching fees to actual costs of providing services.

Many cities like Santa Rosa take an admin fee of 2% out of the BID so that taxpayers aren't subsidizing the Chamber of Commerce with high-cost city labor for free.

That sounds pretty low to me, but as the city manager and city attorney both agree that we're entitled to it, I'd like to see the city take at least 5% out of the BID as an admin fee, or much better, the actual cost for the city to administer that tax and its distribution.

The rest of the amount that Dan mentioned comes from check #28787 ($706.54) for something called "CA EMPLOYER POSTERS".

From what I read, the hotels vote on whether to continue the BID tax, and if they didn't find the Chamber of Commerce management fee worthwhile, they could decide to discontinue it or complain to City Council about the fee. As for whether this is public money, the agenda packet for the 5/27/14 council meeting says:

"Mayor Nihart thought it would help if the City Attorney or City Manager could give a brief explanation about how a BID works, because it sometimes sounds like it’s our money but it isn’t. It is money that the hotels, with the Chamber, have chosen to tax their guests."

The same packet also has a report from the chamber on what it does with the money.

Perhaps the City of Pacifica should take the 50% management fee, and use the $35,000+ to pay down debt.

@Peter Loeb, re tax or public money, the description was not subjective, rather I took City Manager Lorie Tinfow's and City Attorney Michelle Kenyon's written words from the BID description in the May 27, 2014 City Council minutes:

"City Manager Tinfow stated that they collect it in the same way they collect the TOT. They remit the bid amount to the city, they do not assess an administrative fee even though they could, and then they remit that to the Chamber as the administrator for the BID for the hotels.

Councilmember O’Neill then asked, with a revenue of $70,000, what managing agency was taking roughly 50% of that as management. He didn’t know if that should be answered by the Chamber, but he wondered what $35,000 was buying. He also asked if we have any fiduciary responsibility with these public funds collected by the city.

City Manager Tinfow stated that they did have a fiduciary responsibility. She stated that the Council was the taxing authority in this case as this was a tax collected on behalf of the hotels.

The Chamber has been designated as the administrator and the City gives the money to the Chamber. She stated that they have to make sure that it being used in the way the Chamber tells them it will be used, but there was no rule about how much the Chamber, as the administrative body, can charge for that fee as long as the hotels are okay with it. They can work out an arrangement that meets the hotel managers’ expectation.

Councilmember O’Neill asked if it was possible to have the Chamber tell them or do they want to do it at another point in the meeting. He stated that 50% of the revenues was pretty high."

http://www.pacifica.city/forms/PAC_PCC_minutes_052714.pdf#page=2

I checked the check register. There are BID payments for 12 months, from November 2014 through October 2015. The total is $72,709. It's roughly about $6,000/month. At $1 a room night, that would be about 200 room nights per day ($200 x 365 days = $73,000/year). I didn't get a figure with 40¢. I don't know how Dan got that. Maybe there's another small payment in there somewhere.

I'm not defending the Chamber of Commerce or the BID. I'm only trying to provide factual information. You can quibble over whether the BID monies are a tax or public monies. I have to say that there's a quantum difference between a BID and a bond issue. For one thing, the bond has to be approved by the voters. The BID does not. Another thing is the BID monies did not come out of local residents' pockets. The BID money paid to the chamber does not impact any other city funds.

With a limited number of motel/hotel rooms in Pacifica, the $73,415.54 at $1 per hotel/motel night seems extremely high.

How do you get the 54 cents in the above amount?

I think the City of Pacifica should divorce itself from having anything to do with the Pacifica Chamber of Commerce. If the hotels want to subsidize this incredibly ineffective organization, let 'em. The city has much bigger problems, which it isn't doing a very good job of even attempting to solve.

Self-assessment is a misleading description. It's not as if we'd call a 30-year $50M library bond a self-assessment. And reading the RFQ for the Beach Boulevard project, it's more of a requirement by the city to participate than an opt-in program.

To be clear, Business Improvement District (H-BID) funds are public monies, a tax collected by the city, which then gives the entire amount to the Chamber of Commerce, which takes a 50% management fee (largely the Chamber of Commerce CEO's salary contribution), and uses the rest to "promote lodging at the hotels within the district, administer marketing programs that increase overnight lodging and to fund related activities."

https://www.municode.com/library/ca/pacifica/codes/code_of_ordinances?nodeId=TIT3FI_CH17HOBUIMDI

Rather than wait for Chris Porter to come on here and explain once again that the city is not subsidizing the chamber to the tune of $73K and change, let me hasten to point out that those are not city funds. It's the Business Improvement District (BID), which the hotels assess themselves (@ $1/room night) to promote tourism (and sell hotel rooms). The city acts as the receiver of the funds and transfers them to the chamber. It's a pass-through. It's not hotel tax money. It's not city revenues as a "paycheck" to the chamber. This has been explained many times. If the hotels want to assess themselves and have the money go to the chamber, that's their choice and their business.

Still subsidizing the local Chamber of Commerce to the tune of $73,415.54 this year. Is that amount generated from hotel tax? Or does the city just write a check to the local chamber?

The chamber is responsible for the bad decision to subsidize and permit the Fassler fiasco: the Harmony @ 1 failed development, now a scarred dirt and cement surface. What is the chamber doing for the city that deserves a paycheck -- over and above its members' hefty dues?

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