Meeting Date: July 3, 2012 Prepared by: Jason Stillwell

82

City Council Agenda Item Summary

Name: Public Meeting establishing the Carmel Hospitality Improvement District:
1) Consideration of Resolution declaring the City's intention to establish the Carmel Hospitality Improvement District (HID) and 2) The first reading of an Ordinance establishing the Carmel Hospitality Improvement District. Description: As Council is aware, local hotel operators have expressed an interest in establishing a hospitality improvement district (HID) consisting of lodging establishments within the City to focus on small conferences and public relations for CarmeL Staff has prepared the necessary documentation to implement the HID, which includes a resolution of intention to form the HID and a proposed ordinance establishing the HID for first reading. Council should note that the resolution of intent is being brought back to clarify the dates of the previous resolution approved on June 12 and to allow for a longer public comment period. Overall Cost: City Funds: N/A Grant Funds: N/A Staff Recommendation: Adopt a Resolution declaring the City 's intention to establish the Carmel Hospitality Improvement District (HID) and adopt upon first reading the Ordinance establishing the HID. Important Considerations: The public meeting held on July 3, 2012 is required in advance of the public hearing to consider the formation of the HID that will be held on August 7, 2012, assuming the resolution of intention is passed tonight. If there is not a majority protest at the August 7 meeting, Council will hold the second reading of the ordinance, with the ordinance taking effect on September 7, 2012. Assessments would begin to be remitted in October 2012. Decision Record: On June 12, 2012, Council adopted Resolution 2012-35, declaring the City's intention to establish the Carmel Hospitality Improvement District (HID). That resolution will be superseded by this new resolution. Reviewed by:

Jason Stilwell, City Administrator

Date

83

TO: FROM: DATE:

MAYOR BURNETT AND COUNCIL MEMBERS JASON STILWELL, CITY ADMINISTRATOR JULY 3, 2012

SUBJECT: CONSIDERATION OF A RESOLUTION DECLARING THE CITYS INTENT TO ESTABLISH THE CARMEL HOSPITALITY IMPROVEMENT DISTRICT (HID)

RECOMMENDATION: Adopt a Resolution declaring the Citys intention to establish the Carmel Hospitality Improvement District (HID). DISCUSSION: During the past few months, local hotel operators have expressed an interest in having the City Council establish a hospitality improvement district (HID) consisting of lodging establishments within the City to focus on small conferences and public relations for Carmel. Council directed staff to prepare the necessary documentation to implement the HID and as such, we have prepared a resolution of intention to form the HID, with the following features: 1. The assessments would be levied on all lodging units as that phrase is currently defined in the municipal code with respect to the transient occupancy tax. 2. The assessments would further be imposed on non-transient occupancies in hotels. While Revenue and Taxation Code Section 7280 prohibits the application of transient occupancy tax to lodging stays of longer than 30 days, there is no such limitation in the HID law. Furthermore, the assessment under an HID is on the lodging operation, not the guest staying in the lodging operation, even though the assessment will likely be passed on to the guest by the operator. 3. There are record-keeping requirements, penalties and interest provisions, and other enforcement mechanisms drawn from similar requirements under the Citys transient occupancy ordinance. This public meeting is required in advance of the public hearing to consider the formation of the HID. The public hearing to consider the HID formation will be set for August 7 if the resolution of intention is passed tonight. This amended resolution of intent is being brought back to Council to clarify the dates included in the previous resolution passed on June 12 and to allow for a longer period for

84

public comment. Assuming there is not a majority protest at the August 7 meeting, the second reading of the ordinance will take place that night, with the ordinance taking effect on September 7, 2012. Assessments will begin to be remitted during October 2012. FISCAL IMPACT: The total amount of assessments collected each year will vary, depending on the gross lodging revenues reported by lodging operations. ATTACHMENTS: 1. Resolution 2. Notice of adoption of resolution of intention 3. Ordinance adopting the Carmel HID (First reading)

85

CITY OF CARMEL-BY-THE-SEA CITY COUNCIL RESOLUTION 2012A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA DECLARING ITS INTENTION TO ESTABLISH THE CARMEL HOSPITALITY IMPROVEMENT DISTRICT ________________________________________________________________ WHEREAS, the California Streets and Highways Code Section 36500 et seq. authorizes cities to establish business improvement districts to promote tourism, create jobs, attract new business, and enhance the business districts; and WHEREAS, tourism is an essential contributor to the economy of the City of Carmel-by-the-Sea, and the promotion of the Citys lodging operations will serve an important public purpose; and WHEREAS, the owners of the lodging operations and the Carmel Chamber of Commerce have requested that the City Council establish such a business improvement district. NOW, THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA DOES ORDAIN AS FOLLOWS: Section 1. The City Council, at the request of owners of lodging operations and the Carmel Chamber of Commerce, and pursuant to Section 36500 et seq. of the California Streets and Highways Code, does hereby declare its intention to establish the Carmel-bythe-Sea Hospitality Improvement District (the HID). Section 2. The geographic boundaries of the area to be included in the HID are the boundaries of the City of Carmel-by-the-Sea. Section 3. The types of activities proposed to be funded by the levy of assessments on businesses in the HID are those activities that will promote the local lodging operations. Section 4. Except where funds are otherwise available, the City Council intends to levy an assessment on all lodging operations within the HID boundaries to pay for all activities of the HID including, but not limited to, employing a lodging operations manager and recovery of City costs for noticing, meeting(s), and hearing(s) on this matter commencing September 1, 2012. As used herein, the lodging operation shall mean a lodging unit as defined in Section 17.70.020 of the Carmel Municipal Code, which pays transient occupancy tax to the City. The method and the basis for levying the assessment on such lodging operations within the HID shall be as follows: An assessment will be levied against lodging operations to pay for the activities within the HID and shall be paid at the time the lodging establishment pays transient occupancy taxes to the City.

86

Section 5. The proposed assessment is to be levied on all lodging operations within the HID boundaries based upon the formula of $1 per occupied room per night to pay for the activities including, but not limited to, employing a lodging operations manager and recovery of City costs for noticing, meeting(s), and hearing(s) on this matter. Section 6. Lodging operations established after the effective date of ordinance establishing the HID shall not be exempt from assessment. Section 7 Pursuant to Government Code Section 54954.6(a)(1), a public meeting to allow public testimony regarding the proposal to establish the HID is hereby set for July 3, 2012 at 4:30 pm before the City Council at City Hall on Monte Verde Street between Ocean Ave. and 7th Avenue, Carmel-by-the-Sea, California. Section 8. Pursuant to Government Code Section 54954.6(a)(1), a public hearing to allow public testimony and protests regarding the proposal to establish the HID is hereby set for August 7, 2012 at 4:30 pm before the City Council at Carmel City Hall, on Monte Verde Street between Ocean and Seventh Avenues, Carmel-by-the-Sea, California. Section 9. The City Clerk is instructed to provide notice to the public hearing as follows: a. Publish this Resolution of Intention by placing a display advertisement of at least one-eighth page in a newspaper of general circulation and by a first class mailing to those interested parties who have filed a written request with the local agency for mailed notice of public meetings or hearing on new or increased general taxes, the publication being no later than July 27, 2012, 11 days before the public hearing. b. Mail a complete copy of the Resolution of Intention to each and every owner and/or operator of a lodging operation in the proposed HID within seven (7) days of the adoption of this Resolution by the City Council, along with a separate notice of the proposed assessment prepared by the City Attorney. Section 10. At the public hearing, the testimony of all interested persons, for, or against the establishment of the HID, the boundaries of the HID, the area of benefit within the HID, the assessment to be levied, or the furnishing of specified types of improvements or activities including, but not limited to, employing a lodging operations manager and recovery of City costs for noticing, meeting(s), and hearing(s) on this matter will be heard. A protest may be made orally or in writing by an any interested person, but only those protests submitted by those lodging operations that would pay assessments under the proposed HID will be counted for purposes of determining the majority protest set forth in Section 11 of this Resolution. Any written protest as to the regularity or evidence of the proceedings shall clearly state the irregularity or defect to which the objection is made. Written protests must be received by the City Clerk at or before the time set for the public hearing, and shall be submitted to the City Clerk at City Hall, located on Monte Verde St. between Ocean Ave. and 7thAvenue, Carmel-by-the-Sea, California. A written protest may be withdrawn in writing at any time before the conclusion of the public hearing. A written protest must include: (i) A statement that it is a protest against the

87

formation of the HID, the boundaries, area of benefit, annual assessment, or the furnishing of specified types of improvements or activities including but not limited to employing a lodging operations manager or recovery of City costs for noticing, meeting(s), and hearing(s); (ii) the name of the record owner of the lodging operation who is submitting the protest; (iii) the identity of the lodging operation, by street location or assessors parcel number (APN) to which the protest is made; (iv) the number of lodging units within the lodging operation; and (v) the Original signature and legibly printed name of the owner of the lodging operation who is submitting the protest. Each written protest shall contain a written description of the lodging operation in which the person subscribing the protest is interested sufficient to identify the lodging operation. If the person subscribing is not shown on the official records of the City as the owner of the lodging operation, then the protest shall contain or be accompanied by written evidence that the person is the owner of the lodging operation. Section 11. If at the conclusion of the public hearing, there are written protests by the owners of the lodging operations within the HID that would pay fifty percent (50%) or more of the total assessments of the entire HID, no further proceedings to create the HID shall occur. New proceedings to form the HID shall not be undertaken again for a period of at least one (1) year from the date of the finding of the majority written protests by the City Council. If the majority of written protests are only as to an improvement or activity proposed then that type of improvement or activity shall not be included in the HID. Section 12. Upon determination that a majority protest does not exist, the City Council shall be authorized to form the Hospitality Improvement District and may thereafter appoint an Advisory Board for the Hospitality Improvement District. The proposed appointment process shall be by the following process: a. Membership on the HID Advisory Board shall be limited to lodging operation owners, concessionaires representing lodging operations, or employees holding the written consent of the lodging operation, within the HID area. To sponsor a member on the HID Advisory Board, each lodging operation shall have full paid its HID assessment at the time of the appointment and remain fully paid during the term of that representatives membership on the Board. b. The HID Advisory Board shall be comprised of six (6) members. One shall be the President of the Carmel Innkeepers Association. One shall be the Executive Director of the Sunset Center. Two (2) members shall represent lodging properties with conference facilities. Two (2) shall represent small inns or bed & breakfast inns. c. HID Advisory Board members shall serve two-year terms, with appointments staggered at one-year intervals. d. The HID Advisory Board shall be established following a nomination process facilitated by the Chamber of Commerce. Each February, the Carmel Chamber of Commerce (Chamber) shall mail a letter to each lodging operation located in the HID. The letter shall announce that the Chamber shall hold a meeting at City Hall for the purpose of conducting open elections for the HID Advisory Board seats that may be vacant or are scheduled to become

88

vacant as of July 1 of that Calendar year. The letter shall further notify each lodging operation of the Advisory Board selection process. Section 13. It is proposed that the HID Advisory Board shall meet at least four times per year. Each meeting shall be open and public. Section 14. It is proposed that the City Administrator may authorize the Chamber of Commerce, by contract, to spend HID assessment revenues on behalf of the City provided each expenditure is made in accord with the HID program and budget as approved by the City. Section 15. It is proposed that the HID Advisory Board shall prepare and file an annual report with the City regarding the HID. The report shall, among other things, itemize activities for the fiscal year, state the cost of activities, the amount of surplus or deficit revenues carried over from a previous fiscal year, and contributions other than assessments. The report shall meet the requirements of California Streets and Highways Code section 36533. Section 16. It is proposed that after approving the annual report, the City shall adopt an annual resolution of intention to levy the assessment for that fiscal year, publish a notice and hold a public hearing on the assessment.

PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF CARMELBY-THE-SEA this 3rd day of July 2012 by the following roll call vote:

AYES:

COUNCIL MEMBERS:

NOES: ABSENT:

COUNCIL MEMBERS: COUNCIL MEMBERS: SIGNED: _______________________ JASON BURNETT, MAYOR

ATTEST: ____________________________ Heidi Burch, City Clerk

89

AMENDED NOTICE OF INTENT TO ESTABLISH A LODGING BUSINESS IMPROVEMENT DISTRICT

The City Council of the City of CARMEL-BY-THE-SEA shall conduct a public meeting at 4:30 p.m. on July 3, 2012 at City Hall located on Monte Verde Street between Ocean Avenue and 7th Street, Carmel, California and a public hearing at 4:30 p.m. on August 7, 2012, to consider establishing a Lodging Business Improvement District hereinafter referred to as the Carmel-by-the-Sea Hospitality Improvement District (HID), at the request of lodging operators and the Carmel Chamber of Commerce, and pursuant to Section 36500 et seq. of the California Streets and Highways Code. The purpose of the HID is to levy an assessment on all lodging operations within the HID boundaries to pay for all activities of the HID, commencing September 7, 2012. As used herein, the lodging operation shall mean a lodging unit as defined in Section 17.70.020 of the Carmel-by-the-Sea Municipal Code. The method and basis for levying the assessment on such lodging operations within the HID shall be as follows: An assessment will be levied against lodging operations to pay for the activities within the HID and shall be paid at the time the lodging establishment pays transient occupancy tax to the City of Carmel-by-the-Sea. The proposed assessment is to be levied on all lodging operations within the HID boundaries based upon the formula of $1 per occupied room/unit night. It is anticipated that the City of Carmel-by-the-Sea will receive $220,000 annually. The City Council will receive oral and written testimony of all interested persons, for or against the establishment of the HID, the boundaries of the HID, the area of benefit within the HID, the annual assessment to be levied, or the furnishings of specified types of improvements or activities including, but not limited to, employing a lodging operations manager or recovery of reasonable costs by the City of public meeting(s), public hearing(s), and notice required at the August 7, 2012 public hearing. A protest may be made orally or in writing by any interested person, but only those protests submitted by those lodging operations that would pay the assessments under the proposed HID will be counted for the purpose of determining a majority protest. Oral protests may be received at the hearing. Protests also may be submitted by mail or in person (by 5:00 p.m. on Monday, August 6, 2012), to the City Clerk at Carmel City Hall, located on Monte Verde Street between Ocean and 7th Avenues, Carmel, California 93921. If, at the conclusion of the public hearing, written protests are received from the owners of lodging operations in the proposed area which will pay 50 percent or more of the assessments proposed to be levied and protests are not withdrawn so as to reduce the protests to less than that 50 percent, the HID will not be established and cannot be reconsidered for a period of one year. A written protest must include (i) A statement that

90

it is a protest against the formation of the HID, the boundaries, the area of benefit, annual assessment, or the furnishing of specified types of activities or improvements including but not limited to employing a lodging operations manager or recovery of City costs for noticing, meeting(s), and hearing(s); (ii) the name of the record owner of the lodging operation who is submitting the protest; (iii) the identity of the lodging operation, by street location or assessors parcel number (APN) to which the protest is made; (iv) the number of lodging units within the lodging operation; and (v) the original signature and legibly printed name of the owner of the lodging operation who is submitting the protest. If you would like additional information regarding the formation of the proposed HID, boundaries, the area of benefit, proposed rate of assessment, or the furnishings of specified types of improvements or activities including, but not limited to, employing a lodging operations manager or recovery of City costs for noticing, meeting(s) and hearing(s) on this matter, please contact City Clerk Heidi Burch at City Hall, Carmel-bythe-Sea, located on Monte Verde Street between Ocean Avenue and Seventh Avenue, by mail at PO Box CC, Carmel, California 93921, by phone at (831) 620-2000, or by e-mail at hburch@ci.carmel.ca.us.

91

CITY COUNCIL CITY OF CARMEL-BY-THE-SEA ORDINANCE 2012AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA ESTABLISHING THE CARMEL HOSPITALITY IMPROVEMENT DISTRICT WHEREAS, on July 3, 2012, the Carmel City Council adopted Resolution No. 2012-XX entitled, A Resolution of the City Council of the City of Carmel-by-the-Sea declaring its Intention to Establish the Carmel Hospitality Improvement District; WHEREAS, Resolution No. 2012-XX was published and copies thereof were duly mailed and posted as required by the applicable provisions of the California Government and Streets and Highways Codes; and WHEREAS, pursuant to Resolution No. 2012-XX, a public meeting concerning the formation of said district was held before the City Council on July 3, 2012; and WHEREAS, all written and oral protests were duly heard, and testimony concerning the proposed district was received and considered; and WHEREAS, the City Council determined that there was no majority protest within the meaning of Streets and Highways Code Section 36525, as written protests were not received from owners businesses in the proposed district which would pay fifty (50%) or more of the assessments proposed to be levied; and WHEREAS, protests are weighted based on the assessment proposed to be levied on each lodging operation. For purposes of determining the applicable majority protest figure for the initial formation of the district, the proposed assessment to be levied was calculated based on the assessment rate multiplied by the most recent available data for the lodging operations gross lodging revenues as reported to the City during fiscal year 2010-11.

92

NOW, THEREFORE, BE IT RESOLVEDTHAT THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA does hereby resolve to: Establish the Carmel Hospitality Improvement District as set forth in Exhibit A. Severability. If any part of this ordinance, even as small as a word or phrase, is found to be unenforceable such finding shall not affect the enforceability of any other part. Effective Date. This ordinance shall become effective September 7, 2012 PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA this ____day of _____2012 by the following roll call vote: AYES: NOES: ABSENT: COUNCIL MEMBERS: COUNCIL MEMBERS: COUNCIL MEMBERS SIGNED,

________________________ JASON BURNETT, MAYOR

ATTEST:

_____________________ Heidi Burch, City Clerk

93

EXHIBIT A CMC ______ Establishing the Carmel Hospitality Improvement District Section 1. Pursuant to Streets and Highways Code Sections 36500 et seq. and any subsequent amendments, the City of Carmel-by-the-Sea Hospitality Improvement District is hereby established in the City of Carmel-by-the-Sea and all lodging operations in the HID established by this ordinance shall be subject to assessment as set forth herein. Section 2. The City Council of the City of Carmel-by-the-Sea finds that lodging operations within the HID will be benefited by the activities funded by assessments to be levied. Section 3. Chapter ____(Carmel Hospitality Improvement District) is hereby added to Title __________ of the Carmel-by-the-Sea Municipal Code to read as follows: Title This chapter shall be known as the City of Carmel-by-the-Sea Hospitality Improvement District Law. A. City Council shall mean the City Council of the City of Carmel-by-the-Sea B. Advisory Board shall mean the Carmel Hospitality Improvement District board established by the Resolution of Intention to oversee the HID. C. District or HID shall mean the Carmel-by-the-Sea Hospitality Improvement District created by this chapter and as delineated in Section ____. D. Gross lodging revenue shall mean the rent charged by the operator per occupied room per night for all occupancies, plus any other non-optional ancillary charges imposed on occupants of occupied rooms including but not limited to resort fees, housekeeping gratuities and utility surcharges. Notwithstanding the foregoing sentence, occupancies by federal government employees on government business for 30 consecutive days or less shall not be included in gross lodging revenues. Assessments levied pursuant to the District shall not be included in gross room rental revenue for the purpose of determining the amount of the transient occupancy tax under Chapter Three of the Carmel-by-the-Sea Municipal Code. E. Lodging operation shall mean a lodging unit, as defined in Section 17.70.020 of the Carmel-by-the-Sea Municipal Code, which pays transient occupancy tax to the City. F. Law shall mean the Parking and Business Improvement Area Law of 1989, California Streets and Highways Code Sections 36500 et seq., as amended. G. Operator shall mean the person who is the proprietor of the hotel, whether in the capacity of owner, lessee, sublessee, mortgagee in possession, licensee or any other capacity. Where the operator performs its functions through a managing agent of any type or character other than an employee, the managing agent shall

94

also be deemed an operator for the purposes of this and shall have the same duties and liabilities as his/her principal. Compliance with the provisions of this chapter by either the principal or the managing agent shall however be considered to be compliance by both. Authorized Uses. The purpose of forming the HID as a business improvement area under the Law is to provide revenue to defray the costs of services, activities and programs promoting tourism that will benefit the operators of lodging operations in the HID through the promotion of lodging operations and the City of Carmel-by-the-Sea for small conferences and groups. It is the intent of this chapter to provide a supplemental source of funding for the promotion of group business in the HID and it is not intended to supplant any other existing sources of revenue that may be used by the City of Carmel-by-the-Sea for the promotion of tourism. The specific services, activities and programs to be provided by the HID are as follows: A. The general promotion of tourism with the HID shall include costs of programs and physical improvements as specified in the business plan to be adopted annually; B. The marketing of conference, group, and vacation business that benefits local tourism and the local lodging industry in the district; C. The marketing of the HID to the travel industry in order to benefit local tourism and the local lodging industry in the district. Boundaries The boundaries of the HID shall be the boundaries of the City of Carmel-by-theSea. Levy of assessment and exemptions. A. The HID shall include all lodging operations located within the HID boundaries. Beginning on the effective date of the ordinance adopting the HID, the assessment shall be levied against all lodging operations, existing and future, within the boundaries of the business improvement district with the city of Carmel-by-theSea. The assessment shall be collected bimonthly, based on the gross lodging revenues for the previous two months. New lodging operations within the boundaries shall not be exempt from the levy of assessment.

95

B. Each operator shall, on or before the last day of the month following the close of each calendar month, or at the close of any longer period which may be established by the City Administrator, make a return to the City Administrator, on forms provided by him/her, of the total gross lodging revenues charged and received for occupancies in the lodging operation. The return shall be made whether or not gross lodging revenues have been charged during the month. At the time the return is filed, the full amount of the assessment shall be remitted to the City Administrator. The City Administrator may establish shorter reporting periods for a lodging operation if he/she deems it necessary in order to insure collection of the assessment and he/she may require further information in the return. C. If any operator shall fail or refuse to make, within the time provided in this chapter, any report and remittance of said assessment or any portion thereof required by this chapter, the City Administrator shall proceed in such manner as he/she may deem best to obtain facts and information on which to base his/her estimate of the assessments due. As soon as the City Administrator shall procure such facts and information as he/she is able to obtain upon which to base the assessment imposed by this chapter and payable by any operator who has failed or refused to make such report and remittance he/she shall proceed to determine and assess against such operator the assessment, interest, and penalties provided for by this chapter. In case such determination is made, the City Administrator shall give a notice of the amount so assessed by serving notice personally or by depositing it in the United States mail, postage prepaid, addressed to the operator so assessed at his/her last known place of address. D. Such operator may within ten days after the serving or mailing of such notice make application in writing to the City Administrator for a hearing on the amount assessed. If application by the operator for a hearing is not made within the time prescribed, the assessment, interest and penalties, if any, determined by the City Administrator shall become final and conclusive and immediately due and payable. If such application is made, the City Administrator shall give not less than five days written notice in the manner prescribed herein to the operator to show cause at a time and place fixed in said notice why said amount specified therein should not be fixed for such assessment, interest and penalties. At such hearing, the operator may appear and offer evidence why such specified assessment, interest, and penalties should not be so fixed. After such hearing the City Administrator shall determine the proper assessment to be remitted and shall thereafter give written notice to the person in the manner prescribed to be remitted and shall thereafter give written notice to the person in the manner prescribed herein of such determination and the amount of such assessment, interest and penalties.

96

E. It shall be the duty of every operator liable for the collection and payment to the city of an assessment levied by this chapter to keep and preserve, for a period of three years, all records as may be necessary to determine the amount of such assessment as he may have been liable for the collection of and payment to the city, which records the City Administrator shall have the right to inspect at all reasonable times. To conduct such inspections, the City Administrator may utilize the services of City employees or of outside firms or persons such as certified public accountants or auditors, each of whom shall possess full city authority to conduct said inspections. Annual review of assessment All of the assessments imposed pursuant to this chapter shall be reviewed by the Carmel City Council annually in April of each year, based upon the annual report prepared by the Advisory Board. The Advisory Board shall complete its report not later than the last day of March each year. After approval of the annual report, the Carmel City Council shall conduct a public hearing to levy assessment for the ensuing fiscal year. If at the conclusion of the public hearing, there are written protests by the owners of the lodging operations within the HID that would pay fifty percent (50%) or more of the total assessments of the entire HID, there will be no assessed levy in the ensuing fiscal year. Imposition of initial assessment. The Carmel City Council hereby levies and imposes and orders the collection of the initial assessment to be imposed upon lodging operations in the HID described above, which shall be calculated based upon $1 per occupied room per night. Such levy shall begin on the effective date of the ordinance adopting the HID. Use of revenue The activities to be provided by the HID will be funded by the levy of the assessments. The total revenue from the levy of assessments with the HID shall not be used to provide improvement or activities outside the HID or for any purpose other than the purpose specified in the resolution of intention. The proceeds of the assessment shall be spent to administer marketing and visitor programs to promote the City of Carmel as a tourism destination. All funds shall be expended consistent with the purpose of the Law. HID assessment revenues remaining at the end of any fiscal year may be use in subsequent years in which HID assessments are levied as long as they are used consistent with the requirement of this Section. The Carmel City Council shall consider recommendations made by the Advisory Board as to the use of assessment revenues.

97

Delinquency, penalty and interest A. Any lodging operation that fails to remit any assessment imposed by this ordinance within the time required shall pay a penalty of ten (10%) percent of the assessment amount in addition to the assessment. Any operator who fails to remit any delinquent remittance on or before a period of thirty days following the date on which the remittance first became delinquent shall pay a second delinquency penalty of ten percent of the amount of the assessment in addition to the amount of the assessment and the ten percent penalty first imposed. B. In addition to the penalties imposed in this chapter, any operator who fails to remit any assessment imposed by this chapter shall pay interest at the rate of onehalf of one percent per month or fraction thereof on the amount of the assessment, exclusive of penalties, from the date on which the remittance first became delinquent until paid. Any and all remedies available to the City of Carmel-bythe-Sea for other non-payment of assessments shall be applicable in the event of non-payment of an assessment under this chapter. Any penalty and interest fees collected from a lodging operation due to delinquency shall be remitted to the City of Carmel-by-the-Sea for any lawful purpose. C. Any assessment required to be paid by any lodging operation under the provisions of this chapter shall be deemed a debt owed by the lodging operation to the city. Any person owing money to the city under provisions of this chapter shall be liable to an action brought in the name of the city for the recovery of such amount. Advisory board. The Advisory Board shall review the implementation of this chapter, the implementation of programs and activities funded through this chapter, and advise the City Council on the amount of the districts assessments and on the services, programs, and activities to be funded by the assessments, and shall perform such other duties as required by the Law, including preparing the Annual Report. The Annual Report shall be submitted to the City Council no later than the last day of March each year. The City Council shall ensure that the Advisory Board has timely access to all public information regarding collection, disbursement, and uses of the funds collected under the terms of this ordinance. Modification or disestablishment. The City Council may modify the provisions of this chapter or may disestablish the HID or parts of the HID after adopting a resolution of intention to such effect, and after adoption of an ordinance in compliance with the Law.

98

Criminal penalties In addition to the civil penalties and action set forth in this chapter for failing to comply with the provisions of this chapter, the following criminal sanctions may be utilized at the discretion of the city, either together with or completely separate from the civil remedies: A. Any person violating any of the provisions of this chapter shall be guilty of a infraction and shall be punishable therefore by a fine of not more than five hundred dollars per occurrence. B. Any operator or other person who fails or refuses to furnish on time any return required to be made, or who fails or refuses to furnish a supplemental return or other data required by the City Administrator, or who renders a false or fraudulent return or claim, is guilty of an infraction, and is punishable as set out in this section. C. Any person required to make, render, sign, or certify any report or claim who makes any false or fraudulent report or claim with the intent to defeat or evade the determination of any amount due required by this chapter to be made, is guilty of an infraction and is punishable as set out in this section. Section 5. This ordinance shall not be interpreted in any manner to conflict with controlling provisions of state law, including, without limitation, the Constitution of the State of California. If any section, subsection or clause of this ordinance shall be deemed to be unconstitutional or otherwise invalid, the validity of the remaining sections subsections and clauses shall not be affected thereby. If this ordinance, or any section, subsection or clause of this ordinance shall be deemed unconstitutional or invalid as applied to a particular appeal, the validity of this ordinance and its sections, subsections and clauses in regards to other contracts, shall not be affected. Section 6. This ordinance shall become effective on September 7, 2012. Section 7. The City Clerk shall certify to the passage and adoption of this Ordinance, shall enter the same in the book of original ordinances of the City and shall make a minute of the passage and adoption thereof in the records of the meeting at which the same is passed and adopted. Before the expiration of 30 days after passage of this ordinance, the City Clerk shall cause the same to be posted in three public places with in the City of Carmel-by-the-Sea.