Free Response in Opposition to Motion - District Court of California - California

Case 3:07-cv-02172-BEN-JMA
San Diego Municipal Code
(5-2007)

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Article 1: Public Improvement and Assessment Proceedings Division 25: San Diego Tourism Marketing District Procedural Ordinance (Added 5-30-2007 by O-19622 N.S.; effective 6-29-2007.)

§61.2501

Purpose and Intent The purpose and intent of this Division is: (a) To allow for the establishment of a tourism marketing district to provide for tourism development, including coordinated joint marketing and promotion of San Diego, in order to retain and expand the tourism industry which is currently the third largest revenue generator for the San Diego economy and a key employment sector. To create a mechanism to fund generic promotion for tourism development that, pursuant to required supervision and oversight by the City of San Diego [City], as specified in this Division, and that furthers specific governmental goals of the City, and results in a tourism promotional program intended to produce nonideological and commercial communication and, as such, may be entitled to all the privileges and protections of government speech. To establish a method by which benefited businesses may be assessed for the cost of the activities associated with tourism development. To provide for the levying of assessments upon business owners who will benefit from the activities undertaken pursuant to this Division. To provide a method for the involvement of a nonprofit entity to participate in the preparation and review of proposed tourism marketing district plans for district activities.

(b)

(c)

(d)

(e)

To provide a method for the City Council to authorize a nonprofit entity with specific interest in the promotion of City tourism to implement and administer district activities. ("Purpose and Intent" added 5­30­2007 by O­19622 N.S.; effective 6-29-2007.)

(f)

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§61.2502

Citation of Division This division may be cited as the San Diego Tourism Marketing District Procedural Ordinance. ("Citation of Division" added 5­30­2007 by O­19622 N.S.; effective 6-29-2007.)

§61.2503

Rules of Construction This Division shall be liberally construed in order to effectuate its purposes. No error, irregularity, informality and no neglect or omission of any officer, in any procedure taken under this Division which does not directly affect the jurisdiction of the San Diego City Council [Council] to order the work shall void or invalidate such procedure or any assessment or the cost of the work done thereunder. The exclusive remedy of any person affected or aggrieved thereby shall be by appeal to the Council in accordance with the provisions of this Division. ("Rules of Construction" added 5­30­2007 by O­19622 N.S.; effective 6-29-2007.)

§61.2504

Definitions Each word or phrase that is defined in this Division appears in the text of this Division in italicized letters. For purposes of this Division, the following definitions shall apply: "Activities" means, but is not limited to, the promotion of tourism to benefit businesses within the district. "Assessment" means a levy for the purpose of promoting activities which will benefit the businesses located within a tourism marketing district. Assessments levied under this Division are not special taxes. "Business" means any and all types of hotels where a structure, or any portion of a structure, is held out to the public as being occupied, or designed for occupancy, by transients for dwelling, lodging or sleeping purposes. "Business owner" means the owner, operator, or authorized representative of the business who is noted on City records as the responsible party for the remitting and reporting of Transient Occupancy Tax pursuant to Code section 35.0114. "District management plan" or "plan" means a proposal as defined in Code section 61.2506. "Tourism marketing district," or "district," means an area established pursuant to this Division, within which businesses pay assessments to fund activities.

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"Tourism marketing district association" or "association" means a private nonprofit entity which represents, and whose membership includes only the assessed business owners or business owners' representatives in a district and which participates in the preparation and review of proposed tourism marketing district plans for district activities that specifically benefit assessed businesses. A tourism marketing district association may be an existing nonprofit entity or a newly formed nonprofit entity. Pursuant to California Streets and Highways Code section 36614.5, the association is a private entity and may not be considered a public entity for any purpose, nor may its board members or staff be considered to be public officials for any purpose. A tourism marketing district association shall comply with the Ralph M. Brown Act, California Government Code section 54950 et. seq., at all times when matters within the subject matter of the district are heard, discussed, or deliberated, and with the California Public Records Act, California Government Code section 6250 et. seq., for all documents relating to activities of the district. Board members, officers and members of the association are intended and understood to represent and further the economic interest of the City's tourism industry. Board members or officers have a fundamental duty to advance the general welfare of the tourism industry in San Diego. If, in making decisions, a board member or officer is incidentally or indirectly benefited by that decision, it will not be a violation of the fundamental duty of that board member or officer. Each business owner or business owner's representative paying the tourism district assessment has the right to vote in annual elections of the association and the right to seek nomination or election to the board of directors of the association. Transient has the same meaning as in Code section 35.0102. ("Definitions" added 5­30­2007 by O­19622 N.S.; effective 6-29-2007.) §61.2505 Alternative Financing Method; No Limit on Other Provisions of Law This Division provides an alternative method of financing certain activities. The provisions of this Division shall not affect or limit any other provisions of law authorizing or providing for activities or the raising of revenue for the benefit of businesses. ("Alternative Financing Method; No Limit on Other Provisions of Law" added 5­30­2007 by O­19622 N.S.; effective 6-29-2007.) §61.2506 Establishment of Tourism Marketing District A tourism marketing district may be established as provided in this Division, in the following manner: (a) Upon the submission of a written petition, signed by the business owners in the proposed district who will pay more than 50 percent of the assessments proposed to be levied, the San Diego City Council [Council] will initiate
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proceedings to form a district by the adoption of a resolution expressing its intention to form a district. Where the same business owner would be assessed an amount in excess of 40 percent of the total amount of all assessments proposed to be levied, that business owner's share of the assessment over such 40 percent shall not be included in determining whether the petition is signed by business owners who will pay more than 50 percent of the total amount of assessments proposed to be levied. (b) The petition of business owners required under subdivision (a) shall include a summary of the district management plan. That summary shall include all of the following: (1) (2) A map showing the boundaries of the district. Information specifying where the complete district management plan can be obtained. Information specifying that the complete district management plan shall be furnished upon request.

(3)

(c)

The resolution of intention described in subdivision (a) shall contain all of the following: (1) A brief description of the proposed activities, the amount of the proposed assessment, a statement that bonds will not be issued, and a description of the exterior boundaries of the proposed district. The descriptions and statements do not need to be detailed and shall be sufficient if they enable an owner to generally identify the nature and extent of the activities and the location and extent of the proposed district.

A time and place for a public hearing on the establishment of the tourism marketing district and the levying of assessments, which shall be consistent with the requirements of San Diego Municipal Code section 61.2507. ("Establishment of Tourism Marketing District" added 5­30­2007 by O­19622 N.S.; effective 6-29-2007.) §61.2507 Tourism Marketing District Management Plan The district management plan shall contain all of the following: (a)
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(2)

A map of the district.

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(b) (c)

The name of the proposed district. A description of the boundaries of the district, including the boundaries of any benefit zones, proposed for establishment or extension in a manner sufficient to identify the affected lands and businesses included. Nothing in this Division prohibits the boundaries of a district created pursuant to this Division to overlap with other assessment districts established pursuant to other provisions of law including, but not limited to, the Parking and Business Improvement Area Law of 1989, California Streets and Highways Code section 36500 et.seq, or the Property and Business Improvement District Law of 1994, California Streets and Highways Code section 36600 et.seq.. The general description of activities proposed for each year of operation of the district and the estimated maximum cost thereof. The estimated total annual amount proposed to be expended each year for administration and operation of the district. The proposed source or sources of financing including the proposed method and basis of levying the assessment in sufficient detail to allow each business owner to calculate the amount of the assessment to be levied against their business. The planned frequency for the levying of the assessments. The specific number of years in which assessments will be levied. In a new district, the maximum number of years shall be five. Upon renewal, a district shall have a term not to exceed 10 years. The district management plan may set forth specific changes in assessments for each year of operation of the district. The proposed timing and duration of activities under the plan. Any proposed rules and regulations to be applicable to the district. A list of the businesses to be assessed. A description of the procedures utilized by the association for the nomination and election of the association's board of directors.

(d)

(e)

(f)

(g) (h)

(i) (j) (k) (l)

(m)

Any other item or matter required to be incorporated therein by the San Diego City Council, the San Diego Municipal Code, or any other applicable law. ("Tourism Marketing District Management Plan" added 5­30­2007 by O­19622 N.S.; effective 6-29-2007.)
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§61.2508

Notice of Proposed Assessments; Public Hearing If the San Diego City Council [Council] proposes to levy an assessment that is consistent with the assessment proposed in the petition of businesses submitted pursuant to San Diego Municipal Code [Code] section 61.2505 and with the district management plan submitted pursuant to Code section 61.2506, the City shall provide notice to the business owners of the public hearing set pursuant to paragraph (2) of subdivision (c) of Code section 61.2505. (a) The Council shall identify all businesses which will be benefited by the activities and upon which an assessment will be imposed. All assessments shall be supported by the management plan. If the proposed assessment formula is based on gross room revenue, the amount of the proposed assessment for each identified business shall be estimated based on gross room rental revenue for the City's most recent complete fiscal year. The City shall give the business owner written notice, by mail, of the proposed establishment of the tourism marketing district, the estimated total initial annual assessments for the entire district, the duration of the payments, the reason for the assessment and the basis upon which the amount of the proposed assessment was calculated, a specific formula in sufficient detail to allow the business owner to calculate the proposed assessment for the owner's establishment, together with the date, time, and location of a public hearing on the proposed assessment. Each notice shall also include, in a conspicuous place thereon, a summary of the procedures applicable to the completion, return, and tabulation of the ballots required pursuant to Code section 61.2507(d), including a disclosure statement that the existence of a majority protest, as defined in Code section 61.2507(e), will result in the assessment not being imposed. Each notice mailed to owners of identified businesses within the district pursuant to Code section 61.2507(c) shall contain a ballot which includes the City's address for receipt of the ballot once completed by any business owner receiving the notice, whereby the business owner may indicate their name, reasonable identification of the business, and their support or opposition to the proposed assessment. The Council shall conduct a public hearing upon the proposed assessment not less than 45 days after the mailing of the notice of the proposed assessment to business owners of each identified business. At the public hearing, the Council shall consider all protests against the proposed assessment and the San Diego City Manager shall tabulate the ballots. The Council shall not impose an

(b) (c)

(d)

(e)

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assessment if there is a majority protest. A majority protest exists if, upon the conclusion of the hearing, ballots submitted in opposition to the assessment exceed the ballots submitted in favor of the assessment. In tabulating the ballots, the ballots shall be weighted according to the proportional financial obligation of the affected businesses. ("Notice of Proposed Assessments; Public Hearing" added 5­30­2007 by O­19622 N.S.; effective 6-29-2007.) §61.2509 City Council Adoption, Revision or Modification of Assessments; Modification of Approved Activities; Changes to District Boundaries At the conclusion of the public hearing to establish the district, the San Diego City Council [Council] may adopt, revise, change, reduce, or modify the proposed assessment or the type or types of activities to be funded with the revenues from the assessments. At the hearing, the Council may only make changes to the boundaries of the proposed tourism marketing district that will exclude territory containing businesses that the Council finds will not benefit from the proposed activities; and may only change proposed assessments by reducing them. ("City Council Adoption, Revision or Modification of Assessments; Modification of Approved Activities; Changes to District Boundaries" added 5­30­2007 by O­19622 N.S.; effective 6-29-2007.) §61.2510 Resolution of Formation of Tourism Marketing District (a) If the San Diego City Council [Council], following a public hearing, decides to establish a proposed tourism marketing district, the Council shall adopt a resolution of formation that shall contain all of the following: (1) A brief description of the proposed activities, the amount of the proposed assessment, and a description of the exterior boundaries of the proposed district. The descriptions and statements do not need to be detailed and shall be sufficient if they enable an owner to generally identify the nature and extent of the activities and the location and extent of the proposed district. The number, date of adoption, and title of the resolution of intention. The time and place where the public hearing was held concerning the establishment of the district. A determination regarding any protests received. The Council shall not establish the district or levy assessments if a majority protest was received.
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(2) (3)

(4)

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(5)

A statement that the operations of the district established by the resolution shall be subject to any amendments to this Division. A statement that the activities to be provided to benefit businesses in the district will be funded by the levy of the assessments. The revenue from the levy of assessments within a district shall not be used to provide activities that directly benefit businesses outside the district or for any purpose other than the purposes specified in the resolution of intention, as modified by the Council at the hearing concerning establishment of the district. A statement specifying the time and manner for levying the assessments by the San Diego City Treasurer. A statement that any assessment imposed pursuant to this Division is levied solely upon the business owner within the district, that the business owner is solely responsible for payment of the assessment when due, and that, if the owner chooses to collect any portion of the assessment from a transient, that said portion shall be specifically called out and identified for the transient in any and all communications from the business owner as a "San Diego Tourism Marketing District Assessment." A finding that the businesses within the area of the tourism marketing district will be benefited by the activities funded by the assessments proposed to be levied.

(6)

(7)

(8)

(9)

The adoption of the resolution of formation and recordation of the notice and map pursuant to San Diego Municipal Code section 61.2511 shall constitute the levy of an assessment in each of the fiscal years referred to in the district management plan. ("Resolution of Formation of Tourism Marketing District" added 5­30­2007 by O­19622 N.S.; effective 6-29-2007.) §61.2511 Council Resolution Establishing District If the San Diego City Council [Council], following a public hearing, desires to establish a proposed tourism marketing district, and the Council has not made changes pursuant to San Diego Municipal Code [Code] section 61.2508, or has made changes that do not substantially change the proposed assessment, the Council shall adopt a resolution establishing the district. The resolution shall contain all of the information specified in paragraphs (1) to (9), inclusive, of Code section 61.2509(b). ("Council Resolution Establishing District" added 5­30­2007 by O­19622 N.S.; effective 6-29-2007.)
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(b)

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§61.2512

City Clerk to Record Notice and Map of District Following adoption of a resolution establishing a district pursuant to San Diego Municipal Code section 61.2509 the City Clerk shall record a notice and map of the district. ("City Clerk to Record Notice and Map of District" added 5­30­2007 by O­19622 N.S.; effective 6-29-2007.)

§61.2513

Council Establishment of Benefit Zones The San Diego City Council [Council] may establish one or more separate benefit zones within the district based upon the degree of benefit derived from the activities to be provided within the benefit zone, and may impose a different assessment within each benefit zone. The Council may also define categories of businesses based upon the degree of benefit that each will derive from the activities to be provided within the district, and may impose a different assessment or rate of assessment on each category of business, or on each category of business within each zone. ("Council Establishment of Benefit Zones" added 5­30­2007 by O­19622 N.S.; effective 6-29-2007.)

§61.2514

Establishment, Modification or Disestablishment; Districts and Benefit Zones All provisions of this Division applicable to the establishment, modification, or disestablishment of a tourism marketing district apply to the establishment, modification, or disestablishment of benefit zones or categories of business. In order to establish, modify, or disestablish a benefit zone or category of business, the San Diego City Council shall follow the procedure to establish, modify, or disestablish a tourism marketing district. ("Establishment, Modification or Disestablishment; Districts and Benefit Zones" added 5­30­2007 by O­19622 N.S.; effective 6-29-2007.)

§61.2515

Expiration of Tourism Marketing District If a tourism marketing district expires due to the time limit set pursuant to San Diego Municipal Code section 61.2506(h), a new district management plan may be created and a new district established pursuant to this Division. ("Expiration of Tourism Marketing District" added 5­30­2007 by O­19622 N.S.; effective 6-29-2007.)

§61.2516

Collection of Assessments The collection of the assessments levied pursuant to this Division shall be made at the time and in the manner set forth by the San Diego City Council in the resolution
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establishing the district described in San Diego Municipal Code section 61.2509. A method for charging interest and penalties for delinquent payments of assessments may also be prescribed in the resolution establishing the district. ("Collection of Assessments" added 5­30­2007 by O­19622 N.S.; effective 6-29-2007.) §61.2517 Assessments Based on Estimated Benefits Assessments levied on businesses pursuant to this Division shall be levied on the basis of the degree of estimated benefit to the businesses within the tourism marketing district. The San Diego City Council may classify businesses for purposes of determining the degree of benefit to the businesses of the activities provided pursuant to this Division. ("Assessments Based on Estimated Benefits" added 5­30­2007 by O­19622 N.S.; effective 6-29-2007.) §61.2518 Exemptions from Assessments The following business revenues are considered exempt from assessment under this Division: (1) Revenues from a transient who has exercised occupancy for more than one month; Revenues from a transient whose room rent is being paid directly or indirectly by the federal government or the State of California, or

(2)

(3)

Revenues from a transient who is by treaty exempt from locally-levied transient occupancy taxes. ("Exemptions from Assessments" added 5­30­2007 by O­19622 N.S.; effective 6-29-2007.) §61.2519 Validity of Assessments; Contests The validity of an assessment levied under this Division shall not be contested in any action or proceeding unless the action or proceeding is commenced within 30 days after the resolution levying the assessment is adopted pursuant to San Diego Municipal Code section 61.2510. Any appeal from a final judgment in an action or proceeding shall be perfected by the appellant within 30 days after the entry of judgment. ("Validity from Assessments; Contests" added 5­30­2007 by O­19622 N.S.; effective 6-29-2007.)

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§61.2520

City's Promotional Responsibilities (a) Nothing in this Division shall relieve the City of its responsibility to promote the City of San Diego [City] as enumerated in San Diego Municipal Code [Code] section 35.0128 regarding the use of revenues from the City's Transient Occupancy Tax [TOT]. The City Manager, or the Manager's designee, will provide the tourism marketing district association, on an annual basis, a statement detailing actual TOT revenues collected under Code section 35.0103 that are available for promoting the City. This statement should also describe the prescribed use of revenues from the City's TOT to include, but not be limited to: (1) The annual debt payment for all existing bond obligations related to the San Diego Convention Center Corporation; The annual marketing subsidy as required by the San Diego Convention Center Corporation; and

(b)

(2)

The annual debt payment for all existing bond obligations relative to Balboa Park and Mission Bay Park. ("City's Promotional Responsibilities" added 5­30­2007 by O­19622 N.S.; effective 6-29-2007.) §61.2521 Modifications of District Management Plan A tourism marketing district association may, at any time, request that the San Diego City Council modify its district management plan. Any modification of the district management plan shall be made pursuant to this Division. ("Modifications of District Management Plan" added 5­30­2007 by O­19622 N.S.; effective 6-29-2007.) §61.2522 District Plan Modification; Public Hearing Required (a) Upon the written request of a tourism marketing district association, the San Diego City Council [Council] may modify the district management plan after conducting one public hearing on the proposed modifications. The Council may modify the activities to be funded with the revenue derived from the levy of the assessments by adopting a resolution to make the modifications after holding a public hearing. Notice of the public hearing and the proposed modifications shall be published as provided in San Diego Municipal Code [Code] section 61.2507. If the modification includes the levy of a new or increased assessment, the Council shall comply with Code section 61.2507.
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The Council shall adopt a resolution of intention which states the proposed modification prior to the public hearing required by this section. The public hearing shall be held not more than 90 days after the adoption of the resolution of intention. ("District Plan Modification; Public Hearing Required" added 5­30­2007 by O­19622 N.S.; effective 6-29-2007.) §61.2523 Tourism Marketing District Association; Report of Activities (a) Each tourism marketing district association shall cause to be prepared a prospective report for each fiscal year, except the first year, for which assessments are to be levied and collected to pay the costs of the activities described in the report. The tourism marketing district association's first report shall be due after the first year of operation of the district. The report may propose changes, including, but not limited to, the boundaries of the tourism marketing district or any benefit zones within the district, the basis and method of levying the assessments, and any changes in the classification of categories of business, if a classification is used. The report shall be filed with the City Clerk prior to the end of each fiscal year, and shall refer to the tourism marketing district by name, specify the fiscal year to which the report applies, and, with respect to that fiscal year, shall contain all of the following information: (1) Any proposed changes to the boundaries of the tourism marketing district or to any benefit zones or classification of businesses within the district. The activities to be provided for that fiscal year. An estimate of the cost of providing the activities for that fiscal year. The method and basis of levying the assessment in sufficient detail to allow each business owner to estimate the amount of the assessment to be levied against his or her business for that fiscal year. The estimated amount of any surplus or deficit revenues to be carried over from the previous fiscal year. The estimated amount of any contributions to be made from sources other than assessments levied pursuant to this Division.

(b)

(b)

(2) (3) (4)

(5)

(6)

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(c)

The San Diego City Council [Council] may approve the report as filed by the tourism marketing district association, or may modify any portion of the report and approve it as modified. Such modification shall only be made subject to the noticing provisions of San Diego Municipal Code sections 61.2519 and 61.2520. The Council shall not approve a change in the basis and method of levying assessments that would impair an authorized or executed contract to be paid from the revenues derived from the levy of assessments. ("Tourism Marketing District Association; Report of Activities" added 5­30­2007 by O­19622 N.S.; effective 6-29-2007.) Tourism Marketing District Association; Contract With Nonprofit

§61.2524

The district management plan may state that a tourism marketing district association will provide for and administer the activities described in the district management plan. If the district management plan designates a tourism marketing district association, the City will contract with the designated nonprofit corporation to implement the plan and carry out specified activities, subject to the terms and conditions enumerated in the contract. ("Tourism Marketing District Association; Contract With Nonprofit" added 5­30­2007 by O­19622 N.S.; effective 6-29-2007.) §61.2525 Renewal of Expired District (a) Upon renewal of an expired district, any remaining revenues derived from the levy of assessments, or any revenues derived from the sale of assets acquired with the revenues, shall be transferred to the renewed district. If the renewed district includes additional businesses not included in the prior district, the remaining revenues shall be spent to benefit only the businesses in the prior district. If the renewed district does not include businesses included in the prior district, the remaining revenues attributable to these businesses shall be refunded to the owners of these businesses.

(b)

Upon renewal, a district shall have a term not to exceed ten (10) years. There is no requirement that the boundaries, assessments, or activities of a renewed district be the same as the original or prior district. ("Renewal of Expired District" added 5­30­2007 by O­19622 N.S.; effective 6-29-2007.) Disestablishment of District; Procedures (a) Any tourism marketing district established or extended pursuant to the provisions of this Division, where there is no outstanding and unpaid

§61.2526

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indebtedness incurred to accomplish any of the purposes of the district, may be disestablished by resolution by the San Diego City Council [Council] in either of the following circumstances: (1) If the Council finds there has been misappropriation of funds, malfeasance, or a violation of law in connection with the management of the district, it shall notice a hearing on disestablishment. After the first year of operation of the district, there shall be a 30-day period each year in which assessed business owners may request disestablishment of the district. The first such period shall begin upon presentation to Council of the district's initial annual report of activities. During each successive year of operation of the district, business owners shall have such a 30-day period to request disestablishment upon presentation of the district's report of activities. Upon the written petition of the business owners in the area who pay 50 percent or more of the assessments levied, the Council shall pass a resolution of intention to disestablish the district. The Council shall notice a hearing on disestablishment.

(2)

The Council shall adopt a resolution of intention to disestablish the district prior to the public hearing required by this section. The resolution shall state the reason for the disestablishment, shall state the time and place of the public hearing, and shall contain a proposal to dispose of any assets acquired with the revenues of the assessments levied within the district. The notice of the hearing on disestablishment required by this section shall be given by mail to the owner of each business subject to assessment in the district. The Council shall conduct the public hearing not less than 30 days after the mailing of the notice to the business owners. The public hearing shall be held not more than 60 days after the adoption of the resolution of intention. ("Disestablishment of District; Procedures" added 5­30­2007 by O­19622 N.S.; effective 6-29-2007.) §61.2527 Disestablishment; Refund of Assessments After all outstanding debts are paid upon the disestablishment of a tourism marketing district, any remaining revenues derived from the levy of assessments, or derived from the sale of assets acquired with the revenues, shall be refunded to the owners of the businesses then located and operating within the district in which assessments were levied. Such refunds shall be distributed by applying the same method and basis that was used to calculate the assessments levied in the fiscal year in which the district is disestablished. If the disestablishment occurs before an assessment is levied for the fiscal year, the method and basis that was used to calculate the assessments levied in
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(b)

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the immediate prior fiscal year shall be used to calculate the amount of any refund. All outstanding assessment revenue collected after disestablishment shall be spent on activities specified in the district management plan. ("Disestablishment; Refund of Assessments" added 5­30­2007 by O­19622 N.S.; effective 6-29-2007.)

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