Laguna council approves formation of tourism marketing district

The Laguna Beach City Council unanimously approved the formation of a tourism marketing district to replace the previous business improvement district.

The conversion of the district, which includes all lodging businesses within city borders, does not affect the distribution of assessments, but only changes the governance guiding the district, Cultural Arts Manager Sian Poeschl said.

An annual assessment of 2% of gross short-term room rental revenue would fund sales, marketing and communications and programs by the city Arts Commission, Laguna College of Art + Design, Laguna Playhouse and Laguna Art Museum.

The business improvement district was adopted in April 2001 with the intent of using additional taxes on businesses to promote offseason cultural events and encourage hotel occupancy. Converting to a tourism marketing district allows the district a five-year term instead of having to renew annually.

The term of the Laguna Beach Tourism Marketing District will begin on July 1 and last through June 2025.

Though the City Council received public input at its March 31 meeting, residents called in on Tuesday night to raise concerns about the clientele that Visit Laguna Beach would appeal to. Callers raised concerns about the potential for increased numbers of “day-trippers” as opposed to overnight stays by visitors.

The city will remain responsible for collecting the assessment on a quarterly basis and distributing the funds. Visit Laguna Beach will be responsible for managing the tourism district’s programs and reporting annually to the City Council.

Wastewater financing options tabled

The city of Laguna Beach also considered Tuesday alternative financing options to pay for a wastewater system capital improvement program, but the proposal was unanimously tabled to provide city staff more time to verify figures included in the prepared staff report.

The City Council initially approved a 10% one-year sewer user charge increase in February, but the item returned before the council in response to the stay-at-home order issued by Gov. Gavin Newsom in March, which city staff said has caused significant impacts to both the city and to ratepayers.

Up for council consideration Tuesday night was whether the city should increase the sewer user charge by 5%, the proposed 10% or not at all.

City Council members raised concerns about figures included on a table in the staff report that didn’t seem to add up. The numbers were meant to show what the increases could look like for commercial properties. Based on an average of commercial charges, the table reads that a $329 average monthly rate could increase by $45 with a 5% sewer user charge rate increase. It also reads that a 10% increase of a $375 average monthly rate could increase by $90.

“$90 is not 10% of anything other than $900,” Mayor Pro Tem Steve Dicterow said.

He said that, if true, he would back down from a rate increase, adding that $90 could be significant for businesses that could be on the verge of closing.

Councilwoman Toni Iseman asked at the beginning of the City Council’s meeting if an additional meeting could be added between Tuesday’s meeting and the council’s next meeting, scheduled for May 12, pointing to ongoing changes as a result of the coronavirus pandemic. That meeting is scheduled for April 28.

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