Honorable Mayor and Members of the Hermosa Beach City Council Regular Meeting of February 12, 2019
Title
APPROVAL OF THREE-YEAR AGREEMENT
BETWEEN THE CITY OF HERMOSA BEACH AND
THE HERMOSA BEACH CHAMBER OF COMMERCE
FOR FIESTA HERMOSA EVENTS
(Assistant to the City Manager Nico De Anda-Scaia)
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Recommended Action:
Recommendation
Staff recommends that the City Council:
1. Approve the attached three-year contract through 2021 between the City of Hermosa Beach and the Hermosa Beach Chamber of Commerce and Visitors Bureau for production of Fiesta Hermosa and other community events;
2. Approve and provide direction to staff regarding the re-allocation of all or a portion of Chamber funds donated to the City in FY 2014-2015 toward the purchase, installation and/or maintenance of citywide holiday decorations; and
3. Discuss and provide direction regarding the future/ongoing role of the City Council’s ad-hoc Fiesta Subcommittee.
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Executive Summary:
At its regular meeting on October 23, 2018, City Council authorized and directed the City Manager to engage the Hermosa Beach Chamber of Commerce and Visitors’ Bureau in negotiating a new Fiesta Hermosa agreement, and to return to the full Council with a contract for formal approval.
The agreement up for Council’s approval this evening is a result of these efforts over the past several months. Both the Chamber of Commerce and City Manager’s Department fully endorse the proposed agreement.
Background:
In July 2017, the City Council established a subcommittee to work in a coordinated effort with staff and the Chamber of Commerce (Chamber) in assessing public input regarding the overall impacts/benefits of Fiesta Hermosa events. Over the coming year, the subcommittee and Chamber identified various areas for potential future improvements to the Fiestas through a comprehensive community and stakeholder engagement process.
These recommended future improvements were presented to the City Council for endorsement in February 2018. At that meeting, the City Council also approved a one-year contract extension with the Chamber to produce Fiestas through 2018, with direction to continue the efforts of the Council subcommittee in assessing the progress of these improvements over the 2018 Fiestas. City staff provided regular updates to the City Council on the progress of these efforts.
At its October 23, 2018 meeting, City Council reaffirmed the Subcommittee’s initial recommendations from February 2018, provided staff direction regarding parameters for negotiation of a new Fiesta Hermosa agreement with the Chamber, and authorized and directed the City Manager to engage the Chamber in negotiating a new multi-year Fiesta Hermosa agreement as the previous agreement expired at the end of 2018.
Beginning in November 2018, the City Manager and a committee of representatives from the Chamber commenced negotiations, including a full review of the Chamber’s financials associated with Fiesta Hermosa and community event programming. The proposed three-year agreement for Council’s consideration and adoption is the result of these efforts and is endorsed by both the Chamber and City Manager’s Department.
Analysis:
With input from City departments and the City Attorney’s Office, Attachment 1 of this report includes a final draft of the negotiated 2019-2021 Fiesta Agreement, along with Council’s recommendations and past analysis as Exhibit A. Attachment 2 to this report lists all modifications to the Agreement in red-line for the public’s easy reference. Key changes to the Fiesta agreement include the following:
• A three-year contract term for twice annual Fiesta events commencing in 2019 and expiring at the end of 2021;
• Tie-in of Council affirmed recommendations for ongoing improvements to Fiesta event programming;
• An increase in Business In-Lieu Fees to the City to amount of $45 per vendor for year one, with an annual adjustment based on the percentage increase in the cost of living;
• Requirements concerning free booth space for valid nonprofits;
• Improved measures for promoting responsible alcohol consumption and alternative transportation methods;
• Requirements for an annual review process of Chamber programming, and an annual report to the City Manager on Fiesta event operations, including financial records;
• The Chamber shall continue producing the annual St. Patrick’s Day Parade, Holiday Celebration/Tree Lighting Event, and New Year’s Eve Celebration, while the City would take over the State of the City Address and coordination of citywide holiday decorations with partial funding from the Chamber’s donation to the City in FY 2014-2015*;
• Enhancements to the Fiesta’s free bus/shuttle program, including intended mitigation of impacts to residents with an increase in City Proposition A funding to the Chamber;
• Greater collaboration between the Chamber, Hermosa Beach Police Department and other City Departments for continued private security standards and streamlined logistical planning;
• Early communication between the City and Chamber concerning anticipated reimbursement amounts of event-related direct City costs;
• Expectations for a clearer allocation of Fiesta net profits toward marketing and business recruitment, retention and development;
• Establishment of a formal process for receiving public feedback on Fiesta events and ongoing programming changes;
* In FY 2014-2015, the City accepted a donation of $110,000 from the Chamber for refurbishment of the Challenger Shuttle/Greg Jarvis Memorial ($10,000), PCH/Aviation Improvement Project ($50,000), and replacement of the PCH/Pier Marquee with an electronic sign ($50,000). Currently, $100,000 of that donation remains in the City’s General Fund. As part of the proposed agreement, the Chamber has agreed that all or a portion of those funds donated to the City be applied toward the purchase, installation and/or maintenance of citywide holiday decorations (at the sole discretion of the City Council). As part of previous Fiesta Agreements, the Chamber bore responsibility of citywide holiday decorations. As proposed in the 2019-2021 Fiesta Agreement, the City would take on the coordination and funding of these efforts, including replacement of decorations which have reached their end-of-life. Staff therefore recommends that Council provide direction on the amount to be re-allocated toward these efforts.
General Plan Consistency:
This report and associated recommendations have been evaluated for their consistency with the City’s General Plan. Relevant policies are listed below:
Governance Element:
1.6 Long-term Considerations. Prioritize decisions that provide long-term community benefit and discourage decisions that provide short-term community benefit but reduce long-term opportunities.
2.6 Responsive to Community Needs. Continue to be responsive to community inquiries, providing public information and recording feedback from community interactions.
5.1 Residential and Commercial Compatibility. Provide a balance between residential and commercial uses and strive to ensure their compatibility.
5.7 Visitor and Resident Balance. Recognize the desire and need to balance visitor-serving and local-serving uses as a key to preserving character and the economic vitality of the community.
5.8 Public Private Partnerships. Pursue the use of public-private partnerships to implement projects and efforts that maintain the character and benefit the community.
6.4 Business Support. Support the Chamber of Commerce, retailers, tourist service businesses, artists, and other agencies to develop an aggressive marketing strategy with implementation procedures.
Fiscal Implications:
Since 2017, the City has collected a flat $40 fee per vendor in lieu of individual vendors obtaining business licenses. This amount varies depending upon the number of vendors that participate in each Fiesta. In 2018, the City collected $6,720 in total vendor-related fees (these fees are collected in addition to the reimbursement from the Chamber for direct City costs). Direct costs include, but are not limited to, lost parking revenue, city staff inspection activity, provision of police and public works services, and street and sidewalk cleaning. The total direct cost reimbursements to the City averaged approximately $43,500 per event in 2018. Included in this amount is a City credit to the Chamber of $3,000 per event for transportation services using Proposition A funds.
The proposed Agreement for 2019-2021 Fiesta events includes the following fiscal implications to the City:
• An increase in Business License In Lieu fees for participating vendors to $45 for year one, with an annual adjustment based on the percentage increase in the cost of living, not to exceed three percent (3%);
• City shall take over planning and production of the annual State of the City Address at an approximate cost of between $1,500 - $3,000. Currently, $3,500 is budgeted in FY 2018-2019 in City Council’s Special Event Fund for this purpose.
• City shall coordinate the maintenance, upkeep and installation of citywide holiday decorations at an estimated annual cost of $15,000, which would be requested as part of the upcoming budget process.
• Additionally, the City shall increase its contribution to the Chamber for funding of Fiesta bus/shuttle program improvements. This cost may vary per year depending on level of enhancements but is available using Proposition A transportation-related funds.
Attachments:
1. Draft 2019-2021 Fiesta Agreement with Exhibit(s)
2. Draft 2019-2021 Fiesta Agreement (Redlined Revisions)
Respectfully Submitted by: Nico De Anda-Scaia, Assistant to the City Manager
Concur: Kelly Orta, Community Resources Manager
Financial Analysis: Viki Copeland, Finance Director
Legal Review: Mike Jenkins, City Attorney
Approved: Suja Lowenthal, City Manager