To: Honorable Mayor and Members of City Council
From: Molly Rattigan, Interim Community Development Director
Prepared By: Jennifer Owen, Economic Development Program Coordinator
TITLE:
Title
Napa Tourism Improvement District FY 2025-26 Budget and Work Plan
LABEL
RECOMMENDED ACTION:
Recommendation
Adopt a resolution approving the Napa Valley Tourism Improvement District City of Napa Local Governing Committee Budget and Work Plan for Fiscal Year 2025-26.
Body
DISCUSSION:
Background
On June 15, 2010, the Napa County Board of Supervisors approved the Napa Valley Tourism Improvement District (the “District”).The District was renewed for a 10-year term (effective July 2015-June 2025) and levies a two percent assessment upon the “rent” charged by “lodging businesses” (originally defined to include short term rentals of 30 days or less in hotels, motels, bed and breakfasts, and inns; and to exclude vacation rentals and campgrounds - now updated to include vacation rentals). The City Council consented to the formation of the countywide District within the City limits on March 16, 2010, and consented to the extended term on February 21, 2017. On November 19, 2024, the City Council granted consent to another 10-year renewal of the Napa Valley TID and to include the City of Napa in the assessment boundary.
The City of Napa collects the two percent District assessment for lodging businesses within the City and transmits 74% of the revenue to Napa County (who transmits the funds to the Napa Valley Tourism Corporation, a non-profit corporation charged with managing the overall non-local destination tourist promotion and marketing activities). From the remaining revenues, the City retains 1% for administration costs and deposits the remaining 24% into the Napa Tourism Improvement District (“Napa TID”) fund.
The Napa TID fund is managed by the City, with the oversight of the Napa TID Local Governing Committee (“LGC”), as defined by the Management District Plan (“MDP”). The LGC is comprised of seven members; five of whom represent the lodging industry, one member who represents the City, and one member who holds an at-large seat representing a visitor-serving or destination-marketing entity. The current LGC membership consists of the following seven individuals:
• Chair, and Lodging Representative, Sara Brooks, Napa River Inn
• Co-Chair, and Lodging Representative, Jenny Toomer, River Terrace Inn
• Chair-Elect: currently vacant
• Lodging Representative, Rachel Wilson, Napa Valley Marriott
• Lodging Representative, Sam El-Rabaa, Meritage
• At Large Representative, Bill La Liberte, Napa Downtown Association
• City Representative, Julie Lucido, Director of Public Works
Annual Napa TID Budget and Work Plan
Each year the LGC works with City staff to develop a proposed budget and work plan for City Council consideration and approval. This proposed budget and work plan is developed to market the City of Napa, with the specific objective of increasing hotel stays, a main requirement of the MDP.
Napa TID Revenue
The City’s Finance Department, in collaboration with Visit Napa Valley, studies Napa TID revenue trends and produces a projected revenue amount that the City of Napa expects to collect in the new fiscal year (see Exhibit “A” to Attachment 1).
|
Year |
Napa TID Revenue |
Percent Change |
|
FY 2018-2019 |
$907,193 |
n/a |
|
FY 2019-2020 |
$668,798 |
-26.28% |
|
FY 2020-2021 |
$443,600 |
-33.67% |
|
FY 2021-2022 |
$970,800 |
+118.84% |
|
FY 2022-2023 |
$1,270,000 |
+30.82% |
|
FY 2023-2024 |
$1,198,540 |
+2.76% |
|
FY 2024-2025 |
$1,100,000 |
-8.57% |
|
FY 2025-2026 (projected) |
$1,237,000 |
+11.72% |
Workplan and Budget
The proposed corresponding Workplan includes the following categories and expenditures:
• Administrative Support: $44,445.03 ($13,835.03 more than FY 2024/2025). This reflects an increase in City staff time.
• Materials & Services: $32,000 ($57,839 less than FY 2024/2025). This reflects the conclusion of a Strategic Planning process begun in 2024.
• Advertising and Marketing: $810,000 ($40,000 less than FY 2024/2025). This includes a Marketing Agency contract and a contract Marketing Manager to optimize marketing spend.
• Grants to Other Organizations: $400,000 ($300,000 less than FY 2024/2025). The LGC has opted to allocate the majority of available funds to marketing efforts and maintain a balanced budget.
FINANCIAL IMPACTS:
There is no financial impact on the City’s General Fund. The Napa Tourism Improvement District (NTID) was formed by Napa County through a two percent assessment of gross room rentals received from lodging businesses throughout the county. NTID funds are to be expended for tourism promotion in accordance with the approved Management District Plan. The City retains 25 percent of the assessment revenue collected within the City limits, to be used for promotion purposes as set forth in an annual work plan and budget prepared by the Napa TID and approved by City Council. The City also retains one percent of the assessment revenue as an administrative fee. No activities implemented as a part of the Napa TID budget are supported by the General Fund.
CEQA:
The Interim Community Development Director has determined that the Recommended Action described in this Agenda Report is not subject to CEQA, pursuant to CEQA Guidelines
Section 15060.
DOCUMENTS ATTACHED:
ATCH 1 - Resolution Adopting Napa TID FY 2025-2026 Budget and Work Plan
EX A - Napa TID FY 2025-2026 Budget and Work Plan
NOTIFICATION:
The Napa Tourism Improvement District Local Governing Committee has been notified of this agenda item and an agenda has been posted in publicly accessible locations as required by law.