CITY OF CARMEL-BY-THE-SEA

CITY COUNCIL
Staff Report

September 11, 2018

PUBLIC HEARINGS

TO: Honorable Mayor and City Council Members

SUBMITTED BY: Sharon Friedrichsen, Director of Budget and Contracts

APPROVED BY: Chip Rerig, City Administrator

Receive Public Testimony Regarding the Establishment of the Carmel Restaurant

Improvement District and the Levying of an Assessment on Certain Restaurant Business
SUBJECT:
Owners Located Within the District Boundaries.

RECOMMENDATION:
Receive public testimony regarding the establishment of the Carmel Restaurant Improvement District and the
levying of an assessment on certain restaurant business owners located within the District boundaries.
BACKGROUND/SUMMARY:
On August 6, 2018, the City Council adopted a resolution of intention to form the Carmel Restaurant
Improvement District (CRID). A restaurant improvement district is a special assessment district formed under
California Streets and Highway Code that allows restaurant business owners to organize their collective efforts
to increase restaurant sales.

Specifically, the CRID will:

1. Include all full service and fine dining restaurant businesses, existing, and in the future, within the City
boundaries of Carmel-by-the-Sea.
2. Provide sales and marketing services to increase restaurant food and drink sales of the assessed
businesses within the CRID.
3. Set an annual assessment rate at one quarter of one percent (.25%) of gross food and drink sales
revenue.
4. Last for an initial five (5) year duration, beginning January 1, 2019 through December 31, 2023. Once per
year, beginning on the anniversary of the CRID formation, there is a thirty (30) day period in which
business owners paying fifty percent (50%) or more of the assessment may protest and begin
proceedings to terminate the CRID.
5. Anticipate an annual budget of $200,000 for the initial year of the five-year term.

Other elements of the CRID include:

1. The City will be responsible for collecting the assessment on a quarterly basis from each restaurant
business located within the CRID boundaries. The City shall be paid a fee equal to two percent (2%) of
the amount of assessment collected to offset its cost of collection and administration.
 2. The City shall forward the assessments to Visit Carmel, which will serve as the Owners’ Association as
required by State law, and have the responsibility of managing CRID programs as provided in the
Management District Plan.
3. The Visit Carmel Board will form a CRID Management Committee tasked with managing funds and
implementing programs in accordance with the Management District Plan.

In accordance with State law, a public hearing is required to allow public testimony regarding the establishment
of the CRID and the levying of assessments. Then, on October 2, 2018, Council will hold a public hearing to
consider adopting a resolution to form the CRID. During the October 2, 2018 Council meeting, if written
protests are received from the owners of businesses in the proposed CRID that will pay fifty percent (50%) or
more of the assessments proposed to be levied and protests are not withdrawn so as to reduce the protests to
less than fifty percent (50%), no further proceedings to levy the proposed assessment against such businesses
shall be taken for a period of one (1) year from the date of the finding of a majority protest by the City Council.
However, if there is not a protest by the majority, then at the conclusion of the public hearing to establish the
CRID, the City Council may adopt a resolution of formation. The CRID would become effective on January 1,
2019.

FISCAL IMPACT:
There is no fiscal impact associated with receiving public testimony on the establishment of the CRID.
PRIOR CITY COUNCIL ACTION:
Council held a workshop on the concept of a restaurant improvement district on February 5, 2018 and
authorized an agreement with Civitas to complete a study on the feasibility of forming a restaurant improvement
district in Carmel on February 6, 2018. Upon receiving the results of this study, Council authorized an
agreement with Civitas to provide technical assistance in advising on the formation process and drafting the
Management District Plan and other required documents on April 3, 2018. Council adopted a Resolution of
Intention to Form the CRID (Resolution 2018-078) on August 6, 2018.
ATTACHMENTS: