HomeMy WebLinkAbout17 - Agreement with Visit Newport Beach Inc. for Tourism Promotion, Marketing and Branding ServicesQ SEW Pp�T
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c�<,FORN'P City Council Staff Report
November 12, 2024
Agenda Item No. 17
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Grace K. Leung, City Manager - 949-644-3001,
gleung@newportbeachca.gov
PREPARED BY: Tara Finnigan, Assistant City Manager - 949-644-3035,
tinnigan@newportbeachca.gov
TITLE: Agreement with Visit Newport Beach Inc. for Tourism Promotion,
Marketing and Branding Services
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The City Council formed the Destination Marketing Services Ad Hoc Committee
(Committee) in March of this year to review and negotiate a new marketing services
agreement with Visit Newport Beach, Inc. (VNB). The Committee, comprised of
Councilmembers Brad Avery, Will O'Neill and Erik Weigand, completed its research and
met with VNB representatives to negotiate the terms of an agreement.
The City of Newport Beach and VNB representatives agreed it was important that there
be transparency regarding the use of public funds and incorporated agreement terms
accordingly. VNB also agreed to the Committee's proposal to have the City retain the
TOT revenues associated with short-term lodging to help it further address the related
impacts and community needs. To help offset the loss in revenue to VNB related to
foregoing short-term lodging TOT, VNB asked to receive 23 percent of commercial (hotel)
TOT revenues each year under the new agreement.
Staff recommends approval of a five-year agreement that incorporates the proposed,
negotiated terms including allocating 23 percent of the City of Newport Beach's
commercial (hotel) TOT revenue annually to VNB.
RECOMMENDATIONS:
a) Determine this action is exempt from the California Environmental Quality Act (CEQA)
pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because
this action will not result in a physical change to the environment, directly or indirectly;
and
b) Approve a five-year agreement with Visit Newport Beach Inc. for tourism promotion,
branding and marketing services and authorize the Mayor and City Clerk to execute
the agreement.
DISCUSSION:
VNB, a business unit of Newport Beach & Company, provides destination marketing
services to the City of Newport Beach under an agreement for tourism promotion,
branding and marketing services. The agreement will expire on December 31 of this year.
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Agreement with Visit Newport Beach Inc. for Tourism Promotion, Marketing and
Branding Services
November 12, 2024
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In March 2024, the City Council established the Destination Marketing Services
Ad Hoc Committee to review and negotiate terms and conditions for a new agreement
and to make recommendations to the full City Council. The Committee members met with
VNB representatives several times and negotiated key terms. A new, proposed
agreement (Attachment A), incorporating the Committee's proposed terms, has been
drafted for City Council's consideration.
Current Agreement
The City's current agreement with VNB was entered into in September 2011 and was
amended in January 2014 to extend the term to December 31, 2024. The City Council
approved a second amendment to the agreement in August 2014 to update some of the
reporting timelines. (The current agreement and amendments are included as
Attachment B.)
Under the current agreement, VNB receives 18% of all TOT revenues — commercial and
residential - collected by the City to annually fund tourism -focused marketing and
promotion programs and activities. The City's FY 2024-25 General Fund budget projects
that VNB will receive approximately $7.2 million in funding under the agreement this
fiscal year, if the current agreement were to continue through June 30, 2025.
Committee's Review
The Committee's research included reviewing the current City-VNB agreement,
discussing the City's financial projections and its operational needs, considering aspects
of other cities' agreements with their visitor bureaus, and reviewing the
California State Auditors' 2023 recommendations resulting from the audit of the
City of Anaheim's tourism -related contracts. The Committee members then drafted terms
to discuss with VNB representatives.
Proposed Terms
A summary of the proposed, key terms of the new agreement is included as
Attachment C to this report. The Committee and VNB representatives had multiple,
positive and productive discussions, and ultimately reached agreement on 16 key terms
and other provisions that are contained in the agreement.
An important theme of the discussions related to ensuring transparency when it comes to
the use of public funds. To help streamline matters, VNB agreed to restructure its
organization by consolidating Visit Newport Beach, Inc. and Newport Beach & Company
into one company and changing the composition of its voting Board of Directors to a
seven -member committee that includes two City representatives — the city manager and
the finance director. VNB also readily agreed to terms related to executive compensation,
economic interest disclosures; travel expenses; limitations on political activity; and
audit provisions.
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Agreement with Visit Newport Beach Inc. for Tourism Promotion, Marketing and
Branding Services
November 12, 2024
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Compensation
When contemplating the compensation term, the Committee took historical and projected
TOT revenues into consideration and the amount of funding provided to VNB under the
current agreement.
The chart below shows the City's TOT revenues for a 10-year period. TOT revenues
generally increase 6-7% year over year, with the exception being the period between
2020 and 2021 when tourism was impacted by the COVID-19 pandemic.
$40
v
$30
3
o $20
>
$10
O"
~ $0
Transient Occupancy Tax (TOT) Revenue
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Residential (Short -Term Rental) TOT Revenue ■ Commercial (Hotel) TOT Revenue
The City currently provides VNB 18% of all TOT revenues collected from commercial
(hotel) and residential (short-term lodging) guests. The annual payments also reflect the
growth, and brief pandemic -related retraction, of TOT revenues as illustrated in the
following chart.
N $8
C
$7
$6
$5
$4
$3
$2
$1
$0
Payments to VNB
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
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Agreement with Visit Newport Beach Inc. for Tourism Promotion, Marketing and
Branding Services
November 12, 2024
Page 4
The projections staff prepared for the Committee's review and discussion with VNB were
conservatively based on 4% increases in TOT revenues through Fiscal Year 2027-28.
Recognizing and appreciating that VNB's work and the investments made by
Newport Beach hotel owners and operators are important factors in the growth of the
City's TOT revenues, the Committee considered various scenarios when contemplating
a recommendation on the percentage of TOT to provide to VNB under a new agreement
for destination marketing services. The Committee did discuss and agree however, that
retaining the residential (short-term lodging) portion of TOT revenues could enable the
City to further address community needs and the impacts of short-term lodging. For
instance, the funding could be used toward providing additional services such as
maintenance and law and code enforcement.
After reviewing TOT revenue projections and potential funding scenarios, the Committee
agreed, after speaking with VNB representatives, on a compensation term that would call
for transferring 23 percent of the commercial (hotel) TOT annually to VNB. TOT revenues
collected from short-term lodging operators would be retained for City use. Staff estimates
this would equate to approximately $7.05 million in TOT revenue transferred to VNB in
Fiscal Year 2025-26. For comparison purposes, staff estimates that VNB would receive
approximately $7.45 million if the City were to transfer 18 percent of commercial and
residential TOT in FY 2025-26.
FISCAL IMPACT:
Should the City Council approve the destination marketing services agreement with
Visit Newport Beach Inc., the City would provide VNB with 23 percent of the City's annual
total commercial TOT revenues, excluding residential TOT. Staff estimates this would
equate to $7.05 million in FY 2025-26, which is approximately $400 thousand less than
the amount VNB would receive if they were paid 18 percent of total commercial and
residential TOT in FY 2025-26.
ENVIRONMENTAL REVIEW:
Staff recommends the City Council find this action is not subject to the California
Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not
result in a direct or reasonably foreseeable indirect physical change in the environment)
and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA
Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no
potential for resulting in physical change to the environment, directly or indirectly.
NOTICING:
The agenda item has been noticed according to the Brown Act (72 hours in advance of
the meeting at which the City Council considers the item).
ATTACHMENTS:
Attachment A — Agreement
Attachment B — 2011 Agreement and Amendments
Attachment C — Summary of Proposed Agreement Terms
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ATTACHMENT A
AGREEMENT BETWEEN THE CITY OF NEWPORT BEACH AND
VISIT NEWPORT BEACH INC., FOR
TOURISM PROMOTION, BRANDING, AND MARKETING SERVICES
THIS TOURISM PROMOTION, BRANDING, AND MARKETING AGREEMENT
("Agreement") is made and entered into as of this 1st day of January, 2025 ("Effective
Date"), by and between the CITY OF NEWPORT BEACH, a California municipal
corporation and charter city ("City"), and VISIT NEWPORT BEACH INC., a California
nonprofit corporation ("VNB"), whose address is 1600 Newport Center Drive, Suite 120,
Newport Beach, CA 92660, and is made with reference to the following:
RECITALS
A. City is a municipal corporation duly organized and validly existing under the laws
of the State of California with the power to carry on its business as it is now being
conducted under the statutes of the State of California and the Charter of City.
B. VNB is a 501(c)(6) marketing organization whose mission is to partner with the
City and the tourism and hospitality industry by protecting and promoting the
City's brand and to deliver additional spending by leisure and conference visitors,
leading to enhanced community economic vitality and quality of life.
C. To promote tourism in Newport Beach, the Parties have entered into written
agreements whereby the City provides a portion of the City's transient occupancy
tax ("TOT") to VNB for the purpose of funding marketing efforts and the promotion
of tourism within the city, with the most recent agreement set to expire December
31, 2024.
D. The Parties now desire to continue the arrangement whereby a portion of the City's
TOT is provided to VNB for the purpose of funding marketing efforts and promotion
of tourism within the city ("Project").
E. VNB represents that it possesses the skill, experience, ability, background,
certification and knowledge to provide the professional services described in this
Agreement, and City desires VNB render professional services under the terms
and conditions set forth in this Agreement.
NOW, THEREFORE, it is mutually agreed by and between the undersigned parties
as follows:
1. TERM
The term of this Agreement shall commence on the Effective Date and shall
terminate on December 31, 2029, unless terminated earlier as set forth herein.
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2. SERVICES TO BE PERFORMED
VNB shall diligently perform all the services described in the Scope of Services
attached hereto as Exhibit A and incorporated herein by reference ("Services" or "Work")
In performance of the Work, VNB expressly agrees to abide by each term and condition
set forth herein and in the Exhibits.
3. TIME OF PERFORMANCE
3.1 Time is of the essence in the performance of Services under this Agreement
and VNB shall perform the Services in accordance with the schedule included in Exhibit
A. In the absence of a specific schedule, the Services shall be performed to completion
in a diligent and timely manner. The failure by VNB to strictly adhere to the schedule set
forth in Exhibit A, or to perform the Services in a diligent and timely manner shall be
considered a default and may result in termination of this Agreement by City in
accordance with Section 27.1.
3.2 Notwithstanding the foregoing, VNB shall not be responsible for delays due
to causes beyond VNB's reasonable control. However, in the case of any such delay in
the Services to be provided for the Project, each party hereby agrees to provide notice
within two (2) calendar days of the occurrence causing the delay to the other party so that
all delays can be addressed.
3.3 VNB shall submit all requests for extensions of time for performance in
writing to the Project Administrator as defined herein not later than ten (10) calendar days
after the start of the condition that purportedly causes a delay. The Project Administrator
shall review all such requests and may grant reasonable time extensions for
unforeseeable delays that are beyond VNB's control.
3.4 For all time periods not specifically set forth herein, VNB shall respond in
the most expedient and appropriate manner under the circumstances, by hand -delivery
or mail.
4. COMPENSATION
4.1 City shall pay VNB for the Services in accordance with the provisions of this
Section and the Transfer of TOT for Services Exhibit B, which is attached hereto and
incorporated herein by reference. Exhibit B provides the total compensation to be
provided to VNB for all Work performed in accordance with this Agreement, including all
reimbursable items and subconsultant fees.
4.2 VNB shall utilize the compensation only for those costs, expenses and
reimbursements specifically identified in a City Council approved Marketing Plan, as
defined in Exhibit A, and only up to the amounts approved in the Biennial Budget, as
defined in Exhibit A.
4.3 VNB shall not receive any compensation for Extra Work performed without
the prior written authorization of City. As used herein, "Extra Work" means any Work that
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is determined by City to be necessary for the proper completion of the Project, but which
is not included within the Scope of Services and which the parties did not reasonably
anticipate would be necessary at the execution of this Agreement.
4.4 Upon expiration or termination of this Agreement, VNB shall return to the
City any remaining TOT that has not been spent on marketing activities, in accordance
with this Agreement.
5. RIGHT TO AUDIT
5.1 City reserves the right to designate its own representative(s) or its
contracted representatives with a Certified Public Accounting firm who shall have the right
to audit VNB's accounting procedures, internal controls of VNB's financial systems, and
to examine any cost, revenue, payment, claim, other records or supporting documentation
resulting from any items set forth in this Agreement. Any such audit(s) shall be undertaken
by City or its representative(s) at mutually agreed upon reasonable times, not more than
once per year. City will make every attempt to finish the audit in a timely manner and VNB
agrees to submit all records requested by City or its representatives in a timely manner.
VNB agrees to fully cooperate with any such audit.
5.2 This right to audit shall extend during the length of this Agreement and for
a period of three (3) years or longer, if required by law, following the date of any payment
tendered under this Agreement. VNB agrees to retain all necessary
records/documentation for the entire length of this audit period, and to provide, upon prior
notice to VNB, access to VNB's auditors for this purpose.
5.3 The City will notify VNB in writing of any exception taken as a result of an
audit. If VNB disagrees with any such exceptions, VNB will notify City in writing within
twenty (20) days after the notification of exceptions to VNB. VNB and the City Manager,
or the City Manger's designee, will then meet and attempt to resolve any discrepancies.
VNB will be provided an opportunity to include its written responses to audit exception
items in the final report of the audit. Any expenditure of funds for a purpose not authorized
by this Agreement shall be paid by VNB to the City within thirty (30) calendar days from
presentation of City's findings to VNB. If VNB fails to make such payment, VNB agrees
to pay interest at a rate of ten percent (10%) per annum. Interest will be computed from
the date of written notification of exception(s) to the date VNB reimburses City for any
exception(s).
6. PROJECT MANAGER
6.1 VNB shall designate a Project Manager, who shall coordinate all phases of
the Project. This Project Manager shall be available to City at all reasonable times during
the Agreement term. VNB has designated its President & CEO to be its Project Manager.
VNB shall not remove or reassign the Project Manager or any personnel listed in Exhibit
A or assign any new or replacement personnel to the Project without the prior written
consent of City. City's approval shall not be unreasonably withheld with respect to the
removal or assignment of non -key personnel.
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7. ADMINISTRATION
This Agreement will be administered by the City Manager's Office. The City
Manager, or designee, shall be the Project Administrator and shall have the authority to
act for City under this Agreement. The Project Administrator shall represent City in all
matters pertaining to the Services to be rendered pursuant to this Agreement.
8. STANDARD OF CARE
8.1 All of the Services shall be performed by VNB or under VNB's supervision.
VNB represents that it possesses the professional and technical personnel required to
perform the Services required by this Agreement, and that it will perform all Services in a
manner commensurate with community professional standards and with the ordinary
degree of skill and care that would be used by other reasonably competent practitioners
of the same discipline under similar circumstances. All Services shall be performed by
qualified and experienced personnel who are not employed by City. By delivery of
completed Work, VNB certifies that the Work conforms to the requirements of this
Agreement, all applicable federal, state and local laws, and legally recognized
professional standards.
8.2 VNB represents and warrants to City that it has, shall obtain, and shall keep
in full force and effect during the term hereof, at its sole cost and expense, all licenses,
permits, qualifications, insurance and approvals of whatsoever nature that is legally
required of VNB to practice its profession. VNB shall maintain a City of Newport Beach
business license during the term of this Agreement.
8.3 VNB shall not be responsible for delay, nor shall VNB be responsible for
damages or be in default or deemed to be in default by reason of strikes, lockouts,
accidents, acts of God, or the failure of City to furnish timely information or to approve or
disapprove VNB's Work promptly, or delay or faulty performance by City, contractors, or
governmental agencies.
9. HOLD HARMLESS
9.1 To the fullest extent permitted by law, VNB shall indemnify, defend and hold
harmless City, its City Council, boards and commissions, officers, agents, volunteers and
employees (collectively, the "Indemnified Parties") from and against any and all claims
(including, without limitation, claims for bodily injury, death or damage to property),
demands, obligations, damages, actions, causes of action, suits, losses, judgments,
fines, penalties, liabilities, costs and expenses (including, without limitation, attorneys'
fees, disbursements and court costs) of every kind and nature whatsoever (individually,
a Claim; collectively, "Claims"), which may arise from or in any manner relate (directly or
indirectly) to any breach of the terms and conditions of this Agreement, any Work
performed or Services provided under this Agreement (including the negligent, reckless,
and/or willful acts, errors and/or omissions of VNB, its principals, officers, agents,
employees, vendors, suppliers, consultants, subcontractors, anyone employed directly or
indirectly by any of them or for whose acts they may be liable, or any or all of them).
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9.2 Notwithstanding the foregoing, nothing herein shall be construed to require
VNB to indemnify the Indemnified Parties from any Claim arising from the sole negligence
or willful misconduct of the Indemnified Parties. Nothing in this indemnity shall be
construed as authorizing any award of attorneys' fees in any action on or to enforce the
terms of this Agreement. This indemnity shall apply to all claims and liability regardless
of whether any insurance policies are applicable. The policy limits do not act as a limitation
upon the amount of indemnification to be provided by VNB.
10. INDEPENDENT CONTRACTOR
It is understood that City retains VNB on an independent contractor basis and VNB
is not an agent or employee of City. The manner and means of conducting the Work are
under the control of VNB, except to the extent they are limited by statute, rule or regulation
and the expressed terms of this Agreement. No civil service status or other right of
employment shall accrue to VNB or its employees. Nothing in this Agreement shall be
deemed to constitute approval for VNB or any of VNB's employees or agents, to be the
agents or employees of City. VNB shall have the responsibility for and control over the
means of performing the Work, provided that VNB is in compliance with the terms of this
Agreement. Anything in this Agreement that may appear to give City the right to direct
VNB as to the details of the performance of the Work or to exercise a measure of control
over VNB shall mean only that VNB shall follow the desires of City with respect to the
results of the Services.
11. COOPERATION
VNB agrees to work closely and cooperate fully with City's designated Project
Administrator and any other agencies that may have jurisdiction or interest in the Work to
be performed. City agrees to cooperate with the Project Manager on the Project.
12. RESERVED
13. PROGRESS
VNB is responsible for keeping the Project Administrator informed on a regular
basis regarding the status and progress of the Project, activities performed and planned,
and any meetings that have been scheduled or are desired.
14. INSURANCE
Without limiting VNB's indemnification of City, and prior to commencement of
Work, VNB shall obtain, provide and maintain at its own expense during the term of this
Agreement or for other periods as specified in this Agreement, policies of insurance of
the type, amounts, terms and conditions described in the Insurance Requirements
attached hereto as Exhibit C, and incorporated herein by reference.
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15. PROHIBITION AGAINST ASSIGNMENTS AND TRANSFERS
Except as specifically authorized under this Agreement, this Agreement shall not
be assigned, transferred contracted or subcontracted out without the prior written
approval of City. Any of the following shall be construed as an assignment: The sale,
assignment, transfer or other disposition of any of the issued and outstanding capital
stock of VNB, or of the interest of any general partner or joint venturer or syndicate
member or cotenant if VNB is a partnership or joint -venture or syndicate or co -tenancy,
which shall result in changing the control of VNB. Control means fifty percent (50%) or
more of the voting power or twenty-five percent (25%) or more of the assets of the
corporation, partnership or joint -venture.
16. SUBCONTRACTING
VNB shall be fully responsible to City for all acts and omissions of any
subcontractor. Nothing in this Agreement shall create any contractual relationship
between City and any subcontractor nor shall it create any obligation on the part of City
to pay or to see to the payment of any monies due to any such subcontractor other than
as otherwise required by law. City is an intended beneficiary of any Work performed by
the subcontractor for purposes of establishing a duty of care between the subcontractor
and City. Except as specifically authorized herein, the Services to be provided under this
Agreement shall not be otherwise assigned, transferred, contracted or subcontracted out
without the prior written approval of the Project Administrator.
17. OWNERSHIP OF DOCUMENTS
17.1 All intellectual property and each and every image and writing including, but
not limited to, all website/digital content, brochures, publications, guides, promotions,
social media accounts, blog, application, photograph, video, artwork, report, draft, record,
or other document ("Documents"), produced, created, prepared or caused to be
produced, created or prepared by VNB, its officers, employees, agents and
subcontractors, in the course of implementing this Agreement, shall be owned by VNB.
17.2 Notwithstanding anything else in this Agreement, VNB grants to City a non-
exclusive, royalty -free, without further compensation to VNB or any other party, perpetual
license to use the Documents for any purpose, which provision shall survive the
termination of this Agreement.
17.3 VNB shall, at VNB's expense, provide all Documents, including all logins
and password information to City upon written request.
17.4 All Documents shall be transmitted to City in formats compatible with
Microsoft Office, Adobe Acrobat, or other appropriate format acceptable to City.
18. INTELLECTUAL PROPERTY INDEMNITY
VNB shall defend and indemnify City, its agents, officers, representatives and
employees against any and all liability, including costs, for infringement or alleged
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infringement of any United States' letters patent, trademark, or copyright, including costs,
contained in VNB's Documents provided under this Agreement.
19. RECORDS
VNB shall keep records and invoices in connection with the Services to be
performed under this Agreement including, but not limited to, detailed records of how all
compensation provided to VNB under this Agreement is expended and how costs are
shared with other entities. VNB shall maintain complete and accurate records with
respect to the costs incurred under this Agreement and any Services, expenditures and
disbursements charged to City, for a minimum period of three (3) years, or for any longer
period required by law, from the date of final payment to VNB under this Agreement. All
such records and invoices shall be clearly identifiable. VNB shall allow a representative
of City to examine, audit and make transcripts or copies of such records and invoices
during regular business hours. VNB shall allow inspection of all Work, data, Documents,
proceedings and activities related to the Agreement for a period of three (3) years from
the date of final payment to VNB under this Agreement.
20. RESERVED
21. ERRORS AND OMISSIONS
In the event of errors or omissions that are due to the negligence or professional
inexperience of VNB which result in expense to City greater than what would have
resulted if there were not errors or omissions in the Work accomplished by VNB, the
additional expenses shall be borne by VNB and not paid out of the compensation provided
under this Agreement. Nothing in this Section is intended to limit City's rights under the
law or any other sections of this Agreement.
22. CITY'S RIGHT TO EMPLOY OTHER CONSULTANTS
City reserves the right to employ other marketing or public relations consultants in
connection with the Project.
23. CONFLICTS OF INTEREST
23.1 VNB or its employees may be subject to the provisions of the California
Political Reform Act of 1974 (the "Act") and/or Government Code §§ 1090 et seq., which
(1) require such persons to disclose any financial interest that may foreseeably be
materially affected by the Work performed under this Agreement, and (2) prohibit such
persons from making, or participating in making, decisions that will foreseeably financially
affect such interest.
23.2 If subject to the Act and/or Government Code §§ 1090 et seq., VNB shall
conform to all requirements therein. Failure to do so constitutes a material breach and is
grounds for immediate termination of this Agreement by City. VNB shall indemnify and
hold harmless City for any and all claims for damages resulting from VNB's violation of
this Section.
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24. NOTICES
24.1 All notices, demands, requests or approvals, including any change in
mailing address, to be given under the terms of this Agreement shall be given in writing,
and conclusively shall be deemed served when delivered personally, or on the third
business day after the deposit thereof in the United States mail, postage prepaid, first-
class mail, addressed as hereinafter provided. All notices, demands, requests or
approvals shall be addressed as follows:
If to VNB: Visit Newport Beach Inc.
Attn: President & CEO
1600 Newport Center Drive, Suite 120
Newport Beach, CA 92660
If to City: City of Newport Beach
Attn: City Manager
100 Civic Center Drive
Newport Beach, CA 92660
With a copy to: City of Newport Beach
Attn: Finance Director
100 Civic Center Drive
Newport Beach, CA 92660
25. CLAIMS
VNB and City expressly agree that in addition to any claims filing requirements set
forth in this Agreement, VNB shall be required to file any claim VNB may have against
City in strict conformance with the Government Claims Act (Government Code sections
900 et seq.).
26. TERMINATION
26.1 In the event that either party fails or refuses to perform any of the provisions
of this Agreement at the time and in the manner required, that party shall be deemed in
default in the performance of this Agreement. If such default is not cured within a period
of fourteen (14) calendar days, or if more than fourteen (14) calendar days are reasonably
required to cure the default and the defaulting party fails to give adequate assurance of
due performance within fourteen (14) calendar days after receipt of written notice of
default, specifying the nature of such default and the steps necessary to cure such default,
and thereafter diligently take steps to cure the default, the non -defaulting party may
terminate the Agreement forthwith by giving to the defaulting party written notice thereof.
27. STANDARD PROVISIONS
27.1 Recitals. City and VNB acknowledge that the above Recitals are true and
correct and are hereby incorporated by reference into this Agreement.
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27.2 Compliance with all Laws. VNB shall, at its own cost and expense, comply
with all statutes, ordinances, regulations and requirements of all governmental entities,
including federal, state, county or municipal, whether now in force or hereinafter enacted.
In addition, all Work prepared by VNB shall conform to applicable City, county, state and
federal laws, rules, regulations and permit requirements and be subject to approval of the
Project Administrator and City.
27.3 Waiver. A waiver by either party of any breach, of any term, covenant or
condition contained herein shall not be deemed to be a waiver of any subsequent breach
of the same or any other term, covenant or condition contained herein, whether of the
same or a different character.
27.4 Integrated Contract. This Agreement represents the full and complete
understanding of every kind or nature whatsoever between the parties hereto, and all
preliminary negotiations and agreements of whatsoever kind or nature are merged herein.
No verbal agreement or implied covenant shall be held to vary the provisions herein.
27.5 Conflicts or Inconsistencies. In the event there are any conflicts or
inconsistencies between this Agreement and the Scope of Services or any other
attachments attached hereto, the terms of this Agreement shall govern.
27.6 Interpretation. The terms of this Agreement shall be construed in
accordance with the meaning of the language used and shall not be construed for or
against either party by reason of the authorship of the Agreement or any other rule of
construction which might otherwise apply.
27.7 Amendments. This Agreement may be modified or amended only by a
written document executed by both VNB and City and approved as to form by the City
Attorney.
27.8 Severability. If any term or portion of this Agreement is held to be invalid,
illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining
provisions of this Agreement shall continue in full force and effect.
27.9 Controllinq Law and Venue. The laws of the State of California shall govern
this Agreement and all matters relating' to it and any action brought relating to this
Agreement shall be adjudicated in a court of competent jurisdiction in the County of
Orange, State of California.
27.10 Equal Opportunity Employment. VNB represents that it is an equal
opportunity employer and it shall not discriminate against any subcontractor, employee
or applicant for employment because race, religious creed, color, national origin,
ancestry, physical handicap, medical condition, marital status, sex, sexual orientation,
age or any other impermissible basis under law.
27.11 No Attorneys' Fees. In the event of any dispute or legal action arising under
this Agreement, the prevailing party shall not be entitled to attorneys' fees.
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27.12 Counterparts. This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original and all of which together shall
constitute one (1) and the same instrument.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
on the dates written below.
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
Date: I ( / 2 / z y
Y�
Aaron & Harp
City Attorney
ATTEST:
Date:
to
Leilani 1. Brown
City Clerk
CITY OF NEWPORT BEACH,
a California municipal corporation
Date:
Bv:
Will O'Neill
Mayor
CONSULTANT: Visit Newport Beach Inc.,
a California nonprofit corporation
Date:
By:
Gary C. Sherwin
President 1 CEO
Date:
Bv:
Homer Bludau
Secretary
[END OF SIGNATURES]
Attachments: Exhibit A -- Scope of Services
Exhibit B — Transfer of TOT for Services
Exhibit C — Insurance Requirements
Visit Newport Beach Inc. Page 11
17-16
EXHIBIT A
SCOPE OF SERVICES
Visit Newport Beach Inc. Page A-1 17-17
EXHIBIT A
SCOPE OF SERVICES
Goals and Objectives:
At a minimum, and in a manner consistent with standard practices in the tourism and
hospitality industry ("Standard Practices"), VNB shall develop, plan, carry out, and
supervise a program to market and promote the Newport Beach brand to increase tourism
in, and serve the needs of, visitors to Newport Beach and thereby drive up the amount of
TOT collected and improve the overall tourism business and commerce throughout the
City ("Services"). Services shall, at a minimum, include the following:
• The maintenance of suitable office space and the employment of competent
personnel to properly carry out promotional, branding, and marketing duties;
• The creation of marketing materials and information to promote tourism and inform
prospective visitors of the recreational activities, cultural assets, shopping and
dining opportunities, night-time stay opportunities, and natural beauty of Newport
Beach. These materials may include, but are not limited to, website and digital
content, brochures, publications, guides, online promotions, social media
campaigns and various forms of print and digital advertising;
• The dissemination of information described in this section by way of print and
digital media, including direct mail, publications, social media, websites, mobile
applications, direct digital advertising, events or other means of distribution,
• The development and implementation of specific marketing programs designed to
increase awareness of the Newport Beach brand and to increase business and
visitor trade in Newport Beach; and
• Any additional services as may be proposed by the City from time to time, subject
to mutual agreement of the Parties, which are consistent with the promotion of
tourism and the Newport Beach brand.
Reporting/Approvals:
Interim Scope of Services & Budget. The Parties agree that from January 1, 2025, to June
30, 2025, VNB shall only spend compensation provided for under this Agreement on
items set forth in the Marketing Plan and in accordance with the Budget reviewed by the
City Council on July 23, 2024.
Visit Newport Beach Inc. Page A-2 17-18
Long -Term Scope of Services & Budget: By June 1, 2025, and thereafter by June 1 in the
respective year, biennial reports shall be submitted by VNB to the City. The reports shall
be subject to review, approval, denial or modification by the City:
• Biennial Performance Standards Report. VNB shall prepare, and VNB's Board
("VNB Board") shall adopt, biennial performance standards for the two (2) twelve
(12) month fiscal years that begin each July 1, which shall correspond with the
goals and objectives of this Agreement. The Biennial Performance standards shall,
at a minimum:
o Identify deliverables and ensure satisfactory delivery;
o Track and evaluate the efficiency, success, and effectiveness of marketing
programs, materials, and plans;
o Monitor progress toward objectives and goals, including but not limited to,
quality and performance deadlines;
o Conduct audits when necessary, including but not limited to, for critical
compliance issues;
o Track and evaluate subcontract compliance, accuracy, and prompt
payment;
o Ensure accountability and compliance with internal processes and controls
for the tracking and use of funds and receipt of income, if any; and
o Identify subcontract and subcontractor issues, and resolution thereof.
• Biennial Marketing Plan. VNB shall prepare, and VNB's Board shall adopt, a
biennial marketing plan describing VNB's marketing and branding efforts for the
two (2) twelve (12) month fiscal years that begin each July 1.
• Biennial Budget. VNB shall prepare, and VNB's Board shall adopt, a biennial
budget for a period of two (2) twelve (12) month fiscal years that begin each July
1, which budget shall incorporate input from the City's Finance Director as to the
level of specificity needed in the budget. The City Council shall review each
biennial budget and approve, or modify and approve, the budget. The biennial
budget shall describe the revenues and expenditures required to meet the
Performance Standards and Biennial Marketing Plan obligations, which shall
include, but not be limited to, the following:
Visit Newport Beach Inc. Page A-3 17-19
o VNB overhead and operating expenses attributable to the performance of
this Agreement;
o The total amount of compensation and benefits of VNB officers and staff
attributable to the performance of this Agreement;
o VNB expenses, including but not limited to, travel and entertainment,
attributable to the performance of this Agreement;
o Capital outlay, inventory, and valuation attributable to the performance of
this Agreement;
o Debt service attributable to the performance of this Agreement;
o Sources of income and anticipated return on investment attributable to the
performance of this Agreement;
o Sponsorships of special events and not -for -profit organizations, including
the identity of each prospective recipient, the estimated amount or range to
be provided to each recipient, a brief description of how it is intended to
further the goals and objectives of this Agreement, and a summary of
historical return on investment of same;
o The categories or types of subcontractors to be retained to assist in the
performance of this Agreement and the amounts budgeted thereto; and
o Miscellaneous costs, expenses, or income not otherwise accounted for
incurred in furtherance of this Agreement and a brief description thereof.
• Annual Audited Financial Statements. By September 30th of each year, VNB shall
submit to the City audited financial statements for its most recently ended fiscal
year, including any management letter associated with the audited financial
statements.
• Annual Expenditure Report. By September 30th of each year, VNB shall submit an
expenditure report which shall be certified by VNB and a Certified Public
Accountant to the effect that the funds received pursuant to this Agreement were
expended in accordance with this Agreement in the previous fiscal year for
purposes authorized by this Agreement. This report shall include reasonable detail
in support of the certification.
Visit Newport Beach Inc. Page A-4 17-20
Internal Processes and Controls:
In accordance with Standard Practices, by January 31, 2025, the VNB Board shall adopt
the internal policies and controls ("Policies") set forth below. The Policies shall be
maintained and enforced by VNB and shall include, at a minimum, the following:
• A procurement policy that includes a fair and open request for proposals process
for the selection of any and all subcontractors retained by VNB pursuant to this
Agreement;
• A policy to establishing a process for ensuring there is a fair and equitable
allocation of any shared costs and expenses between VNB and the Meetings
Assessment Partnership, or similar entity that receives funding that is similar to
TOT (hereinafter "MAP"), including but not limited to, travel expenses,
sponsorship/grants, joint marketing campaigns, and overhead/operational costs,
such as rent, utilities, insurance, employee salaries, accounting fees, legal fees,
office supplies, advertising expenses, and business licenses;
• A travel and entertainment expense authorization and reimbursement policy that
includes a process for pre -authorization, identification of how the expense furthers
the goals and objectives of this Agreement, restricts its application to VNB officers
and staff in the performance of this Agreement, limits when private, first class or
business class air travel is allowed, sets reasonable limits for costs associated with
mileage, meals, and hotel accommodations, requires approval by the VNB Board
Chair for VNB's Chief Executive Officer, Chief Financial Officer, and Chief
Marketing Officer travel expenses as well as full disclosure of VNB's Chief
Executive Officer, Chief Financial Officer, and Chief Marketing Officer travel
expenses to the full VNB Board, and requires adequate documentation to
substantiate all expenditures and reimbursements, including but not limited to,
receipts, invoices, and statements;
• A conflict -of -interest policy applicable to VNB staff and VNB Board members that
requires VNB executive officers, including but not necessarily limited to, the Chief
Executive Officer, Chief Financial Officer, and Chief Marketing Officer to annually
file FPPC Form 700 Statement of Economic Interests for all Form 700 categories,
and additionally, includes procedures which ensure compliance with the applicable
provisions of:
o California Corporations Code,
o Internal Revenue Service best practices,
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o Political Reform Act, and
o Government Code §1090;
• Policies and procedures to ensure that none of the funds provided pursuant to this
Agreement are used for any purpose other than the performance of this
Agreement; and
• Policies and procedures to ensure that none of the funds provided pursuant to this
Agreement shall be used to supplant or replace any other funds that are allocated
to, or intended for, the same activity.
Governance:
VNB expressly agrees that it shall adhere to the following:
• VNB shall only spend funds in accordance with the approved budget;
• The compensation and benefits for VNB's Chief Executive Officer shall be
approved by the full VNB Board. The compensation and benefits for VNB's other
executive officers, including but not limited to, the Chief Financial Officer, and Chief
and Chief Marketing Officer shall be approved by the Chief Executive Officer. VNB
Board Members shall be able to view individual employee salary and benefit
information that is paid by TOT funds upon request;
• Unless previously approved by the City Council in the biennial budget, as amended
from time to time, VNB shall seek City Council approval before obligating itself in
any way to pay any "fixed operating costs" by One -Hundred Thousand Dollars
($100,000) or more in any twelve (12) month period. The City Council may
approve, deny or modify the request. "Fixed operating costs" is defined as any
expenditure, other than a one (1) time expenditure, that commits VNB to an on-
going fiscal obligation;
• VNB shall not comingle any compensation received under this Agreement with
compensation from any other entity;
• VNB shall ensure that the MAP covers its proportional share of all the foregoing
costs/expenses set forth in this subsection including, but not limited to
costs/expenses for employees working on MAP -related services, including
offsetting costs of any VNB executive -level employee whose time is taken for MAP -
related activities. VNB shall track all shared expenses and their allocation between
Visit Newport Beach Inc. Page A-6 17-22
the City and the MAP. The proportional costs and how the costs are calculated
should be reviewed annually and reported to the VNB Board.
• VNB shall not pay for any costs that are for the benefit of another entity and not
the City;
• VNB shall not transfer any money to or contract with the MAP or any entity that is
a parent, affiliate or subsidiary of VNB to provide services to VNB. This provision
shall not prevent the MAP from contracting with VNB so that VNB can provide the
MAP with marketing services. VNB shall not allow any entity that it contracts with
to subcontract with the MAP or any company that is a parent, affiliate or subsidiary
of VNB;
• VNB shall not spend any compensation received pursuant to this Agreement on
political activities or for political purposes. No executive officer of VNB shall have
any role in the leadership of a Political Action Committee and no VNB paid staff
time shall be used for political purposes;
• The VNB Board shall approve sponsorships/grants to any person, entity, group or
event that cumulatively exceeds Ten Thousand Dollars ($10,000) but is less than
Fifty Thousand Dollars ($50,000), in any fiscal year. City Council approval shall be
required of any sponsorship/grants to any person, entity, group or event that is
equal to or exceeds Fifty Thousand Dollars ($50,000), in any fiscal year. VNB shall
ensure that the City is credited for any event sponsorship or grants that are paid
for with compensation received under this Agreement;
• VNB shall provide, without cost to the entity hosting the event, Twenty -Five
Thousand Dollars ($25,000) of marketing support services for the event known as
the Newport Beach Christmas Boat Parade. The Commodores Club of the
Newport Beach Chamber of Commerce has traditionally hosted the event known
as the Newport Beach Christmas Boat Parade;
• By June 30, 2025, VNB shall take action so that it is governed by a seven (7)
member Board of Directors that shall be the only voting board governing the affairs
of VNB. The City Manager and the City Finance Director shall serve as two (2) of
the seven (7) full voting members of the VNB Board. VNB expressly agrees that
Visit Newport Beach, Inc., and Newport Beach & Company will be merged into a
single entity and no longer be two separate entities by June 30, 2025;
• The City shall have the right to have a representative on any Ad Hoc Committee;
and
Visit Newport Beach Inc. Page A-7 17-23
• VNB shall notify the City Manager and the City Finance Director of any and all
meetings of the VNB Board of Directors not less than 72 hours before each
meeting.
VNB shall provide the City with a copy of all tax filings and communications with the
Internal Revenue Service or State Franchise Tax Board including, but not limited to its
Form 990 filings tax forms, within five (5) business days of filing said tax forms or
sending/receiving said communications.
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EXHIBIT B
TRANSFER OF TOT FOR SERVICES
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EXHIBIT B
TRANSFER OF TOT FOR SERVICES
City shall provide VNB with twenty three percent (23%) of the City's annual total
commercial transient occupancy tax ("TOT") collected from operators, excluding TOT
collected from short-term lodging operators/operations, pursuant to Newport Beach
Municipal Code Chapters 3.16, and 3.28. The funds provided shall not include any other
tax, fee, or assessment including, but not limited to, any fee paid to the City for the right
to develop timeshares.
Funds shall be forwarded electronically to VNB monthly on the twentieth (20th) day
of each month following the receipt of TOT funds from operators, other than short-term
lodging operators/operations, during the term of this Agreement.
Visit Newport Beach Inc. Page B-2 17-26
November 12, 2024
Item No. 17
Exhibit C to Agreement
EXHIBIT C
INSURANCE REQUIREMENTS — PROFESSIONAL SERVICES
Provision of Insurance. Without limiting VNB's indemnification of City, and prior to
commencement of Work, VNB shall obtain, provide and maintain at its own
expense during the term of this Agreement, policies of insurance of the type and
amounts described below and in a form satisfactory to City. VNB agrees to provide
insurance in accordance with requirements set forth here. If VNB uses existing
coverage to comply and that coverage does not meet these requirements, VNB
agrees to amend, supplement or endorse the existing coverage.
2. Acceptable Insurers. All insurance policies shall be issued by an insurance
company currently authorized by the Insurance Commissioner to transact
business of insurance in the State of California, with an assigned policyholders'
Rating of A- (or higher) and Financial Size Category Class VII (or larger) in
accordance with the latest edition of Best's Key Rating Guide, unless otherwise
approved by the City's Risk Manager.
3. Coverage Requirements.
A. Workers' Compensation Insurance. VNB shall maintain Workers'
Compensation Insurance, statutory limits, and Employer's Liability
Insurance with limits of at least one million dollars ($1,000,000) each
accident for bodily injury by accident and each employee for bodily injury by
disease in accordance with the laws of the State of California.
VNB shall submit to City, along with the certificate of insurance, a Waiver of
Subrogation endorsement in favor of City, its City Council, boards and
commissions, officers, agents, volunteers and employees.
B. General Liability Insurance. VNB shall maintain commercial general liability
insurance, and if necessary, excess/umbrella liability insurance, with
coverage at least as broad as provided by Insurance Services Office form
CG 00 01, in an amount not less than two million dollars ($2,000,000) per
occurrence, four million dollars ($4,000,000) general aggregate. The policy
shall cover liability arising from bodily injury, property damage, personal and
advertising injury, and liability assumed under an insured contract (including
the tort liability of another assumed in a business contract).
C. Automobile Liability Insurance. VNB shall maintain automobile insurance at
least as broad as Insurance Services Office form CA 00 01 covering bodily
injury and property damage for all activities of VNB arising out of or in
connection with Work to be performed under this Agreement, including
coverage for any owned, hired, non -owned or rented vehicles, in an amount
not less than one million dollars ($1,000,000) combined single limit each
accident.
D. Professional Liability (Errors & Omissions) Insurance. VNB shall maintain
professional liability insurance that covers the Services to be performed in
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connection with this Agreement, in the minimum amount of two million
dollars ($2,000,000) per claim and four million dollars ($4,000,000) in the
aggregate. Any policy inception date, continuity date, or retroactive date
must be before the Effective Date of this Agreement and VNB agrees to
maintain continuous coverage through a period no less than three years
after completion of the Services required by this Agreement._
E. Criminal Conduct Insurance in an amount not less than two million dollars
($2,000,000) with coverage including, but not limited to theft, forgery,
alteration, computer fraud and funds transfer fraud.
F. Excess/Umbrella Liability Insurance shall be "following form" of the
underlying policy coverage, terms, conditions, and provisions and shall
meet all the insurance requirements stated in this Agreement, including, but
not limited to the additional insured, primary & non-contributory and waiver
of subrogation insurance requirements stated herein. No insurance policies
or self-insurance maintained by the Lessor, whether primary, reinsurance
or excess, and which also apply to a loss covered hereunder, shall be called
upon to contribute to a loss until Lessee's primary and excess/umbrella
liability policies are exhausted.
4. Other Insurance Requirements. The policies are to contain, or be endorsed to
contain, the following provisions:
A. Waiver of Subrogation. All insurance coverage maintained or procured
pursuant to this Agreement shall be endorsed to waive subrogation against
City, its City Council, boards and commissions, officers, agents, volunteers
and employees or shall specifically allow VNB or others providing insurance
evidence in compliance with these requirements to waive their right of
recovery prior to a loss. VNB hereby waives its own right of recovery against
City and shall require similar written express waivers from each of its
subconsultants.
B. Additional Insured Status. All liability policies including general liability,
excess/umbrella liability, pollution liability, and automobile liability, if
required, but not including professional liability and crime, shall provide or
be endorsed to provide that City, its City Council, boards and commissions,
officers, agents, volunteers and employees shall be included as insureds
under such policies.
C. Primary and Noncontributory. All liability coverage shall apply on a primary
basis and shall not require contribution from any insurance or self-insurance
maintained by City.
D. Notice of Cancellation. All policies shall provide City with thirty (30) calendar
days' notice of cancellation (except for nonpayment for which ten (10)
calendar days' notice is required) or nonrenewal of coverage for each
required coverage.
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5. Additional Agreements Between the Parties. The parties hereby agree to the
following:
A. Evidence of Insurance. VNB shall provide certificates of insurance to City
as evidence of the insurance coverage required herein, along with a waiver
of subrogation endorsement for workers' compensation and other
endorsements as specified herein for each coverage. Insurance certificates
and endorsement must be approved by City's Risk Manager prior to
commencement of performance. Current certification of insurance shall be
kept on file with City at all times during the term of this Agreement. The
certificates and endorsements for each insurance policy shall be signed by
a person authorized by that insurer to bind coverage on its behalf. At least
fifteen (15) calendar days prior to the expiration of any such policy, evidence
of insurance showing that such insurance coverage has been renewed or
extended shall be filed with the City. If such coverage is cancelled or
reduced, VNB shall, within ten (10) calendar days after receipt of written
notice of such cancellation or reduction of coverage, file with the City
evidence of insurance showing that the required insurance has been
reinstated or has been provided through another insurance company or
companies. City reserves the right to require complete, certified copies of
all required insurance policies, at any time.
B. City's Right to Revise Requirements. City reserves the right at any time
during the term of the Agreement to change the amounts and types of
insurance required by giving VNB sixty (60) calendar days' advance written
notice of such change. If such change results in substantial additional cost
to VNB, City and VNB may renegotiate VNB's compensation.
C. Subcontractor Insurance. VNB shall require and verify that all
subcontractors maintain insurance meeting all the requirements stated
herein, and VNB shall ensure that City is an additional insured on insurance
required from subcontractors. For CGL coverage, subcontractors shall
provide coverage with a format at least as broad as CG 20 38 04 13.
D. Reserved.
E. Requirements not Limiting. Requirements of specific coverage features or
limits contained in this Section are not intended as a limitation on coverage,
limits or other requirements, or a waiver of any coverage normally provided
by any insurance. Specific reference to a given coverage feature is for
purposes of clarification only as it pertains to a given issue and is not
intended by any party or insured to be all inclusive, or to the exclusion of
other coverage, or a waiver of any type. If the VNB maintains higher limits
than the minimums shown above, the City requires and shall be entitled to
coverage for higher limits maintained by the VNB. Any available insurance
proceeds in excess of the specified minimum limits of insurance and
coverage shall be available to the City.
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F. Self -insured Retentions. Any self -insured retentions must be declared to
and approved by City. City reserves the right to require that self -insured
retentions be eliminated, lowered, or replaced by a deductible. Self-
insurance will not be considered to comply with these requirements unless
approved by City.
G. City Remedies for Non -Compliance. If VNB or any subconsultant fails to
provide and maintain insurance as required herein, then City shall have the
right but not the obligation, to purchase such insurance, to terminate this
Agreement, or to suspend VNB's right to proceed until proper evidence of
insurance is provided. Any amounts paid by City shall, at City's sole option,
be deducted from amounts payable to VNB or reimbursed by VNB upon
demand.
H. Timely Notice of Claims. VNB shall give City prompt and timely notice of
claims made or suits instituted that arise out of or result from VNB's
performance under this Agreement, and that involve or may involve
coverage under any of the required liability policies. City assumes no
obligation or liability by such notice, but has the right (but not the duty) to
monitor the handling of any such claim or claims if they are likely to involve
City.
I. VNB's Insurance. VNB shall also procure and maintain, at its own cost and
expense, any additional kinds of insurance, which in its own judgment may
be necessary for its proper protection and prosecution of the Work.
Visit Newport Beach Inc. Page C-4
Attachment B
AGREEMENT BETWEEN THE CITY OF NEWPORT BEACH AND
VISIT NEWPORT BEACH INC. FOR
TOURISM PROMOTION, BRANDING, AND MARKETING SERVICES
THIS TOURISM PROMOTION, BRANDING, AND MARKETING AGREEMENT
("Agreement"), is made and entered into on this 27'h day September, 2011 ("Effective
Date"), by and between the City of Newport Beach, a California municipal corporation
and charter city ("City") and Visit Newport Beach Inc., a California nonprofit corporation
and an IRC 501(c)(6) destination marketing organization ("VNB"). City and VNB are at
times individually referred to herein as "Party" and collectively as "Parties."
RFrITBI S
A. City is a municipal corporation duly organized and validly existing under the laws
of the State of California with the power to carry on its business as it is now being
conducted under the statutes of the State of California and the City's Charter.
B. VNB is a 501(c)(6) marketing organization whose mission is to partner with the
City and the tourism and hospitality industry by protecting and promoting the
City's brand and to deliver additional spending by leisure and conference visitors,
leading to enhanced community economic vitality and quality of life.
C. VNB serves as the owners' association to the City's Tourism Business
Improvement District's pursuant to an agreement between the City and the VNB
dated July 1, 2009,
D. City and VNB operate under a May 12, 2004 agreement ("Original Agreement")
whereby the VNB receives a portion of the City's transient occupancy tax ("TOT")
to fund marketing efforts and the promotion of tourism within the City.
E. City and VNB amended the Original Agreement on March 10, 2009 to extend its
term and revise Recital "B" to clarify the taxes that comprise TOT under the
Original Agreement.
F. City and VNB desire to terminate the Original Agreement, as amended, in its
entirety and replace it with this Agreement.
NOW, THEREFORE, it is mutually agreed by and between the Parties as follows:
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City of Newport Beach 17_28
AGREEMENT
1. INCORPORATION OF RECITALS
The Recitals provided above are true and correct and incorporated into the
operative part of this Agreement.
2. TERMINATION OF ORIGINAL AGREEMENT
Notwithstanding the termination language provided in Section 10 of the Original
Agreement, the Original Agreement and any amendments thereto shall be terminated
and of no further effect upon the execution of this Agreement by the Parties.
3. TERM
This Agreement shall be effective on the date first written above, the Effective
Date, and shall terminate on June 30, 2016, unless terminated earlier as provided
herein.
4. SCOPE OF SERVICES
At a minimum and in a manner consistent with standard practices in the tourism
and hospitality industry ("Standard Practices") VNB shall develop, plan., carry out, and
supervise a program to market and promote the Newport Beach brand and to promote
tourism in, and serve the needs of, visitors to Newport Beach as well as increase the
amount of TOT collected through their promotional activities ("Services"). Subject to the
foregoing sentence, the Services shall, at a minimum, include the following:
a) The maintenance of suitable office space and the employment of competent
personnel to properly carry out promotional, branding, and marketing duties;
b) The preparation of brochures, publications, guides, on-line promotions, social
networking efforts, and other marketing materials and information that inform
prospective tourists and visitors of the recreational activities, cultural assets,
shopping and dining opportunities, night-time stay opportunities, and natural
beauty of Newport Beach.
c) The dissemination of information described in this section by way of the
media, direct mail, handouts, social networking, websites, smart phone
applications, or other means of distribution, and
d) The development and implementation of specific marketing programs
designed to increase awareness of the Newport Beach brand and to increase
business and visitor trade in Newport Beach; and
2
City of Newport Beach „_,
e) Any additional Services when proposed by the City which are consistent with
the promotion of tourism and the Newport Beach brand which are mutually
agreeable and acceptable to the Parties.
5. TIME OF PERFORMANCE
Time is of the essence in the performance of this Agreement by both Parties, and
VNB shall perform all Services to completion in a diligent and timely manner.
6. REPORTS TO THE CITY
In accordance with the Standard Practices, the following reports shall be
submitted by VNB to the City within the time frame set forth below. The reports shall be
subject to review and approval or modification by the City where noted below:
a) Performance Standards Report. In time for presentation to the City Council
by the City Council's second meeting in July of each year, VNB shall annually
set and update performance standards ("Performance Standards") that
correspond with VNB's approved goals, as set by the VNB's Board of
Directors ("Board"). The City Council shall review this report.
b) Annual Marketing Plan. In time for presentation to the City Council by the
City Council's second meeting in July of each year, VNB shall annually
prepare and its Board shall adopt an Annual Marketing Plan describing its
marketing and branding effort for the upcoming fiscal year. The City Council
shall review this report.
c) Budget. In time for presentation to the City Council by the City Council's
second meeting in July of each year, VNB shall annually prepare and its
Board shall adopt an annual budget for the twelve (12) month fiscal year that
begins each July 1. The budget shall describe the revenues and
expenditures required to meet the Performance Standards and Annual
Marketing Plan obligations. The City Council shall review the budget and
approve and/or modify and approve the budget. Once the annual budget is
approved by the City Council, the City Council shall review and approve or
deny any proposed budget amendments that increase VNB's "fixed operating
costs" by One -Hundred Thousand Dollars ($100,000) or more in any one (1)
year. "Fixed operating costs" is defined as any expenditure, other than a one-
time expenditure, that commits VNB to an on -going fiscal obligation.
d) Audited Financial Statements. By September 30th of each year, VNB shall
submit to the City audited. financial statements for its most recently ended
fiscal year, including any management letter associated with the audited
financial statements. The City Council shall review the audited financial
statements and management letter.
3
City of Newport.Beach 730
e) Expenditure Report. By September 30th of each year, VNB shall submit an
expenditure report which shall be certified by VNB and a Certified Public
Accountant to the effect that the funds received pursuant to this Agreement
were expended in accordance with this Agreement in the previous fiscal year
for purposes authorized by this Agreement. This report shall include
reasonable detail in support of the certification, including expenditures for or
contributions to special events and not -for -profit organizations in Newport
Beach.
7. INTERNAL PROCESSES AND CONTROLS
In accordance with Standard Practices, the Board shall adopt and enforce
internal policies and controls, including but not limited to:
a) Requests for Proposals for outside consultant services, including marketing
and independent auditing firms;
b) Travel and entertainment expense authorization and reimbursement,
including international travel;
c) Conflict of interest procedures that are applicable to VNB staff as well as
Board members in accordance with Internal Revenue Service practices; and
d) Use of external consultants for determination of compensation of executive
staff, as well as the establishment and evaluation of performance standards
for determining payment of incentive compensation, and other non -salary
compensation.
8. COMPENSATION
a) City shall pay VNB eighteen percent (18%) of the annual total TOT collected
by City ("Payment", "funds" or "City funds provided under this Agreement").
For the purposes of this Agreement, TOT shall only include the tax collected
under City Municipal Code Chapters 3.16 and 3.28 and shall not include any
other tax, fee, or assessment including, but not limited to, any fee paid to the
City for the right to develop timeshares. The Payment shall be electronically
distributed to VNB on a monthly basis on the twentieth (201h) day of each
month during the term of this Agreement.
b) Subject to the limitations set forth in this Section 8(b), City shall have the
right, in its sole discretion, to adjust the Payment (increase or decrease the
percentage of TOT paid to VNB) for any reason after notice to VNB and an
opportunity for VNB to formally comment on the adjustment. If the City
adjusts the Payment, it shall do so as a part of the City's once -annual budget
adoption process.
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City of Newport Beach ,,,
9. RIGHT TO AUDIT
City reserves the right to designate its own employee representative($) or its
contracted representatives with a Certified Public Accounting firm who shall have the
right to audit VNB's accounting procedures and internal controls of VNB's financial
systems and to examine any cost, revenue, payment, claim, other records or supporting
documentation resulting from any items set forth in this Agreement. Any such audit(s)
shall be undertaken by City or its representative(s) at mutually agreed upon reasonable
times, not more than once per year. City will make every attempt to finish audit timely
and VNB agrees to submit all records requested by City or its representative(s) in a
timely manner. VNB agrees to fully cooperate with any such audit(s).
This right to audit shall extend during the length of this Agreement and for a
period of three (3) years or longer, if required by law, following the date of any Payment
tendered under this Agreement. VNB agrees to retain all necessary
records/documentation for the entire length of this audit period, and to provide, upon
prior notice to VNB, access to VNB's auditors for this purpose.
The City will notify VNB in writing of any exception taken as a result of an audit.
If VNB disagrees with any such exceptions, VNB will notify City in writing within twenty
(20) days after the notification of exceptions to VNB. VNB and the City Manager or
his/her designee will then meet and attempt to resolve any discrepancies. VNB will be
provided an opportunity to include its written responses to audit exception items in the
final report of the audit. Any expenditure of funds for a purpose not authorized by this
Agreement shall be paid to City by VNB within thirty (30) days from presentation of
City's findings to VNB. If VNB fails to make such payment, VNB agrees to pay interest,
accruing monthly, at a rate of ten percent (10%) per annum. Interest will be computed
from the date of written notification of exception(s) to the date VNB reimburses City for
any exception(s).
10. VNB GOVERNANCE
The City Council shall appoint, at its sole discretion, one (1) person with
experience in matters of board governance, preferably either directly or indirectly in the
tourism or hospitality industry, to serve as a full voting member of the VNB's Executive
Committee. The City Council shall consult in advance with VNB on candidates for this
appointment. The City Manager or his/her designee shall serve as an ex-officio non-
voting member of the VNB's Board of Directors. VNB agrees that, except for any
portion of the meeting relating to confidential personnel matters, the City Manager or his
or her designee may attend but not vote at Executive Committee meetings.
VNB shall notify the City Manager and the City's board appointee of any and all
meetings of the Board of Directors and Executive Committee not less than 72 hours
before each meeting.
5
City of Newport Beach ,,,
11. ASSIGNABILITY
VNB shall not assign or otherwise transfer any of its rights or obligations
whatsoever in this Agreement without the prior written consent of City acting by and
through the City Manager.
12. COPYRIGHTS
If this Agreement results in any publication, in any form, which may be
copyrighted, the author is free to copyright the work, but City reserves a royalty -free
nonexclusive and irrevocable license to reproduce, publish or otherwise use and may
authorize others to use such materials for use in connection with official City programs
or activities; provided, however, that the City shall be bound by and responsible for the
payment of any contracts VNB may have entered into, at City's direction, regarding
copyrighted material.
13. OFFICE SPACE
VNB shall maintain office space within the City's corporate boundaries.
14. INDEMNIFICATION
To the fullest extent permitted by law, VNB shall indemnify, defend and hold
harmless City, its City Council, boards and commissions, officers, agents, volunteers
and employees (collectively, the "Indemnified Parties") from and against any and all
claims (including, without limitation, claims for bodily injury, death or damage to
property), demands, obligations, damages, actions, causes of action, suits, losses,
judgments, fines, penalties, liabilities, costs and expenses (including, without limitation,
attorneys' fees, disbursements and court costs) of every kind and nature whatsoever
(individually, a Claim; collectively, "Claims"), which may arise from or in any manner
relate (directly or indirectly) to the negligence, recklessness, or misconduct of the VNB
or its principals, officers, agents, employees, vendors, suppliers, subconsultants,
subcontractors, anyone employed directly or indirectly by any of them or for whose acts
they may be liable or any or all of them.
Notwithstanding the foregoing, nothing herein shall be construed to require VNB
to indemnify the Indemnified Parties from any Claim arising from the sole negligence,
active negligence or willful misconduct of the Indemnified Parties. Nothing in this
indemnity shall be construed as authorizing any award of attorney's fees in any action
on or to enforce the terms of this Agreement. This indemnity shall apply to all claims
and liability regardless of whether any insurance policies are applicable. The policy
limits do not act as a limitation upon the amount of indemnification to be provided by
VNB.
0
City of Newport Beach ,,,,
15. NO WAIVER OF RIGHTS
A waiver by either Party of any breach, of any term, covenant or condition
contained herein shall not be deemed to be a waiver of any subsequent breach of the
same or any other term, covenant or condition contained herein, whether of the same or
a different character.
16. INSURANCE
Without limiting VNB's indemnification of City, and prior to commencement of
Services, VNB shall obtain, provide and maintain at its own expense during the term of
this Agreement, policies of insurance of the type and amounts in a form satisfactory to
City.
17. NOTICES
Any notice, demand, request, consent, approval, or communication that either
Party desires or is required to give to the other Party or to any other person shall be in
writing and either served personally or sent by pre -paid, first-class mail. Any notice,
demand, request, consent, approval, or communication that either Party desires or is
required to give to the other Party shall be addressed as follows:
If to VNB: Visit Newport Beach Inc.
Attn: President & CEO
1200 Newport Center Drive, Suite 120
Newport Beach, CA 92660-6904
After November 14, 2011:
Visit Newport Beach Inc.
Attn: President & CEO
1600 Newport Center Drive, Suite 120
Newport Beach, California 92660-6210
If to City: City of Newport Beach
Attn: City Manager
3300 Newport Blvd.
P.O. Box 1768
Newport Beach, CA 92658-8915
With a cc to: City of Newport Beach
Attn: Finance Director
3300 Newport Blvd.
P.O. Box 1768
Newport Beach, CA 92658-8915
7
City of Newport Beach ,,,,
Either Party may change its address by notifying the other Party of the change of
address. Notice shall be deemed given within three (3) days after the date of mailing, if
mailed as provided in this Section.
18. CONFLICTS OF INTEREST
VNB or its employees may or may not be subject to the provisions of the
California Political Reform Act of 1974 ("Act") which (among other provisions): (1)
requires public officials to disclose any financial interest that may foreseeably be
materially affected by the Services performed under this Agreement; and (2) prohibits
public officials from making, or participating in making, decisions that will foreseeably
financially affect such interest.
If subject to the Act, VNB shall conform to applicable requirements of the Act.
Failure to do so constitutes a material breach and is grounds for immediate termination
of this Agreement by City. VNB shall indemnify and hold harmless City for any and all
claims for damages resulting from VNB's violation of this Section. Upon request of the
City, VNB shall provide all approved conflict of interest forms to the City that are
required under the Act.
19. CLAIMS
VNB and City expressly agree that -in addition to any claims filing requirements
set forth in this Agreement, VNB shall be required to file any claim VNB may have
against the City in strict conformance with the Tort Claims Act (Government Code
Sections 900 et seq.).
20. TERMINATION
In the event that either Party fails or refuses to perform any of the provisions of
this Agreement at the time and in the manner required, that Party shall be deemed in
default in the performance of this Agreement. If such default is not cured within a period
of fourteen (14) calendar days, or if more than fourteen (14) calendar days are
reasonably required to cure the default and the defaulting Party fails to give adequate
assurance of due performance within fourteen (14) calendar days after receipt of written
notice of default, specifying the nature of such default and the steps necessary to cure
such default, and thereafter diligently take steps to cure the default, the non -defaulting
Party may terminate the Agreement forthwith by giving to the defaulting Party written
notice thereof.
Notwithstanding the above provisions, City shall have the right, at its sole
discretion and without cause, of terminating this Agreement at any time by giving one
year's (365 calendar days) prior written notice to VNB. The written notice of termination
without cause must be authorized by the City Council at a regular or special meeting.
to
City of Newport Beach ,,,,
21. INDEPENDENT CONTRACTOR
It is understood that City retains VNB on an independent contractor basis and
VNB is not an agent or employee of City. The manner and means of conducting the
Services are under the control of VNB, except to the extent they are limited by statute,
rule or regulation and the expressed terms of this Agreement. Nothing in this
Agreement shall be deemed to constitute approval for VNB or any of VNB's employees
or agents, to be the agents or employees of City. VNB shall have the responsibility for
and control over the means of performing the Services, provided that VNB is in
compliance with the terms of this Agreement. Anything in this Agreement that may
appear to give City the right to direct VNB as to the details of the performance or to
exercise a measure of control over VNB shall mean only that VNB shall follow the
desires of City with respect to the results of the Services.
22. STANDARD PROVISIONS
a) Compliance With all Laws
VNB shall at its own cost and expense comply with all statutes, ordinances,
regulations and requirements of all governmental entities, including federal, state,
county or municipal, whether now in force or hereinafter enacted. In addition, all
Services performed by VNB shall conform to applicable City, county, state and
federal laws, rules, regulations and permit requirements.
b) Integrated Agreement
This Agreement represents the full and complete understanding of every kind or
nature whatsoever between the Parties hereto, and all preliminary negotiations
and agreements of whatsoever kind or nature are merged herein. No verbal
agreement or implied covenant shall be held to vary the provisions herein.
c) Conflicts or Inconsistencies
In the event there are any conflicts or inconsistencies between this Agreement
and any attachments attached hereto, the terms of this Agreement shall govern.
d) Interpretation
The terms of this Agreement shall be construed in accordance with the meaning
of the language used and shall not be construed for or against either Party by
reason of the authorship of the Agreement or any other rule of construction which
might otherwise apply.
e) Amendments
This Agreement may be modified or amended only by a written document
executed by both VNB and City and approved as to form by the City Attorney.
A
City of Newport Beach
17-36
f) Severability
If any term or portion of this Agreement is held to be invalid, illegal, or otherwise
unenforceable by a court of competent jurisdiction, the remaining provisions of
this Agreement shall continue in full force and effect.
g) Controlling Law and Venue
The laws of the State of California shall govern this Agreement and all matters
relating to it and any action brought relating to this Agreement shall be
adjudicated in a court of competent jurisdiction in the County of Orange.
h) Equal Opportunity Employment
VNB represents that it is an equal opportunity employer and it shall not
discriminate against any subcontractor, employee or applicant for employment
because of race, religion, color, national origin, handicap, ancestry, sex, sexual
orientation or age.
i) No Attorney's Fees
In the event of any dispute or legal action arising under this Agreement, the
prevailing Party shall not be entitled to attorneys' fees.
j) Counterparts
This Agreement may be executed in two (2) or more counterparts, each of which
shall be deemed an original and all of which together shall constitute one (1) and
the same instrument.
k) Good Faith, Due Diligence, and Fair Dealing
VNB and the City of Newport Beach shall exercise good faith, due diligence, and
fair dealing toward one another in carrying out the terms of this Agreement.
Rev 0825.11
[SIGNATURES ON FOLLOWING PAGE]
10
City of Newport Beach ,,,,
IN WITNESS WHEREOF. the Parties hereto have caused this Agreement to be
executed on the dates hereinafter respectively set forth.
Date:
Date:
i.3M,l
APPROVED AS TO FORM:
CITY ATTOR '&,OFFICE
Aaron --Karp
City Attorney
Date?hSz/1
CITY OF N�WPORT B�ACH,
a California m nicipal dorporation
By
Mic ael F. Hen
Mayor
ATTEST n
1 UW" r.11i V I I
Leilani Brown
City Clerk U ?
-0
col
VISIT NEWPORT BEACH INC., a
Cal ifo nonprofit corporation and
an I C 5 q 1(c)(6) rE in rganization
B
Pri mee a
-
Title;
By
Printed Narne
Title CA4/,-'-"�
[END OF SIGNATURES]
11
�iYy cif Nuwport Beach
17-38
AMENDMENT NO, ONE TO
AGREEMENT BETWEEN THE CITY OF NEWPORT BEACH AND
VISIT NEWPORT BEACH, INC. FOR
TOURISM PROMOTION, BRANDING AND MARKETING SERVICES
THIS AMENDMENT NO, ONE TO TOURISM PROMOTION, BRANDING AND
MARKETING SERVICES AGREEMENT ("Amendment No, One") is made and entered
into as of this 28th day of January, 2014 ("Effective Date"), by and between the City of
Newport Beach, a California municipal corporation and charter city ("City") and Visit
Newport Beach, Inc., a California nonprofit corporation and an IRC 501(c)(8) destination
marketing organization ("VNB"), whose address is 1600 Newport Center Drive, Suite
120, Newport Beach, CA 02660, and is made with reference to the following:
RECITALS
A. On September 27, 2011, City and VNB entered into a Tourism Promotion,
Branding and Marketing Services Agreement ("Agreement") for destination
marketing services.
B. The parties desire to enter into this Amendment No. One to extend the term of
the Agreement to December 31, 2024, to switch from an annual to biennial
budget process, to update contact information, and to add public benefit funding.
C. City and VNB mutually desire to amend the Agreement, as provided below.
NOW, THEREFORE, it is mutually agreed by and between the undersigned
parties as follows:
1. TERM
Section 3 of the Agreement is amended in its entirety and replaced with the
following: "The term of this Agreement shall commence on September 27, 2011, and
shall terminate on December 31, 2024, unless terminated earlier as set forth herein."
2. REPORTS TO THE CITY
Section 6(c) of the Ay
following; "(c) Budget.
Council's second meeting in
prepare and its Board shall
fiscal years that begin eac
expenditures required to me
obligations. The City Count
approve the budget. Once tl
Council shall review and a
increase VNB's "fixed opera
($100,000.00) or more in e
defined as any expenditure,
an on -going fiscal obligation,"
reement is amended in its entirety and replaced with the
In time for presentation to the City Council by the City
July of each even numbered year of the term, VNB shall
idopt a biennial budget for the two (2) twelve (12) month
i July 1. The budget shall describe the revenues and
.t the Performance Standards and Annual Marketing Plan
it shall review the budget and approve and/or modify and
e biennial budget is approved by the City Council, the City
)prove or deny any proposed budget amendments that
ing costs" by One -Hundred Thousand Dollars and 00/100
ny twelve (12) month period. "Fixed operating costs" is
)ther than a one (1) time expenditure, that commits VNB to
Visit Newport Beach, Inc, - Page 1
V I I V Y ITV f.J V I L O G G lr I I
17-39
3. NOTICES
Section 17 of the Agreement is amended in its entirety and replaced with the
following: "Any notice, demand, request, consent, approval, or communication that
either Party desires or is required to give to the other Party or to any other person shall
be in writing and either served personally or sent by pre -paid, first-class mail. Any
notice, demand, request, consent, approval, or communication that either Party desires
or is required to give to the other Party shall be addressed as follows:
If to VNB: Visit Newport Beach Inc,
Attn: President & CEO
1600 Newport Center Drive, Suite 120
Newport Beach, CA 92660-6210
If to City: City of Newport Beach
Attn: City Manager
100 Civic Center Drive
P.O. Box 1768
Newport Beach, CA 92660
With a copy to: City of Newport Beach
Attn: Finance Director
100 Civic Center Drive
P.O. Box 1768
Newport Beach, CA 92660
Either Party may change its address by notifying the other Party of the change of
address. Notice shall be deemed given within three (3) days after the date of mailing, if
mailed as provided in this Section."
4. PUBLIC BENEFIT FUNDING
Section 23 shall be added into the Agreement and read as follows: "VNB shall
contribute One Hundred Fifty Thousand Dollars and 00/100 ($150,000.00) per year,
commencing annually June 1, 2014, to the City of Newport Beach for expenditure on
programs or activities (e.g,, public art, cultural and promotional activities, beautification
projects, etc,) that benefit the public, as determined by the City Council. The
contribution shall be made annually to the City in two (2) equal installments of Seventy -
Five Thousand Dollars and 00/100 ($75,000.00) payable on June 1 and December 1."
� 111 LN k Mel ;ZA d A 9X0091 j! k 9
Except as expressly modified herein, all other provisions, terms, and covenants
set forth in the Agreement shall remain unchanged and shall be in full force and effect.
[SIGNATURES ON NEXT PAGE]
Visit Newport Beach, Inc, I 1A(=VVPU1 L OUCIU I Page 2 17-40
IN WITNESS WHEREOF, the parties have caused this Amendment No. One to
be executed on the dates written below.
APPROVED AS TO FORM:
CITY ATTORNE 'S OFFICE
Date: Z 110 11
By: � (f.r
Aaron C. H'ar
City Attorney
ATTEST:
Date:
CITY OF NEWPORT BEACH,.
a California municipal corporation
Date: 'Z.P "7. 14
By:
Rush 1 . Hill, II
Mayor
VNB: Visit Newport Beach, Inc., a
California nonprofit corporation and an IRC
501(c)(6) destination marketing
organization
Date; ,,--
By: C I B
Leilani ! Brown
City Clerk
C
1.9
Chair of the Board
[END OF SIGNATURES]
Visit Newport Beach, Inc. V I 1 C W[' V 1 L 0 U d(�� Page 3
1"' 17-41
AMENDMENT NO. TWO TO
AGREEMENT BETWEEN THE CITY OF NEWPORT BEACH AND
VISIT NEWPORT BEACH, INC. FOR
\ TOURISM PROMOTION, BRANDING AND MARKETING SERVICES
THIS AMENDMENT NO. TWO TO TOURISM PROMOTION, BRANDING AND
MARKETING SERVICES AGREEMENT ("Amendment No. Two") is made and entered
into as of this 5 day of August, 2015 ("Effective Date"), by and between the City of
Newport Beach, a California municipal corporation and charter city ("City"), and Visit
Newport Beach, Inc., a California nonprofit corporation and an IRC 501(c)(6) destination
marketing organization ("VNB"), whose address is 1600 Newport Center Drive, Suite
120, Newport Beach, CA 92660, and is made with reference to the following:
RECITALS
A. On September 27, 2011, City and VNB entered into a Tourism Promotion,
Branding and Marketing Services Agreement ("Agreement") for destination
marketing services.
B. On January 28, 2014, the parties entered into Amendment No. One to extend the
term of the Agreement to December 31, 2024, to switch from an annual to
biennial budget process, to update contact information, and to add public benefit
funding.
C. On August 12, 2014, the City Council authorized the City Manager to enter into a
second amendment to the Agreement to change the reporting timeline for the
Performance Standards, Marketing Goals, and the Marketing Plan from annual to
biennial to correspond with the biennial budget reporting timeline.
D. The parties desire to enter into this Amendment No. Two to implement the City
Council's direction from August 12, 2014.
E. City and VNB mutually desire to amend the Agreement, as provided below.
NOW, THEREFORE, it is mutually agreed by and between the undersigned
parties as follows:
1. PERFORMANCE STANDARDS REPORT
Section 6(a) of the Agreement is amended in its entirety and replaced with the
following: "(a) Performance Standards Report. In time for presentation to the City
Council by the City Council's second meeting in July of each even numbered year of the
term, VNB shall set and update performance standards ("Performance Standards") that
correspond with VNB's approved goals, as set by the VNB Board of Directors ("Board")
for the two (2) twelve (12) month fiscal years that begin each July 1. The City Council
shall review this report."
Visit Newport Beac fty*��a� ��vvNvrt Beach Page 1
17-42
2. BIENNIAL MARKETING PLAN
Section 6(b) of the Agreement is amended in its entirety and replaced with the
following: "(b) Biennial Marketing Plan. In time for presentation to the City Council
by the City Council's second meeting in July of each even numbered year of the term,
VNB shall prepare and its Board shall adopt a Biennial Marketing Plan, describing
VNB's marketing and branding efforts, for the two (2) twelve (12) month fiscal years that
begin each July 1. The City Council shall review this report."
3. REPORTS TO THE CITY
Section 6(c) of the Agreement is amended in its entirety and replaced with the
following: "(c) Budget. In time for presentation to the City Council by the City
Council's second meeting in July of each even numbered year of the term, VNB shall
prepare and its Board shall adopt a biennial budget for the two (2) twelve (12) month
fiscal years that begin each July 1. The budget shall describe the revenues and
expenditures required to meet the Performance Standards and Biennial Marketing Plan
obligations. The City Council shall review the budget and approve and/or modify and
approve the budget. Once the biennial budget is approved by the City Council, the City
Council shall review and approve or deny any proposed budget amendments that
increase VNB's "fixed operating costs" by One -Hundred Thousand Dollars and 00/100
($100,000.00) or more in any twelve (12) month period. "Fixed operating costs" is
defined as any expenditure, other than a one (1) time expenditure, that commits VNB to
an on -going fiscal obligation."
4. INTEGRATED CONTRACT
Except as expressly modified herein, all other provisions, terms, and covenants
set forth in the Agreement shall remain unchanged and shall be in full force and effect.
[SIGNATURES ON NEXT PAGE]
Visit Newport Beach, Inc. Page 2
ji i1CWPV1 L UVOLA i
17-43
IN WITNESS WHEREOF, the parties have caused this Amendment No. Two to
be executed on the dates written below.
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
Date: 9 /lr / /.As-
Cf - ((,.r �
Aaron C. R'w
City Attorney
ATTEST: 6115
Date: _t
By: "4�
Leilani I. Brown
City Clerk
a6W
CITY OF NEWPORT BEACH,
a California municipal corporation
Date: R141 C,
By: G_l
Dave I{i
City Manager
VNB: Visit Newport Beach, Inc., a
California nonprofit corporation and an IRC
501(c)(6) destination marketing
oraanization
Chair of the Board
[END OF SIGNATURES]
Visit Newport Beach, Inc. Page 3
J1 11CWNVi L ucaUi i
17-44
ATTACHMENT C
Tourism Promotion, Branding and Marketing Services Agreement - Proposed Key Terms
F]
Topic
Tcurrent
Proposed
18% of all Transient Occupancy
23% of commercial (hotel) TOT
1
Transfer of Funds
Tax (TOT) to Visit Newport
to VNB annually.
Beach, Inc. VNB annually.
2
Public Benefit Funding
VNB contributes $150,000 per
Term deleted.
year to the City.
City contract is currently with
Consolidate Newport Beach &
3
Operating Companies
Visit Newport Beach, Inc.
Company and Visit Newport
Beach Inc. into one nonprofit
company by June 30, 2025.
City has one board seat of
Consolidated company to have
seven on executive board of
a 7-member board of directors
VNB only.
which will be the only voting
4
Board Representation
board. City to have two seats on
consolidated company board -
City Manager and Finance
Director.
5
Term
Expires December 31, 2024
Expires December 31, 2029
6
Tourism Business
Expired.
Expired.
Improvement District TBID
VNB employs the Group Sales
VNB shall establish a policy to
Team. Previously paid for using
ensure fair and equitable
funds from the Tourism
allocation of any shared costs
Business Improvement District
and expenses between VNB
(TBID).
and the Meetings Assessment
7
TBID expenses
Partnership, or similar entity that
As of spring 2024, Group Sales
receives funding that is similar
supported by newly formed,
to TOT.
Newport Beach Meetings
Assessment Partnership (MAP)
revenues.
VNB must use "external
The Board of Directors will set
consultants for determination of
Chief Executive Officer's
compensation of executive staff,
compensation.
as well as the establishment
and evaluation of performance
8
Compensation
standards for determining
payment of incentive
compensation, and other non -
salary compensation."
None required.
Require Chief Executive Officer
(CEO), Chief Financial Officer
(CFO), and Chief Marketing
9
Economic Interest
Officer (CMO) to file a Form 700
Disclosures
statement of economic
interests.
17-45
Topic-
Proposed
Disclosure to City not required.
Require copy of IRS Form 990
to be sent to City within 5
business days of filing with the
10
IRS Form 990
IRS. Provide copies of any
communications with the IRS
within 5 business days of
receipt or transmission.
Audit rights available as to VNB
Audit rights to remain as
11
Audit Rights
only.
provided in current agreement
but for consolidated company.
Not addressed.
No executive shall have any
role in leadership for any
Political Action Committee. No
12
Political activity
TOT money or related staff time
from the consolidated company
may be used for political
purposes.
No limit on sponsorship of
Board to approve sponsorships
events within the city.
of $10K - $49,999. City Council
to approve sponsorships $50K
and over. VNB shall ensure that
Internal City Marketing / Event
the City is credited for any event
13
Sponsorships
sponsorship or grants that are
paid for with compensation
received under this agreement.
Marketing support for Christmas
Boat Parade of $25K.
Not currently disclosed.
Board Chair to approve CEO,
CFO and CMO travel expenses.
15
Travel expenses
Travel expenses for CEO, CFO
and CMO to be disclosed to the
full Board.
Addressed for VNB but not
Board will adopt, maintain and
Newport Beach & Company.
enforce a conflict of interest
16
Conflict Of Interest
policy for consolidated
company.
17-46