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HomeMy WebLinkAbout10 - Visit Newport Beach, IncCITY OF Q SEW POQr �mn Lp W ®R ,� City Council Staff Report Agenda Item No. 10 September 27, 2011 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: City Manager's Office Dave Kiff, City Manager 949 - 644 -3001, dkiff @newportbeachca.gov PFEPAR13DBY: Dave Kiff, City Manager A91FKA . t TILE: Agreement with Visit Newport Beach, Inc. for Destination Marketing Services AB5IRCCT: Visit Newport Beach, Inc. is the Destination Marketing Organization for Newport Beach. The City and the Visit Newport Beach executive board have worked on an updated agreement reflecting, among other things, an increased presence for the City's representative on the executive board, some administrative improvements, as well as extending the term of the agreement out two more years, to 2016. RB0OMMENDATION: 1. Authorize the Mayor and City Clerk to execute the attached agreement between the City and Visit Newport Beach, Inc. in a manner and form substantially similar to the attached document. 2. Authorize the City Clerk to seek applications for the City's appointment to the VNB Executive Board. There is no fiscal impact related to this specific agreement, although we note that Visit Newport Beach, Inc. receives about $2.7 million per year in transient occupancy taxes (also known as hotel bed taxes) to provide destination marketing services for Newport Beach. 1 Agreement with Visit Newport Beach, Inc. for Destination Marketing Services September 27, 2011 Page 2 l a_r' .7759M Visit Newport Beach, Inc. ( "VNB "), a non - profit organization (under IRS code §501(c)(6)), is the Destination Marketing Organization ( "DMO ") for Newport Beach (DMOs were previously referred to as conference and visitors bureaus). VNB has an Agreement with the City dating back to May 12, 2004 and as amended March 10, 2009 ( "Current Agreement ") that directs VNB to provide specific services to the City and community using transient occupancy tax ( "TOT ") revenues. The Current Agreement is set to expire June 30, 2014. The Current Agreement generally directs that VNB should maintain suitable quarters and employ competent personnel to carry out its promotional activities, inform prospective tourists and visitors of the recreational, cultural, shopping and dining opportunities offered in the City, and develop and implement specific marketing programs designed to increase business and visitor trade in the City. In turn, the Current Agreement directs the City to pay to VNB 18% of all TOT collected. In the past 3 years, the City has paid $7,667,510 to VNB. In Fiscal Year 2010 -11, VNB received about $2.7 million in TOT. VNB also serves as the owner's association to the City's Tourism Business Improvement District ( "T- BID ") under a July 1, 2009 management agreement with the City. In this capacity the VNB is charged with administering and implementing the T- BID's activities and improvements. In Fiscal Year 2010 -11, VNB oversaw the expenditure of about $1.3 million in T -BID funds. VNB's governance includes two related boards • a 25- member Board of Directors (currently, the City Manager is a non - voting member and the Library Director is a voting member); and • a 7- member Executive Board. The Current Agreement sets forth a number of reports that VNB must send to the City on an annual basis — these include: • A Marketing Plan and Budget (budget must be approved by City Council); • A report on the previous fiscal year's activities; and • An annual independent audit. In addition, the City has ability to conduct a compliance review once each year. The Current Agreement can be terminated for cause for improper expenditures, failure to perform, and bankruptcy or other insolvency. It can be terminated without cause with a years' notice to either party. The Current Agreement is AttachmentA. 2 Agreement with Visit Newport Beach, Inc. for Destination Marketing Services September 27, 2011 Page 3 A recent compliance review by the City's internal auditor, found VNB to be in good compliance with the terms of the Agreement. The internal auditor did identify some possible improvements to the City's partnership with VNB, and VNB has been open to those improvements along with suggesting that the partnership's term be extended by an additional two (2) years to June 30, 2016. The proposed improvements are: ® Include a City Council appointee on the VNB Executive Board; Direct VNB to modernize, adopt, and follow policies (their own policies —not policies specifically directed or written by the City) regarding requests for proposals, travel and entertainment, and more; Have the City review and approve any increases in the adopted VNB budget that would increase VNB's fixed operational costs by $100,000 or more; A clarification of the City's ability to review VNB's compliance with the agreement; A stronger description of what documents should be reviewed by the City Council and when VNB should provide them to the Council, including the: • Performance Standards Report; • Annual Marketing Plan; • Budget; • Audited Financial Statements (including any management letter); and • Expenditure Report. VNB President and CEO Gary Sherwin and I presented this information to the City Council and public at a Study Session held July 12, 2011. Readers can review the presentation by going on the City's website. The proposed agreement generally reflects that discussion. The proposed agreement is included as Attachment B. Staff has met with representatives of VNB and they believe that the proposed agreement appropriately characterizes our staff -level discussions. Staff recommends the City Council find this action is not subject to the California Environmental Quality Act ( "CEQK) 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. 3 Agreement with Visit Newport Beach, Inc. for Destination Marketing Services September27, 2011 Page 4 NOTICIiiIG: 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). Submitted by: Dave <iff City Manager Attachment: A. Current Agreement B. Proposed Agreement 0 Attachment: A t' -- • L THIAZ411:-� • TO THIS TOURISM PROMOTION, BRANDING, AND MARKETING AGREEMENT ( "Agreement "), is made and entered into on this — day , 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." 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, TFEREFCRE, it is mutually agreed by and between the Parties as follows: uli�:'- •.iii+ - •' �'' -��. The Recitals provided above are true and correct and incorporated into the operative part of this 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. 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. 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 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. 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. �I .I b- lO '11- !' ll1 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 7 e) Expenditure Report. By September 301h 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. 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. MEW 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 (20th) 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. CI DIIIIIIIIIIIIIIIIIIIET, 'R T ]s'1'1 City reserves the right to designate its own employee representative(s) 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). The City Council shall appoint, at its sole discretion, one (1) person with 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 9 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. 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. 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. A 10 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. 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. iYirl.`L��i Any notice, demand, request, consent, approval, or communication that either Party desires or is required to give to the other Parry 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 11 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. 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. f✓ 12 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. 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. I) 13 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 082511 10 14 IN W , the Parties hereto have caused this Agreement to be executed on the dates hereinafter respectively set forth. Date: Date: APPROVED AS TO FORM: CITY ATTORNEY'S OFFICE L0 Aaron Harp City Attorney Date CITY OF NEWPORT BEACH, a California municipal corporation Michael F. Henn Mayor ATTEST: Leilani Brown City Clerk VISIT NEWPORT BEACH INC., a California nonprofit corporation and an IRC 501(c)(6) marketing organization a Printed Title Z Printed Title FLdzfl• . - e 11 15 ® 0 Attachment B CM M FIRST AMENDMENT TO AGREEMENT BETWEEN CITY OF NEWPORT BEACH AND THE NEWPORT BEACH CONFERENCE & VISITORS BUREAU V This first amendment to agreement is entered into this le day of March 2009, by and between the City of Newport Beach, a municipal corporation and charter city ( "City'), and the Newport Beach Conference 8 Visitors Bureau, a non -profit corporation organized and existing under and by virtue of the laws of the State of Cafdomia ( "Bureau "), with reference to the following facts: RECITALS A. On May 12, 2004, City entered into an agreement (the *Agreement") with the Bureau in which the Bureau would promote tourism in the City and the City would pay Bureau 18% of the Transient Occupancy Tax and Visitors Service Fee collected. B. The Agreement currently expires on June 30, 2009, with two (2) additional one (1) year renewal options. C. City and Bureau desire to amend the Agreement to extend the terms of the Agreement to June 30, 2014. Now therefore, City and Bureau hereby agree as follows: Tenn. Section 1 of the Agreement is hereby deleted In its entirety and replaced with the following: This Agreement shall commence on the 1° day of March, 2004 and shall continue through June 30, 2014, unless terminated earlier as provided herein! 2. Recital B of the Agreement is hereby deleted in Its entirety and replaced with the following: The City has adopted Chapter 3.16 of the Newport Beach Municipal Code (*Code*) that authorizes the Imposition and collection of ` Translent Occupancy Tax° as well as Chapter 3.28 of the Code that authorizes the collection of a °Visitor's Service Fee.° For purposes of this AGREEMENT, the term "Tax Collected° shall only include the amount of Transient Occupancy Tax and Visitor's Service Fee actually collected by the City pursuant to Chapters 3.16 and 3.28 of the Code 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 as required by Chapters 15.45 and 20.84. 3. Except as expressly modified herein, all other provisions, terms, covenants and conditions of the Agreement shall remain unchanged and in full force and effect. 16 IN WITNESS WHEREOF, the parties hereto have executed this AMENDMENT NO. 1 on the date first written above. APPROVED AS TO FORM: A,c- City Attorney for the City of Newport Beach ATTEST: By. IrdW� Leilani Brown, City Clerk for the City of Newport Beach NEWPORT BEACH CONFERENCE AND VISITOR Title: Q�e�lr (V Cj�)b Print Name:t,�tt1 By: Lle noDii 2! p (Financial Officer) 17 a E AGREEMENT BETWEEN THE CITY OF NEWPORT BEACH AND THE NEWPORT BEACH CONFERENCE & VISITOR'S BUREAU F.'� �38f lug -�`i� i This AGREEMENT, made and entered into this 12'h day of May, 2004, by and between the CITY OF NEWPORT BEACH, a municipal corporation and charter city ( "City's, and NEWPORT BEACH CONFERENCE & VISITOR'S BUREAU, a non -profit corporation organized and existing under and by virtue of the laws of the State of California (`Bureau "), is made with reference to the following facts: A. The City, pursuant to the provisions of its City Charter and Section 37110 of the Government Code of the State of California, has the power to expend monies accruing to the General Fund for the purpose of promoting tourism and related activities; B. The City has adopted Chapter 3.16 of the Newport Beach Municipal Code (Code) that authorizes the imposition and collection of a "Transient Occupancy Tax "as well as Chapter 3.28 of Newport Beach Municipal Code that authorizes the collection of a Visitor's Service Fee. For purposes of this AGREEMENT, the term "Tax Collected" shall refer to the amount of Transient Occupancy Tax and Visitor's Service Fee actually collected by the City.; C. The City Council has determined that the Bureau has special knowledge and experience necessary to promote tourism in, and serve the needs of visitors to, the City of Newport Beach; D. The City Council has determined that the Bureau's promotional activities are likely to substantially increase the amount of the Tax Collected by the City.; and E. The City Council has determined that funding of. Bureau activities will be a significant benefit to the residents of, and visitors to, the City. NOW, THEREFORE, the'Parties agree as follows: 1. Term This Agreement shall commence on the I" day of March, 2004 and shall continue through June 30, 2009, unless terminated earlier as provided in Section 10. The City reserves the right, upon sixty (60) days written notice, to renew this Agreement for two additional one (I)-year terms provided that Bureau's performance is deemed acceptable to City, and that the renewal is agreeable to the Bureau. 2. Bureau Duties Bureau shall develop, plan, carry out and supervise a program to promote tourism in, and serve the needs of, visitors to the City as well as increase the amount of Tax Collected Ff.] through their promotional activities. This promotional program shall, at a minimum, include the following: (a) The maintenance of suitable quarters and the employment of competent personnel to properly carry out its promotional activities; (b) The preparation of brochures, publications, guides and information that inform prospective tourists and visitors of the recreational activities, cultural assets, shopping and dining opportunities, and natural beauty of the City of Newport Beach; (c) The dissemination of the information described in subparagraph 2 (b) by way of the media, direct mail, handout or other means of distribution; and (d) The development and implementation of specific marketing programs designed to increase business and visitor trade in the City of Newport Beach. 3. City Funding (a) City shall pay the Bureau: (1) Payment: City shall pay the Bureau 18% of the total Tax Collected to operate the programs described in Paragraph 2(b) and increase the amount of Tax Collected (Payment). The Payment shall be made in monthly installments. (2) Annual Adjustment: The City shall have the right, in its sole discretion, to adjust the Payment (increase or decrease the percentage of Tax Collected that is paid to the Bureau) at the end of each fiscal year for any reason including, without limitation, (i) the City's revenue assumptions prove to significantly higher or lower than forecast; (ii) the Bureau is unable to establish that its promotional activities have increased the amount of Tax Collected; or (iii) the adjustment is necessary or appropriate given the City's then current fiscal situation. 4. Manner of Payment Funds due Bureau pursuant to the provisions of (a)(1) shall be paid on a monthly basis, and on or before the 20`h day of the month. 5. Bureau Report s (a) Bureau shall provide City with a marketing plan and an annual budget at the second Council Meeting in July each year during the term of this Agreement. The Board of Directors of Bureau shall approve the budget before it is submitted to the City. The marketing plan shall specify the goals and objectives of Bureau during the upcoming 19 0 fiscal year, as well as the programs Bureau will implement to achieve those goals and objectives. (b) Bureau shall, on or before the second City Council meeting in July each year during the term of this Agreement, submit to the City the following: (i) A report describing the services and programs offered by Bureau during the preceding fiscal year and an evaluation of the extent to which these services and programs have achieved the Bureau's goals and objectives; and (ii) an audit listing all revenues and expenses of the Bureau during the preceding fiscal year. 6. Expenditure of Funds by Bareau Bureau shall expend funds provided by City in accordance with the budget submitted to, and approved by, the City Council. Bureau may transfer funds, or make expenditures, allocated for one element of the budget to another element so long as the basic goals of the Bureau's tourist development program are not impaired. 7. Recordkeepina Bureau shall prepare and maintain, during the term of this Agreement, and for twelve (12) months after its termination, complete and accurate books, records and accounts showing the expenditures of all funds disbursed to it by City pursuant to this Agreement. Bureau shall maintain all accounts, books and records in accordance with generally accepted accounting principles. The City shall have the right, subject to reasonable written notice and no more than one time each calendar year during the term of this Agreement, to conduct an audit of the accounts, books and records of the Bureau. Bureau shall fully cooperate with City in the conduct of the audit. If, upon audit of the records, it is determined that funds provided by the City have been utilized other than as provided in the budget and as specified in this Agreement, Bureau shall reimburse City all such funds and the cost of the audit. 8. Licenses and permits Bureau shall obtain and maintain any and all licenses and permits necessary to conduct its activities, to render the services required by this Agreement, and to maintain its office facilities. 9. Indemnification Bureau shall defend, indemnify, and hold harmless City, and its officers, employees, agents and representatives from and against any and all claims, losses, damage, liability, lawsuits, judgments, costs, fees, and expenses that may be claimed by any person or entity, or incurred by the City, and which arise out of, or are in any way 20 related to, the activities of Bureau, its officers, employees, agents, subcontractors, volunteers, or representatives, pursuant to this Agreement, whether or not there is concurrent, passive or active negligence on the part of the City or its officers, agents or employees. However, Bureau's duties under this Section shall not extend to any claims, losses, damage, liability, lawsuits, judgments, costs, fees, and'expenses arising from the sole negligence, fraud or willful misconduct of the City, its employees, officers, agents or representatives. 10. Termination (a) City Termination. City shall have the right to terminate this Agreement upon thirty days (30) written notice to Bureau in the event the City Council determines, based upon substantial evidence, that: (i)• Bureau has improperly expended funds provided by the City pursuant to this Agreement; or (ii) Bureau has failed to perform the services required of it pursuant to this Agreement; or (iii) Bureau has filed, or has taken or committed any act preparatory to filing, a petition in bankruptcy or for receivership or reorganization under the Bankruptcy Act; or (iv) Bureau has become insolvent or committed any act of insolvency. (b) City/Bureau Termination. Either party shall have the right to terminate this Agreement without cause, by giving the other party three hundred and sixty -five (365) days written notice of its intention to terminate. (c) Automatic Termination. This Agreement shall terminate, without notice to either party, within ninety (90) days after the repeal of, or a final court order invalidating, the Visitor Service Fee Ordinance. 12. Independent Contractor The parties agree that Bureau, and its officers, employees, agents, representatives and volunteers, while engaged in performance of duties required by this Agreement, is an independent contractor, and not an officer, agent or employee of the City. 13. Assignment 21 rI Bureau shall not assign this Agreement, or the right to receive any monies pursuant to this Agreement, or the Visitor Services Fee Ordinance, without the prior written consent of the City. Bureau acknowledges that the unique nature of the services to be provided by the Bureau and nature of the funds disbursed to Bureau by City provide adequate justification for any City refusal to consent to an assignment of the rights and/or duties of this Agreement. 14. Notices All notices required to be given by this Agreement shall be in writing and personally served or given by mail. Notice by mail shall be deemed to have given when deposited in the United States mail, certified postage prepaid, and addressed to the party to be served as follows: To Citv: City of Newport Beach Attn.: City Manager's Office 3300 Newport Blvd. P.O. Box 1736 Newport Beach, CA 92659 -1768 To Bureau: Newport Beach Conference & Visitor's Bureau Attn.: President/CEO 110 Newport Center Drive, Suite 120 Newport Beach, CA 92660 15. Complete Asreement This document represents the entire Agreement between the City and Bureau and supercedes all prior negotiations, representations or agreements, either oral or in writing. This Agreement may be amended only by a written instrument signed by City and Bureau and approved as to form by the City Attorney. 22 8 11 El In Witness whereof, the Parties are deemed to have executed this Agreement effective on the day and year first written above. CONFERENCE & VISITORS BUREAU BY Marta Hayden President/CEO as to form: City Attorney CITY OF NEWPORT BEACH: By Tod W. Ridgeway City Clerk 23 STATE OF CALIFORNIA) ) SS. COUNTY OF ORANGE ) I am a citizen of the United States and a resident of the County of Los Angeles; I am over the age of eighteen years, and not a party to or interested in the notice published. I am a principal clerk of the NEWPORT BEACH /COSTA MESA DAILY PILOT, which was adjudged a newspaper of general circulation on September 29, 1961, case A6214, and June 11, 1963, case A24831, for the City of Costa Mesa, County of Orange, and the State of California. Attached to this Affidavit is a true and complete copy as was printed and published on the following date(s): Saturday October 1, 2011 I certify (or declare) under penalty of perjury that the foregoing is true and correct. Executed on October 4, 2011 at Los Angeles, California Signature ; m o:; o M n - Z o Y 1 Al 2 '2 o o� 07 0. iJ q m U o mot �' 7p, � �I `,�w� pa _ .c� d ; c+ Nay }�NI '� fV P. Ci'.tC i0. m W o ff v H 0 o a o4 �'io d oxl '3 wrn Wt'. of P. U .om �O•kyPJ J W N o coi ;7 d y. N'A w N U N O. y1 A'N O O ��J.0 {y y Z 00, 0 oz c6 q m O A w �. 'ay 7. WN GG �i p. O blJl 4`,� ,C �'' as ,C'f -I � o' m N sr f•'^' % gyro rIG H IG mY ml w nli vt y tc ',' yt �� P a �, w C' U H °m F N P. m ,C P '�.� Ii~. P o v C7 H S