By the board of the Feather River Tourism Management District
Shared with Plumas News
We are pleased to share that the effort to form the Feather River Tourism Management District has succeeded. It has been a six-year journey, taken over $45,000 of donated and loaned funds, and countless volunteer hours to get here, and now the real and exciting work begins.
On Oct. 13, 2020, the Plumas County Board of Supervisors adopted a Resolution to Form the District. This after being petitioned by over 64% of the lodging businesses in the proposed district estimated to be paying 50% or more of the annual assessments to be levied and conducting several public hearings.
Though it has taken six years and untold hours, the real work now begins. The District assessment begins on Jan. 1, 2021. The Feather River Tourism Association, a 501c6, is the entity designated to manage the District.
The Feather River Tourism Management District will begin to receive funds to operate about May of 2021 but will not see any appreciable funds until October and thereafter. The District Management Plan and By-Laws of the Association can be found on the resources page of FeatherRiverTourism.com. A monthly meeting schedule is being established for initial implementation discussions and planning. These meeting dates and agendas will be posted on the resources page of FeatherRiverTourism.com and at other public locations prior to each meeting. All are welcome to attend.
Resources and Forms: Agendas, meeting minutes, implementation resources, forms, etc. will be posted and updated as needed on the resources page of FeatherRiverTourism.com.
Baseline Data: We will begin to compile baseline data to be used to measure project successes soon. Information, surveys and interview opportunities will be shared with you as they occur.
The Board of Directors of the Feather River Tourism Association is composed of Karen Kleven, Susan Bryner, Jeff Titcomb, Sharon Roberts, Janice Haman, Jill Rivoli and Todd Geer.
The process to form the Feather River Marketing District (FRTMD) began over six years ago. During the first four years multiple meetings both large and small were held across the county. And, volunteers talked individually with countless people. In addition, information regarding the district was on the agenda for meetings of the County Board of Supervisors at least four times, with an additional three for public hearings this year.
The intention was to engage, inform, and solicit support for an organized and sustainable approach to tourism promotion that would benefit our lodging industry and our communities. We met with those who were uninformed or misinformed and ultimately became enthusiastic, and those who were in opposition and remained so. We also sent letters and information via email and snail mail to those whose addresses we were able to obtain, on our own, as we did not have the support of such information from the County. We did our due diligence as best as we could as a dedicated, all volunteer group.
This is Not a Tax
It is important to re-iterate that the assessment that will fund this district is not a tax. The funding for this district is allowed through the Property and Business Improvement District Law of 1994. This law allows for the creation of a benefit assessment district to raise funds within a specific geographic area. The key difference between TMDs and other benefit assessment districts is that these funds raised are returned to the private non-profit corporation governing the district. In our case the Feather River Tourism Association. If it were a tax, the County would keep it and manage it (as they do with TOT). If it were a tax, we, the lodging providers would not be the governing board with ultimate say in how it is spent. If it were a tax, it most likely would not have a five-year expiration date that this assessment has so the constituency could review its return on investment and decide for themselves if it was worthwhile to continue.
TOT an Unsustainable Argument
Some lodging providers have continued to feel that the County should be using the existing TOT funds to accomplish what this District proposes to do, market, promote and develop. This is a frustrating and recurring argument for many. We would agree with this argument if we had not done our research prior to executing the drive to form the District.
After research, we, like a majority of lodging providers in California, came to the same conclusion, the TOT fight could not and would not prevail. Almost every county in California had reduced or even ceased supporting tourism investment due to the ever-increasing cost of executing and maintaining the basic services they are charged with providing. In fact, it is this reality that led to the enactment of the 1994 law allowing the formation of these districts.
We understood that we had to come up with alternate solutions to create the needed funding to support one of the most important, in fact, top 10 industries in our state, let alone our County. In Plumas County we can comfortably say that tourism is one of the top 3 industries in our county, second only in employment to the government itself. TOT funds would never be an answer to the need.
ROI and Effects on Occupancy & Room Rates
In speaking with lodging providers some were concerned about the assessment’s potential effects on their operations. Concerns such as, “We can’t afford to assess our guests on top of existing TOT and still be able to raise our rates”. Or, “With a 2% assessment tacked onto their bill, our guests will stop coming. Our revenues will decline.”
The answers come from research. And, we can say that the only good thing about Plumas County coming to this idea “late in the game” is that we have 10 years’ worth of research with which to answer these concerns. Research has unequivocally shown that:
- Return on Investment (ROI) varies between 20% – 60%.
- Room stays increase. These regions actually experience significantly increased spending on lodging, food & beverages.
- Room prices are able to be increased in proportion to the increased demand.
Additionally, Plumas County’s TOT is 9%. With a 2% assessment, our guests will have 11% added to their base stay rate. 11% puts our District lodging tax and assessment at one of the lowest combined rates across California.
What is at Stake if We Don’t Fund Promotion?
Without effective promotion, research has shown that states and cities cede the economic benefits to competing destinations and fall behind the competition. It is a mistake from which it takes many years to recover. And it is a mistake that is easily avoided when governments and communities take a long view on their economic outlook.
We would add to this, that pre-Covid our competition with other mountain communities in Northern CA for tourism dollars was fierce. Post Covid it will be more so, and our neighbors already have the funds to compete!
Leveraging and the Little Guy
We are looking to use these funds to obtain an excellent and just balance for the small provider as well the large by leveraging these dollars to benefit the entire lodging community. Our goal is to increase awareness of our area as a travel destination with focus on our unique culture and values and stewardship of our beautiful recreational area. Our shoulder months have plenty of room for additional visitation even now, as we begin grow this important industry in our area.
Frequently asked questions
- What is the basis for the Feather River Tourism Marketing District (FRTMD) assessment?
- The FRTMD Tourism Assessment is authorized by the California Property and Business Improvement District Law of 1994 (Streets and Highway Code §36600 et. seq.)
- This law allows for the creation of a benefit assessment district to raise funds within a specific geographic area that provide a stable, long-term source of funding for tourism promotion. In addition:
- Funds must be spent on services and improvements that provide a specific benefit only to those who pay;
- Funds cannot be diverted to general government programs;
- Funds are governed by those who pay the assessment.
- The specific assessment plan for FRTMD was petitioned for by over 64% of the area lodging providers and was subsequently approved October 13, 2020 by the Plumas County Board of Supervisors.
- What is the Feather River Tourism Association (FRTA)? And what is its relationship to FRTMD?
- FRTA serves as the owner’s association of the FRTMD. FRTA board of directors is comprised of a majority of representatives of assessed lodging businesses within FRTMD.
- The management plan of the FRTMD and the By-Laws of FRTA can be found at www.featherrivertourism.com/resources.
- What areas of Plumas County are within the boundary of the Feather River Tourism Marketing District and subject to the assessment?
- Lake Almanor/Chester, Indian Valley, Feather River Canyon, Quincy, Bucks Lake
- What type of lodging businesses are included in the FRTMD assessment?
- The term “lodging provider” includes hotels, motels, vacation rentals, RV parks and private campgrounds.
- Any business that is now subject to TOT is subject to the assessment, with the same compliance requirement.
The 2% Assessment Fee
- What is the effective date of the assessment?
- The assessment is effective for lodging nights sold beginning on January 1, 2021 and continuing through December 31, 2026
- Can we pass the 2% assessment fee to our guests?
- Yes. That is in fact what most lodging providers do.
- The lodging provider is required to list it as a separate line item in a lodging quote or invoice with an appropriate title, such as “FRTMD Assessment”.
- How should items that are exempt from the local transient occupancy tax (TOT) be treated in terms of application of the 2% FRTMD assessment?
- Items that are not subject to the local TOT are also not subject to the 2% FRTMD assessment.
- In other words, the same exemptions that are allowed when calculating the 9% TOT are allowed in considering the 2% FRTMD assessment.
- Accordingly, the monthly report form utilizes the same calculation for the Net Room Revenues/Receipts, which is net of the exemptions allowed County of Plumas.
- How should lodging providers within the Feather River Tourism Management District handle binding group room night contracts that had been executed prior to the January 1, 2021 commencement of the District? Specifically, does the 2% Tourism District Assessment apply to these previously executed group contracts? Additionally, does the 2% Tourism District Assessment apply to guaranteed or prepaid transient room reservations that were made prior to January 2021?
- Lodging providers that have binding group room night contracts that were executed prior to January 2021 do not need to apply the 2% tourism PID assessments to the room nights under these contracts, unless the contract allows it.
- Likewise, lodging providers that have guaranteed and/or prepaid transient room reservations that were made prior to January 2021 do not have to apply the 2% assessments to the room nights under these reservations.
- A special box for exclusions has been added to the quarterly report form to record these amounts.
- How is the FRTMD assessment calculated?
- The assessment is applied at 2% of the value of the lodging nights sold, on lodging stays of 30 days or under.
- Is the guest responsible to pay the 2% FRTMD assessment fee?
- Yes, if it is included in the charges noted in the bill for the room night or included within the quoted room night rate.
- What happens if the hotel guest refuses to pay the 2% fee?
- The guest can be pursued for this charge in the same way as any other legal lodging charge.
- The 2% FRTMD assessment is owed by the Lodging Provider even if the provider fails to collect directly from the guest.
- The lodging provider may alternatively choose to itself cover the cost of the assessment and not charge the guest.
- Is there any difference in the handling of these matters if the room is booked through a travel broker (e.g., VRBO)?
- No, the fees are part of the charges that the provider should indicate are to be included in any booked stay.
- It is the provider’s responsibility to notify any entities that handle reservations to include this assessment unless the provider does not plan to pass on the cost to the guests.
How Funds Will Be Managed
- Who gets the money raised by the assessment?
- The funds are collected by the County of Plumas and are transferred, at the end of the quarterly reporting period, to the Feather River Tourism Association, the non-profit designated to manage the funds.
- How will the funds that are generated by the 2% Tourism assessment be spent?
- Activities include public relations, advertising, website operations, social media and other significant marketing programs. The purpose of these activities is to bring targeted visitors into the Feather River Tourism Region increasing occupancy and visitation beyond the summer season.
- Why isn’t Eastern Plumas County included in the FRTMD?
- The lodging providers of Eastern Plumas county declined to take part in forming the district.
- The district was formed without their participation; however, individual lodging providers of Easter Plumas may apply to be involved either via an individual contract with FRTMD,
- At the 5-year renewal mark, Eastern Plumas county lodging providers will have the option of being included.
- What is the involvement of the County of Plumas?
- Plumas County performs the administrative duties to collect and transfer the FRTMD funds as required by the District Management Agreement.
- FRTA will also present an annual report of FRTMD operations to the Plumas County Board of Supervisors at the end of each fiscal year.
- Is the Tourism District permanent?
- The FRTMD has been approved for an initial five-year period.
- After the five-year period, the District can be reconsidered by petition of the lodging providers to Plumas County Supervisors.
- How can I get involved with or stay abreast of what FRTA and FRTMD are doing, and, or voice ideas or concerns?
- FRTA website, featherrivertourism.com, has resources for providers and information on upcoming meetings and minutes (all are welcome to attend). In addition, a quarterly newsletter will be sent with updates on marketing activities and opportunities.
- For legal or regulatory questions about the District or implementation of the charges contact one of the board members, or the Plumas County Counsel’s office or Treasurer’s office.