TO: Board of Supervisors
FROM: Tracy Schulze, Auditor-Controller
REPORT BY: Susan MacDonald, Internal Audit
SUBJECT: Napa Valley Tourism Improvement District Annual Report for Fiscal Year 2023-2024
RECOMMENDATION
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Accept and instruct the Clerk of the Board to file the Napa Valley Tourism Improvement District (NVTID) Annual Report for Fiscal Year 2023-2024. (No Fiscal Impact; Discretionary)
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BACKGROUND
On January 19, 2010, at the request of Napa Valley lodging owners, the Napa County Board of Supervisors adopted Resolution No. 2010-07, establishing the Napa Valley Tourism Improvement District (NVTID), regulated through the adoption of the Management District Plan requiring the jurisdictions to collect a 2% assessment on gross short-term room rental revenues from the lodging establishments. The collected revenue is then distributed according to the Management District Plan for the purpose of promoting tourism and providing services that increase room night sales.
“The services in the Management District Plan are designed to provide targeted benefits directly to assessed lodging businesses…NVTID funds will be used exclusively to provide the specific benefit of increased room night sales directly to the payors.”
Management District Plan - § VI. Services (B)
Per the Management District Plan (Plan), Section VII - Governance, the Napa County Auditor-Controller conducts an annual review of each jurisdiction’s reconciliation of TID collections and disbursements and presents the findings to the Board of Supervisors. The jurisdictions are requested to complete a single-page financial report which provides total Transient Occupancy Tax (TOT) collected, the total Tourism Improvement District (TID) assessment, and the TID distributions mandated by the Plan. Jurisdictions are required to submit accounting detail to support the data provided in their financial reports.
The local governing committees (LGCs) are also required to provide a report for the 25% of TID retained by the jurisdictions, along with an annual budget/expense reconciliation and approvals in committee meeting minutes to demonstrate spending in accordance with the Plan.
Jurisdictions were requested to base their Fiscal Year 2023-24 reports on unaudited financials as of June 30, 2024 to provide the County Board of Supervisors with a timely report and to take corrective actions (if needed) before the mid-year review is conducted for Fiscal Year 2024-25. The mid-year review will provide jurisdictions the opportunity to update their financial reporting once they have completed their Annual Comprehensive Financial Report (ACFR) for Fiscal Year 2023-24.
The internal audit section of the Napa County Auditor-Controller’s Office has completed an annual review of the Napa Valley Tourism Improvement District (NVTID) funds for fiscal year ended June 30, 2024. The objectives of this review were to assess whether Tourism Improvement District (TID) funds were administered consistently throughout the County and verify that the funds were collected, distributed, and spent in accordance with the Management District Plan approved by the County Board of Supervisors in 2010.
Based on the financial reports and general ledger detail provided by each of the jurisdictions, we are confident that the collection and disbursement of the Tourism Improvement District funds throughout the reporting jurisdictions is in accordance with the requirements outlined in the Management District Plan.
Action requested: Accept and file the NVTID Annual Report for Fiscal Year 2023-2024.
FISCAL & STRATEGIC PLAN IMPACT
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Is there a Fiscal Impact? |
No |
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Is it Mandatory or Discretionary? |
Discretionary |
ENVIRONMENTAL IMPACT
ENVIRONMENTAL DETERMINATION: The proposed action is not a project as defined by 14 California Code of Regulations 15378 (State CEQA Guidelines) and therefore CEQA is not applicable.