SAN DIEGO TOURISM MARKETING DISTRICT REPORT OF ACTIVITIES for FY2013 – PART II: City Council Meeting March 28, 2013 Lorin Stewart, SDTMD Corporation Jere Batten, CPA, CFE, Batten Accountancy, Inc.

FY 2013 PART II: Period of Collections: January 1, 2013 – May 30, 2013 Period of Incurred Expenditures: FY 2013 Q4 (April 1, 2013 – June 30, 2013)

NEW DISTRICT MANAGEMENT PLAN Reconstructed to Accommodate PROP 26 Reconstructed to Accommodate PROP 26 Refined District Created for Assessed Hotels Refined District Created for Assessed Hotels SDTMD Contractor Funding Not Guaranteed SDTMD Contractor Funding Not Guaranteed Annual Distribution: Annual Distribution: 90% Sales & Marketing Programs 90% Sales & Marketing Programs 5% Contingency 5% Contingency 5% Admin including fully loaded City Fees 5% Admin including fully loaded City Fees Two Major Benefit Categories Created Two Major Benefit Categories Created – Benefit Category A: TMD Meeting & Group Sales / Consumer Direct Sales & MarketingTMD Meeting & Group Sales / Consumer Direct Sales & Marketing Payor Universe = Lodging businesses in City of SD with thirty (30) rooms or morePayor Universe = Lodging businesses in City of SD with thirty (30) rooms or more 1.45%* – Benefit Category B: Destination Marketing with Specific Call to Action for TMD Lodging BusinessesDestination Marketing with Specific Call to Action for TMD Lodging Businesses Payor Universe = All Lodging Businesses in City of SDPayor Universe = All Lodging Businesses in City of SD 0.55%* * All TMD lodging businesses of 30 or more rooms pay Categories A + B for total assessment of 2% * All TMD lodging businesses of 30 or more rooms pay Categories A + B for total assessment of 2%

Benefit Category A A1- Meeting and Group Sales & Marketing Programs and TMD Consumer Direct Sales & Marketing Programs A1- Meeting and Group Sales & Marketing Programs and TMD Consumer Direct Sales & Marketing Programs(DMO) A2 – Sub-Regional Targeting A2 – Sub-Regional Targeting A3 – Competitive Targeting A3 – Competitive Targeting Payor Universe = Lodging businesses in City of SD with thirty (30) rooms or more assessed at 1.45% Payor Universe = Lodging businesses in City of SD with thirty (30) rooms or more assessed at 1.45%

Benefit Category A3 : Competitive Targeting* See Application / Guidelines - Appendix 4 A1.1 - Hotel Meeting Sales A1.1 - Hotel Meeting Sales A1.2 - Event Management and Group Sales Dev. A1.2 - Event Management and Group Sales Dev. A1.3 - Tourism Development including Travel & Trade A1.3 - Tourism Development including Travel & Trade A1.4 - Group Meeting Direct Marketing A1.4 - Group Meeting Direct Marketing A1.5 - Consumer Direct Sales & Marketing Programs A1.5 - Consumer Direct Sales & Marketing Programs * Payor Universe = Lodging businesses in City of SD with thirty (30) rooms or more assessed at 1.45%

Benefit Category B Destination Marketing (DMO) Benefit Category B advertising campaigns and earned media to drive sales demand for San Diego TMD lodging businesses. Benefit Category B advertising campaigns and earned media to drive sales demand for San Diego TMD lodging businesses. Payor Universe = All Lodging Businesses in City of SD assessed at 0.55%. Payor Universe = All Lodging Businesses in City of SD assessed at 0.55%. Includes revenue from businesses with 1-29 rooms*; and Includes revenue from businesses with 1-29 rooms*; and Includes revenue from businesses with 30 rooms* or more. Includes revenue from businesses with 30 rooms* or more. % estimates to be provided by City % estimates to be provided by City All campaigns must have proportional other-source funding reflective of benefits. All campaigns must have proportional other-source funding reflective of benefits.

FY Part II – Budget Summary Estimated Funds Available$11.66 M  TMD Assessments $11.66 M  FY2013 CarryoverNA  FY2013 InterestNA Allocations Category A  Variable Distributions $ 7.59 M  Opportunity/Catastrophe reserve$ 422 K  SDTMD & City Admin$ 422 K  TOTAL CATEGORY A$ 8.43 M Category B  Destination Marketing $ 2.90 M  Opportunity/Catastrophe reserve$ 161K  SDTMD & City Admin$ 161K  TOTAL CATEGORY B$ 3.23 M

FY2013 Part II – Budget By Contractor Category SDTMD SDTA VARIABLE TOTAL Category SDTMD SDTA VARIABLE TOTAL A1 $2,629,596 $ 2,629,596 A1 $2,629,596 $ 2,629,596 A1.1 $1,197,634$ 1,197,634 A1.1 $1,197,634$ 1,197,634 A1.2 $ 279,525$ 279,525 A1.2 $ 279,525$ 279,525 A1.3 $ 388,918$ 388,918 A1.3 $ 388,918$ 388,918 A1.4 $ 629,518$ 629,518 A1.4 $ 629,518$ 629,518 A1.5 $2,299,946$ 2,299,946 A1.5 $2,299,946$ 2,299,946 A2 $ 165,053 $ 165,053 A2 $ 165,053 $ 165,053 Contingency $ 421,677$ 421,677 Contingency $ 421,677$ 421,677 Admin & Ops$421,677 $ 421,677 Admin & Ops$421,677 $ 421,677 Total A $421,677 $4,960,594 $ 3,051,273 $ 8,433,544 Total A $421,677 $4,960,594 $ 3,051,273 $ 8,433,544 B $2,586,400 $ 317,399 $ 2,903,799 B $2,586,400 $ 317,399 $ 2,903,799 Contingency $ 161,322 $ 161,322 Contingency $ 161,322 $ 161,322 Admin & Ops$161,322 $ 161,322 Admin & Ops$161,322 $ 161,322 Total B $161,322 $2,586,400 $ 478,721$ 3,226,443 Total B $161,322 $2,586,400 $ 478,721$ 3,226,443 Total$582,999 $7,546,994 $3,529,994$11,659,987 Total$582,999 $7,546,994 $3,529,994$11,659,987

FY2013 Part II – Budget SDTMD Administration DescriptionCategory ACategory BTotal Personnel$ 37,305$ 14,271$ 51,576 Contract Svcs$163,825$ 62,675$226,500 Overhead$ 9,709$ 3,714$ 13,423 City Admin $210,838$ 80,662$291,500 Total$421,677$161,322$582,999

QUESTIONS?