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I. OVERVIEW Developed by Travel Santa Ana (TSA), a non profit organization, the Santa Ana Tourism Marketing District (SATMD) is an assessment district proposed to provide specific benefits to payors, by funding marketing and sales promotion efforts for assessed businesses. This approach has been used successfully in other destination areas throughout the country to provide the benefit of additional room night sales directly to payors. Location: The proposed SATMD includes all lodging businesses with seventy (70) rooms or more located within the boundaries of City of Santa Ana, as shown on the map in Section III. Services: The SATMD is designed to provide specific benefits directly to payors by increasing room night sales. Marketing and sales promotions will increase overnight tourism and market payors as tourist, meeting and event destinations, thereby increasing room night sales. Budget: The total SATMD annual budget for the initial year of its five (5) year operation is anticipated to be approximately $2,400,000. Cost: The annual assessment rate is two percent (2%) of gross short-term room rental revenue. Based on the benefit received, assessments will not be collected on: stays of more than thirty (30) consecutive days; stays of any officer or employee of a foreign government who is exempt by reason of express provision of federal law or international treaty; stays pursuant to contracts executed prior to January 1, 2021; and stays by any federal or state officer or employee while on official business only and when payment for such occupancy is made directly to the operator by duly authorized voucher payment from a governmental accounting office. This exemption does not exempt a transient who is employed by the United States government or the state or their respective instrumentalities from payment of the assessment when the payment is later to be reimbursed by the United States government or the state or their respective instrumentalities. Collection: The City will be responsible for collecting the assessment on a monthly basis (including any delinquencies, penalties and interest) from each lodging business located in the boundaries of the SATMD. The City shall take all reasonable efforts to collect the assessments from each lodging business and remit collections to the Owners' Association. Duration: The SATMD will have a five (5) year life, beginning January 1, 2021 through December 31, 2025. Once per year, beginning on the anniversary of SATMD renwal, there is a thirty (30) day period in which owners jointly paying fifty percent (50%) or more of the total assessment may protest and initiate a City Council hearing on SATMD termination. Management: Travel Santa Ana will serve as the SATMD's Owners' Association. The Owners' Association is charged with managing funds and implementing programs in accordance with this Plan, and must provide annual reports to the City Council. SATMD Management District Plan 3 March 19, 2020 12A-12