HomeMy WebLinkAbout2010-07-13 City Council Item No. 17CITY OF
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DREAM FXTREMEn
REPORT TO CITY COUNCIL
TO: HONORABLE MAYOR
AND MEMBERS OF THE CITY COUNCIL
FROM: ROBERT A. BRADY
CITY MANAGER
DATE: JULY 13, 2010
SUBJECT: INCREASE IN TRANSIENT OCCUPANCY TAX
Background
During discussions related to the City's ongoing budget challenges, the City Council
recognized the need to explore ways to increase revenues. Increasing the rate of the
City's transient occupancy tax ("TOT") would increase revenue to the City during these
times of fiscal uncertainty.
The most common TOT rate by Riverside County cites is 10%. Of the 26 cities in
Riverside County, six have a TOT rate above 10%, twelve cities are at 10%, and eight
cities are below 10%. TOT rates by Riverside County cities are listed below:
City
TOT
Banning
6%
Beaumont
10%
Blythe
13%
Calimesa
10%
Canyon Lake
10%
Cathedral City
11%
Coachella
9%
Corona
10%
Desert Hot Springs
12%
Hemet
10%
Indian Wells
9.3%
Indio
10%
Lake Elsinore
10%
La Quinta
11%
Menifee
10%
Moreno Valley
8%
AGENDA ITEM NO.17
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Increase in Transient Occupancy Tax
July 13, 2010
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Murrieta
10%
Norco
8%
Palm Desert
9%
Palm Springs
13.5%
Perris
10%
Rancho Mirage
10%
Riverside
11%
San Jacinto
8%
Temecula
8%
Wildomar
10%
Pursuant to State law, any increase of the tax rate must be approved by a 2/3 vote (4
members) of the City Council and a majority vote of the City's voters who vote at a
regular municipal election. The next regular municipal election will be held on November
2, 2010.
Discussion
Staff proposes that the City Council consider an increase in the TOT from 10% to 12%
and to also extend the TOT to occupancies that include tent and RV campgrounds.
TOT revenues related to fiscal year 2009/10 are anticipated to be approximately
$240,000 pending collection of fourth quarter revenues. A 2% increase would result in
additional annual revenues of $48,000.
Revenues from a TOT on camping are uncertain. However, based on data from the
City Campground, annual TOT revenues in excess of $20,000 from camping are
reasonably anticipated.
In order to accomplish any change in the TOT, the City Council must authorize placing
an ordinance on the ballot for the November 2, 2010 regular municipal election. Four
(4) members of the City Council must approve the introduction of an ordinance
amending Chapter 3.32 of the Lake Elsinore Municipal Code to increase the TOT and
approve a resolution placing the ordinance on the ballot for the November 2, 2010
election.
In order to meet the necessary deadlines imposed by the County election official, the
City Council must submit the proposed measure increasing the TOT by August 6th.
In addition to the actions discussed above, the City Council should designate two
members of the City Council to draft the argument in favor of the ballot measure.
An additional issue regarding the argument supporting the measure is whether the City
Council wants to review and possibly revise the argument supporting the measure
before it is finalized. If so, the argument could be reviewed by the City Council at the
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Increase in Transient Occupancy Tax
July 13, 2010
Page 3
regular meeting on July 27th. Alternatively, the City Council may opt to have those
members supporting the argument sign it after being finalized by the two member
Council committee. Staff seeks direction from the City Council on this issue.
Fiscal Impact
The cost of placing this measure on the ballot is anticipated to cost $10,000. Increased
revenues are anticipated to be approximately $68,000.
Recommendation
1. Waive further reading and introduce by title only an ordinance amending Chapter
3.32 of the Lake Elsinore Municipal Code to increase the rate of the City's
transient occupancy tax to 12% on hotels and campgrounds;
2. Adopt the attached Resolution No. 2010-046 ordering that a measure related to
increasing the City's transient occupancy tax be submitted to the voters at the
regular municipal election on November 2, 2010;
3. Authorize two members of the City Council to draft the argument in favor of the
measure, which can be submitted to the entire City Council for review and
approval at the City Council meeting on July 27, 2010.
Prepared by: Robert A. Brady
City Manager
Barbara Zeid Leibold
City Attorney
Approved by: Robert A. Brady
City Manager
Attachments: Ordinance
Resolution
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Page 4 of 11
ORDINANCE NO. 1281
AN ORDINANCE AMENDING PROVISIONS OF CHAPTER 3.32 OF THE
LAKE ELSINORE MUNICIPAL CODE TO INCREASE THE RATE OF
THE CITY'S TRANSIENT OCCUPANCY TAX TO 12% ON HOTELS
AND CAMPGROUNDS
THE PEOPLE OF THE CITY OF LAKE ELSINORE ORDAIN AS FOLLOWS:
SECTION 1. Section 3.32.020 of the Lake Elsinore Municipal Code is hereby
amended to add the following to the definition of "Hotel":
The definition of "hotel" as used in this Chapter 3.32 shall also include any
"campground." A "campground" means any park or real property where a transient may
locate a tent, trailer, tent trailer, pick-up, camper, recreational vehicle (as defined in
California Vehicle Code sections 242, 243, 362, 465, 635, or California Health and
Safety Code section 18010) or other similar temporary means for the purposes of
lodging, dwelling, or sleeping, whether or not water, electricity, or sanitary facilities are
provided.
SECTION 2. Section 3.32.030 of the Lake Elsinore Municipal Code is hereby
amended in its entirety as follows:
For the privilege of occupancy in any hotel, each transient is subject to and shall
pay a general tax in the amount of twelve percent (12%) of the rent charged by the
operator. Said tax constitutes a debt owed by the transient to the City which is
extinguished only by payment to the operator or to the City. The transient shall pay the
tax to the operator of the hotel at the time the rent is paid. If the rent is paid in
installments, a proportionate share of the tax shall be paid with each installment. The
unpaid tax shall be due upon the transient's ceasing to occupy space in the hotel. If for
any reason the tax due is not paid to the operator of the hotel, the tax administrator may
require that such tax shall be paid directly to the tax administrator.
SECTION 3. Notwithstanding Section 9217 of the California Elections Code,
without a vote of the people, the City Council may do any and all of the following: (i)
repeal this Ordinance; (ii) reduce the rate of the transient occupancy tax below twelve
percent (12%); or (iii) increase the rate of the transient occupancy tax to twelve percent
(12%) if it has been previously reduced below such rate. In no event shall the City
Council increase the rate of the transient occupancy tax in excess of twelve percent
(12%) without approval by a majority of the voters voting in an election on the increase.
SECTION 4. If any section, subsection, sentence, clause, phrase, or portion of
this Ordinance is for any reason held to be invalid or unenforceable by a court of
competent jurisdiction, the remaining portions of this Ordinance shall nonetheless
remain in full force and effect. The People of the City of Lake Elsinore hereby declare
that they would have adopted each section, subsection, sentence, clause, phrase, or
portion of this Ordinance, irrespective of the fact that anyone or more sections,
Page 5 of 11
Ordinance No. 1281
Page 2 of 3
subsections, sentences, clauses, phrases, or portions of this Ordinance be declared
invalid or unenforceable.
SECTION 5. If adopted, this Ordinance will increase the rate of the City's
existing Transient Occupancy Tax, which is a general tax of the City, from 10% to 12%
and also impose the Transient Occupancy Tax on campgrounds. This Ordinance was
proposed by the City Council of the City of Lake Elsinore through the approval and
introduction of the Ordinance and the adoption of Resolution No. 2010-_ by the
affirmative votes of not less than four of its members as required by Government Code
Section 53724(b).
SECTION 6. The Mayor is hereby authorized to attest to the adoption of this
Ordinance by signing where indicated below. This Ordinance shall take effect ten (10)
days following certification of the vote by the City Council.
I hereby certify that the foregoing ordinance was PASSED, APPROVED and
ADOPTED by the People of the City of Lake Elsinore voting on the 2nd day of
November, 2010.
MAYOR
ATTEST:
CITY CLERK
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Ordinance No. 1281
Page 3 of 3
STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE )ss.
CITY OF LAKE ELSINORE )
I, Carol Cowley, Interim City Clerk of the City of Lake Elsinore, California, hereby
certify that the foregoing Ordinance No. 1281 was introduced at a regular meeting of the
City Council of the City of Lake Elsinore on the 13th day of July 2010.
AYES:
NOES:
ABSENT:
ABSTAIN:
CAROL COWLEY
INTERIM CITY CLERK
Page 7 of 11
Page 8 of 11
RESOLUTION NO. 2010-046
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE
ELSINORE, CALIFORNIA, ORDERING THAT A MEASURE RELATED
TO INCREASING THE CITY'S TRANSIENT OCCUPANCY TAX BE
SUBMITTED TO THE VOTERS AT THE REGULAR MUNICIPAL
ELECTION ON NOVEMBER 2, 2010
THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA,
DOES HEREBY RESOLVE, DECLARE, DETERMIE AND ORDER AS FOLLOWS:
SECTION 1. The City Council, pursuant to its right and authority, does hereby
order submitted to the voters at the Regular Municipal Election to be held on November
2, 2010, the following measure:
Shall an ordinance be adopted to
impose a transient occupancy tax of
twelve percent (12%) on hotels and YES NO
campgrounds in the City of Lake
Elsinore?
SECTION 2. The text of the proposed ordinance to be submitted to the voters is
attached hereto as Exhibit "A" and incorporated herein by reference.
SECTION 3. The ballots to be used at the election shall be in form and content
as required by law.
SECTION 4. The Riverside County election official is authorized, instructed and
directed to procure and furnish any and all official ballots, notices, printed matter and all
supplies, equipment and paraphernalia that may be necessary in order to properly and
lawfully conduct the election and is authorized to canvass the returns of the election.
SECTION 5. The polls for the election shall be open at seven o'clock a.m. on the
day of the election and shall remain open continuously from that time until eight o'clock
p.m. of the same day when the polls shall be closed, except as provided in California
Elections Code Section 14401.
SECTION 6. In all particulars not recited in this Resolution, the election shall be
held and conducted as provided by law for holding municipal elections.
SECTION 7. The Interim City Clerk is hereby directed to file a certified copy of
this Resolution with the Board of Supervisors and the election official of the County of
Riverside, not later than August 6, 2010.
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Resolution No. 2010-046
Page 2 of 3
SECTION 8. The City Clerk shall certify to the passage and adoption of this
resolution and the same shall thereupon take effect and be in force.
PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council
of the City of Lake Elsinore, California, this 13th day of July 2010.
MELISSA A. MELENDEZ, MAYOR
CITY OF LAKE ELSINORE
ATTEST:
CAROL COWLEY
INTERIM CITY CLERK
APPROVED AS TO FORM:
BARBARA ZEID LEIBOLD
CITY ATTORNEY
Page 10 of 11
Resolution No. 2010-046
Page 3 of 3
STATE OF CALIFORNIA
COUNTY OF RIVERSIDE
CITY OF LAKE ELSINORE }SS
I, CAROL COWLEY, Interim City Clerk of the City of Lake Elsinore, California,
hereby certify that Resolution No. 2010- was adopted by the City Council of the City
of Lake Elsinore, California, at a regular meeting held on the 13th day of July 2010, and
that the same was adopted by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
CAROL COWLEY
INTERIM CITY CLERK
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