The URL can be used to link to this page

Home My WebLink About12/5/2001 - STAFF REPORTS (18) DATE: December 5, 2001 TO: City Council FROM: Director of Finance and Treasurer RE: Increase in Transient Occupancy Tax rates Recommendation: It is recommended that the City Council amend the Transient Occupancy Tax Ordinance to impose an additional 1.7%tax on transient rentals for Group Meeting Hotels, and an additional.7%tax on all other hotels, effective January 1, 2002. Summary: The new TOT rates for Group Meeting Hotels would be 12.5%, and for all other hotels, 11.5%. The additional tax would raise about $1.7 million per year. Background: The current TOT rates are 10.8%for Group Meeting Hotels (generally, hotels of 100 rooms or more), and 10%for all other hotels. In the November, 2001 election, the voters of Palm Springs authorized the City Council to increase the TOT rates to 12.5% and 11.5%, respectively. The desire of the supporters of the rate increase is to use the additional money generated to fund an expansion of the Convention Center. However, as a general tax increase, any new money is not specifically obligated for that purpose. For the remainder of Fiscal Year 2001-02, the proposed increase would produce about $1 million. Those funds could be used to cover the preliminary costs of the Convention Center expansion,direct costs of near term improvements in the Convention Center (carpet replacement, kitchen improvements, etc.), increases in Tourism funding, other City General Fund services, or any combination of these. If the Convention Center expansion was approved, the annual debt service would likely absorb most of the additional TOT revenue produced by the rate increase. The attached resolution amends the TOT ordinance to increase the existing rates. The appropriation of the additional revenue would be left for future consideration. Submitted by Approved Thomas David H. Ready Director off Finance & Treasurer City Manager Attachments: Ordinance Amendment History of TOT rates/rates in other cities minis We Wory 1119/01 CITY OF PALM SPRINGS HISTORY OF TRANSIENT OCCUPANCY T (TOT) RATES IN PALM SPRINGS Date of Change Rate 4/13/67 4.00% 1/1/68 5.00% 10/1/72 6.00% 7/1/78 7.00% 9/l/84 9.00% 8/1/91 10.00% 8/l/92 10.80% 11/1/95 10.90% 11/1/96 10.80% * Group Meeting Hotels only; all other **Group Meeting Hotels only; all other TOT RATES IN COACHELLA VALLEY Cathedral City 10.00% Coachella N/A Desert Hot Springs 10.00% Indian Wells 9.25% Indio 10.00% La Quinta 11.00% Palm Desert 9.00% Rancho Mirage 10.00% County of Riverside 10.00% TOT RATES IN OTHER CITIES Anaheim 15.00% Las Vegas 9.00% Los Angeles 14.00% Monterey 10.00% Phoenix 12.07% Reno 12.00% Sacramento 12.10% San Diego 10.50% San Francisco 14.00% Santa Barbara 12.00% Santa Cruz 10.00% Santa Monica 12.00% Seattle 15.60% 17041 ORDINANCE NO. AN ORDINANCE OF THE CITY OF PALM SPRINGS CALIFORNIA ADDING SECTION 3.24.037 (a) TO THE PALM SPRINGS MUNICIPAL CODE TO IMPOSE AN ADDITIONAL, ONE AND SEVEN TENTHS PERCENT (1.7%) TRANSIENT OCCUPANCY TAX FOR GROUP MEETING HOTELS AND AN ADDITIONAL ONE AND FIVE TENTHS PERCENT (1.5%) FOR ALL OTHER HOTELS ADOPTED PURSUANT TO GOVERNMENT CODE SECTION 36937 (d) THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, DOES HEREBY ORDAIN AS FOLLOWS: SECTION 1. Section 3.24.037 (a) is hereby added to the Palm Springs Municipal Code to read as follows: 3.24.037 (a) Additional tax imposed — Use of proceeds. In addition to the tax imposed by Sections 3.24.030, 3.24.035, 3.24.036, and 3.24.037 for the privilege of occupancy in any hotel on or after January 1, 2002, each transient is subject to and shall pay an additional tax in the amount of one and seven tenths percent (1.7%) of the rent charged by the operator in group meeting hotels, and an additional one and five tenths percent(1.5%) in all other hotels. The additional tax imposed by this section shall be administered and collected in the same manner, and is subject to all of the same definitions, exemptions, rules and regulations as the tax imposed by Section 3.24.030, except that the tax imposed by this section shall be paid into the general fund of the city, and the provisions of Section 3.24.310 shall not apply to the tax imposed by this section. This tax shall be in force effective January 1, 2002. SECTION 2. Effective Date. This Ordinance, being an Ordinance relating to taxes for the usual and current expenses of the City, shall take effect immediately upon its passage, pursuant to Government Code Section 36937 (d). SECTION 3. Severability. In the event any section, subsection, sentence, clause, phrase, or portion of this Ordinance is for any reason held invalid or unconstitutional by any court of competent jurisdiction, such portion shall be deemed as a separate, distinct, and independent provision, and such holding shall not affect the validity of the remaining portions of this Ordinance. SECTION 4. Publication. The City Clerk is hereby ordered and directed to certify to the passage of this Ordinance, and to cause the same or a summary thereof or a display advertisement, duly prepared according to law, to be published in accordance with the law. ADOPTED this day of , 2001. I M AYES: NOES: ABSENT: ATTEST: CITY OF PALM SPRINGS, CALIFORNIA By City Clerk Mayor REVIEWED &APPROVED AS TO FORM: ORDINANCE NO. AN ORDINANCE OF THE CITY OF PALM SPRINGS CALIFORNIA ADDING SECTION 3.24.037 (a) TO THE PALM SPRINGS MUNICIPAL CODE TO IMPOSE AN ADDITIONAL, ONE AND SEVEN TENTHS PERCENT (1.7%) TRANSIENT OCCUPANCY TAX FOR GROUP MEETING HOTELS AND AN ADDITIONAL ONE AND FIVE TENTHS PERCENT (1.5%) FOR ALL OTHER HOTELS ADOPTED PURSUANT TO GOVERNMENT CODE SECTION 36937 (d) THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, DOES HEREBY ORDAIN AS FOLLOWS: SECTION 1. Section 3.24.037 (a) is hereby added to the Palm Springs Municipal Code to read as follows: 3.24.037 (a) Additional tax imposed — Use of proceeds. In addition to the tax imposed by Sections 3.24.030, 3.24.035, 3.24.036, and 3.24.037 for the privilege of occupancy in any hotel on or after January 1, 2002, each transient is subject to and shall pay an additional tax in the amount of one and seven tenths percent (1.7%) of the rent charged by the operator in group meeting hotels, and an additional one and five tenths percent(1.5%) in all other hotels. The additional tax imposed by this section shall be administered and collected in the same manner, and is subject to all of the same definitions, exemptions, rules and regulations as the tax imposed by Section 3.24.030, except that the tax imposed by this section shall be paid into the general fund of the city, and the provisions of Section 3.24.310 shall not apply to the tax imposed by this section. This tax shall be in force effective January 1, 2002. SECTION 2. Effective Date. This Ordinance, being an Ordinance relating to taxes for the usual and current expenses of the City, shall take effect immediately upon its passage, pursuant to Government Code Section 36937 (d). Notwithstanding the foregoing, the City's previously existing rate shall apply to any contracts entered into by any hotel operator with prospective occupants prior to November 6, 2001, where the application of the new rate would cause the operator to breach such preexisting contracts. SECTION 3. Severability. In the event any section, subsection, sentence, clause, phrase, or portion of this Ordinance is for any reason held invalid or unconstitutional by any court of competent jurisdiction, such portion shall be deemed as a separate, distinct, and independent provision, and such holding shall not affect the validity of the remaining portions of this Ordinance. SECTION 4. Publication. The City Clerk is hereby ordered and directed to certify to the passage of this Ordinance, and to cause the same or a summary thereof or a display advertisement, duly prepared according to law, to be published in accordance with the law. ADOPTED this day of 2001. AYES: NOES: ABSENT: ATTEST: CITY OF PALM SPRINGS, CALIFORNIA By City Clerk Mayor REVIEWED &APPROVED AS TO FORM: