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HomeMy WebLinkAbout07/21/1998, 4 - TRANSIENT OCCUPANCY TAX RECORDS REVIEW council °°° j I=Numbs ac En as nEpont CITY OF SAN LUIS OBISPO FROM: Bill Statler,Director of Financ4a-v Prepared By: Linda Asprion, Revenue Manager��„�%(! "� SUBJECT: TRANSIENT OCCUPANCY TAX RECORDS REVIEW CAO RECOMMENDATION Approve implementing a transient occupancy tax (TOT) records review to assure compliance with the TOT ordinance and to establish an informal rapport and an information sharing process with the business owners so they have a contact in City Hall. DISCUSSION Background The transient occupancy tax in San Luis Obispo was originally implemented in 1968. Transient occupancy taxes are levied on all individuals occupying their dwelling for 30 days or less. This is generally most applicable to room rentals at motels/hotels, although it is also applicable to other types of short term rentals. The TOT rate is 10%of the room rental rate. Although the tax is collected for the City by the operators, it is a tax on the occupant,not the hotel or motel. One of the objectives in 1997-99 for the Finance Department was to determine the feasibility of implementing a transient occupancy. tax records review program. This project began by surveying twelve cities that are comparable to San Luis Obispo, all the cities within San Luis Obispo county and the County itself. The survey asked the following questions: ■ Has a transient occupancy tax review been performed by your agency? ■ Who performs (ed) this review? This question included the method of payment, contingency or flat fee, if a consultant was used; or was internal staff made available to perform the review work. ■ What review procedure was used? This question was to determine if a sample or if all hotel operators were reviewed. ■ What were the results of the review? This was an opportunity for the agency to provide information regarding the issues and effects of the review. These consisted of compliance issues,unclear TOT ordinances, additional revenue, etc. ■ Is the review ongoing? In other words was the review worthwhile and will the agency continue to perform any type of follow-up with the hotel operators. Council Agenda Report—Transient Occupancy Tax Records Review Page 2 The results of this survey are presented in Attachment A. Based upon the results of this survey a proposal for performing a TOT records review along with an implementation plan were presented to the City Administrative Officer, the Assistant City Administrative Officer, the Director of Finance, the Assistant to the Administrative Officer, and the Economic Development Manager. Summary of the Proposal for a TOT Records Review Why a Records Review of TOT? While the City has no indication that TOT is being reported incorrectly by any hotel or motel, there are three issues which are the impetus for a records review: ■ Compliance with the TOT ordinance. Compliance examples would be the manner in which the 30 day exemption rule is applied by the hotel operators and the circumstances under which government employees are exempt from paying TOT. ■ Equity among the businesses paying TOT. Businesses charging the customer and remitting correct payment to the City want to be assured that their competition is doing likewise. ■ Rapport with business owners. We view this as an opportunity to work with the businesses owners and operators in sharing information and building a rapport so they have someone to contact in City Hall. Performing the Records Review The proposed performance of a records review consists of the following two phases: ■ Planning. There are two aspects in the planning process: preparing a professional pamphlet containing the complete transient occupancy tax ordinance; and explaining a variety of compliance issues by meeting with a variety of organizations to explain the records review process. ■ Executing. Implementing the TOT records review consists of the following processes: ♦ Scheduling. The reviews will be scheduled during the non-peak tourist season for the convenience of the hotel operators. The months of November, 1998 through February, 1999 have been chosen for the reviews. Letters will be sent to the business owners approximately two months prior to the review offering choices of days and times for the review. ♦ Performing the Review. While the main focus of the records review is to assure compliance with the TOT ordinance, it is also a time to share information regarding exemptions, remittance, or a variety of other issues surrounding the processing of transient occupancy tax. The time period of review will initially be the most recent records beginning in January, 1998,however, if discrepancies are found the ordinance allows us to go back three years. Not every single transaction will be reviewed-typically a sample will be chosen. Z/-z' Council Agenda Report—Transient Occupancy Tag Records Review Page 3 ♦ Findings. Staff is proposing an amnesty program. If the tax was collected from the occupant but not remitted to the City, the operator will be required to remit the tax but will not be assessed a late fee or interest. If the tax was not collected from the occupant, the operator will be required to immediately 'institute tax collection but will not be required to pay the tax. ♦ Recognition for Hotel Operators. If the records review indicates the hotel is processing and remitting TOT tax in a manner complying with the ordinance, we may want to provide some form of recognition. ♦ Follow-up Reviews. The proposal indicates that some sort of follow-up occur at least every three years for each hotel. Who will perform the TOT Records Review? As noted in the survey results,most cities hire a consultant to perform the TOT reviews either on a contingency or a fixed fee basis. The downside of hiring a consultant is the lack of City staff involvement. Information sharing and training of hotel operators will not be a high priority for a consultant. Additionally, after the consultant leaves, the business owner will not have a person to contact with any additional questions. Fortunately, the City has staff capable of performing this review and, as such, we are recommending implementing the record reviews as a special assignment. By having the reviews performed by staff an informal rapport and an information sharing process with the business owners can be established while assuring compliance with the transient occupancy tax ordinance. A copy of the complete proposal is provided as Attachment A. CONCURRENCES Promotional Coordinating Committee. Prior to bringing this item to the City Council, staff met with the Promotional Coordinating Committee (PCC) on June 10, 1998. After a brief overview of the proposed TOT records review program a discussion centered around what type of information could be provided from the review and forms of recognition for hotels where no discrepancies are found. The PCC concluded by voting to support the TOT records review. A copy of the minutes from this portion of the PCC meeting is provided as Attachment B. Tourism Council. On June 23, 1998, the Tourism Council was provided a similar overview of the proposed TOT records review program. On balance, most of the members were supportive of implementing the TOT records review and voted to recommend the Chamber of Commerce endorse the program. However, there was some concern expressed by some members that this program was discriminatory to the hotel industry, as no other businesses are audited, and that if recognition was provided to hotel operators where no discrepancies were found it would make the other hotel operators look unseemly. Additional comments centered around the larger hotels being in compliance because they are scrutinized carefully by corporate owners and that the �-3 Council Agenda Report—Transient Occupancy Tax Records Review Page 4 smaller hotels have several different sets of books - "so what do we intend to accomplish with this records review/' The Chamber of Commerce will be voting on whether to endorse the records review at their July 16, 1998 meeting. A copy of the minutes from this portion of the Tourism Council is provided as Attachment C. While we understand these concerns,we continue to believe that the proposed review program is a good idea in meeting our goals of ensuring compliance, providing equity among businesses, and building rapport with business owners and operators. FISCAL IMPACT Compliance and equity are the main reasons for implementing the record reviews. There is no indication at this time that any hotel operator is not in compliance with collecting and remitting the correct amount of TOT, so if the TOT tax revenue does increase, it will be a by-product of this process, but not the reason for implementing it. There will be some minimal costs for the printing of pamphlets and supplies required to perform the reviews which can be paid for with existing resources. ALTERNATIVES Do nothing. Transient occupancy tax is the City's third largest tax revenue source for the General Fund, increasing between 6% and 8%annually. Because of its financial significance,we believe some form of review is desirable. ATTACHMENTS A. Proposal for Transient Occupancy Tax Records Review B. Minutes from Promotional Coordinating Committee meeting of June 10, 1998 C. Minutes from Tourism Council meeting of June 23, 1998 Y-� Attachmant.g. CITY OF SAN LUIS OBISPO PROPOSAL FOR TRANSIENT OCCUPANCY TAX RECORDS REVIEW Prepared By: Linda Asprion, Revenue Manager =. b845zc.:� - PROPOSAL FOR TRANSIENT OCCUPANCY TAX RECORDS REVIEW OBJECTIVE To perform a records review of the hotel operators within San Luis Obispo to assure compliance with the transient occupancy tax ordinance and to establish an informal rapport and an information sharing process with the business owners so that they have a contact in City Hall. DISCUSSION Background The transient occupancy tax(TOT)in the City of San Luis Obispo was originally implemented in 1968 at a five percent rate. Three rate increases have occurred since then: in 1976 the TOT rate increased by one percent to 6%;in 1991,the TOT rate was increased by three percent to 9%; and on October 1, 1993 the rate was increased an additional one percent to the current rate of ten percent Transient occupancy taxes are levied on all individuals occupying their dwelling for 30 days or less. This is generally most applicable to room rentals at motels and hotels,although it is also applicable to other types of short term rentals. The TOT rate is 10% of the room rental rate. Although the tax is collected for the City by the operators,it is a tax on the occupant,not the hotel or motel. TOT is the third highest tax revenue source for the General Fund, increasing between 6% and 8% annually as shown below. Transient occupancy Tax Revenue History %=Revenue Increase 199495 Over Prior Year MijjjMM r.,....._,- .. ... _,_ 1995-96 1996 97 - —- $2:84.`300:— Protected ._'_$3A16,000:...':_.... Projected 1996-99 - $0 $500,000 $1,000,000$1,500,000$2,000,000$2,500,000$3,000,000$3,500,000 y� Projected revenue for 1997-98 is based on current trending from actual TOT revenue received during the current year. The 1998-99 projected revenue is based on a 4%increase from the projected 1997-98 revenue. Why A Records Review of TOT? During the past few years there have been suggestions from business organizations, such as the Chamber of Commerce, the Business Improvement Association, and lodging owners, that the City perform a records review on the transient occupancy tax reported by the hotels and motels. While the City has performed a cursory review by comparing the tax amount reported on the TOT reports with the gross receipts reported by the hotels and motels for calculating their business tax,no specific review work has been completed The City has no indication that TOT is being reported incorrectly by any hotel or motel, but there are two issues which are the impetus for a records review: • Compliance with the TOT ordinance Compliance examples would be the retention of records and the manner in which the 30 day exemption rule is applied by the hotel/motel operators. • Equity among the businesses paying TOT. Businesses charging the customer and remitting correct payment to the City want to be assured that their competition is doing likewise. Survey Results As a part of the feasibility study for performing a records review of the hotels and motels,we wanted to find out the experiences of other cities. Accordingly,we contacted every city within San Luis Obispo County,as well as the County itself,along with the other twelve cities we typically use for comparison purposes. Since the cities used in our comparison group are mostly tourist destinations and often with college facilities,their experience in TOT reviews provides excellent insight. Below are the results of this survey. CITY Any TOT Who Performs Review Results Review : .. . Review? Ongomg?; ; � . - ' s.r Arroyo Grande No Atascadero No Camarillo Yes. 4 years David M. Griffith Reviewed all Received add'1 revenue Clarified ago (DMG)on operators but spent on attorney fees ordinance and contingency basis defending ordinance will perform requirements reviews again in about two years TOT_ �:--.Who Performs f Review ResWis -' Reviews, Review Procedure n r4A....... County of San Performed Internal audit Reviewed Received about$20,000 Starting review Luis Obispo reviews in staff sample of total from prior 3 years of again in 1998 1994, 1995, operators review. Only problem is & 1996. based on determining TOT on input from package deals. tax collector Davis: No Grover Beach No Monterey. Ongoing Internal audit PerfJrms Continually.find TOT:is largest: staff. review on all compliance:issues with::.. revenue.sou=:. operators bi- exerriptions-but no $10 revenue annually. perforxn.::.:. . . ...... :-reviews. Morro. Bay Review is Municipal Plan to N/A vvrU depend c currently in Resource perform findings preliminary Consultants review on all stage- (MRC-on operators contingency basis Napa Did have Currently Review-only MRGreview very:little: Con MRC perflormed.by problem revenue not.irally *v4�of internal audit staff op problem .. perform reviewzfew 0 Ma im only years ago, Now only. review when there isa_ problem: Palm Springs Ongoing internal audit All operators Find variances in about Plan to continue staff and MRC on reviewed one-half of the reviews. with current contingency basis once every Revenue recovery more program ffim years than pays for staff time but could not provide any $'s. :Any TOT whdYerforms: Review Results.: Review Review? Review Procedureng ° '• ` 1 Paso Robles Yes, DMG on flat rate All operators Add'l revenue of$39,000 Revising TOT completed in per operator as reviewed with most problems over ordinance to Fall of 1997 was less than 30 day exemption remove contingency ambiguities. Haven't decided about another review. Petaluma Yes,.first By.extemal8 motels in No add'l.revenue&no NU contiaue review in: auditors.paid.a. city, firm changes to TOT: for 3:7ears:unti7 1997 flatfee:per wrl :reyrew'.' ordinance all°operators operator two per yea;:. reviewed:..... Pismo Beach Yes,in 1989 By external Performed No add'l revenue&no No or 1990 auditors paid a review of changes to TOT flat fee per sample of ordinance operator operators San<Juan Yes,but:only By external: :: Have.-2' No add':1 revenue:&:no . Only whenthge Capistrano' when thereis auditors.paid a. motels in changes to.'TOT '': is a problem a problem flat fee:per. city ordinance operator : . Santa Barbara Yes through Internal audit Sample of Received small amounts Continuing to IRS tax staff operators of add'1 revenue,no request tax returns& changes to TOT information SBOE ordinance -- reports Santa Cruz Yes,since Internal audit.. : EveryOnly find<add':1 revenue Continue to 1988: staff operator whennew:hoteUmotel ievtewfior reviewed on:. opens or changes :::. compliance .3 year cycle ownership issues:: Santa Maria Yes,over Internal staff Every No add'1 revenue from Plan to continue last 3 years hotel/motel review but overall as time permits reviewed on revenue increased once 3 year cycle word was out about reviews. CTI'Y : Any TOTWhd Performs Review .. Resrilis_ Review Reyr .Procedure Ventura Yes,3 years Hired a Reviewed all No significant revenue Currently ago consultant operators from review but did find establishing an 1 motel that was not on audit office who their records&not will begin this paying TOT work Visalia Yes,started Hired MRC on a:. Reviews:all. Major offense was MRC continues in 1996 contingency opetators exempting all to:perfornr when-City basis. every two govemmentemploydm- audits:as:part::of owned years. . Add'1 revenue.of revenue.services Radisson $100,000.butforgaveall . . offeied::': Hotel. operators so paid MRC out of City:funds:. As reflected above, most sites perform some type of review. However, significant increases in revenue are rarely the result,whether the review is performed by in-house staff or outside consultants. THE RECORDS REVIEW Planning There are two aspects in the planning process: ■ Preparing a professional pamphlet containing the complete transient occupancy tax ordinance and explaining a variety of compliance issues. ■ Meeting with a variety of organizations to explain the who's, why's and how's of the records review process. These organization will include but not be limited to the Chamber of Commerce, the San Luis Obispo Downtown Association (formerly the Business Improvement Association), and the Hotel/Motel Association(if this organization remains active). A draft of the pamphlet will be provided to the organizations at the meetings for their review and comment regarding content. The completed pamphlet will also be provided to the hotel operators as a basis for discussion and answering questions. By presenting the records review as a compliance issue as well as ensuring that all hotel operators are collecting and remitting their fair share of transient occupancy tax,we are hopeful that the records review will be endorsed by these organizations. T�� Executing Scheduling The records review should be scheduled during the non-peak tourist season for the convenience of the hotel operators. Accordingly, the reviews will be scheduled during the months of November, 1998 through February, 1999. Since the City has 40 hotels, the reviews will average approximately 10 hotels per month. Letters will be sent to the business owners approximately two months prior to the review. The letter will indicate the documents requested for review and offer two or three choices of days and times for the actual review. The name and phone number of the contact person will be included so that the business owner can call and schedule their preference of date and time. Follow-up contact will be made with the business owner to help ensure a smooth review process. All reasonable accommodations will be made to work with the business owner to complete a successful records review. Performing the Review While the main focus of the records review is to assure compliance with the transient occupancy tax ordinance, it is also a time to share information regarding exemptions, remittance, or a variety of other issues surrounding the processing of transient occupancy tax. The actual review of the records will begin with the registration cards,matching those to the cash receipts ledger or cash log, the housekeeping report, and the remittance of the tax to the City. The period of review will initially be the most recent records beginning in January, 1998, however, if discrepancies are found the ordinance allows us to go back three years. Not every single transaction will be reviewed. Typically a sample will be chosen. Depending on the size of the hotel,the sample could consist of a one month period or specific days of activity. If discrepancies are found in the initial sample the scope of the review will be expanded to determine the extent of the discrepancies. Recognition for Hotel Operators If the records review indicates the hotel is processing and remitting transient occupancy tax in a manner complying with the ordinance,we may want to provide some form of recognition. This could be a plaque or a certificate in frame(ready for hanging) from the City indicating the hotel's successful completion of the records review. Additionally, a listing of hotels successfully completing the records review might be published in the Chamber of Commerce and/or Downtown Association newsletter. This could be an item for discussion when we have our planning meetings with the organizations. Findings For those hotels where discrepancies are found an educational process is recommended. Time will be spent with these operators so that they can understand the ordinance requirements. Additionally,they will be required to pay the back taxes owing, if collected from the occupant, but no interest or late penalties will be assessed. If the documentation indicates no tax was collected from the occupants, the operator will be required to immediately institute tax collection in this area and a follow-up review will be scheduled to ensure compliance. Follow-up Reviews Once the initial reviews are completed, we will have a better feel for how many hotels will require additional follow-up activities. This follow-up activity will be dictated by the requirements of each hotel, but some sort of follow-up should occur at least every three years. In other words,this process will be on- going but to a lesser extent after the initial records review. ALTERNATIVES ■ Do nothing. Transient occupancy tax is the City's third largest tax revenue source for the General Fund,increasing between 6%and 8%. Because of its financial significance,we believe some form of review is desirable. ■ Have the records review performed by a consultant Several firms (HdL, MRC, DMG, etc.) perform transient occupancy tax reviews either on a contingency or fixed fee basis. The downside of this alternative is the lack of City staff involvement Information sharing and training of hotel operators will not be a high priority for a consultant. Additionally, after the consultant leaves, the business owner will not have a person to contact with any additional questions. As such, this alterative is not recommended. ■ Have City staff perform the records review. Implementing the record reviews as a special assignment for staff is the recommended alternative. While assuring compliance with the transient occupancy tax ordinance, staff can establish an informal rapport and an information sharing process with the business owners so that they have a contact in City Hall. Fortunately, the City has staff capable of performing this type of review. Prior to worldng for the City of San Luis Obispo, the Revenue Manager performed internal audits on hotel operations ranging from small La Quinta and Holiday Inn motels to major resort properties such as the Hilton Hawaiian Village and Embarcadero Hyatt Regency in San Francisco. Because these internal audits were performed on contractors as well as joint partners, there was an emphasis on education and information sharing along with the technical financial accountability. Based on the time frame proposed for the reviews, the Revenue Manager will be able to manage this project: business tax renewal will be largely completed; 1999-01 Financial Plan preparation will not be seriously underway; and implementation of the new financial management system for revenue applications will not yet be underway. In summary, if this work is to be performed by City staff then the proposed"November to February"time frame is the best opportunity to do so. FISCAL IlKPACT The record reviews will be performed as a special assignment by the Revenue Manager. There will be some minimal costs for the printing of the pamphlets and supplies required to perform the reviews. While some additional revenue may be generated from the reviews, there is no indication at this time that any hotel operator is not in compliance with collecting and remitting the convect amount of transient occupancy tax. Again, compliance and fairness are the real issues for implementing the record reviews; increased tax revenue,if any,will be a by-product. zk-/Z SCHEDULE If this proposal is approved by the City Administrative Officer, we will present this item to the City Council and begin implementing the following schedule. Process to Complete Time Period for Completion Present proposal to the Promotional June 10, 1998 Coordinating Committee Present proposal to the San Luis Obispo June 23, 1998 Chamber of Commerce Tourism Council Present records review for City Council July 21, 1998 approval Prepare draft pamphlet for staff review August, 1998 Present records review process and draft September, 1998 pamphlet to community groups Send notification letter to hotel operators and September and October, 1998 schedule record reviews Complete record reviews November 1998 through February 1999 Report results to the City Council April, 1999 Continue information sharing and records On-going review as required with individual hotel operators - SUMMARY We believe that a transient occupancy tax records review can produce very positive results in assuring that all operators are familiar with the City's requirements and that all TOT collectors are treated equally. While additional revenue collections may be a by-product of this effort, it is not the main purpose of this review. To best achieve our goals,we recommend that the review be performed by City staff rather than by a consultant,where the emphasis may be more on revenue collection than education. 4 /3 AttachmenUL PROMOTIONAL COORDINATING COMMITTEE DRAFT REGULAR MEETING MINUTES June 10, 1998 Council Hearing Room, City Hall San Luis Obispo, CA 93401 1. CALL TO ORDER The meeting was called to order at 5:33 p.m. by Chairperson Sandy Baer with the following members present: Mitch Massey, George Newland, Bill Pyper,and Wilda Rosene. Absent were Carol Ann Lockary and Denis Rizzo. Wendy George served as staff. Also present were Christine Bragg,Jonni Biaggini and Maggie Cox. 2. PUBLIC COMMENT There was no public comment. 3. APPROVAL OF MINUTES The minutes were approved as presented. 4. TRANSIENT OCCUPANCY TAX RECORDS REVIEW Linda Asprion, the City's Revenue Manager, reviewed the Transient Occupancy Tax (TOT)as it stands today. TOT is currently set at 10 percent and is growing at a rate of 6-8 percent per year. The City expects to receive almost$3 million in TOT next year. She explained that the reasons for the record review are: (1)compliance issues regarding records retention, the 30-day exemption and charging of government employees; (2)equity—making sure everyone is reporting TOT fairly; and (3) an opportunity to exchange information with hotel/motel owners, to provide education and to allow them to develop a contact at City Hall. The process will begin with providing hotel/motel owners with a pamphlet that contains the wording of the ordinance and answers anticipated questions about the process. City staff will also meet with organizations, such as the Downtown Association and the Chamber of Commerce,so no one is caught unaware. Linda anticipates that the record review will actually take place between November 1998 and February 1999, during the winter season. Those records chosen for review will begin with January 1998. The City will be offering an amnesty program. If the mistake is a failure in collecting TOT, the hotel/motel will be asked to start collecting. If the mistake is that the hotel/motel collected TOT but did not remit it to the City,they will be asked to remit the TOT collected. There will be no fines for failure to remit. If no problems are found, the Finance Department plans to give recognition to the hotel/motel. Once this review process is established, it will be ongoing and occur about once every three years,with closer follow-up on problem businesses. The City does not anticipate receiving additional revenue; that is not the purpose for the review. Most cities surveyed have used consultants to perform their review. The City of San Luis Obispo is fortunate to have a Revenue Manager who has performed such reviews in a previous job and is capable of performing the process in-house. It was stressed that the Finance Department has the mindset that this is an educational opportunity. It is an opportunity for the City to establish good relationships with its hotels/motels. Jonni Biaggini asked if there was a way to establish occupancy rates for the City as a part of this study. Linda answered that because the City will only be taking samples and not reviewing all months, the information would not be reliable. Maggie Cox suggested that recognition could be in yid L of an ad run in the newspaper listing the hotels/motels that were doing things right. option might be to provide tickets to the Performing Arts Center. On a motion by George ,seconded by Bill Pyper,the PCC voted to support the TOT records review. 5. REPORT ON SIGN SUBCOMMITTE MEETING Sandy Baer asked that Subcommittee Chairperson Wilda Rosene provide a report on the Sign Subcommittee meeting held earlier that day. Wilda reported that the three subcommittee members were present: herself, Bill Pyper and Denis Rizzo(along with Wendy George,John Dunn and Bridget Frazer, the Project Engineer). Bridget and John Dunn reviewed the history of the project and discussed why a sign was not included in the final product. Wendy then reported that she had been approached by Erik Justesen of RRM Design,who said that he would be interested in helping, perhaps even on a voluntary basis. RRM Design were the designers of the bridge itself. The Subcommittee directed staff to contact Erik to see if he might be willing to work with the group to produce a design for the sign. A suggestion was then made that someone from the Historical Society might be willing to coordinate fundraising. John Dunn indicated that he had been approached by someone with that suggestion. The process would involve the PCC providing conceptual approval and then going to Council for their conceptual approval. The Subcommittee asked staff to place this issue on the PCC agenda for next month. 6. REPORT ON COORDINATED MARKETING PLAN Maggie Cox reported that she and Jonni Biaggini of the VCB are meeting on Friday to develop a Coordinated Marketing Plan and she will be prepared to report on it at the next PCC meeting. 7. REPORT FROM CHAMBER OF COMMERCE Christine Bragg reported that Alex Cairns and Dave Garth were at the Highway 1 Re-Opening Celebration and were not available to provide a report. Christine reported that Alex has been working closely on the PBS"California Heartland" production. She has also met with Hearst Castle to continue discussion of providing some form of bus transportation through Ride-Share. This issue has been placed on hold since a new provider, Parknet, has taken over issuing tickets. In addition to working on the transportation issue, the Chamber has been trying to have a Hearst Castle ticket outlet reopened in the Visitor's Center. Christine pointed out that the number of visitors coming into the Visitor's Center during the extended hours is going up each month. She also sai6that one of the winners of the radio promotion came into the Chamber and told her they were very happy with their trip. Finally, she reported that the Visitor's Center has hired its new summer help (also someone named"Christine".) 8. REPORT ON MARKETING Maggie Cox reported that there have been more than 700 responses from the second run of the brochure ad. Altogether,there have been several thousand responses. The hotel thank you ad has also had good response with 350 calls coming in the first time it ran and 300 calls the second time. BCA has advertising money left over because of the cheaper rate they received from the LA Times and the use of co-op advertising in the San Jose Mercury News. We also did not have to pay to have work done on the video for our Internet ad. Maggie wishes to encumber the remaining funds to be used next year to update the City's brochure. Maggie has also met with Tom Fenno of Travel-Related Marketing to review a program in which TV advertorial is provided in exchange for commercial"buys"on cable TV systems. A representative of BCA attends the Special Events Task Force meetings and reported that the Solvang 100 and the Western Regional Stream Conference are both upcoming events. Maggie 1/_4 Attachment COMMITTEE MEETING MINUTES Committee: Tourism Council Meeting Date: June 23, 1998 Meeting Time: 8 a.m. Meeting Place: Embassy Suites Hotel I. Approval of Minutes IL Proposal for Transient Occupancy Tax Records Review—Linda Asprion, Revenue Manager for the City of San Luis Obispo reviewed the City's proposal for Transient Occupancy Tax(TOT) Records Review. The City is proposing a records review reported by hotels and motels within the City.The current TOT is 10%and is the third largest general fund. The City expects to receive almost$3 million next year. The reasons for the review are: (1) compliance with the TOT ordinance,meaning retention of records by hotel/motel operators; (2) equity— making sure everyone is reporting TOT fairly;and (3) an opportunity to exchange information with hotel/motel owners, to provide education and allow them to develop a contact at City Hall. The proposal is set to go before City Council on July 21. If approved, the review will most likely take place between November '98- February '99. Ten properties would be reviewed/audited each month for a total of 40 and each review will most likely take half of one day. Those records chosen 1 for review will begin with January '98. There will be an amnesty program for those who are required to pay any fines. Dave Garth mentioned that the Chamber has been asking for this review for a long time to ensure that hotels/motels are paying fairly. While lodging industry representatives John Conner and Terry Reay voiced support of the review,Bob Griffin cautioned that it seems to be discriminatory against one industry and questioned whether it is worth spending the time doing it if the big operators are already in compliance. Asprion noted that properties would only be reviewed once every three years, unless they are not in compliance, and then they would be reviewed sooner. On a motion by Terry Reay,seconded by John Conner,the Tourism Council voted to support the proposed TOT records review. Bob Griffin abstained. Garth stated that the proposal would be presented to the Chamber Board of Directors at their next meeting on July 16. y iG MEL.A AGENDA DATE -a 1'97 ITEM # �Pe=SX?M6 AT AR,`77,V San Luis Obispo Chamber of Commerce 1039 Chorro Streel San Lws Obispo. Calilonua 93401-3278 (805) 781.2777 • FAX (805) 54,3 1.155 r-mail: sloth,uiil�cr<rrs,C:;h,�inbi:r.oitl David E. Garth, Prasideiil/CEO July 17,1998 Eu � DO DIR IN DIR Mayor Allen Settle FIRE CHIEF PW DIR City of San Luis Obispo POLICE CHF 990 Palm Street i REC DIA 1lTLL 018 San Luis Obispo,CA 93401PEFS DM Re: Proposed Transient Occupancy Tax Records Review Dear Mayor Settle: The San Luis Obispo Chamber of Commerce appreciates City staff's efforts to ensure equitable compliance,by local hospitality businesses,with the Transient Occupancy Tax (TOT). However, we do not agree with the methods proposed to ensure this compliance. At its most recent meeting,the Chamber Board listened to presentations,both pro and con,on this subject.After much discussion,the Chamber Board decided to oppose the TOT records review program as currently proposed. The Chamber opposes staff's plans fora blanket review of all hotels/motels for TOT compliance. Such a review is far-reaching and unnecessary. However,the Chamber supports reasonable efforts to ensure compliance. Existing City policy to conduct random audits of hotels/motels, should be utilized to ensure TOT compliance. Also,audits should be utilized in cases where there are indicators of non-compliance. Thank you for your consideration of our concerns. Sincerely, Anita Robinson Chairman of the Board cc: Linda Asprion Gordon Jackson a Pragna Patel . 's� P TuY YF.AIIS ACCREDITED c„nanr.0 ur corr•rxcv David Garth President CEO Chamber of Commerce 1039 Chorro Street San Luis Obispo, Ca. 93401 Regarding: Proposal for Transient Occupancy Tax Records Review Dear Mr. Garth, We the undersigned principals and managers representing the San Luis Obispo area lodging industry, request that the Chamber Board of Directors vote to not grant approval for having the City of San Luis Obispo perform an annual city-wide occupancy tax records review. A city—wide annual tourism industry review is discriminatory, a I'/zday intrusion of our businesses and will not generate any additional revenues. The cities own survey shows that no additional revenue will be generated. We feel it is not logical for the Chamber Board of Directors to grant approval so that the City revenue manager can spend four months worth of her salary to train the San Luis Obispo City lodging industry on how to pay it's TOT taxes. The Cities' revenue manager should be spending her time reviewing the IRS and State Board of Equalization records and performing reviews on individual properties that need her help. Sincer VOL 1 �es Sal Luis Jhr �1v� L1� i � Gves� � San Luis Marketplace Presentation July 21, 1998 I lot STAFF PRESENTATION 20 minutes Project Overview John 3 minutes Why is this matter on the agenda this evening? An overview of this project The Physical Project Ron 4 minutes New project design No physical mall connection From Costco to Target,large home improvement store Eventual road connection to Los Osos Valley Road(and its relationship to open space) Recommendations: p 5, 6,7, 8 of staff report The Prado Road Interchange Overall project need and benefit;probable timing&cost Mike 3 minutes Bond funding/sales tax reimbursement Bill 3 minutes Recommendation: p 10, 11 of staff report Downtown Fiscal Analysis Arnold I minutes Why is the study needed? Policy 3.1.3 of the City's LUE Recommendation: p 11 of staff report Review Process and Time Line Ron 4 minutes EIR Land use approvals Building permits Prado road interchange MOU and DDA Negotiations Recommendations: p 12, 13 of staff report Wrap-up John 2 minutes Summary and recommendations Recommendations: p 14, 15 of staff report r r _ 1 ME,. _AG AGENDA DATE -7,9 L ITEM # San Luis Obispo Chamber of Commerce 1039 Chorro Street • San Luis Obispo, California 93401-3278 (805) 781-2777 • FAX (805) 543-1255 e-mail: slochamberpslochamberorg David E. Garth, President/CEO July 17,1998 vnolc � _U 0 c DIR Mayor Allen SettleDIR O FIRE CHIEF City of San Luis Obispo O PW DIR 990 Palm Street O POLICE CHF San Luis Obispo,CA 93401 0VTL jRP11tOM Re: Proposed Transient Occupancy Tax Records Review Dear Mayor Settle: The San Luis Obispo Chamber of Commerce appreciates City staff's efforts to ensure equitable compliance,by local hospitality businesses,with the Transient Occupancy Tax(TOT). However, we do not agree with the methods proposed to ensure this compliance. At its most recent meeting,the Chamber Board listened to presentations,both pro and con,on this subject.After much discussion,the Chamber Board decided to oppose the TOT records review program as currently proposed. The Chamber opposes staff's plans for a blanket review of all hotels/motels for TOT compliance. Such a review is far-reaching and unnecessary. However,the Chamber supports reasonable efforts to ensure compliance. Existing City policy to conduct random audits of hotels/motels, should be utilized to ensure TOT compliance. Also,audits should be utilized in cases where there are indicators of non-compliance. Thank you for your consideration of our concerns. Sincerely, p Anita Robinson Chairmanof the Board cc: Linda Asprion Gordon Jackson Pragna Patel TEN YEARS RECEIVED 17 1998 ACCREDITED CX1M68Y 01 C•M�ENCE SLO CITY COUNCIL I. 10"%