HomeMy WebLinkAbout07/21/1998, 4 - TRANSIENT OCCUPANCY TAX RECORDS REVIEW council °°°
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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.
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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
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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
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Attachmant.g.
CITY OF SAN LUIS OBISPO
PROPOSAL FOR TRANSIENT
OCCUPANCY TAX RECORDS REVIEW
Prepared By: Linda Asprion, Revenue Manager
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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
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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?; ;
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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
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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¬ 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.
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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.
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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.
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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
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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
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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"%