EAST PALO ALTO
CITY COUNCIL
STAFF REPORT
DATE: July 25, 2023
TO: Honorable Mayor and Members of the City Council
VIA: Melvin E. Gaines, City Manager
BY: Maurice Baker, Acting Community Services Manager
Melvin E. Gaines, City Manager
SUBJECT: 2023 TOT Recommendations
Recommendation
Adopt a Resolution approving:
For Calendar Year 2023 funding cycle only, appointment of a one-time Internal Review Panel comprised of City Staff to recommend awards of the Transient Occupancy Tax (TOT) community funds in place of the Community Grants Review Panel; and The Internal Review Panel’s proposed funding recommendations for Calendar Year 2023 Transient Occupancy Tax (TOT) grants.
Alignment with City Council Strategic Plan
This recommendation is primarily aligned with:
· Enhance Community Services and Parks for Residents
Background
City Code and Policies Related to TOT Grants
Chapter 3.68 of the Municipal Code, the uniform transient occupancy tax (TOT ordinance), establishes the imposition of a 12 percent tax on hotel rents for transient stays. In 2002, East Palo Alto voters modified the TOT ordinance requiring dedication of 10 percent of TOT revenue to affordable housing and 10 percent to children, youth and family services, including senior citizens (CYFS).
According to the Municipal Code Section 3.68.150, although TOT funding may be used for “any legitimate municipal purpose,” CYFS revenues can only be used to:
Support comprehensive, integrated, and community-based systems of services and support systems for children, youth, and their families and senior citizens to promote individual and community health, recreation, and cultural arts, and;
Exclusively to fund grants or loans to nonprofit service providers headquartered in East Palo Alto OR for which a majority of clients served are East Palo Alto residents.
On May 20, 2014 (Policy and Action Item #9D), the City Council adopted a policy to use a TOT Grant Review Panel comprised of a City staff member, a representative from the Four Seasons Hotel, a small business representative, an East Palo Alto resident and subject matter expert(s).
Calendar Year 2023 TOT Grants Process
The City initiated the Calendar Year 2023 CYFS funding cycle in January, launching the TOT Grants Process as follows:
· January 6, 2023: Published Notice of Funding Availability (NOFA) for Transient Occupancy Tax (TOT) and Summer Park Activation proposals. · January 26, 2023: Held mandatory Informational Session(s) virtually with 28 individuals.
(The City requires CYFS funding applicants to attend a mandatory information session to be eligible for funds. In recent years, staff has seen a decline in informational session attendees. Previous funding rounds have seen 30-40 attendees at these sessions, this year, only 28 people attended.)
· February 24, 2023: All applications were submitted with supporting documentation to City of East Palo Alto staff.
· March 20, 2023: Staff reviewed 11 proposals.
· May 16, 2023: Council approved a Community Grants Review Panel comprised of the following persons:
Table 1- 2023 Recommended TOT Grants Review Panel
TOT CGRP Organizations Category
Michelle Goudeaux Columbia Property Trust Large Business Debra Turner Above All Insurance Small Business
Marcia Perez Perez Immigration Law Resident
Sarahi Espinoza-Salamanca Sobrato Organization Expert
Q. Smith East Palo Alto Resident Resident
At the May 16, 2023 City Council meeting, staff communicated to the City Council a plan to convene the TOT Grant Review Panel in June or July and to bring forward funding recommendations by the end of July. The TOT (Community) Grants Review Panel that the City Council appointed on May 16, 2023 has not been able to meet. Because of this, TOT grant funding recommendations have been delayed. Considering the City Council’s August recess and a desire to not further delay funding recommendations, staff proposes that the funding recommendations made by an Internal Review Panel be considered by the City Council.
Analysis
Internal Review Panel
While there is a precedent for the TOT (Community) Grants Review Panel, the appointed panel has not been able to convene due to scheduling challenges. If the panel is able to convene in August, the earliest that the City Council would be able to consider recommendations would be September. Many of the proposed activities that organizations have requested funds for are scheduled for summer. To enable summer activities, staff recommends that the City Council expedite TOT Grants funding distribution by approving appointment of an internal Staff review panel. This internal panel would only be used for the current funding cycle. temporary appointment of an Internal Review Panel.
The Community Services Manager convened an Internal Review Panel to review TOT funding applications. The internal panel was comprised of:
1. Jeff Liu (Chief of Police)
2. Ana Torres-Mondragon (Human Resources Manager)
3. James Colin (City Clerk)
4. Maurice Baker (Acting Community Services Manager)
This panel reviewed the applications and made the funding recommendations listed below.
Recommended Funding
The City normally distributes $150,000 in TOT grants each funding cycle to vetted and approved community organizations that serve East Palo Alto residents. The City received a total of $176,000 in funding requests, however, the Internal Review Panel recommends a total of $150,000 be awarded, similar to previous years. Historically, funds have been extended out in small grants that have not exceeded $16,000 each and support organizations to conduct summer activities.
The Internal Review Panel Recommends the funding the following funding awards:
Table 2 - 2023 TOT Grant Recommendations
Organization Name Requested Amount Recommended Funding
EPACenter for the Arts $16,000 $16,000
Fresh Approach $16,000 $15,000
Greyhoundz Athletic Club $16,000 $10,000
Hope Horizon $16,000 $15,000
Lewis & Joan Platt YMCA $16,000 $16,000
Live in Peace $16,000 $12,000
Mannakin Theater & Dance $16,000 $12,000
Onyxx Village Connection $16,000 $15,000
Retraining the Village $16,000 $15,000
St. Mark AME Zion Church $16,000 $14,000
Step It Up Dance $16,000 $10,000
Total $176,000 $150,000
Alternative Options
If the City Council desires, City staff can move forward with reconvening the previously approved Community Grants Review Panel. While this will delay the release of funding, it would keep the process in line with what has been done historically. With the August City Council recess, the earliest staff could bring this item back to the Council for their approval will be in September.
Fiscal Impact
The recommended funding will result in a fiscal impact of $150,000 to the TOT fund. As of June 2023, the balance of the TOT fund was $1,190,236.30.
Environmental
The proposed action does not constitute a “project” with the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines sections 15378(b)(4) and (5) in that it is a governmental fiscal, organizational or administrative activity that will not result in direct or indirect changes in the environment.
Attachments
1. 2023 TOT Recommendations Resolution
2. 2023 TOT Final Proposals