STAFF REPORT
Meeting Date:
October 14, 2025
CONSENT
14 SUBJECT: CONSIDERATION OF: (I) AN URGENCY ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAGUNA BEACH, CALIFORNIA, ADDING CHAPTER 3.10 TO TITLE 3 (FINANCE) OF THE CITY OF LAGUNA BEACH MUNICIPAL CODE
RELATING TO COLLECTION OPTIONS FOR UNPAID TRANSIENT
OCCUPANCY TAX IN THE CITY; (II) AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAGUNA BEACH, CALIFORNIA, ADDING CHAPTER 3.10 TO TITLE 3 (FINANCE) OF THE CITY OF LAGUNA BEACH MUNICIPAL CODE
RELATING TO COLLECTION OPTIONS FOR UNPAID TRANSIENT
OCCUPANCY TAX IN THE CITY; (III) AND FINDING THESE EXEMPT FROM
THE CALIFORNIA ENVIRONMENTAL QUALITY ACT
RECOMMENDATION: It is recommended that the City Council:
1. Waive full reading and adopt by title only an Urgency Ordinance titled, “AN URGENCY
ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAGUNA BEACH, CALIFORNIA, ADDING CHAPTER 3.10 TO TITLE 3 (FINANCE) OF THE CITY OF LAGUNA BEACH
MUNICIPAL CODE RELATING TO COLLECTION OPTIONS FOR UNPAID TRANSIENT
OCCUPANCY TAX IN THE CITY AND FINDING THE SAME EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT”;
2. Waive full reading and introduce for first reading by title only an Ordinance titled, “AN
ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAGUNA BEACH, CALIFORNIA, ADDING CHAPTER 3.10 TO TITLE 3 (FINANCE) OF THE CITY OF LAGAUNA BEACH
MUNICIPAL CODE RELATING TO COLLECTION OPTIONS FOR UNPAID TRANSIENT
OCCUPANCY TAX IN THE CITY AND FINDING THE SAME EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT”; and
3. Find that the ordinances are not projects subject to CEQA pursuant to CEQA Guidelines Section (15378(b)(5)).
SUMMARY OF THE MATTER
The proposed urgency ordinance and ordinance will add Chapter 3.10 to the Laguna Beach Municipal Code (“LBMC”) to provide the City an additional enforcement options to collect unpaid and delinquent transient occupancy tax (“City TOT”). Specifically, the ability for the City to record – and possibly enforce – a lien on the properties (or other properties owned by the operator) that were subject to the City TOT that went unpaid or delinquent.
DISCUSSION
The proposed identical urgency ordinance and regular ordinance amend Title 3 (Finance) of the LBMC to add Chapter 3.10 (Collection of Unpaid Tax). Specifically, these ordinances add an option to the City’s options to collect on unpaid City TOT – the authority to record and file a lien against operators in the City that fail to remit City TOT. Existing City law does not explicitly provide this authority to record liens for unpaid City TOT.
Consideration of an Urgency Ordinance
October 14, 2025
Sometimes, operators in the City that are subject to the City TOT fail to pay the City TOT that they collect from patrons. Based on the existing provisions of the LBMC, the City's sole civil remedy for collection of unpaid and delinquent TOT is to sue the operators. This process is time consuming and costly for the City and may not make financial sense depending on the amount of unpaid City TOT.
The option to allow the City Manager, or their designee, after certain notice periods to record a lien on the at-issue property or any other property in the City owned by the operator, including interest and penalties.
Once the lien is recorded, the ordinances do have other enforcement options against the operator by the City (warrant and cause sale of property, seizure and sale or personal property). Further, the ordinances apply to successors in interest and allow possible buyers to contact the City to get up to speed on any unpaid City TOT.
Currently, a few operators in the City are in arrears with the City for unpaid City TOT and the properties in question could be subject to legal actions that result in a change of ownership. In order to ensure any possible future owner of these properties is put on notice, and that the City’s right to the City TOT that was collected from patrons, the ordinance is proposed to the City Council as an urgency ordinance pursuant to Government Code 36937. A regular version of the ordinance is also proposed as back-up in case there is any regarding the urgency nature of the item.
FINANCIAL ANALYSIS
Amendment to the LBMC to add Chapter 3.10 would provide the City with additional options to collect unpaid and delinquent City TOT, thus improving the City's TOT collection rate. In the event that the City's collection efforts articulated in the proposed amendments are unsuccessful, the City would pay a modest fee to record a lien with the County.
ENVIRONMENTAL ANALYSIS
These actions are not projects subject to CEQA, because it is an organizational or administrative activity that will not result in direct or indirect physical changes in the environment. (CEQA Guidelines Section (15378(b)(5)).
ATTACHMENTS
1. Urgency Ordinance (Pgs. 3-8)
2. Ordinance (Pgs. 9-14)
Submitted By: Megan Garibaldi Approved: .David A Kiff
Megan Garibaldi, City Attorney Dave Kiff, City Manager
Report Prepared By: Coordinated With:
Patrick Donegan, Assistant City Attorney