Agenda Item
City Council
Item #: 6.3. 8/22/2023 File #: 23-0557
TO: Honorable Mayor and Members of the City Council
FROM: Tom Kisela, City Manager
1. SUBJECT
Proposal to analyze a possible increase in the Uniform Transient Occupancy Tax rate.
2. SUMMARY
Proposal to direct City staff to analyze a possible increase in the Uniform Transient Occupancy Tax rate.
3. RECOMMENDED ACTION
Authorize staff to analyze a possible increase in the Uniform Transient Occupancy Tax rate.
4. FISCAL IMPACT
None.
5. STRATEGIC PLAN GOALS
Goal 2: Be a fiscally healthy community
b: Analyze future fiscal needs and potential revenue opportunities.
6. DISCUSSION AND BACKGROUND
The City of Orange is a full-service city with aging infrastructure. City services such as police, fire, parks, and libraries are essential to maintaining the quality of life for Orange residents. In recent years, City revenues have not kept pace with the increase in costs to maintain the services and infrastructure that the community relies on. As part of the Fiscal Year 2024 budget process, the City Council directed staff to present options to increase City revenues so that they are sufficient to maintain the high quality of City services.
One policy option is to increase the rate of the Uniform Transient Occupancy Tax (TOT). TOT is a tax on persons staying in Orange for a period of 30 days or less. TOT generally applies to persons staying in hotels or short-term rentals, and as such is not typically paid by city residents. The current TOT rate for the City of Orange is 10%.
The process to increase the rate of TOT would include subsequent Council action to hold a public hearing and place a measure on the ballot, which would require majority approval by voters to be enacted. Staff is requesting direction from City Council to analyze the impact of an increase in the TOT rate to 15%. If so directed, staff would come back to Council with revenue projections, additional policy analysis, and a tentative timeline for the approval process.
City of Orange Printed on 8/17/2023Page 1 of 2
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Item #: 6.3. 8/22/2023 File #: 23-0557
7. ATTACHMENTS
· None
City of Orange Printed on 8/17/2023Page 2 of 2
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