55575.38285\44723891.1
CITY COUNCIL STAFF REPORT
DATE: March 11, 2026 BUSINESS & LEGISLATIVE
SUBJECT: INTRODUCTION OF AN ORDINANCE AMENDING SECTIONS
5.27.050(D) AND 5.27.040(D), (E) AND (F) OF THE PALM SPRINGS MUNICIPAL CODE, REGARDING THE CITY’S HOTEL INCENTIVE
PROGRAM
FROM: Scott C. Stiles, City Manager
BY: Economic Development
SUMMARY:
This agenda item provides the City Council with the opportunity to amend the restructured Hotel Operations Incentive Program. The ordinance amends the restructured Hotel Operations Incentive Program by stating that any program participants who fail to remain current with remitting the collected transient occupancy taxes to the City will receive a 30- day notice requiring that the participant become current on payments.
RECOMMENDATION:
Waive the full reading of the ordinance text in its entirety and read by title only; and introduce for first reading of Ordinance entitled, “AN ORDINANCE OF THE CITY
COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, AMENDING SECTIONS
5.27.050(D) AND 5.27.040(D), (E), AND (F) OF THE PALM SPRINGS MUNICIPAL CODE, REGARDING THE CITY’S HOTEL OPERATIONS INCENTIVE PROGRAM” BACKGROUND:
On February 25, 2026, the City Council adopted Ordinance No. 2126, adding Chapter
5.27 to the Palm Springs Municipal Code, restructuring the City’s Hotel Operations Incentive Program. Subsequently, the City Council desired to clarify the City’s authority to enforce the conditions of the restructured Hotel Operations Incentive Program.
In addition, following the February 25, 2026 Council meeting, it was discovered that, within the Hotel Tier section of the new Chapter, the numerical references do not match the textual referencing in two subsections; and, language regarding a cap on the amount that can be rebated to hotel operators under the “bonus” provision of Chapter 5.27.
City Council Staff Report
Mar 11, 2026 -- Page 2
Introduction of an Ordinance Amending Section 5.27.050(D) of the Palm Springs Municipal Code, Clarifying City’s Authority to Enforce Conditions of Restructured Hotel Operations Incentive Program 55575.38285\44723891.1
This ordinance will amend Section 5.27.050(D) to require that the City provide a 30-day notice of compliance if any program participants do not remain current with remitting the collected transient occupancy taxes to the City, and will conform the numerical references to their textural references, and include a cap of 75 percent to an operator using the bonus provision.
ENVIRONMENTAL:
Approval of the ordinance does not constitute a “Project” under the California Environmental Quality Act (CEQA), as it can be seen with certainty that there is no possibility for it to cause a direct physical change in the environment (CEQA Guidelines §15061(b)(3)). The ordinance involves amending an economic assistance program (a governmental financing mechanism) and does not directly authorize any specific development or construction activity. This action is an organizational/administrative activity of the City in furtherance of its economic development goals and thus is not a “project” as defined in CEQA Guidelines §15378(b)(5).
FISCAL:
Adoption of the ordinance has no immediate fiscal impact, as it does not appropriate funds or approve a specific subsidy. Adoption of the ordinance does not directly change the fiscal impact of the restructured Hotel Operations Incentive Program, but it will authorize the City to better enforce compliance with its conditions.
REVIEWED BY:
Department Director: Wayne Olson
City Attorney: Jeffrey Ballinger
City Manager: Scott Stiles
ATTACHMENTS:
A. Ordinance entitled – An Ordinance Amending Sections 5.27.050(D) and 5.27.040(D), (E) and (F) of the Palm Springs Municipal Code, Regarding the City’s Hotel Incentive Program