City of Sacramento
City Council Report
915 I Street, 1st Floor
Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2022-01360 7/26/2022 Discussion Item 23.
Title: Placement of the Sacramento Tourism and Economic Development Facilities Update of 2022, a Measure Amending the Permitted Uses of the City of Sacramento’s Transit Occupancy Tax, on the November 8, 2022 Ballot and Administrative Approvals Associated with the Measure
File ID: 2022-01360
Location: Citywide
Recommendation: 1) Adopt a Resolution calling and giving notice of the placement of one measure on the November 8, 2022 General Municipal Election ballot: The Sacramento Tourism and Economic Development Facilities Update of 2022, 2) adopt a Resolution directing the City Attorney to begin an impartial analysis, and 3) adopt a Resolution authorizing members of the City Council to author arguments that will be presented to voters.
Contact: Mayor Darrell Steinberg, (916) 808-5300, [email protected] Presenter: Mayor Darrell Steinberg, (916) 808-5300; Mike Testa, Visit Sacramento, [email protected]
Attachments:
1-Description/Analysis
2-Resolution (Submittal of the Measure to the Voters)
3-Exhibit A - Ordinance (Redline)
4-Exhibit B - Ordinance (Clean)
5-Resolution (Directing the City Attorney to Prepare an Impartial Analysis) 6-Resolution (Authorizing Written Argument Authors)
Description/Analysis
To update Sacramento’s transit occupancy tax in order that the funds generated by overnight stays can be used on tourism-focused projects that create jobs and economic growth.
Issue Detail: The City of Sacramento’s 12 percent Transit Occupancy Tax (TOT) is paid by guests who stay in hotel rooms and short-term rentals.
City of Sacramento Page 1 of 3
File ID: 2022-01360 7/26/2022 Discussion Item 23.
Although imposed at a single rate of 12 percent, the TOT is actually an amalgamation of three tax rates: a 7% tax; a 3% tax; and a 2% tax. The 2% tax revenues are placed in the General Fund and may be used for any governmental purpose. However, the remaining 10% is restricted to the following purpose:
Acquisition, construction, completion, operation, repair and maintenance of public assembly and convention halls, including convention center, auditorium, and little theater buildings with facilities for convention meetings, and public assemblies (including dramatic and musical performances), public off-street parking facilities and other site improvements related thereto; lands, easements, and rights-of-way; and other works, property or structures, necessary or convenient for public assembly and convention halls[.]
The language governing use of the 10% has not been updated since the ordinance was adopted in 1964. The resolution would place a measure on the ballot to broaden the potential uses of TOT funds. The proposed language is as follows:
“Shall the measure, with no increase in tax rates, amending the city’s special transient occupancy (hotel/lodging bed) tax to allow its revenues to be used for tourism-related economic development projects that would create jobs and strengthen the local economy, subject to independent annual audits and full public disclosure of all spending, be adopted?” Policy Considerations: Updating the TOT ordinance would allow the City to invest in economic development projects that would attract hotel occupants and so grow more TOT tax, and also that would provide significant benefits to residents of the City and region. Such investments have the potential not only to produce more TOT tax, but also to create more jobs and more spending in the City, a benefit to the City budget and to residents who receive City services.
Many other cities have fewer restrictions on use of the TOT tax. In San Francisco, half the 14% TOT goes to the General Fund. Other cities have language allowing a greater range of tourism-related uses. One example is the San Diego TOT tax ordinance, which reads as follows:
“The proceeds of the tax shall be used for promoting the City of San Diego, including the planning, construction, maintenance and operation of tourist- related cultural, recreational and convention facilities, as more particularly set forth in Chapter 3, Article 5, Division 1, and for those additional general governmental purposes as more particularly set forth in Chapter 3, Article 5, Division 1, as the City Council may from time to time provide in accordance with the Charter of the City and the City Council’s appropriation ordinance.” Economic Impacts: The measure would not raise the TOT tax, which is paid by guests of hotels and short-term rentals. It has the potential to deliver millions of dollars in benefits to the City through increased economic development.
Environmental Considerations: Not applicable.
Commission/Committee action: Not applicable.
Rationale for recommendation: Update the City’s TOT ordinance to create more opportunities to City of Sacramento Page 2 of 3
File ID: 2022-01360 7/26/2022 Discussion Item 23.
invest in facilities that create jobs, attract visitors and serve residents.
Financial Considerations: Would not change the rate or structure of the TOT tax. The 2% that flows into the General Fund would continue to do so. Could improve City finances long-term by creating more visitation and economic growth.
Local Business Enterprise (LBE): Not applicable.
City of Sacramento Page 3 of 3
RESOLUTION NO. 2022-XXXX
Adopted by the Sacramento City Council
Calling and Giving Notice of the Submittal to the Voters of a Ballot Measure:
Sacramento Tourism and Economic Development Facilities Update of 2022 to be Included in the General Municipal
Election of November 8, 2022
BACKGROUND
A. On April 19, 2022 the City Council adopted a resolution (2022-0108) calling for and giving notice and consolidating a Municipal Election to be held on Tuesday, November 8, 2022 and the Statewide Municipal Election held on November 8, 2022 B. On July 26, 2022, the City Council adopted a resolution (2022-XXXX) approving for placement on the November 8, 2022, Municipal Election ballot a question pertaining to the Sacramento Tourism and Economic Development Facilities Update of 2022.
C. On July 26, 2022, the City Council approved text of the proposed ordinance to be submitted to the voters
D. The City Council desires to submit the measure to the voters at the November 8, 2022 General Municipal Election.
BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE CITY COUNCIL RESOLVES AS FOLLOWS:
SECTION 1: The City Council herby orders that the following question be submitted to the voters in the City of Sacramento, California on Tuesday, November 8, 2022.
Measure_ - Sacramento Tourism and Economic Development Facilities Update of 2022 “Shall the measure, with no increase in tax rates,
amending the city’s special transient occupancy
(hotel/lodging bed) tax to allow its revenues to
be used for tourism-related economic
development projects that would create jobs and
strengthen the local economy , subject to
independent annual audits and full public
disclosure of all spending, be adopted?”
YES
NO
SECTION 2: That the text of the proposed measure to be submitted to the vo ters are attached as Exhibit A.
SECTION 3: The ballots to be used at the election shall be in the form and content as required by law.
SECTION 4: The vote centers for the election shall open at 7:00 a.m. on the day of the election and shall remain open continuously from that time until 8:00 p.m. of the same day when the polls shall be closed, except as provided in sections 4005 and 14401 of the California Elections Code.
SECTION 5: In all particulars not recited in this resolution, the election shall be held and conducted as provided by the law for holding municipal elections.
SECTION 6: Notice of the time and place of holding the election is hereby given and the City Clerk is hereby authorized, instructed and directed to give further or additional notice of the election, in the time, form, and manner required by law.
SECTION 7: The City Clerk shall certify the passage and adoption of this resolution and enter it into the book of original resolutions.
Table of Contents:
Exhibit A Ordinance (Redline)
Exhibit B Ordinance (Clean)
Adopted by the Sacramento City Council
Date Adopted
AN ORDINANCE AMENDING SECTION 3.26.180 OF THE SACRAMENTO CITY
CODE, RELATING TO THE USE OF TRANSIENT OCCUPANCY TAX RECIPTS
BE IT ENACTED BY THE COUNCIL OF THE CITY OF SACRAMENTO:
SECTION 1.
Section 3.26.180 of the Sacramento City Code is hereby amended to read as follows:
3.28.180 Use of tax receipts; annual audits.
A. The assessor-collector shall pay into the treasury all moneys, including taxes and penalties, collected by him or her pursuant to this chapter for deposit to the credit of a revenue account to be known as the transient occupancy tax account. The revenue from the transient occupancy tax account shall be used solely and exclusively for the following purposes:
A1. Administration of the provisions of this chapter;
2. Economic development projects to create local jobs;
B3. Acquisition, construction, completion, operation, repair and maintenance of public assembly and convention halls, including convention center, auditorium, and little theater buildings with facilities for convention meetings, and public assemblies (including dramatic and musical performances), visitor-serving facilities that promote tourism, economic development, and other activities that bolster the local economy, such as convention halls and centers; theatre and arts venues; public off-street parking facilities and other related site improvements related thereto; lands, easements, and rights-of-way;, and other works, property, or structures, necessary or convenient for public assembly and convention halls these facilities;
C4. Expense in connection with proposals or proceedings for acquisition of the facilities referred to in subsection B 3 of this section; D5. Interest and principal payments on bonds issued to acquire any of the facilities referred to in subsection B 3 of this section; E6. Lease payments for lease of any of the facilities referred to in subsection B 3 of this section.
B. All spending pursuant to this section is subject to independent annual audits and full public disclosure as part of the city’s annual external audit.
Adopted by the Sacramento City Council
Date Adopted
AN ORDINANCE AMENDING SECTION 3.26.180 OF THE SACRAMENTO CITY
CODE, RELATING TO THE USE OF TRANSIENT OCCUPANCY TAX RECIPTS
BE IT ENACTED BY THE COUNCIL OF THE CITY OF SACRAMENTO:
SECTION 1.
Section 3.26.180 of the Sacramento City Code is hereby amended to read as follows:
3.28.180 Use of tax receipts; annual audits.
A. The assessor-collector shall pay into the treasury all moneys, including taxes and penalties, collected by him or her pursuant to this chapter for deposit to the credit of a revenue account to be known as the transient occupancy tax account. The revenue from the transient occupancy tax account shall be used solely and exclusively for the following purposes:
1. Administration of the provisions of this chapter;
2. Economic development projects to create local jobs;
3. Acquisition, construction, completion, operation, repair and maintenance of visitor-serving facilities that promote tourism, economic development, and other activities that bolster the local economy, such as convention halls and centers; theatre and arts venues; public off-street parking facilities and related site improvements; lands, easements, rights-of-way, and other works, property, or structures, necessary or convenient for these facilities;
4. Expense in connection with proposals or proceedings for acquisition of the facilities referred to in subsection 3 of this section;
5. Interest and principal payments on bonds issued to acquire any of the facilities referred to in subsection 3 of this section;
6. Lease payments for lease of any of the facilities referred to in subsection 3 of this section.
B. All spending pursuant to this section is subject to independent annual audits and full public disclosure as part of the city’s annual external audit.
RESOLUTION NO. 2022-XXXX
Adopted by the Sacramento City Council
Directing the City Attorney to Prepare an Impartial Analysis of Sacramento Tourism and Economic Development Facilities Update of 2022 Approved by the City Council to be Submitted to the Voters at the General Municipal Election to be Held on
Tuesday November 8, 2022
BACKGROUND
A. On April 19, 2022 the City Council adopted a resolution (2022-0108) calling for and giving notice and consoli dating a Municipal Election to be held on Tuesday, November 8, 2022 and the Statewide Municipal Election held on November 8, 2022
B. On July 26, 2022, the City Council adopted a resolution (2022-XXXX) approving for placement on the November 8, 2022, Municipa l Election ballot a question pertaining to the Sacramento Tourism and Economic Development Facilities Update of 2022.
C. On July 26, 2022, the City Council approved text of the proposed ordinance to be submitted to the voters.
D. The City of Sacramento desires to have an impartial analysis of the measure.
BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE CITY COUNCIL RESOLVES AS FOLLOWS:
Section 1. The City Council hereby directs t he City Attorney to prepare an impartial analysis of the issue pertaining to the Sacramento Tourism and Economic Development Facilities Update of 2022 showing the measure’s effect on existing law and its operation. The impartial analysis is not to exceed 500 words, and the City Attorney shall file it with the City Clerk no later Friday, August 5, 2022, by 4:30 p.m. for the November 8, 2022 General Municipal Election.
Section 3. The City Clerk is hereby directed to cause the impartial analys is to be printed in the official sample ballot for the November 8, 20 22, General Municipal Election.
Section 4. The City Clerk shall certify the passage and adoption of this resolution and enter it into the book of original resolutions.
RESOLUTION NO. 2022-XXXX
Adopted by the Sacramento City Council
Authorizing the City Council or Members of the City Council to Submit Written Argument(s) for Sacramento Tourism and Economic Development Facilities Update of 2022, Approved by the City Council to be Submitted to the Voters at the General Municipal Election to be Held on Tuesday November 8, 2022
BACKGROUND
A. On April 19, 2022 the City Council adopted a resolution (2022-0108) calling for and giving notice and consolidating a Municipal Election to be held on Tuesday, November 8, 2022 and the Statewide Municipal Election held on November 8, 2022
B. On July 26, 2022, the City Council adopted a resolution (2022-XXXX) approving for placement on the November 8, 2022, Municipal Election ballot a question pertaining to the Sacramento Tourism and Economic Development Facilities Update of 2022.
C. The City Council desires to submit argument(s) for the measure.
BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE CITY COUNCIL RESOLVES AS FOLLOWS:
Section 1. The City Council hereby authorizes the following members, on behalf of the City Council, to file a written argument for/support the question pertaining to the measure Sacramento Tourism and Economic Development Facilities Update of 2022:
Name(s) _______________________
_______________________
_______________________
_______________________
_______________________
Section 2. The City Council hereby authorizes the following members, on behalf of the City Council, to file a written argument against/opposing the question pertaining to the measure Sacramento Tourism and Economic Development Facilities Update of 2022:
Name(s) _______________________
_______________________
_______________________
_______________________
_______________________
Section 3. The arguments shall be prepared in accordance with the California Elections Code and the Election Official’s printing guidelines available from the City Clerk.
Section 4. The primary arguments are due in the Office of the City Clerk no later than 4:30 p.m. on Friday August 5, 2022. If arguments are appropriately received, each side will be given the opportunity to provide a written rebuttal. The rebuttal arguments are due in the Office of the City Clerk no later than 4:30 p.m. on Monday, August 15, 2022.
Section 5. The City Council hereby directs the City Clerk to certify the passage and adoption of this resolution and enter it into the book of origin.