City of Sacramento
Budget and Audit Committee Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2025-00927 4/22/2025 Item 7.
Transient Occupancy Tax (TOT) - Past, Present and Future File ID: 2025-00927
Location: Citywide
Recommendation: Review, comment, and provide direction.
Contact: Megan Van Voorhis, Director, (916) 808-5979, [email protected], Department of Convention & Cultural Services; Pete Coletto, Director, (916) 808-5416, [email protected], Department of Finance; Michael Jasso, Assistant City Manager, (916) 808-1380, [email protected], City Manager Office Presenter: Megan Van Voorhis, Director, (916) 808-5979,[email protected], Department of Convention & Cultural Services
Attachments:
1-Description/Analysis
2-TOT Presentation - April 1, 2025
Description/Analysis
Issue Detail: The Uniform Transient Occupancy Tax (TOT) is a tax paid by guests staying 30 or fewer consecutive days at hotels, motels, inns, short term rentals, and similar establishments within the City. Currently the tax is 12% of rent charged by the operator and has two components. The first component, which accounts for 2% of the 12% tax, is a general tax that is placed directly into the City’s General Fund and can be used for any governmental purpose. The remaining 10% of the tax is a special tax which is deposited into the transient occupancy account and shall be used exclusively for:
1. Administration of the provisions of City Code 3.28;
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;
File ID: 2025-00927 4/22/2025 Item 7.
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; and
7. Recurring annual payments to fund Visit Sacramento.
Existing TOT obligations include, but are not limited to, annual payments to Visit Sacramento operations, and Council-approved bond obligations for the Convention Center Complex Project (SAFE Credit Union Convention Center, SAFE Credit Union Performing Arts Center, and Memorial Auditorium).
Policy Considerations: The information presented in this report is to advise the Budget and Audit Committee of the status, forecasts, and obligations of the Uniform Transient Occupancy Tax Account.
Economic Impacts: None.
Environmental Considerations: This report is not a project pursuant to the California Environmental Quality Act (CEQA). This report is an informational item only. No action is being taken in connection with this report. As there is no potential for this oral report to result in a direct physical change in the environment or a reasonably foreseeable indirect physical change, this report does not qualify as a “project” under CEQA. (See CEQA Guidelines 15378(a)).
Sustainability: Not applicable.
Commission/Committee Action: Not applicable.
Rationale for Recommendation: This is a follow up on the presentation made to City Council on April 1, 2025.
Financial Considerations: Not applicable.
Local Business Enterprise (LBE): Not applicable.
TRANSIENT OCCUPANCY TAX (TOT)
City Code 3.28
Voter approved tax on rent at hotels, motels, etcSupport and Maintain Facilities & Activities that Stimulate VisitationStay fewer than 30 consecutive daysPassed in 1964Measure N 2022City Code 3.28
S P E C I AL U S E
TAX
1 0 %
T O T
1 2 %
G E N E R AL
TAX
2 %
G e n e r a l F u n d
C o m m u n i t y
C e n t e r
F u n d
$100
TA X
A n y
G o v e r n m e n t a l
P u r p o s e
R e s t r i c t e d U s e
p e r 3 . 2 8
V i s i t
S a c r a m e n t o
S P E C I AL U S ETAX1 0 %T O T1 2 %G E N E R AL TAX2 % G e n e r a l F u n dC o m m u n i t yC e n t e rF u n d$100TA X Infrastructure to Support Public Assembly and Convention HallsPublic Assembly and Convention HallsVisit Sacramento’s Annual Payment SPECIAL USE TAX1964 - 2022
ADMINISTRATION OF CITY CODE 3.28SPECIAL TAX- MEASURE N
ECONOMIC DEVELOPMENT PROJECTS TO CREATE LOCAL JOBS
ADMI NI STRATION OF CITY CODE 3 .2 8SPECIAL TAX- MEASURE NECONOMIC DEVELOPMENT PROJECTS
V I S I TO R - S E RV I N G FA C I L I T E S T H AT P R O M O T E TO U R I S M ECO NO MI C DEV ELOP ME NT PRO JECTSAC Q U I S I T I O N , C O N S T R U C T I O N , C O M P L E T I O N , O P E R AT I O N , R E PAI R , AN D M AI N T E N AN C E O F V I S I T O R - S E RV I N G FAC I L I T I E S T H AT P R O M O T E T O U R I S M E C O N O M I C D E V E L O P M E N T AN D O T H E R AC T I V I T I E S T H AT B O L S T E R T H E E C O N O M YS U C H AS C O N V E N T I O N H AL L S AN D C E N T E R S ; T H E AT E R AN D AR T S V E N U E S ; P U B L I C O F F S T R E E T PAR K I N G FAC I L I T I E S AN D R E L AT E D S I T E I M P R O V E M E N T S ; L AN D S , E AS E M E N T S , R I G H T S - O F - WAY, AN D O T H E R W O R K S , P R O P E R T Y, O R S T R U C T U R E S , N E C E S S ARY O R C O N V E N I E N T F O R T H E S E FAC I L I T I E S ADMI NI STRATION OF CITY CODE 3 .2 8SPECIAL TAX- MEASURE N E C O N O M I C D E V E L O P M E N T P R O J E C T SV I S I TO R - S E RV I N G FA C I L I T E S T H AT P R O M O T E TO U R I S MA D M I N I S T R ATI O N O F C I T Y C O D E 3 . 2 8SPECIAL TAX- MEASURE NEXPENSES IN CONNECTION WITH PROPOSALS OR PROCEEDINGS FOR ACQUISITION OF THE FACILITIES REFERRED TO IN SUBSECTION 3 OF THIS SECTION E
B O N D PAY M E N T S
E C O N O M I C D E V E L O P M E N T P R O J E C T SA D M I N I S T R ATI O N O F C I T Y C O D E 3 . 2 8SPECIAL TAX- MEASURE NINTEREST AND PRINCIPAL PAYMENTS ON BONDS ISSUED TO AQUIRE ANY OF THE FACILITIES REFERRED TO IN SUBSECTION 3 OF THIS SECTIONE X P E N S E S F O R V I S I TO R S E RV I N G FA C I L I T E SV I S I TO R - S E RV I N G FA C I L I T E S T H AT P R O M O T E TO U R I S M E C O N O M I C D E V E L O P M E N T P R O J E C T SA D M I N I S T R ATI O N O F C I T Y C O D E 3 . 2 8SPECIAL TAX- MEASURE NLEASE PAYMENTS FOR LEASE OF ANY OF THE FACILITIES REFERRED TO IN SUBSECTION 3 OF THIS SECTIONE X P E N S E S F O R V I S I TO R S E RV I N G FA C I L I T E SV I S I TO R - S E RV I N G FA C I L I T E S T H AT P R O M O T E TO U R I S MB O N D PAY M E N T S E C O N O M I C D E V E L O P M E N T P R O J E C T SA D M I N I S T R ATI O N O F C I T Y C O D E 3 . 2 8SPECIAL TAX- MEASURE NE X P E N S E S F O R V I S I TO R S E RV I N G FA C I L I T E SB O N D PAY M E N T SL E A S E PAY M E N T SV I S I TO R - S E RV I N G FA C I L I T E S T H AT P R O M O T E TO U R I S M TOT Revenue FY18- FY25
2025*2024202320222021202020192018FY $42.1$41.1$37.6$32.2$18.6$25.8$35.4$32.2TOT Totals2.4%9.3%16.8%73.1%-27.9%-27.1%9.9%Y/Y Growth*Based on FY 2025 Projected Revenue01020304050 TOT Revenue FY18- FY25
2025*2024202320222021202020192018FY $42.1$41.1$37.6$32.2$18.6$25.8$35.4$32.2TOT Totals2.4%9.3%16.8%73.1%-27.9%-27.1%9.9%Y/Y Growth*Based on FY 2025 Projected Revenue $7.0$6.9$6.3$5.4$3.1$4.3$5.9$5.4GF (2%)$35.1$34.3$31.3$26.8$15.5$21.5$29.5$26.8CCF (10%) $1.8$1.6$1.5$1.5$1.4$1.4$1.3$1.3VISIT SACDollars in Millions
COMMUNITY CENTER FUND REVENUE
0102030405060
FY18/19FY19/20FY20/21FY21/22FY22/23FY23/24FY24/25
TOT
EARNEDREVENUE
$Millions
TOT REVENUE BY REGION
123-TOT Re ve nue-FY 24 % of TOT Revenue-FY 24 # of TO T Bus ine sses$1 2. 63 1%27SacramentoNorth Dollars in Millions
TOT REVENUE BY REGION
1234-TOT Re ve nue-FY 24 % of TOT Revenue-FY 24 # of TO T Bus ine sses SacramentoNorth$1 2. 631 %2 7$ 21. 35 3%35Central
Dollars in Millions
TOT REVENUE BY REGION
12345678-TOT Re ve nue-FY 24 % of TOT Revenue-FY 24 # of TO T Bus ine sses SacramentoNorthCentral$1 2. 631 %2 7$ 21. 35 3%3 5$ 3. 89 %18South Dollars in Millions
TOT REVENUE BY REGION
12345678-TOT Re ve nue-FY 24 % of TOT Revenue-FY 24 # of TO T Bus ine sses NorthCentralSouth$1 2. 631 %2 7$ 21. 35 3%3 5$3 . 89 %18 Short-Term Rentals$2 . 36%Dollars in Millions
*Based on FY 2025 Projected Expenses
Debt Service$19.0 Convention Center$8.0 Cultural Partners$3.3 City Expenses$2.8 G1C PIT$1.1 Visit Sac$1.8 COMMUNITY CENTER FUND TOTEXPENSES AND OBLIGATIONSFY-2025 Dollars in Millions
O T H E RP R I O R I T I E S AN D C O M M I T M E N T STransientOccupancyTaxWAT E R F R O N T P R O J E C T P H AS E 1D E F E R R E DM AI N T E N AN C EM O S ACB O N D PAY M E N TWAT E R F R O N TP R O J E C T P H AS E 2$ 2 5 M i l l i o nO n e -T i m e$ 1 5 M i l l i o nO n e -T i m e$ 6 0 0 KA n n u a l l yO n G o i n gD e t e r m i n e d b y C o u n c i l
CONSIDERATIONS
ProjectedRevenuesPrior 12 MonthsRevenuesTOT ObligationsMarket FactorsBONDING CAPACITYPerceivedRiskFACTORS
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