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8.A. - Page 20 of 42 <br />Transient Occupancy Tax (TOT) is collected from visitors to Redwood City through a charge on hotel/motel <br />accommodations. As a result of the pandemic, occupancy rates for hotels in the San Francisco/San Mateo <br />area have dropped dramatically. In the Redwood City area, revenue per available room (RevPAR), which is <br />calculated by multiplying a hotel's average daily room rate (ADR) by its occupancy rate, is down from $94 <br />million in 2019 to just $29 million in 2020. The hotel market forecast in our region does not anticipate a full <br />recovery until FY 2024-25. TOT revenues received year-to-date are approximately $750,000, compared to <br />$3.65 million at the same time last year. This is nearly an 80 percent decline in TOT revenue. Staff is <br />projecting TOT revenue of $2.0 million in FY 2020-21, a 67 percent decrease from the $6.0 million received <br />in FY 2019-20. Data on projected TOT revenue is limited and uncertain at this time. For that reason, the <br />projection for FY 2021-22 includes an increase of $500,000. It should be noted that two motels were <br />purchased by the County of San Mateo during 2020, which will result in up to $800,000 in lost TOT revenue <br />annually, since the motels will be converted to affordable housing and will no longer collect TOT. <br />Utility Users' Tax (UUT) revenue is expected to decrease by 3.1 percent in FY 2020-21, when compared to FY <br />2019-20 actual revenues. Beginning FY 2021- 22, staff is projecting that the UUT revenue stream will be <br />stable, with only minor growth. As wireless telecommunication services become more of a commodity item, <br />service plan rates have become very competitive, offering more services at lower rates, which negatively <br />affects UUT revenue. As a result, it is prudent to forecast conservatively for future UUT revenue. By City <br />Council policy, UUT revenue has been dedicated to capital projects and is not reflected in the chart below <br />depicting major General Fund revenue sources. <br />Projected UUT revenue is indicated below. <br />gio.o <br />S <br />Utility Users' Tax <br />(in millions) <br />Page 20 of 28 <br />City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.org <br />551 <br />�� <br />meq' <br />�5 �4 <br />qt Qt <br />Qt <br />Qt <br />�4 <br />qt 4 <br />tO� <br />Qt <br />�°j•y� <br />�►�', <br />'y'} <br />'y�+ <br />'L`'. <br />'y�0, <br />'y�. <br />tib, <br />ry°�f <br />'h�. <br />Page 20 of 28 <br />City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.org <br />551 <br />