AgdaPkt 2011-05-23 - Laserfiche WebLink

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8.C. - Page2 The City is actively engaged in pursuing prongs one and two by investigating and implementing shared services, restructuring and reorganizing to maximize efficient service delivery, and working to create a fiscally-sound and sustainable compensation program for employees. The third prong of the City Council's directive, which this staff report addresses, is to explore ways to increase revenues, primarily through potential increases in the TOT and Business License Tax. Transient Occupanc� The recommended increase in the TOT is one of the revenue enhancements that the Council Finance Committee has directed staff to explore. A TOT is a form of hotel occupancy tax that supports general fund public services. Redwood City has had a TOT for many years. The City last increased the TOT from 8% to 10% in 2003. Attached is a listing of the current TOT rates levied by cities in San Mateo County, illustrating that of the 15 cities imposing a TOT, eight are at 12%, six are at 10% (including Redwood City) and one is at 8%. A proposed increase in the TOT would constitute a general tax measure and require a simple majority of the voters to pass. If the City Council directs staff to proceed with pursuing an increase to the TOT rate, the measure would be proposed through a ballot question, which must be no longer than 75 words, that states the nature of the ordinance to be adopted. Council members Bain and Seybert, as an ad hoc subcommittee of the Finance Committee, reviewed and provided input into the recommended ballot question for the TOT measure (allowing some discretion for staff to revise for consistency and legal compliance): "To preserve funding for general city services such as libraries, parks, street repairs, and public safety, and support other fundamental City services, shall an ordinance be approved increasing the Transient Occupancy Tax ("Hotel Tax') charged to hotel guests in Redwood City from the current rate of 10% to a new rate of 12%, with proceeds placed in the City's General Fund which is sub�ect to the City's annual independent financial audit?" Business License Tax The recommended increase in the Business License Tax is one of the other revenue enhancements that the Council Finance Committee has directed staff to explore. The City's business license tax rates were most recently increased on July 1, 1994. The current version of the ordinance was adopted by Council in 1990 and called for 5% annual increases in the tax rates from 1991 — 1994. The ordinance provides for no increases thereafter.