SR 06-28-2022 11A
City Council
Report
City Council Meeting: June 28, 2022
Agenda Item: 11.A
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To: Mayor and City Council
From: Gigi Decavalles-Hughes, Director, Finance Department
Subject: Adoption of resolution to place revenue measure on the November 2022
Ballot and amend the relevant ordinance to reflect the proposed revenue
measure and additional clarifying changes
Recommended Action
Staff recommends that the City Council:
1. Adopt a resolution to place a measure on the November 8, 2022 ballot which
would increase the City’s Transient Occupancy Tax (TOT) rate by 1 percentage
point for hotels and by 3 percentage points for home-shares, and make minor
adjustments to Chapter 6.68 of the Santa Monica Municipal Code to clarify
existing language and align outdated sections with existing practices.
2. Identify Council Members, if any, who wish to prepare arguments for or against
the measure.
Summary
Santa Monica continues its gradual recovery from the ongoing disruption and economic
losses that accompanied the COVID-19 pandemic. Additional revenue will provide the
City the means to address community needs in the context of a slow and uncertain
recovery. In response to Council direction at the May 24, 2022 Budget Study session,
staff is presenting for adoption a resolution to place a measure on the November 8,
2022 General Municipal Election Ballot. The measure would amend Santa Monica
Municipal Code Chapter 6.68 to set the Tax on Transients for Occupancy (Transient
Occupancy Tax or TOT), paid by persons visiting Santa Monica for 30 days or less as a
percentage of the total amount paid for room rental, at 15% for hotels and at 17% for
home-shares. The measure would also make minor language adjustments to Municipal
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Code Chapter 6.68 to clarify existing language and align with existing practices. The
proposed resolution is attached (Attachment A).
Background
On February 8, 2022, Council directed staff to review the feasibility, timing, and
structure of potential revenue measures to provide additional funding to restore and
enhance City services. The potential ballot measures included increases to the
Transient Occupancy and Parking Facility taxes, increases within the City’s Business
License Tax, and a parcel tax to restore Library services. To assess the feasibility of
these options, staff completed additional analysis and worked with Goodwin Simon
Strategic Research to conduct a statistically reliable community survey of Santa Monica
voters on the revenue measures staff determined to have the most promise for the
November ballot: a TOT increase and a Library Parcel Tax.
At the May 24, 2022 Budget Study Session for the FY 2022-23 Proposed Budget, staff
reported that, based on research and the polling results, the most viable measure at this
time is an increase to the City’s TOT. The survey, or poll, demonstrated strong support
for the proposed TOT increase (approximately 70%), well above the 50% plus 1
majority required for passage. Council directed staff to proceed with steps necessary to
place a measure on the ballot and prepare ballot measure language.
The Proposed FY 2022-23 Budget is set against economic recovery, tempered by
ongoing uncertainties and potential threats from inflation, interest rate increases, supply
chain issues, continued disruptions to the tourism and retail sectors due to COVID, and
long-term shifts in the office culture that has had a strong role in the City’s economy.
The Proposed General Fund Budget includes limited new investments in Council
priorities but additional revenues are needed to meet current community needs. Beyond
these changes, it is still anticipated that the City will require new revenues, beyond the
revenue already projected for the next five years, to enhance services that address
community priorities, and specifically priorities to address homelessness and enhance
safety, on an ongoing basis.
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Discussion
While the City’s economy continues to recover, the City does not have sufficient
revenue to return service delivery to pre-pandemic levels and has not been able to
restore foundational ongoing maintenance and capital programs reduced in the past two
years. Outside of these considerations, there are present challenges to address,
particularly in the area of safety and homelessness. The proposed TOT increase would
provide an estimated $4.1 million in annual revenue to support priorities that were
affirmed in the revenue measure poll such as:
• Expansion of the Police Department’s Homeless Liaison Program (HLP) to
provide services seven days a week.
• Expansion of the Police Department’s Downtown Services Unit (DSU) and the
Public Services Officer (PSO) program. These expanded teams, together, would
provide the needed coverage levels for the Downtown, Pier, and Beach areas.
These teams would further increase resources responding to people
experiencing homelessness, and would allow public safety resources that have
been shifted to deal with increased activity in these areas to be redistributed to
neighborhoods and patrols throughout the City.
• Expansion of the City’s homeless multidisciplinary outreach teams’ work beyond
the Downtown area.
• Redesign of the SAMOSHEL interim housing program to accommodate 24/7
intakes, giving additional options for after-hours intake and facilitating SMPD
transports for people experiencing homelessness and non-urgent behavioral
health issues. These initiatives were discussed by Council during the May 11,
2022, Special Meeting on Homelessness.
The City’s TOT rate is 14%, last increased in 2004. Santa Monica visitors also pay a
tourism marketing district or TMD assessment - which goes directly to Santa Monica
Travel and Tourism to fund hotel marketing - currently set at fixed rates of $1.90-$6.25
per room night. Varying with the average nightly room rate of each hotel from the prior
year, the TMD assessment approximates to 1-2% of the room rate, for an effective total
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tax and assessment rate of approximately 15-16%. This rate is comparable to the City
of Los Angeles and below that of some neighboring or other destination cities.
The table below shows Santa Monica compared to other major California tourist
destinations.
City TOT Rate Additional Assessment Total Equivalent
Inglewood 15.5% 15.5%
Palo Alto 15.5% 15.5%
Malibu 15% 15%
Anaheim 15% TMD 2% 17%
Ojai 15% 15%
Garden Grove 14.5% TMD 2.5% 17%
Los Angeles 14% TMD 1.5% 16.5%
Santa Monica 14% TMD $1.90-$6.25/ room night
(approx. 1-2%)
15-16%
San Francisco 14% TMD 2.75% (highest tier) 16.75%
Oakland 14% TBID $1.50/ room (>50 rooms) Over 14%
Long Beach 12% TMD 3% 15%
Staff proposes a 1% increase for hotels and 3% increase for home-shares which
collectively will raise approximately $4.1 million annually once fully implemented. The
higher amount applied to home-shares considers the greater regulatory oversight that
home-shares require, and the greater impacts these home-shares have on residential
neighborhoods and areas not typically subject to the impacts of commercial endeavors.
This tax would be paid for entirely by visitors to Santa Monica. With the proposed
increase, Santa Monica’s effective rate for hotel visitors - including the TMD
assessment - would be approximately 16%-17%, still comparable to the cities shown
above. If the City moves forward with this measure, staff recommends an associated
Advisory Board made up of stakeholders and community members to provide non-
binding recommendations to staff and Council on the uses of some portions of TOT
revenues.
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Staff recommends that the City continue community outreach and planning in
conjunction with placing this measure on the November ballot. The recommended ballot
language is as follows:
Santa Monica Transient Occupancy Tax draft ballot language:
To address homelessness, improve 911 emergency response times and
neighborhood police protection, make public areas safer and cleaner, including
streets, sidewalks, parks, and the beach, and provide other vital City services,
shall the City of Santa Monica increase the transient occupancy tax – which is
paid entirely by overnight visitors – by 1% for hotels and motels, and by 3% for
home-shares, providing approximately $4.1 million annually, until ended by
voters, with all funds benefiting Santa Monica.
The proposed resolution (Attachment A) includes the recommended ballot language
and measure language and authorizes designated City Council members to submit
arguments and rebuttals concerning the measure. Finally, the resolution directs the City
Clerk to transmit a copy of the measure to the City Attorney and directs the City
Attorney to prepare an impartial analysis of the effects of the measure on the existing
law as well as on the operation of the measure.
Arguments and rebuttals shall be submitted in accordance with State Elections Code
Sections 9280-9287 and Santa Monica Municipal Code Section 11.04.125. The
Elections Official will set the deadline for submitting arguments as 14 days from the date
the election is called on the measure and the deadline for submitting rebuttals to
arguments as 10 days after the deadline for submitting arguments on the measure, or
the date fixed by the City Clerk, whichever date is later.
To establish an additional level of accountability on the use of the additional revenues
raised from this ballot measure, staff is recommending that Council create an advisory
committee that would make non-binding recommendations on the use of the additional
TOT revenues. Staff is proposing a 5-person committee appointed by the City Council
for 2-year terms. Staff recommends that the Committee would include one member
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representing the hospitality industry, one member representing the homeless behavioral
health services community, one member from the Santa Monica Chamber of
Commerce, and two residents. Additional detail on the Committee structure will be
included in a resolution to be adopted by Council by February 28, 2023, if the ballot
measure is successful.
Additional Clarifications to the TOT Ordinance
In addition to the proposed rate changes, staff proposes minor revisions to clarify
ordinance language detailed in the table below. Municipal Code Chapter 6.68 contains
language created and not updated since the mid-1960s, with the result that some text is
unclear or outdated with current practice. Staff proposes to update this language along
with the proposed rate changes if voters approve the proposed ballot measure. If voters
do not approve the proposed ballot measure, staff will return to Council at a later date
with these proposed ordinance revisions. These minor adjustments will have no impact
on the amount of taxes owed.
Municipal Code
Section
Content Change and Rationale
6.68.010 Definitions • Transient: to align with the State Revenue and Taxation Code
• Rental: to clarify that rental charges includes all required room
charges except charges prohibited from inclusion by Revenue
and Taxation Code section 7282.3
6.68.040 Collection • Remove the quarterly payment option that is no longer in use
• Update title to align with other taxes
• Clarify timing of payment and add instructions for when
payment falls on holidays and weekends per current practice
6.68.055
Determination of
Date Payment Made
• New section outlining existing practices and to provide clarity
on the effective date of when the City treats a payment as
being made
6.68.060 Interest
and Penalties
• Update to include interest payment information
• Clarify penalty charges for delinquent payment
6.68.070 Failure to
collect and report tax
• Update title to reflect content
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6.68.075 Manner of
giving notice
• Updated manner and effective date of providing notice
6.68.080 Records • Update to four years consistent with limitations period in
Revenue and Taxation Code section 7283.51
6.68.100 Exceptions • Add exemption for foreign diplomats consistent with federal
regulations and other applicable law
6.68.110
Administrative
Penalties
• Clarify that penalties in this section refer to administrative
penalties
Attachment A shows the revisions within the ordinance text.
Financial Impacts & Budget Actions
The cost of placing the measure on the ballot will be covered by the FY 2022-23
election budget. Staff expects that voter approval of the transient occupancy tax
measure will increase General Fund revenues by approximately $1.4 million in FY
2023-24 due to the timing of implementation, and an anticipated $4.1 million per year in
the following years. There is no anticipated financial impact associated with the other
ordinance revisions.
Prepared By: Gigi Decavalles-Hughes, Director
Approved
Forwarded to Council
Attachments:
A. 2022-6-21 - TOT - Resolution Ballot Measure
B. Exhibit 1 - PDF v.2 6-23-22
C. Budget Session Staff Report - May 24, 2022 Council Meeting (Web Link)
D. PowerPoint Presentation
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City Council Meeting: June 28, 2022 Santa Monica, California
RESOLUTION NUMBER _____ (CCS)
(City Council Series)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA
SUBMITTING TO THE VOTERS A MEASURE TO AMEND CHAPTER 6.68 OF
THE SANTA MONICA MUNICIPAL CODE TO INCREASE THE CITY’S
TRANSIENT OCCUPANCY TAX TO 15% FOR HOTELS AND 17% FOR HOME-
SHARES AT THE GENERAL MUNICIPAL ELECTION TO BE HELD ON TUESDAY
NOVEMBER 8, 2022, AND AUTHORIZING CITY COUNCIL MEMBERS TO FILE
WRITTEN ARGUMENTS FOR OR AGAINST THE MEASURE AND DIRECTING
THE CITY ATTORNEY TO PREPARE AN IMPARTIAL ANALYSIS OF THE
MEASURE
WHEREAS, on October 8, 1963, the City Council of the City of Santa Monica
adopted Ordinance No. 625 (CCS), which established the City’s Tax on Transients for
Occupancy (the “TOT”); and
WHEREAS, the TOT is contained in Chapter 6.68 of the Santa Monica Municipal
Code; and
WHEREAS, on November 2, 2004, the voters approved Measure N, which
established the current TOT rate of 14% of the total charge for room rental within the
City; and
WHEREAS, many residents live in the City of Santa Monica because the City
invests in community priorities, offering extensive services and programs that
substantially enhance the quality of life of its residents; and
WHEREAS, additional locally-controlled revenue source is needed to restore and
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enhance Santa Monica’s essential city services; and
WHEREAS, increasing the TOT rate to 15% for hotels and 17% for home-shares
would partially fill the revenue gap created by COVID-19 and help restore and enhance
Santa Monica’s essential city services; and
WHEREAS, the proposed increase to the TOT would help provide new, ongoing
revenue to help preserve key foundational services, including: keeping public spaces
(parks, beaches, beach restrooms) clean and safe, increasing homelessness response
resources, and expanding interim housing programs; and
WHEREAS, under applicable law, the City Council of the City of Santa Monica
must present a proposed increase to the TOT to the electorate of the City of Santa
Monica for adoption by majority vote of the electorate; and
WHEREAS, pursuant to California Elections Code Section 10403, the City
Council has previously requested that the County of Los Angeles consent and agree to
the consolidation of all aspects of a General Municipal Election with the Statewide
General Election scheduled for Tuesday, November 8, 2022, for the purpose of electing
members of the Santa Monica City Council, the Santa Monica Rent Control Board, the
Santa Monica-Malibu Unified School District, and the Santa Monica College Community
College District.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA
DOES RESOLVE AND PROCLAIM AS FOLLOWS:
SECTION 1. At the General Municipal Election called for November 8, 2022, the
following measure shall be submitted to the qualified electors of the City of Santa
Monica:
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MEASURE " ":
To address homelessness, improve 911
emergency response times and
neighborhood police protection, make
public areas safer and cleaner, including
streets, sidewalks, parks, and the beach,
and provide other vital City services,
shall the City of Santa Monica increase
the transient occupancy tax – which is
paid entirely by overnight visitors – by
1% for hotels and motels, and by 3% for
home-shares, providing approximately
$4.1 million annually, until ended by
voters, with all funds benefitting Santa
Monica?
YES ________
NO _________
SECTION 2. That the City Clerk shall file a certified copy of this resolution with
the Board of Supervisors and with the county election department of the County of Los
Angeles.
SECTION 3. That the City of Santa Monica recognizes that additional costs may be
incurred by the County by reason of the addition of this measure to the ballot and agrees
to reimburse the County for any additional costs.
SECTION 4. The City Clerk shall transmit to the City Attorney, in accordance with
applicable law, a copy of the proposed measure. The City Attorney shall prepare an
impartial analysis of it, which shall not exceed 500 words in length. The impartial analysis
shall be filed by the date set by the City Clerk for the filing of primary arguments. ln
accordance with applicable law, not less than 10 calendar days before the City Clerk submits
the official election materials for printing, the City Clerk shall make a copy of all applicable
elections materials available for public examination in the City Clerk's office.
SECTION 5. The City Council authorizes its members, as follows, to file written
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arguments for or against the measure described above and which is contained in Exhibit 1
to this Resolution, which Exhibit is incorporated by reference herein:
FOR:
AGAINST:
All written arguments filed by any person in favor of or against any measure, including
any rebuttal arguments, shall be accompanied by the names and signatures of the persons
submitting the argument as required by applicable law, and any names, signatures and
arguments may be filed until the time and date fixed by the City Clerk in accordance with
applicable law, after which no change may be submitted to the City Clerk unless permitted
by law.
SECTION 6. The City Clerk shall cause the text of the measure, which is contained
in Exhibit 1, together with the City Attorney impartial analysis, and any arguments for or
against the measure, as well as any rebuttal, to be mailed to all qualified voters with the
sample ballot. In addition to other notices and publications required by law, the City Clerk,
not less than forty (40) days and not more than sixty (60) days before the General Municipal
Election, shall cause the text of the measure to be published once in the official newspaper
and in each edition thereof during the day of publication. The City Clerk is authorized to give
such notices and to fix such times and dates as are required by law or which are
appropriate to conduct properly the election.
SECTION 7. The provisions of Resolution Numbers 11425 and 11426 are referred
to and incorporated into this resolution for more particulars concerning the conduct of
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General Municipal Election to be held on November 8, 2022, and in all respects the election
shall be held and conducted as provided for by applicable law. The City Clerk is authorized
and directed to procure and furnish any official ballots, notices, printed materials and all
supplies or equipment that may be necessary in order to properly and lawfully conduct the
election.
SECTION 8. The City Clerk shall certify to the adoption of this Resolution, and
thenceforth and thereafter the same shall be in full force and effect.
APPROVED AS TO FORM:
______________________
DOUGLAS T. SLOAN
City Attorney
Exhibit 1 – Text of Measure
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CITY COUNCIL PROPOSED MEASURE TO AMEND SANTA MONICA MUNICIPAL
CODE CHAPTER 6.68 TO INCREASE THE CITY’S TRANSIENT OCCUPANCY TAX
TO 15% FOR HOTELS AND 17% FOR HOME-SHARES
WHEREAS, on October 8, 1963, the City Council of the City of Santa Monica
adopted Ordinance No. 625 (CCS), which established the City’s Tax on Transients for
Occupancy (the “TOT”); and
WHEREAS, the TOT is contained in Chapter 6.68 of the Santa Monica Municipal
Code; and
WHEREAS, on November 2, 2004, the voters approved Measure N, which
established the current TOT rate of 14% of the total charge for room rental within the
City; and
WHEREAS, many residents live in the City of Santa Monica because the City
invests in community priorities, offering extensive services and programs that
substantially enhance the quality of life of its residents; and
WHEREAS, additional locally-controlled revenue source is needed to restore and
enhance Santa Monica’s essential city services; and
WHEREAS, increasing the TOT rate to 15% for hotels and 17% for home-shares
would partially fill the revenue gap created by COVID-19 and help restore and enhance
Santa Monica’s essential city services; and
WHEREAS, the proposed increase to the TOT would help provide new, ongoing
revenue to help preserve key foundational services, including: keeping public spaces
(parks, beaches, beach restrooms) clean and safe, increasing homelessness response
resources, and expanding interim housing programs; and
WHEREAS, under applicable law, the City Council of the City of Santa Monica
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Exhibit 1
must present a proposed increase to the TOT to the electorate of the City of Santa
Monica for adoption by majority vote of the electorate.
NOW, THEREFORE:
SECTION 1. Chapter 6.68 of the Santa Municipal Code is amended to read as
follows:
Chapter 6.68 TAX ON TRANSIENTS FOR OCCUPANCY
6.68.010 Definitions.
The following words and phrases, when used in this ordinance, shall, for the purpose of
this Chapter, have the following respective meanings except where the context clearly indicates
a different meaning:
(a) Transient. Any person who, for any period of not more than one month30 days
either at his ownthat person’s expense or at the expense of another, obtains lodging or the use
of any lodging space in any hotel as hereinafter defined, for which lodging or use of lodging
space a charge is made.
(b) Person. Any individual, corporation, company, association, firm, copartnership, or
any group of individuals acting as a unit.
(c) Hotel. Any public or private hotel, inn, hostelry, tourist home or house, motel,
rooming house, bed and breakfast, home-share (as defined in Santa Monica Municipal Code §
6.20.010), or other lodging place within the City of Santa Monica offering lodging, wherein the
owner and operator thereof, for compensation, furnishes lodging to any transient as
hereinabove defined.
(d) Room Rental. The total charge madeAny charge required by any such hotel for
lodging and/or lodging space furnished to any such transient, including, but not limited to,
furniture, fixtures, appliances, linens, towels, non-coin-operated safes, and maid service. Room
Rental shall not include any amount upon which a sales or use tax is imposed with respect to
the sale of food products. If the charge made by such hotel to such transient includes any
charge for services or accommodations in addition to that of lodging, and/or the use of lodging
space, then such portion of the total charge as represents only room and/or lodging space rental
shall be distinctly set out and billed to such transient by such hotel as a separate item.
(e) Director of Finance-City Controller.: The Director of Finance-City Controller of the
City of Santa Monica.
(f) Permanent Resident. Any person who, as of a given date, has occupied or has had
the right to occupy a room or rooms in a particular hotel, as herein defined, for the thirty
consecutive days next preceding such date.
6.68.020 Transient Occupancy Tax Imposed.
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Exhibit 1
On and after the effective date of this ordinance, there is hereby imposed and levied on
each and every transient a tax for the privilege of occupancy in a hotel (other than a home-
share, which is subject to section 6.68.025) equivalent to fourteen fifteen percent (1415%) of the
total amount paid for room rental by or for any such transient to any such hotel; which said tax
shall be collected from such transient at the time and in the manner hereinafter provided. .Said
tax is levied for revenue purposes and is necessary for the usual financial operation of the City
of Santa Monica.
6.68.025 Transient Occupancy Tax Imposed on Home-Shares.
On and after the effective date of this ordinance, there is hereby imposed and levied on
each and every transient a tax for the privilege of occupancy in any home-share equivalent to
seventeen percent (17%) of the total amount paid for room rental by or for any such transient for
the use of a home-share.
6.68.040 Collection.
On and after the effective date of this ordinance, every person receiving any payment for
room rental with respect to which a tax is levied under this ordinance shall collect the amount of
tax hereby imposed from the transient on whom the same is levied or from the person paying for
such room rental, at the time payment for such room rental be made. Where the tax has been
collected for room rental for thirty days or less and the occupant subsequently completes thirty-
one consecutive days of occupancy, the person whose duty it is to collect said tax may return
such tax to the occupant or person obligated to pay such tax. If said person whose duty it is to
collect said tax has paid such tax over to the City, he may, within one year from the date of
payment to the Director of Finance-City Controller, and provided he has returned such tax to the
occupant or person obligated to pay such tax, either take credit for the tax so paid on any
subsequent return filed by hint or file a claim for refund of such tax. Such claim may be paid to
such person by the Director of Finance-City Controller. The taxes required to be collected
hereunder shall be deemed to be held in trust by the person required to collect the same until
remitted as hereinafter required.
6.68.050 Reports and Tax Remittance.
The person collecting any such tax shall prepare a report upon such forms and setting
forth such information as the Director of Finance-City Controller may prescribe and require,
showing the amount of room rental charges collected, and the tax required to be collected and
shall sign and deliver the same to the Director of Finance-City Controller with a remittance for
said tax. Said reports and remittances shall be due the first business day of each month
covering the amount of tax collected during the preceding month, the first report and remittance
hereunder being due on the first day of December, 1963, covering the amount of tax collected
during the month of November, 1963. Any person operating a hotel regularly throughout the
year may, upon written application to, and with the written consent of, the Director of Finance-
City Controller, make reports and remittances on a quarterly basis in lieu of the monthly basis
hereinbefore provided. Such quarterly reports and remittances shall be due on the first days of
January, April, July and October in each year, and shall cover the amounts collected during the
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Exhibit 1
three months immediately preceding the months in which reports and remittances are required.
If the remittance is by check or money order, the same shall be payable to the City of Santa
Monica.
6.68.055 Determination of Date Payment Made.
(a) The payment of tax made in person or electronically prior to close of City
business hours will be treated as received at the date of delivery.
(b) If payment is made by United States mail, the payment date will be the: (1) date
of cancellation by the United States Postal Service, as reflected on the envelope which contains
the payment; or (2) date of receipt by the City for any payment mailed in an envelope which has
used a postal meter.
6.68.060 Delinquent Tax Payments - Interest and penalties.
(a) If any person shall fail or refuse to remit to the Director of Finance-City
Controller the tax required to be collected and paid under this Chapter in the amount specified in
this Chapter, on or before the last day of the month in which said remittance becomes due, such
tax is delinquent.
(b) there Upon any tax becoming delinquent, shall be added to such tax by the
Director of Finance-City Controller shall impose a penalty of ten percent of the amount of the
tax.
(c) To the extent permitted by law, the Director of Finance, or their designee, may
establish rules and regulations that establish an applicable interest rate for any delinquency.,
and
(d) if If the any tax shall remains delinquent and unpaid thereafter for a period of
more than thirty days, there shall be added thereto by the Director of Finance-City Controller an
additional penalty of ten percent shall be added.
(e) For collection purposes only, every penalty imposed and any such interest as
accrues under this section shall become a part of the tax required to be remitted.
6.68.070 Failure to collect and report tax – Notice of Delinquency.
If any person shall fail or refuse to collect said tax and to make, within the time provided
in this Chapter, any report and remittance required by this Chapter, the Director of Finance-City
Controller shall proceed in such manner as he or she may deem best to obtain facts and
information on which to base his or her estimate of the tax due. As soon as the Director of
Finance-City Controller shall procure such facts and information as he or she is able to obtain
upon which to base the assessment of any tax payable by any person who has failed or refused
to collect the same and to make such report and remittance, he or she shall proceed to
determine and assess against such person the tax, and penalties, and interest provided for by
this Chapter and shall notify provide a notice of delinquency to such person by mail sent to his
or her last known place of addressas provided in section 6.68.075. The notice of delinquency
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Exhibit 1
shall describe of the total amount of such tax, including and applicable interest and penalties,
owed. , and tThe total amount thereoftax owed shall be payable within ten days from the date
of such notice of delinquency.
6.68.075 Manner of giving notice.
Any notice required under this Chapter may be served personally or by mail; if by mail,
service shall be made by depositing the notice in the United States mail, in a sealed envelope
with postage paid, addressed to the person on whom it is to be served at his or her address as it
appears in the records of City or as ascertained by the Director of Finance, or designee. The
service is complete at the time of the deposit of the notice in the United States mail, without
extension of time for any reason.
6.68.080 Records.
It shall be the duty of every person liable for the collection and payment to the City of any
tax imposed by this Chapter to keep and preserve, for a period of two four years, such suitable
records as may be necessary to determine the amount of such tax as he or she may have been
liable for the collection of and payment to the City, which records the Director of Finance-City
Controller shall have the right to inspect at all reasonable times.
6.68.090 Cessation of business.
Whenever any person required to collect and pay to the City a tax under this Chapter
shall cease to operate or otherwise dispose of his or her business, any tax payable hereunder to
the City shall become immediately due and payable and such person shall immediately make a
report and pay the tax due.
6.68.100 Exceptions.
No tax shall be payable hereunder in any of the following instances:
(a) On room rental paid by any Federal, State of California, or City of Santa Monica,
official or employees when on official business provided that a tax exempt certificate is executed
at the time of registration, on a form to be provided by the Director of Finance-City Controller.
(b) (b) On room rental paid to any hospital, medical clinic, convalescent
home or home for aged people.
(c) On any person as to whom, or any occupancy as to which, it is beyond the power
of the City to impose the tax herein by reason of Federal, State, or local law or regulation.
6.68.110 Administrative Penalty.
Any person violating or failing to comply with any of the provisions of this Chapter, shall
be subject to any of the penalties set forth in Section 1.08.010 of the Santa Monica Municipal
11.A.b
Packet Pg. 402 Attachment: Exhibit 1 - PDF v.2 6-23-22 [Revision 2] (5179 : Adoption of resolution to place revenue measure on the November 2022 Ballot)
Exhibit 1
Code. upon conviction thereof, be fined not less than twenty-five dollars nor more than five
hundred dollars, and each Each such violation or failure shall constitute a separate offense.
Such conviction Neither the City’s pursuit of any such penalties nor the imposition of any such
penalties shall not relieve any such person from the payment, collection or remittance of said
the tax as provided in this Chapter.
6.68.120 Director of Finance-City Controller—Powers and duties.
It shall be the duty of the Director of Finance-City Controller to ascertain the name of
every person operating a hotel in the City of Santa Monica, liable for the collection of the tax
levied by this Chapter, who fails, refuses or neglects to collect the tax or to make, within the time
provided by this Chapter, the reports or remittances required herein.
6.68.130 Advisory Committee.
The City Council shall, no later than February 28, 2023, establish by resolution an
advisory committee that will make non-binding recommendations as to the expenditure of
additional funds raised by increasing the transient occupancy tax above 14%.
SECTION 2. Any provision of the Santa Monica Municipal Code inconsistent with
the provisions of this measure, to the extent of such inconsistencies and no further, is
hereby repealed or modified to that extent necessary to effect the provisions of this
measure.
SECTION 3. If any section, subsection, sentence, clause, or phrase of this
measure is for any reason held to be invalid or unconstitutional by a decision of any court
of competent jurisdiction, such decision shall not affect the validity of the remaining
portions of this measure. The City Council hereby declares that it would have placed this
measure and the resulting Santa Monica Municipal Code amendment, and the voters
declare that they would have adopted this measure and the resulting Santa Monica
Municipal Code amendment, and each and every section, subsection, sentence, clause,
or phrase not declared invalid or unconstitutional, without regard to whether any portion
may be subsequently declared invalid or unconstitutional.
11.A.b
Packet Pg. 403 Attachment: Exhibit 1 - PDF v.2 6-23-22 [Revision 2] (5179 : Adoption of resolution to place revenue measure on the November 2022 Ballot)
Transient Occupancy Tax Revenue Measure Proposal
June 28, 2022
11.A.d
Packet Pg. 404 Attachment: PowerPoint Presentation (5179 : Adoption of resolution to place revenue
•Recovery from the pandemic continues at a slow pace
•City services, capital and maintenance below pre-pandemic levels
•New revenue streams required for new or expanded programs
•Proposed Transient Occupancy Tax measure would bring an
estimated $4.1 million annually
Additional resources required to support community priorities11.A.d
Packet Pg. 405 Attachment: PowerPoint Presentation (5179 : Adoption of resolution to place revenue
City TOT Rate Additional Assessment Total Equivalent
Inglewood 15.5%15.5%
Palo Alto 15.5%15.5%
Malibu 15%15%
Anaheim 15%TMD 2%17%
Ojai 15%15%
Garden Grove 14.5%TMD 2.5%17%
Los Angeles 14%TMD 1.5%16.5%
Santa Monica 14%TMD $1.90-$6.25/ room night (approx. 1-2%)15-16%
San Francisco 14%TMD 2.75% (highest tier)16.75%
Oakland 14%TBID $1.50/ room (>50 rooms)Over 14%
Long Beach 12%TMD 3%15%
Current Transient Occupancy Taxes in Context 11.A.d
Packet Pg. 406 Attachment: PowerPoint Presentation (5179 : Adoption of resolution to place revenue
Increase existing TOT rates:
•By 1% for hotels
•By 3% for vacation rentals (homeshares through Airbnb,
Vrbo, and other platforms)
Proposed Transient Occupancy Tax Measure 11.A.d
Packet Pg. 407 Attachment: PowerPoint Presentation (5179 : Adoption of resolution to place revenue
Addressing homelessness and public safety are key community needs
•Homeless Liaison Program (HLP) services seven days a week
•Downtown Services Unit (DSU) and the Public Services Officer (PSO) program expansion
•Homeless multidisciplinary outreach team beyond the Downtown area
•SAMOSHEL program redesign to accommodate 24/7 intakes
Revenue Can Address Key Needs 11.A.d
Packet Pg. 408 Attachment: PowerPoint Presentation (5179 : Adoption of resolution to place revenue
•5-person committee, Council appointed, 2-year terms
•Hospitality industry (1), homeless service provider (1),
business community (1), residents (2)
•Additional detail to be included in a resolution to be adopted
by 2/28/23
Advisory Committee 11.A.d
Packet Pg. 409 Attachment: PowerPoint Presentation (5179 : Adoption of resolution to place revenue
Description Year % Yes Poll % Yes Election
Measure ES SMMUSD bond 2012 62%68%
Measure GSH City sales tax 2016 55%62%
Measure V SMC bond 2016 65%66%
Measure SM property transfer tax 2020 62%72%
Proposed transient occupancy tax 2022 70%
7
Support for Transient Occupancy Tax Greater than Levels of Support for Previous Voter Approved Measures
11.A.d
Packet Pg. 410 Attachment: PowerPoint Presentation (5179 : Adoption of resolution to place revenue
To address homelessness, improve 911 emergency response times
and neighborhood police protection, make public areas safer and
cleaner, including streets, sidewalks, parks, and the beach, and
provide other vital City services, shall the City of Santa Monica
increase the transient occupancy tax –which is paid entirely by
overnight visitors –by 1% for hotels and motels, and by 3% for vacation
rental properties, providing approximately $4.1 million annually, until
ended by voters, with all funds benefiting Santa Monica.
Proposed Ballot Language 11.A.d
Packet Pg. 411 Attachment: PowerPoint Presentation (5179 : Adoption of resolution to place revenue
•Approve the resolution
•Designate one or more Councilmembers to write the argument in favor of the measure
Recommended Action 11.A.d
Packet Pg. 412 Attachment: PowerPoint Presentation (5179 : Adoption of resolution to place revenue