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November 8, 2016 — California General Election

— Increase Uniform Transient Occupancy Tax —

Special District
November 8, 2016 —California General Election

Duplicate - City of El Centro
Measure Q - Majority Approval Required

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Election Results

Failed

5,027 votes yes (38.83%)

6,817 votes no (52.66%)

  • 100% of precincts reporting (23/23).
  • 12,945 ballots counted.

Shall Ordinance No. 16-06 be adopted increasing the existing Uniform Transient Occupancy Tax from 10% to 13% on April 1, 2017 (raising an additional $480,000/year); and applying the Tax to all rent charged by hotel operators, including online travel companies, for the transient occupancy of any hotel room, to maintain general city services, including police, fire, library, streets, parks and recreation and other general municipal services until repealed by the voters?

Impartial analysis / Proposal

The City of El Centro imposes a transient occupancy tax (“TOT”), also called a “room” tax, at the rate of ten percent (10%) of the rent paid by guests for the ability to occupy a room or other space in a hotel or other similar accommodation for dwelling, lodging or sleeping purposes (collectively “occupancy” and a “hotel”) for a period of thirty (30) consecutive days or less. This TOT currently is imposed upon paying hotel guests for the ability to occupy a room or other hotel space and collected by the hotel operator.

The City Council has placed Measure “Q” on the ballot by unanimous vote. Passage of Measure “Q” would amend the City’s Municipal Code as follows:

     •      Effective April 1, 2017, increase the TOT rate from ten percent (10%) to thirteen percent (13%) of the rent paid by guests for hotel occupancy. Because the tax is a general tax, its proceeds may be used for any City general governmental purpose, including but not limited to fire and police services; street operations and maintenance; library and parks and recreation facilities and services. The rate increase may generate up to an additional $480,000 per year.

     •      Clarify that when a guest occupies a hotel for longer than 30 consecutive days, the TOT will apply only to the first 30 days of occupancy;

     •      Clarify that the ordinance applies to online travel companies and other third parties as hotel “operators” who must collect the TOT from guests who purchase hotel occupancy on the internet;

     •      Clarify that taxable rent paid for a hotel occupancy includes all rates and fees commonly charged including room rates, parking fees, cancellation charges, and online booking fees, but excludes charges for food and beverages;

     •      Provide that for “block reservation” arrangements the period of taxable occupancy is measured by the length of an individual guest’s stay, not the length of the “block reservation” entered into by the guest’s employer or agent; and

     •      Clarify exemptions from the TOT for state and federal employees.

Measure “Q” must be approved by a majority of the votes cast by the City voters who vote on the ballot proposition. A “yes” vote on Measure “Q” will authorize the amendments to the City’s Municipal Code described above. A “no” vote on Measure “Q” will prohibit the City from adopting the amendments to its Municipal Code as described above and the TOT will remain in place at ten percent (10%) until otherwise revised by a majority vote of the voters.

The above statement is an impartial analysis of Ordinance or Measure “Q”. If you desire a copy of the ordinance or measure, please call the election official‘s office at 442-265-1060 and a copy will be mailed at no cost to you.

— City Attorney for the City of El Centro

Arguments FOR

Measure Q would amend the City’s Municipal Code to increase the transient occupancy tax by three (3%) percent effective April 1, 2017. The Transient Occupancy Tax is a rent tax paid by guests who occupy a room or other space in a hotel or other similar accommodation for dwelling, lodging or sleeping purposes (collectively “occupancy” and a “hotel”) for a period of thirty (30) consecutive days or less.

By voting YES on Measure Q, the City of El Centro will be able to take an important step in becoming the City we all envision. Upgraded public infrastructure, expansion and upgrade of parks and recreational facilities and an overall increase to the “Quality of Life” to our residents.

The El Centro City Council unanimously endorses Measure Q.

The taxpayers of El Centro will NOT pay this tax. However, the benefit of this increase will fund economic development projects within the City of El Centro thus improving the quality of life for our residents.

The El Centro Police Officers Association, El Centro Firefighters Association, and business leaders join Mayor Jason Jackson and the rest of the El Centro City Council Members in strongly supporting Measure Q for a safer and stronger El Centro.

For a better El Centro, vote Yes on Measure Q.

We strongly urge you to vote YES ON MEASURE Q.

Jason Jackson
Mayor

Alex Cardenas
Mayor Pro Tem

Cheryl Viegas-Walker
Council Member

Efrain Silva
Council Member

Edgard Garcia
Council Member 

— Imperial County Registrar of Voters

Proposed legislation

AN ORDINANCE OF THE PEOPLE OF THE CITY OF EL CENTRO AMENDING VARIOUS PORTIONS OF CHAPTER 25, ARTICLE IV, THE CITY’S TRANSIENT OCCUPANCY (ROOM) TAX CODE, BY INCREASING THE RATE FROM 10 PERCENT TO 13 PERCENT EFFECTIVE APRIL 1, 2017 AND ADDRESSING ONLINE TRAVEL COMPANY AND OTHER THIRD PARTY BOOKINGS, AND MAKING VARIOUS CONFORMING CHANGES.

THE PEOPLE OF THE CITY OF EL CENTRO, CALIFORNIA DO HEREBY ORDAIN AS FOLLOWS:

SECTION 1. Section 25-58 of Article IV of Chapter 25 of the El Centro Municipal Code is hereby amended to read as follows:

Sec. 25-58. Definitions. Except where the context otherwise requires, the definitions given in this section govern the construction of this article:

Block Reservation” means an arrangement whereby a person reserves, whether on an exclusive or non-exclusive basis, a room or block/group of rooms for a defined period of time under a written or oral agreement with an operator, intending for such room(s) to be occupied by that person’s employees or agents on an intermittent, periodic or “as needed” basis during that defined period of time.

Hotel means any structure or any portion of any structure which is occupied or intended or designed for occupancy by transients for dwelling, lodging or sleeping purposes and includes any hotel, inn, tourist home or house, motel, studio hotel, bachelor hotel lodging house, rooming house, apartment house. dormitory, public or private club, mobile home or house trailer at a fixed location or other similar structure or portion thereof.

Occupancy means the use or possession or the right to the use or possession of any room or rooms or portion thereof (whether or not the person entitled to the use or possession actually uses or possesses such room or rooms or portion thereof) in any hotel for dwelling, lodging or sleeping purposes. The use or possession or right to use or possess any room or any suite of connecting rooms as office space, banquet or private dining rooms, or exhibits, sample or display space shall not be considered “occupancy” within the meaning of this definition unless the person exercising occupancy uses or possesses, or has the right to use or possess all or any portion of such room or suite of rooms for dwelling, lodging or sleeping purposes.

Online Travel Company shall mean any person, whether operating for profit or not for profit, which enables transients to purchase occupancy in a hotel via the Internet, or by similar electronic means.

Operator means the person who is proprietor of the hotel (or any other person who has the right to rent rooms within the hotel), whether in the capacity of owner, lessee, sublessee, mortgagee in possession, licensee, seller, reseller or any other capacity. Where the operator performs his functions through a managing agent or booking agent of any type or character other than an employee (including, but not limited to, an online travel company), the managing agent or booking agent shall also be deemed an operator for the purposes of this article and shall have the same duties and liabilities as his principal. Compliance in full with the provisions of this article by either the principal or the managing agent or booking agent shall however, be considered to be compliance by both.

Person means any individual, firm, partnership, joint venture, association, social club, fraternal organization, joint stock company, corporation, estate, trust, business trust, receiver, trustee, syndicate or any other group or combination acting as a unit. Rent means the consideration charged to the transient, (including but not limited to, room rates, service charges, parking fees, purchase price, advance registration, block or group reservation charges, assessments, retail markup, commission, processing fees, cancellation charges, attrition fees, or online booking fees), whether or not received, for the occupancy in a hotel valued in money, whether to be received in money, goods, labor or otherwise, including all receipts, cash credits and property and services of any kind or nature without any deduction therefrom whatsoever. Bona fide charges for food and beverages that are subject to tax under the California Sales and Use Tax Law (Revenue and Taxation Code Section 6001 et seq) shall not be deemed rent subject to the tax imposed by the Article. Nothing in this definition shall be construed to mean that rent is charged directly or indirectly for occupancy in a hotel when a room is provided to the transient as a compliment by the operator and where no consideration is charged to or received from any other person.

Transient means any person who exercises occupancy or is entitled to occupancy by reason of concession, permit, right of access, license or other agreement for a period of thirty (30) consecutive calendar days or less, counting portions of calendar days as full days. The following rules shall apply to this definition:

     (a)      Any such person so occupying or entitled to occupy in a hotel shall be deemed to be a transient until the period of thirty (30) calendar days has expired. In determining whether a person is a transient uninterrupted periods of time extending both prior and subsequently to the effective date of this article may be considered. In the event a person exercises or is entitled to occupancy for a continuous and uninterrupted period of longer than 30 calendar days, he or she shall be deemed a transient and subject to the tax for only the first 30 calendar days of occupancy and shall cease being a transient and the tax shall not apply on the 31st calendar day of occupancy and following. However, any break or interruption in occupancy shall start a new 30 day period subject to the tax.

     (b)      In determining whether a person is a transient, uninterrupted periods of time extending both prior and subsequent to the effective date of this Article may be considered.

     (c)      Any person who exercises or is entitled to occupancy for a period of 30 consecutive calendar days or less shall be deemed to be a transient for that period, regardless of whether the reservation and/or payment for occupancy is made directly by the person exercising or entitled to occupancy or by another person. The intent is to tax the person exercising occupancy or having the entitlement to occupancy of a hotel room.

     (d)      In the case of a block reservation, a person’s employee or agent shall be deemed a transient if that employee or agent exercises or is entitled to occupancy of a room for a period of 30 consecutive calendar days or less, regardless of the duration of any block reservation agreement. By way of example and not of limitation, if a corporation enters into a one-year block reservation agreement with an operator and one of the corporation’s employees occupies a room for 30 calendar days, the employee shall be deemed a transient whose occupancy is subject to the tax, notwithstanding the fact that the block reservation agreement has a duration longer than 30 calendar days.

SECTION 2. Section 25-59 of Article IV of Chapter 25 of the El Centro Municipal Code is hereby amended to read as follows:

For the privilege of occupancy in any hotel, effective as of April 1, 2017, and thereafter until revised by the voters. each transient shall pay a tax of 13 percent of the rent charged by the operator. Such tax constitutes a debt owed by the transient to the city. The transient shall pay the tax to the hotel operator when the rent is paid. If the rent is paid in installments, a proportionate share of the tax shall be paid with each installment. Any tax remaining unpaid when the transient no longer occupies space in the hotel is immediately due and payable to the operator, and if not so paid may be collected by the city finance officer or his/her designee.

     (a)      No tax shall be imposed upon any person who is legally exempt from paying the tax, any federal officer or State of California employee when occupying a room while on official business, any officer or employee of a foreign government who is exempt by reason of express provision of federal law or international treaty or any person who has signed an agreement in writing for occupancy in a hotel for more than thirty (30) days or who has actually occupied the hotel for more than thirty (30) days. For purposes of this section, students, non-employee supporters and volunteers of California public universities and colleges shall not be deemed to be officers or employees of the State of California.

     (b)      No exemption shall be granted except upon a claim therefor made at the time rent is collected and under penalty of perjury upon a form prescribed by the finance director or his/ her designee. Any federal or State of California officer or employee when on official government business claiming such an exemption shall provide to the operator as conclusive evidence that his or her occupancy is for the official business of his or her employer:

     (1)      Travel orders from his or her government employer; or a government warrant issued by his or her employer to pay for the occupancy; or a government credit card issued by his or her employer to pay for the occupancy; and

     (2)      Proof of his or her governmental employment as an employee or officer as described in paragraph (1) of this subsection (b), and proof, consistent with these provisions, that his or her occupancy is for the official business of his or her governmental employer.

     (c) It shall be the duty of an operator to keep and maintain for a period of three (3) years written documentation in support of each exemption granted under this Section.

SECTION 3. Effective Date of this ordinance. Pursuant to California Constitution Article XIIIC §(2)(b) and California Elections Code §9217, if a majority of the qualified voters voting in the November 8, 2016 election on Measure “Q” vote in favor of the adoption of such measure, this ordinance shall be deemed valid and binding and shall be considered as adopted upon the date that the vote is declared by the City Council, and shall go into effect ten (10) days after that date.

SECTION 4. Severability. If any section, sentence, clause or phrase of this ordinance 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 provisions of this ordinance. The People of the City of El Centro hereby declare that they would have adopted this ordinance and each section, sentence, clause or phrase thereof, irrespective of the fact that any one or more section, subsections, sentences, clauses or phrases be declared invalid or unconstitutional.

SECTION 5. Certification/Summary. Following the City Clerk’s certification that the voters of El Centro have approved this Ordinance, the Mayor shall sign this Ordinance and the City Clerk shall cause the same to be entered in the book of original ordinances of said City; and shall cause the same, or a summary thereof, to be published as required by law.

     INTRODUCED at a regular meeting of the City Council of the City of El Centro California, held on the 7th day of June, 2016.

     PASSED AND ADOPTED at a regular meeting of the City Council of the City of El Centro, California, held on the 21st day of June, 2016.

          CITY OF EL CENTRO By: Jason Jackson, Mayor

ATTEST:
By: L. Diane Caldwell, City Clerk

APPROVED AS TO FORM:
Office of the City Attorney
By: Elizabeth L. Martyn, City Attorney 

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