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TOT Increase?  Council to decide August 11
Web Exclusive | Posted August 8, 2008. | The following article did not appear in the print edition.

click here for a report on the Council's action concerning this issue at its Monday, August 11 meeting

by Mark Whitehead

Currently, Del Mar's TOT is set at 10.5%, generating $1,750,000 for the city annually, a major source of our revenue. This tax rate, paid by visitors to hotels, is lower than fees charged in neighboring San Diego (10.5 % + 2 % Tourist Marketing District fee) and Solana Beach (13% TOT, effective Jan. 1, 2009). By law, Del Mar must obtain voter approval to raise the TOT. Therefore, the city is considering submitting a ballot measure for the Nov. 4, 2008 allowing the city to set a TOT rate of up to 13%. Approval by a majority of voters is required. Passage of the measure provides the city the option of raising the TOT; an increase is not automatic or obligatory. If raised the full amount, 2.5%, to a total of 13%, approximately $400,000 of new revenue could be generated annually.

The Del Mar hotels are seeking to form a Tourist Marketing District (TMD) and have pledged $28,000 to pay legal and planning fees for its establishment. During the Aug. 4 council meeting they urged that instead of the city pursuing a potential increase in the TOT, funds the city would control, that the hotels be permitted to form a TMD. Under this structure they proposed to charge 1-2% of room costs, fees (as much as 300,000 annually) that would fund a TMD that the hotels would direct in efforts to promote tourism in Del Mar.

Discussion at the August 4 council meeting included a desire by the city to increase options for generating additional revenue, and a desire for flexibility in the use of the funds. The city currently funds the Del Mar Village Association (DMVA) ($80,000 current year) which has engaged in some village marketing activities. The DMVA supports the hotels' request.

To make the deadline for the Nov. election, the council must decide Monday night whether to initiate the ballot measure for a TOT increase. Alternatively, the hotels are urging that, instead, they should form a TMD funded by new fees that they would collect. The council continued discussion of TOT vs. TMD until Monday Aug. 11. The issue is unresolved. So far discussion has involved primarily the city council, the DMVA and the Del Mar hotels. Residents interested in the generation and allocation of city revenue should weigh-in.



Dude, who stole my city?
by Mark Whitehead, former Mayor

The city council voted 4:1 (Abarbanel, opposed) Monday night to place  
a measure on the Nov. ballot permitting an increase in the TOT from  
10.5%. to 13% of hotel charges. But the ballot measure language will not reveal a  
last minute sleight of hand regarding potential un-availability of the  
full 13% to the City. Hoteliers were successful in gaining the  
concession that if they impose a TMD (Tourist Marketing District) fee,  
that fee would be considered when raising the TOT so as to keep the  
total of TOT and TMD fee competitive with the totals paid in  
neighboring cities. This concession to the Del Mar hoteliers, codified  
by Monday's ordinance, could effectively reduce the potential TOT  
revenue to the City by as much as $300,000, money that instead would  
be available to the hoteliers for marketing. While the ballot measure  
promises that every dollar of the TOT will be paid by visitors and  
will "stay in Del Mar," the revised wording of the ordinance introduced by  
the majority council, potentially will direct huge sums to the hotels  
and limit the city's take to less than 13%. The council was generally  
dismissive of the  sincere, well-reasoned and unanimous urgings of  
residents who argued to the council that we have pressing  
infrastructure needs: a pump station, a lifeguard headquarters, unmet  
obligations to pay for the Shores site to name a few. Residents  
argued: Why should the hoteliers get a sum equal to half the  public  
improvement budget of the City annually?

Click here to watch the video of the City Council's August 11 meeting, including the public testimony and council deliberation and action on the TOT ballot measure.


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