Colton’s City Council passed a resolution late Tuesday that will place a tax increase on the November ballot to help the city renovate an existing soccer field and construct a new sports complex.
Despite some council members proposing to increase the Transient Occupancy (Hotel) Tax (TOT) to as high as 15 percent during the July 19 meeting, City Manager Bill Smith and his staff again suggested a 12.5-percent increase.
The motion passed unanimously by a 6-0 vote (District 5 Councilmember Deirdre Bennett was absent). A previous effort by council members Frank Navarro and David Toro to increase the tax to 13 percent failed by a 4-2 vote.
The entire Council expressed delight in passing the ordinance, which they refer to as a “historic” decision.
“This is the first step in seeing money delegated for sports activities,” said Councilman Isaac Suchil. “I’m excited about that because I’ve never seen that in my entire life in this city. To me that’s a benefit.”
The Transient Occupancy (Hotel) Tax (TOT) is a charge imposed on the city’s hotel and motel guests. The purpose of the tax is to collect funding for street maintenance, police and fire services, library services, parks and recreation services, and other general costs. It does not incur any costs for residents or property owners.
According to Smith’s report, Colton’s TOT ordinance has not been updated in nearly 50 years. As a result, the city is having difficulty garnering full TOT compensation from contemporary forms of hotel booking. The proposed measure will amend the current TOT ordinance to include online travel companies, such as Expedia, Travelocity, and short-term rental company AirBnB.
In addition, the ordinance will clarify that taxable rent paid for a room or space covers room rates, service charges, parking fees, cancellation charges, and online booking fees, to name a few.
After consulting with a local economist on the financial impacts the TOT increase may have, city staff learned that a 2.5-percent increase is not likely to have adverse affects on a hotel business’ decision to function in Colton or a consumer’s decision to choose to stay overnight. However, a 5-percent increase, “could impact development and operational models.”
The key component to the ballot measure is the “Special Tax” designation the increase will be given. The rate increase will contribute to approximately $150,000 annually to constructing, maintenancing, and rehabilitating the city’s athletic and recreational areas, as written on Smith’s staff report.
Many of the residents in attendance applauded the Council’s efforts in bringing forth the ballot measure. “I applaud you for doing the best you can,” said Joe Perez, who is involved with Colton Youth Soccer. “We want better soccer fields.”
Smith urged the Council to think ahead to August 25–the final day city leaders could submit an impartial analysis and an argument in favor of the measure. Smith said the resolution authorizes a council representative or a resident to write the argument. The next council meeting is scheduled for August 16.