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Smart Voter
Alameda County, CA July 21, 2009 Election
Measure C
An ordnance amending the city's hotel tax
City of Oakland

Ordinance - 2/3 Approval Required
Official Final Results

Pass: 38907 / 76.8% Yes votes ...... 11757 / 23.2% No votes

See Also: Index of all Measures

Information shown below: Summary | Fiscal Impact | Impartial Analysis | Arguments | Full Text

To provide additional funding to the Oakland Zoo, the Oakland Museum of California, the Chabot Space and Science Center, cultural arts programs and festivals and the Oakland Convention and Visitor Bureau, shall the City of Oakland add a three percent (3%) surcharge to the current eleven percent (11 %) Transient Occupancy Tax (Hotel Tax) that persons who stay in Oakland hotels pay?

Summary Prepared by Oakland City Attorney:
This proposed ordinance would amend the City of Oakland's transient occupancy tax (Hotel Tax) to provide an additional surcharge of 3% that will be paid by persons who stay in any single Oakland hotel for less than 30 consecutive days in order to provide funding to the Oakland Zoo, Oakland Museum, the Chabot Space and Science Center, cultural arts programs and festivals and the Oakland Convention and Visitor's Bureau. The CUIrent hotel taxis 11%. The revenue from the 3% surcharge will be allocated as follows: 50% to the Oakland Convention and Visitor's Bureau, and 12.5% each to the Oakland Zoo, the Oakland Museum of California, the Chabot Space and Science Center and cultural arts programs and festivals. The language "cultural arts programs and festivals" is broad and would allow the City to distribute this category of funds to outside organizations or to programs operated directly by the City. The measure also does not provide specificity regarding the criteria for allocating this category of revenue; nor does it identify the decision-making process by which these funds will be distributed. The City does have an existing process under the Cultural Funding Program of the City's Cultural Arts and Marketing Division and the cultural arts programs' funds could be distributed through this program.

s/JOHN RUSSO City Attorney

Fiscal Impact from Oakland City Auditor:
Measure C authorIzes the City of Oakland to add Section 4.24.031 to the Municipal Code, which would require a supplemental surcharge of 3% to the City's Transient Occupancy Tax (Hotel Tax), in addition to the current 11 % hotel tax. The measure specifies that the revenues generated from the 3 % surcharge will be appropriated according to the percentages listed below: 50% Oakland Convention and Visitors Bureau

12.5% Oakland Zoo 125% Oakland Museum of California
12.5% Chabot Space and Science Center
12.5% Cultural Arts Programs and Festivals

The measure stipulates that these hotel tax revenues will be used to distribute appropriations through set percentages described above, and thus are regarded as special taxes. This surcharge cannot be appropriated for any other use and would constitute a steady stream of revenue for these institutions. Existing transient occupancy taxes are considered general taxes, where proceeds are deposited into the general fund. The revenues to be collected through the proposed 3% hotel tax surcharge are mandated to be deposited into a separate, special fund. The hotel operator may state the 11 % tax and the 3% surcharge as a single tax of 14% on receipts provided to transients. The revenue generated through the supplemental 3% hotel tax is not intended to replace or supplant any other established sources of funding. The proposed surcharge will be in effect starting on January 1, 2010 if it receives two-thirds approval by Oakland voters. The measure requires an annual independent audit or review shall be performed to assure accountability and the proper disbursement of the proceeds of this tax and tax proceeds may be used to pay for the audit or review.

FINANCIAL IMPACT As of the FY 2008-09 October Midcycle Budget the 11% hotel tax budgeted $12.7 million in revenues for Oakland. In FY 2009-10, due to a difficult economy, the City projects hotel tax revenues to decrease by $2.6 million from lower hotel occupancy. The table below shows the estimated FY 2009-10 hotel tax and proposed surcharge revenue that is projected:



Fiscal Year
Estimated Hotel Tax Revenue (11%)
Proposed Surcharge (3%)
Total Projected Hotel Tax Revenue
2009-10
$10,097,740
$2,753,929
$12,851,669
Based on our analysis of the data provided by City staff, the supplemental revenues projected from the 3% surcharge appear reasonable to strengthen the specific programs targeted for pre-determined appropriations under Measure C. We relied on the best data available at this time, however actual results may vary from our estimates.

s/COURTNEY A. RUBY. CPA City Auditor

Impartial Analysis from Oakland City Attorney
California cities may impose special taxes only if two-thirds of a city's voters approve the tax. (California Constitution Article XIII(A), Section 4). A "special tax" is a tax that the City can use only for the purposes specified in the tax measure. This measure would add a 3% surcharge to the City's existing 11 % Transient Occupancy Tax (Hotel Tax) to provide funds to the Oakland Zoo, the Oakland Museum of California, the Chabot Space and Science Center, cultural arts programs and festivals, and the Oakland Convention and Visitor's Bureau. The Hotel Tax is paid only by persons who stay in any single Oakland hotel for less than 30 consecutive days. The new Hotel Tax would not apply to residents of hotels who reside in the hotel for 30 consecutive days or more. If two thirds of the voters approve this surcharge, the total hotel tax will be 14%.

Purpose of the Surcharge Tax The revenue stream generated from this additional 3% surcharge may be expended as follows:

A. 50% to Oakland Convention and Visitor's Bureau.
B 12.5% each to the Oakland Zoo, the Oakland Museum of California, the Chabot Space and Science Center, and cultural arts programs and festivals.

The language "cultural arts programs and festivals" is broad and would allow the City to distribute this category of funds to outside organizations or to programs operated directly by the City. The measure also does not provide specificity regarding the criteria for allocating this category of revenue; nor does it identify the decision-making process by which these funds will be distributed. Therefore, the City Council has the budgetary power under the City Charter to make these decisions. The City does have an existing process under the Cultural Funding Program of the City's Cultural Arts and Marketing Division and the cultural arts programs' funds could be distributed through this program.

Independent Audit or Review This measure also requires an annual independent audit or review to assure accountability and the proper disbursement of the 3% surcharge revenues. However, the measure does not specify whether this audit or review is to be conducted by the City Auditor, by an outside auditor at the direction of the City Auditor, or by an outside agency at the direction of the City Council.

s/JOHN RUSSO City Attorney

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Oakland Tribune

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Arguments For Measure C
A "Yes" vote on Measure C ensures that Oakland children and families will continue to have access to world-class learning experiences at some of the region '$ top education.. al and entertainment attractions, like the Oakland Museum of California, the Chabot Space & Science Center, the Oakland Zoo, and cultural arts programs and festivals.

A "Yes" vote on Measure C means jobs and economic stimulus for Oakland, and it does not cost Oakland residents anything. The revenue Measure C generates will be invested in our tourism attractions and services. which will create good, local jobs, attract more visitors to Oakland, and increase overall tax revenues for City services.

A "Yes" vote on Measure C will continue funding city programs for teacher training and educational services for Oakland's youth -- providing them with safe, accessible activities and recreation outside of school

The Hotel Tax is paid by travelers staying in our hotels and using and receiving city services. Increasing the rate by 3% (about $3.00 more a night for a room that costs $100) will generate approximately $3 million in much-needed revenue each year. This money will be used right here in and cannot be taken away by Sacramento.

Our city is missing out on valuable revenue, and fixing that won't put us at a disadvantage in the region. Oakland's Hotel Tax will be no higher than other major cities, like San Francisco.

Measure C is not a blank check for the city government. It generates dedicated funding for the Oakland Museum of California, the Chabot Space & Science Center, the Oakland Zoo, the OCVB and cultural arts programs and festivals that benefit all Oakland residents.

Please join us in voting "Yes" on Measure C to fund important programs for youth and families and bring jobs and revenue lo our city.

s/Jcel Parrott Executive Director - Oakland Zoo

s/Dick Specs Board Member - Chabot Space & Science Center Foundation

s/Richard Edwards Vice-Chair - Oakland Museum or California Foundation

s/Patricia Scates Chair of the Board of Directors - Oakland Metropolitan Chamber of Commerce

s/Sharon Cornu Executive Officer - Alameda Central Labor Council. AFL-CIO

(No arguments against Measure C were submitted)

Full Text of Measure C
A Proposed Ordinance Amending the City's Transient Occupancy Tax (Hotel Tax) to Provide an Additional Three Percent (3 %) Surcharge That Will Be Paid by Persons Who Stay In Oakland Hotels, In Order To Provide Additional Revenue to Several Oakland Programs

WHEREAS, the City Council of the City of Oakland desires to amend the Oakland Municipal Code in order to provide for a supplemental three percent (3%) transient occupancy tax, in addition to the eleven percent tax specified in Section 4.24.030; and

WHEREAS, tourism promotions and marketing programs will build greater awareness of the City of Oakland as a tourist, meeting, and event destination; and

WHEREAS, Oakland visitors and residents benefit from quality cultural and educational experiences and institutions located within the city; and

WHEREAS, the Oakland Zoo, the Oakland Museum of California, the Chabot Space and Science Center, and Cultural Arts programs and Festivals are valuable assets that enhance the quality of life of Oakland residents; and

WHEREAS, the increasing costs of maintenance and operations and dwindling private resources are ongoing threats to the viability of Oakland's most valuable institutions;and

WHEREAS, it is the desire of the City Council to establish a steady stream of revenue for Oakland Convention And Visitors Bureau ("OCVB"), the Oakland Zoo, the Oakland Museum of California, the Chabot Space and Science Center and Cultural Arts Programs and Festivals; and

WHEREAS, in many cities tourism programs and regional cultural institutions such as these, are funded from hotel taxes; and

WHEREAS, these institutions attract a large number of visitors to the City of Oakland; and

WHEREAS, all revenues received from the 3% increase in transient occupancy tax shall be allocated as follows: 50% to OCVB for its expenses and promoting tourism activities, and 12.5% each to the Oakland Zoo, the Oakland Museum of California, the Chabot Space and Science Center and Cultural Arts Programs and Festivals; and

WHEREAS, this economic investment in OCVB, the Oakland Zoo, the Oakland Museum of California, the Chabot Space & Science Center, and the Cultural Arts Programs & Festivals will enhance the City of Oakland's attractiveness to visitors and provide employment and enrichment to the City's residents; and

WHEREAS, OCVB, the Oakland Zoo, the Oakland Museum of California, the Chabot Space and Science Center and the Cultural Arts Programs and Festivals shall engage in marketing efforts to promote the City of Oakland; now, therefore be it

RESOLVED: That the City Council of the City of Oakland does hereby submit to the voters at a special municipal election that is not less than 88 days and no more than 150 days after the date the council passes this resolution the following:

SECTION 1. The Oakland Municipal Code is hereby amended by adding Section 4.24.031 to read as follows:

Section 4.24.031. Imposition of surcharge.

A. There shall be a tax of three percent (3%) of the rent charged by the operator of a hotel, in addition to the eleven percent tax specified in Section 4.24.030, for the privilege of occupancy in any hotel in the City of Oakland (the "Surcharge"). Subject to subsection E, below, the Surcharge so collected shall be appropriated to the Oakland Convention and Visitors Bureau (OCVB), the Oakland Zoo, the Oakland Museum of California, the Chabot Space and Science Center and the Cultural Arts Programs and Festivals as follows: 50% (fifty percent) to OCVB, 12.5% (twelve point five percent) to the Oakland Zoo, 12.5% (twelve point five percent) to the Oakland Museum of California, 12.5% (twelve point five percent) to Chabot Space and Science Center and 12.5% (twelve point five percent) for Cultural Arts Programs and Festivals. The Surcharge shall not be appropriated for any purpose other than specifically set forth in this subsection. Appropriations will be subject to applicable City of Oakland policies.

B. Said Surcharge constitutes a debt owed by the transient to the city which is extinguished only by payment to the operator of the hotel at the time the rent is paid. If the rent is paid in installments, a proportionate share of the Surcharge shall be due upon the transient's ceasing to occupy space in the hotel. If for any reason the Surcharge due is not paid to the operator of the hotel, the Tax Administrator may require that such a Surcharge shall be paid directly to the Tax Administrator.

C. All funds collected by the City from the Surcharge imposed by this section shall be immediately segregated from all other funds collected and shall be deposited into a special fund in the City treasury (the "Surcharge Fund"). All monies in the Surcharge Fund shall be distributed pursuant to subsection A herein on a monthly basis, following the month in which they were collected by the City.

D. Pursuant to Section 4.24.050, on the receipt provided to the transient, the operator may state the current eleven percent (II %) tax specified in Section 4.24.030 and the three percent (3%) Surcharge as a single transient occupancy tax of fourteen percent (14%).

E. Annual Audit. An independent audit or review shall be performed annually as provided by Government Code sections 50075.1 and 50075.3 to assure accountability and the proper disbursement of the proceeds of this Surcharge in accordance with the purposes stated herein. Surcharge proceeds may be used to pay for the audit or review.

SECTION 2. This ordinance shall be effective upon 2/3 vote approval by Oakland voters at an election, or such later date as required by state law, and may not be repealed or amended except by a subsequent vote of the voters of Oakland.

SECTION 3. Severability: If any article, section, subsection sentence, clause or phrase of this ordinance is held to be invalid or unconstitutional, the offending portion shall be severed and shall not affect the validity of remaining portions which shall remain in full force and effect.

SECTION 4. This Ordinance is exempt from the California Environmental Quality Act, Public Resources Code section 21000 et seq., including without limitation, Public Resources Code section 21065, CEQA Guidelines l5378(b)(4) and 15061(b)(3), as it can be seen with certainty that there is no possibility that the activity authorized herein may have a significant effect on the environment.

SECTION 5. There are existing transient occupancy taxes that are general taxes, the proceeds of which are deposited in the general fund. The Surcharge revenues received as a result of this ordinance will be used fOf the purposes set forth in Section 4.24.031 and thus are special taxes.


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Created: September 30, 2009 16:23 PDT
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