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HomeMy WebLinkAboutItem 7.1 Consideration of Ballot Measure to Amend Dublin Municipal Code Section 3.16.030 to Increase the Rate of the Transient Occupancy Tax Agenda Item 7.1 STAFF REPORT CITY COUNCIL Page 1 of 3 DATE: June 2, 2026 TO: Honorable Mayor and City Councilmembers FROM: Colleen Tribby, City Manager SUBJECT: Consideration of Ballot Measure to Amend Dublin Municipal Code Section 3.16.030 to Increase the Rate of the Transient Occupancy Tax Prepared by: Felicia Escover, Economic Development Manager EXECUTIVE SUMMARY: The City Council will consider placing a measure on the ballot to amend Section 3.16.030 of the Dublin Municipal Code to increase the rate of the Transient Occupancy Tax from 8 percent to 10 percent effective July 1, 2027, and from 10 percent to 12 percent effective July 1, 2028. If approved by voters, the measure would apply to guests staying at hotels within the City of Dublin, unless otherwise exempt under applicable law. STAFF RECOMMENDATION: Adopt the Resolution Ordering the Submission to the Qualified Electors of the City of Dublin an Ordinance Amending Section 3.16.030 of the Dublin Municipal Code to Increase the Rate of the Transient Occupancy Tax; Calling for an Election to be Consolidated with the Statewide General Election to be Held on November 3, 2026; Fixing the Date and Manner of the Election and the Procedure for Voting Therein; and Providing for Notice Thereof. FINANCIAL IMPACT: If approved by the voters, the proposed phased increase to the Transient Occupancy Tax rate to 10 percent is estimated to generate approximately $350,000 in additional revenue, and the total increase to 12 percent is estimated to generate approximately $700,000 annually in additional revenue, assuming stable hotel performance and market conditions. The estimated cost to prepare ballot materials for the November 2026 General Municipal Election is approximately $33,630. Because a municipal election is already scheduled for November 2026, no additional election-related costs would be incurred for ballot placement. 923 Page 2 of 3 DESCRIPTION: Background Transient Occupancy Tax (TOT), often referred to as a “bed tax” or “hotel tax,” is authorized under California Revenue and Taxation Code Section 7280. The tax is imposed on the privilege of occupying a room or other living space in a hotel, inn, tourist home, motel, or similar lodging for a period of 30 days or less. Certain exemptions apply, including official state and federal government travel. On September 10, 1984 the City Council adopted Ordinance 16 -84 establishing the City’s TOT at 8 percent. The rate has remained unchanged since that time. Any increase to the TOT requires voter approval through a ballot measure. On February 17, 2026 the City Council received a report regarding the City’s TOT and direct ed Staff to move forward with preparation of a ballot measure utilizing a phased implementation approach to increase the City’s TOT rate from the current 8 percent to 10 percent effective July 1, 2027, and to 12 percent effective July 1, 2028. Proposed Ballot Measure The proposed ordinance would amend Section 3.16.030 of the Dublin Municipal Code to increase the City’s TOT according to the following schedule:  Increase from 8 percent to 10 percent effective July 1, 2027; and  Increase from 10 percent to 12 percent effective July 1, 2028. Consistent with the City Council’s direction, the measure has been structured as a general tax measure. Revenues generated through the measure would continue to be deposited into the General Fund and used for general governmental purposes as determined through the annual budget process. As a general tax measure, the proposed Resolution requires approval by at least four affirmative votes of the City Council for placement on the ballot and approval by a simple majority (50 percent plus one) of Dublin voters at the November 3, 2026 General Municipal Election. Community Outreach and Stakeholder Engagement Prior to the February 17, 2026 City Council meeting, Staff conducted preliminary outreach and discussions with local hotel operators regarding market conditions, business trend s, and the potential for a TOT increase as part of the City’s ongoing Hospitality Expansion initiative identified in the adopted Economic Development Strategy. Since that meeting, Staff has continued providing updates to local hoteliers regarding the proposed ballot measure and has extended invitations for additional meetings and discussion. Staff also attended a Dublin Chamber of Commerce Economic Development Committee meeting where the proposed TOT increase was discussed with members of the business community and hospitality stakeholders. 924 Page 3 of 3 In addition to engaging is these discussions, Staff has continued ongoing efforts to support local hoteliers and hospitality businesses. Election Timeline If the Resolution is adopted, Staff will coordinate with the A lameda County Registrar of Voters to submit all required election materials and comply with applicable statutory deadlines associated with placement of the measure on the November 3, 2026 ballot. STRATEGIC PLAN INITIATIVE: Strategy 2: Fiscal Sustainability Objective B: Identify and pursue new ongoing revenue sources to support long-term fiscal stability. NOTICING REQUIREMENTS/PUBLIC OUTREACH: The City Council Agenda was posted. The Staff Report has also been shared with local hoteliers. ATTACHMENTS: 1) Resolution Ordering the Submission to the Qualified Electors of the City of Dublin an Ordinance Amending Section 3.16.030 of the Dublin Municipal Code to Increase the Rate of the Transient Occupancy Tax; Calling for an Election to be Consolidated with the Statewide General Election to be Held on November 3, 2026; Fixing the Date and Manner of the Election and the Procedure for Voting Therein; and Providing for Notice Thereof 2) Exhibit A to the Resolution – Ordinance Amending Section 3.16.030 of the Dublin Municipal Code to Increase the Rate of the Transient Occupancy Tax 925 Attachment 1 Reso. No. XX-26, Item X.X, Adopted 06/02/2026 Page 1 of 4 RESOLUTION NO. XX – 26 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN ORDERING THE SUBMISSION TO THE QUALIFIED ELECTORS OF THE CITY OF DUBLIN AN ORDINANCE AMENDING SECTION 3.16.030 OF THE DUBLIN MUNICIPAL CODE TO INCREASE THE RATE OF THE TRANSIENT OCCUPANCY TAX; CALLING FOR AN ELECTION TO BE CONSOLIDATED WITH THE STATEWIDE GENERAL ELECTION TO BE HELD ON NOVEMBER 3, 2026; FIXING THE DATE AND MANNER OF THE ELECTION AND THE PROCEDURE FOR VOTING THEREIN; AND PROVIDING FOR NOTICE THEREOF WHEREAS, the City of Dublin currently imposes a Transient Occupancy Tax (“TOT”) pursuant to Chapter 3.16 of the Dublin Municipal Code; and WHEREAS, the City Council adopted Ordinance No. 16-84 on September 10, 1984, establishing the City’s current TOT rate of eight percent; and WHEREAS, the TOT is imposed on the privilege of occupying a room or other lodging in a hotel, motel, inn, or similar facility within the City for a period of thirty (30) consecutive calendar days or less; and WHEREAS, the TOT is paid by visitors staying in hotels and lodging establishments within the City and is an important source of General Fund revenue supporting municipal services and operations; and WHEREAS, the City Council has identified the importance of maintaining long-term fiscal sustainability and identifying additional ongoing revenue sources to support municipal services, infrastructure, public safety, and quality of life initiatives; and WHEREAS, on February 17, 2026, the City Council received a report regarding the City’s TOT and directed Staff to prepare a ballot measure to increase the TOT utilizing a phased implementation approach; and WHEREAS, the proposed ballot measure would increase the TOT rate from eight percent (8%) to ten percent (10%) effective July 1, 2027, and from ten percent (10%) to twelve percent (12%) effective July 1, 2028; and WHEREAS, the proposed measure is structured as a general tax measure, with revenues deposited into the City’s General Fund and available for general governmental purposes as determined through the annual budget process; and WHEREAS, pursuant to Article XIII C of the California Constitution and applicable provisions of the California Elections Code, a general tax proposed by a local government must be submitted to the voters at a regularly scheduled general municipal election and approved by a majority vote of the electorate. NOW, THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL OF THE CITY OF DUBLIN DOES HEREBY RESOLVE AND ORDER AS FOLLOWS: 926 Reso. No. XX-26, Item X.X, Adopted 06/02/2026 Page 2 of 4 Section 1. That pursuant to the requirements of the Elections Code of the State of California and other applicable law, there is called and ordered to be held in the City of Dublin, California, on November 3, 2026, an election at which there shall be submitted to t he qualified voters of the City a measure to amend Section 3.16.030 of the Dublin Municipal Code to increase the rate of the Transient Occupancy Tax. Section 2. The ballot question for the proposed ordinance shall be as follows: “Shall the measure to protect essential City of Dublin general services, such as police, fire, emergency medical, street maintenance, and parks and recreation, by increasing the City's transient occupancy tax, which is paid only by hotel and lodging guests, from 8% to 10% on July 1, 2027 and to 12% on July 1, 2028, and generating approximately $7,000,000 over a ten-year period that cannot be taken by the State , be adopted?” Section 3. The Ordinance to be considered by the voters pursuant to Section 2 of this Resolutio n is as set forth in Exhibit A. Section 4. (a) An election on the measure set forth in Section 2 shall be held in consolidation with the statewide general election to be held on November 3, 2026, and shall be held and conducted in the manner prescribed in Section 10418 of the Elections Code of the State of California. (b) The election on the measure set forth in Section 2 shall be held and conducted, the votes canvassed and the returns made, and the results ascertained and determined as provided by law. (c) The election for the measure set forth in Section 2 shall be held as required by law, and the Alameda County Registrar of Voters is authorized to canvass the returns of that election with respect to the votes cast in the City of Dublin. (d) At the next regular meeting of the City Council of the City of Dublin occurring after the returns of the election for the measure set forth in Section 2 have been canvassed and the certification of the results provided to the City Council, the City Council shall cau se to be entered in its minutes a statement of the results of the election. Section 5. (a) In accordance with Elections Code sections 9282 and 9283, arguments submitted for or against the measure shall not exceed 300 words in length and shall be printed u pon the same sheet of paper and mailed to each voter with the sample ballot for the election and may be signed by not more than five persons. (b) In accordance with Elections Code section 9282, the following headings, as appropriate, shall precede the arguments’ wording, but shall not be counted in the 300-word maximum: “Argument Against Measure __” or “Argument In Favor of Measure __” (the blank spaces being filled only with the letter or number, if any, designating the measure). (c) In accordance with Elections Code section 9283, printed arguments submitted to voters in accordance with section 9282 of the Elections Code shall be filed with the City Clerk, accompanied by the printed name(s) and signature(s) of the author(s) submitting it or, if submitted on behalf of an organization, the name of the organization and the printed name and signature of at least one of its principal officers. Arguments are due in the office of the City Clerk prior to 4:00 p.m., on August 3, 2026. (d) The City Council may authorize, by motion, a member or members to prepare a draft argument against the measure and to return the draft for consideration and adoption by the City Council at a duly 927 Reso. No. XX-26, Item X.X, Adopted 06/02/2026 Page 3 of 4 noticed meeting of the City Council. In accordance with Elections Code section 9282, any councilmembers authorized by the City Council to do so may sign the argument against the measure. Section 6. (a) Pursuant to Elections Code section 9285, when the City Clerk has selected the arguments for and against the measure, that will be prin ted and distributed to the voters, the City Clerk shall send copies of the argument in favor of the measure to the authors of the argument against, and copies of the argument against to the authors of the argument in favor. Rebuttal arguments shall be printed in the same manner as the direct arguments. Each rebuttal argument shall immediately follow the direct argument that it seeks to rebut. (b) Rebuttal arguments shall not exceed 250 words and shall not be signed by more than five persons. The persons that sign the rebuttal arguments may be different persons than the persons that signed the direct arguments. (c) The last day for submission of rebuttal arguments for or against the measure shall be by 4:00 p.m. on August 13, 2026. Section 7. In accordance with Elections Code section 9280, the City Attorney is directed to file with the City Clerk an impartial analysis of the measure, not to exceed 500 words, showing the effect of the measure on the existing law and the operation of the measure. Section 8. The City of Dublin recognizes that additional costs may be incurred by the County by reason of the measure and agrees to reimburse the County for such costs. The City Manager is hereby authorized and directed to appropriate the necessary funds to pay for the City's cost of placing the measure on the election ballot. Section 9. (a) The City Clerk is directed to file a certified copy of this resolution with the Board of Supervisors of Alameda County and the Alameda County Elections Department. The City Cle rk is hereby authorized and directed to take all steps necessary to place the measure on the ballot and to cause a synopsis of the measure to be published once in a newspaper of general circulation in accordance with California Elections Code 12111. A copy of the measure shall be made available to any voter upon request. The City Clerk is authorized and directed to give further additional notice of the measure in the time, form, and manner required by law. (b) In all particulars not recited in this Resolution, the election shall be held and conducted as provided by law for holding municipal elections. Section 11. This Resolution and the measure are not a project under the California Environmental Quality Act (CEQA). {Signatures on the following page} 928 Reso. No. XX-26, Item X.X, Adopted 06/02/2026 Page 4 of 4 PASSED, APPROVED AND ADOPTED BY at least a two-thirds vote of the City Council of the City of Dublin, on this 2nd day of June, 2026 by the following vote: AYES: NOES: ABSENT: ABSTAIN: ______________________________ Mayor ATTEST: _________________________________ City Clerk 929 Attachment 2 Exhibit A to the Resolution Exhibit A AN ORDINANCE OF THE CITY OF DUBLIN AMENDING SECTION 3.16.030 OF THE DUBLIN MUNICIPAL CODE TO INCREASE THE RATE OF THE TRANSIENT OCCUPANCY TAX The People of the City of Dublin do ordain as follows: Section 1. Effective July 1, 2027, Section 3.16.030 of the Dublin Municipal Code is amended to read as follows (material deleted from the Dublin Municipal Code is in strikeout type and additions shown in underline): Pursuant to the authority of Section 7280 and 7281 of the Revenue and Taxation Code, for the privilege of occupancy in any hotel, each transient subject to and shall pay a tax in the amount of eight percent (8%) ten percent (10%) effective July 1, 2027 and twelve percent (12%) effective July 1, 2028 of the rent charged by the operator. The tax 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 tax shall be paid with each installment. The unpaid tax shall be due upon the transient's ceasing to occupy space in the hotel. If for any reason the tax due is not paid to operator of the hotel, the Tax Administrator may require that such tax be paid directly to the Tax Administrator. 930 Item 7.1 - Correspondence 931 932 933 Consideration of Ballot Measure to Increase the Transient Occupancy Tax June 2, 2026 934 Background During the April 15, 2025 and June 3, 2025 meetings, the City Council expressed interest in exploring a potential increase to the Transient Occupancy Tax (TOT) as part of its budget-balancing strategies. On February 17, 2026, the City Council provided direction to move forward with a ballot measure for the November 2026 election to implement a phased increase to the City’s TOT rate. 935 Background, 2 •Transient Occupancy Tax •Authorized under California Revenue & Taxation Code §7280 •Applied to hotel stays of 30 days or less unless exempt •Often referred to as a “bed tax” or “hotel tax” •Current Hotel Inventory •Aloft (4075 Grafton St.) •Extended Stay America (4500 Dublin Blvd.) •Holiday Inn (6680 Regional St.) •Hyatt Place (4950 Hacienda Dr.) •La Quinta Inn & Suites (6275 Dublin Blvd.) •IHG Army Hotel (operated at Camp Parks) 936 Background, 3 •Current Structure •Established in 1984 at 8% •Any increase requires voter approval •A general tax requires: •A City Council 2/3 majority vote (4 of 5); and •A simple majority of voter (50% + 1) approval •Revenues deposited into the General Fund •Existing Transient Occupancy Tax Revenues •2025-2026: Approximately $1,000,000 through April 2026 •2024-25: $1,324,612 •2023-24: $1,481,868 •2022-23: $1,533,093 937 Proposed Rate Increase •Phased Approach •8% effective through June 30, 2027 •10% effective July 1, 2027 •12% effective July 1, 2028 Current 8%None $1.4M July 1, 2027 10%+ 350K $1.75M July 1, 2028 12%+ 700K $2.1M 938 Recent Hospitality Efforts •Established an Economic Development Support Reserve. •Participated in a Hotelier Meeting through the Chamber Economic Development Committee. •Conducted Ongoing Hotelier Outreach. •Worked with TV30 on a Hotel Feature. •Explored Hotel Promotion and Marketing Efforts. 939 Recommended Ballot Measure Language Shall the measure to protect essential City of Dublin general services, such as police, fire, emergency medical, street maintenance, and parks and recreation, by increasing the City's transient occupancy tax, which is paid only by hotel and lodging guests, from 8% to 10% on July 1, 2027 and to 12% on July 1, 2028, and generating approximately $7,000,000 over a ten-year period that cannot be taken by the State, be adopted? 940 Staff Recommendation Adopt the Resolution Ordering the Submission to the Qualified Electors of the City of Dublin an Ordinance Amending Section 3.16.030 of the Dublin Municipal Code to Increase the Rate of the Transient Occupancy Tax; Calling for an Election to be Consolidated with the Statewide General Election to be Held on November 3, 2026; Fixing the Date and Manner of the Election and the Procedure for Voting Therein; and Providing for Notice Thereof. 941