Auburn moves forward with travelers tax increase on November ballot

The Auburn City Council voted Monday night to place a transient occupancy tax (TOT) on the Nov. 5 ballot. The tax, which would affect those visiting Auburn, would amend sections of the city's municipal code, increasing the TOT from 8 percent to 10 percent and include charging short-term rental facilities (such as Airbnb properties). The current TOT of 8 percent is charged to occupants of hotels in the city only, which leaves 75 short-term rental facilities on the table. The combination of the increase and including short-term rentals would increase city revenues $162,000 annually. "Frankly, this is 100-percent a fairness issue," said City Manager Sean Rabé, who recommended council move forward with the resolution to put the tax measure on the November ballot. Auburn's ask of a TOT increase is following suit of successful TOT increase campaigns in Roseville, Rocklin, Lincoln and Colfax, which passed in the past few years. Roseville, Rocklin, Lincoln and Colfax all charge a 10-percent TOT, while the town of Loomis and unincorporated Placer County charge 8 percent. Auburn launched an unsuccessful effort to pass a TOT increase and include short-term rentals in 2016. They only garnered 40-percent support, not the simple majority needed to pass. "Frankly, I think the reason it failed was the ballot language was a bit too attorney-speak," Rabé said. He said he worked with a political consultant and Rob Haswell of Visit Placer to craft more appealing language which reads: "Shall the measure funding police, fire, street maintenance, pothole repairs, parks, and for general government use for maintaining other city services by increasing the city's transient occupancy tax (paid only by hotel and lodging guests) on hotel rent by 2 percent matching nearby city rates, and by extending it to short-term rentals, to last until voters end it, raising approximately $162,000 in additional revenue per year that cannot be taken by the State, be adopted?" Councilman Mike Holmes brought up the city's need to have a supportive campaign to help pass the measure. The city is not allowed to campaign for the measure but is able to provide facts and figures around the issue. Rabé said Haswell and the Downtown Business Association have said they will support the city's effort. Councilwoman Sandy Amara and Mayor Rachel Radell-Harris said they would help with the campaign. Amara met with Haswell on Thursday to set up a game plan. "I urge you to consider moving forward with the measure," Haswell said during public comment. "This language couches it in a way voters can understand. They will know who is paying for it and they will know what they are getting for it." The city council voted 4-1 to place it on the ballot, with Councilwoman Alice Dowdin Calvillo dissenting. "I want to make it clear that I am not opposed to raising the TOT to 10 percent and including the Airbnb (visitors)," Dowdin Calvillo said. "I think it's important to ensure we level the playing field. My issue is truly with the timing of all of this." Back in March, it was discovered that city financial projections were over-estimated and led to a structural deficit which will eventually mean cuts to city operations. "We got ourselves into this mess, we have to do our homework and do some cost-cutting measures before we get to the electorate and ask them to support an additional tax measure," Dowdin Calvillo said. Other council members disagreed with Dowdin Calvillo's take on the action. "Auburn has a history of being risk averse and leaving money on the table," Radell-Harris said. "We've done that so many times because nothing was ever the right time and I think we don't have the time to waste anymore." Radell-Harris said it is important to move forward with the work to diversify revenue and the city can't cease operations because of a bad financial situation. "I haven't found one person who thinks this is a bad idea," Radell-Harris said. "Yes, it's at the same time as our fiscal emergency, which may have pushed it forward a little faster, but I think that's not necessarily a bad thing. We do need to move forward faster. We have been going too slow on diversifying our revenue and this is making us move things as fast as we probably should be." The city has until July 3 to submit the ballot language to the Placer County Elections Office to be present on the Nov. 5 ballot. The cost to be on the ballot is $15,000.