City Council to vote on spending $107K to poll public on TOT increase

SOUTH LAKE TAHOE, Calif. - The South Lake Tahoe City Council will be taking steps at its meeting Tuesday to add a November 2024 ballot measure to become a charter city and raise the tourist accommodation tax (TOT) by another two percent.

On the agenda this week is an item to hire a polling firm for $107,500 to poll the public on a TOT increase of two percent and moving to a charter city status with a focus on adding a real estate transfer tax. If approved, the firm of Lew Edwards Group would be hired to provide consulting and outreach services for a possible ballot measure.

In September, the council voted 4-1, with Tamara Wallace voting against, to pursue the TOT increase. Even though this raise could raise approximately $3.25M a year, there is concern this increase would start to outprice South Lake Tahoe as a preferred overnight destination.

In 2016, Measure P was approved by South Lake Tahoe voters to increase the TOT by two percent to 10 percent in the city except to 14 percent in the redevelopment area near Stateline. The funds from that are going to fund the new recreation complex and had the backing and support of the local lodging industry, the Boys and Girls Club, and others that supported the recreation center and other recreation endeavors.

Now, the increase would most likely not be endorsed by the lodging industry and recreation-focused support will be missing, a fact told to the City Council at that September meeting by Jerry Bindel of the local lodging association.

With a TOT of 14-16 percent, South Lake Tahoe will be on the levels (or higher) of other popular destinations. San Francisco is 14 percent, Palm Springs is 11 percent, San Diego is 8 percent, Anaheim is 15 percent, Mammoth Lakes is 13 percent, and Truckee is at 12 percent. Over in the county, a four percent increase in TOT was approved by voters on the lake side of El Dorado County, with funds raised to go to snow removal and roads only.

The second part of the ballot in 2024 is the possibility of changing South Lake Tahoe to a charter city, instead of a common law city as it is now. Mayor pro tem Cody Bass has long supported this change so the City could earn more income from a real property transfer tax. When homes are sold, a new tax would be added that could raise approximately $4 million annually, dependent on the tax rate.

In a separate agenda item, The Ad Hoc Charter City Subcommittee of Bass and
Councilmember Scott Robbins has drafted a city charter for City Council consideration, and they are being asked to authorize the Subcommittee to begin public outreach on the draft charter.

The draft city charter, if approved by voters, would establish home rule authority for the City to maintain local control to the maximum extent possible, subject only to limitations in the California Constitution and laws of the United States. The draft charter would maintain the Council-Manager form of government and the appointment of the City Manager and City Attorney by the City Council. Some charter cities have a strong mayor form of government. The draft charter would maintain all current City ordinances, codes, and regulations unless later repealed or amended, and states that the
City will continue to be governed by the general laws of the State of California unless a contrary ordinance is adopted by the City Council regarding a matter that is a municipal affair.

The draft charter specifically states that the City will continue to pay state prevailing wages on public works projects, will comply with state labor relations laws, and will comply with the state laws applicable to general law cities regarding elections.

The two specific areas where the draft charter departs from the laws applicable to general law cities are: (1) authorization to impose a real property transfer tax above the current level authorized for general law cities; and (2) authorization for the City Council to establish standards, procedures, and rules and regulations related to the award and performance of the construction of public improvements.

If the Council provides direction to move forward with the draft charter on Tuesday, the Charter City subcommittee will begin stakeholder and public outreach on the draft charter.

The meeting Tuesday starts at 5:30 p.m. with a closed session at 5 p.m. The meeting is held in council chambers at the airport and can be viewed online. For the full agenda and viewing instructions, visit https://cityofslt.us/84/Watch-City-CouncilCommission-Meetings.