Sebastopol leaders will keep revenue generated from the increased bed tax flexible going into the new year.
What to do with the anticipated $112,000 was a debated topic during Tuesday’s regular city council meeting, and there was no shortage of ideas about where to use the funds.
In November, voters approved Measure R which increased the city’s transient occupancy tax (TOT) from 10 to 12 percent. A TOT is charged to visitors who stay overnight in a hotel room, based on a percentage of the cost of the room per night.
Vice Mayor Patrick Slayter brought the agenda item to the meeting and suggested the money be designated for two dire needs of the city: affordable housing and the city’s employee pension plan, California’s Public Employee Retirement System (CalPERS).
A study from the California League of Cities shows CalPERS is drastically underfunded.
“As of January 2018, CalPERS had only 68 percent of the funds required to pay estimated retirement benefits — in other words, only 68 cents for every dollar needed to fund retiree pension commitments,” according to the study.
“Rising pension costs will require cities over the next seven years to nearly double the percentage of their general fund dollars they pay to CalPERS.”
Councilmember Michael Carnacchi argued that while both affordable housing and CalPERS savings are priorities, the information published in favor of Measure R did not mention affordable housing or paying for pensions.
Carnacchi read directly from the published argument for the measure stating, “the TOT Sebastopol collects ensures that visitors pay for the added demand that they cause on city services such as roads, water, sewer, police and fire.”
Mayor Neysa Hinton said she felt earmarking the money to any specific cause at this point would be the wrong move. “This additional money needs to be flexible,” she said.
For now, the TOT money will stay in the general fund with no designation.
Other highlights of the meeting
Cary Bush and Ted Luthin will keep their seats on the design review board, and Gregory Beale will serve as an alternate. Zach Douch was re-appointed to serve on the planning commission, while one seat is left to be filled.
The city approved the purchase of a gas-powered dump truck. Staff brought the item to the council last year, to request a diesel truck, but Hinton pushed back, encouraging the staff to look for a cheaper alternative.
The decision proved to be a success, as the gas-powered truck is more than $14,000 lower than the original amount. No electric-powered vehicles of this caliber are currently available.