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November 8, 2016 — California General Election
Ballot and voting information for Riverside County.
This is an archive of a past election.

Increase Transient Occupancy Tax for Indian Wells Golf Resort

Local
November 8, 2016California General Election

City of Indian Wells
Measure GG - 2/3 Approval Required

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Election Results

Failed

1,371 votes yes (58.82%)

960 votes no (41.18%)

  • 100% of precincts reporting (4/4).
  • 2,331 ballots counted.

To maintain Indian Wells Golf Resort long-term financial stability, shall the Indian Wells Municipal Code be amended to increase the Transient Occupancy (Hotel) Tax rate from 11.25% to 12.25% of rent charged for transient occupancy of any hotel room or similar lodging, with the 1% rate increase generating an estimated $630,000 annually that will specifically fund the operations, maintenance, and improvement of the Golf Resort, until ended by voters?

Impartial analysis / Proposal

(Transient Occupancy Tax)

The City of Indian Wells currently imposes a transient occupancy tax (“TOT”), also generally known as a “hotel” tax, at the rate of eleven and one-quarter percent (11.25%) of rent paid by guests to occupy lodging space in a hotel or certain other residential lodging (collectively, “hotel”). This TOT is imposed upon occupancy of a hotel within the City for dwelling, lodging, or sleeping purposes for thirty (30) consecutive days or less. The TOT currently provides  approximately $6,900,000 annually to the City’s General Fund to pay for general City services and programs such as public safety, public works, planning and building, water conservation, and community activities.

The City-owned Indian Wells Golf Resort has consistently operated at a financial loss since its new clubhouse was constructed and two eighteen-hole golf courses reconstructed in or around 2006/2007. The Golf Resort’s annual operating loss last year was $799,000, and has been between $43,000 and $799,000 annually for the past five years. The Golf Resort’s operating losses are projected for the next five years to be between $330,000 and $552,000 annually. The City’s General Fund covers all such losses.

Measure “GG” would increase the rate of TOT from eleven and one-quarter percent (11.25%) to twelve and one-quarter percent (12.25%) of the payment by guests to occupy lodging space. This rate increase will generate estimated annual revenues of approximately $630,000.

Measure “GG” expressly provides that the 1% TOT rate increase is a “special tax”. Therefore, these new revenues must be deposited into a special City account and spent only for the limited purpose of construction, reconstruction, operation and maintenance of the Indian Wells Golf Resort. This would relieve the General Fund from paying for at least a portion of Golf Resort annual losses, thereby allowing the General Fund to pay for continued or increased general City services and programs described above. The current 11.25% TOT rate will remain a “general tax,” which revenues will continue to be spent on general City services and programs.

A survey conducted by City staff indicates that TOT rates of other Coachella Valley cities range from nine percent (9%) to thirteen and one-half percent (13.5%). TOT rates of certain large business and tourist destinations in the southwest United States range from twelve point fifty-seven percent (12.57%) in Phoenix to fourteen percent (14%) in Los Angeles.

Since Measure “GG” is a “special tax” the revenues from which could only be used for the Indian Wells Golf Resort as described above, Measure “GG” must be approved by a two-thirds (2/3) supermajority of the voters pursuant to California Proposition 218.

A “Yes” vote on Measure “GG” will authorize the 1% TOT rate increase as a special tax.

A “No” vote on Measure “GG” will not authorize the 1% TOT rate increase.

The above statement is an impartial analysis of Measure “GG”. If you desire a copy of the Measure, please call the elections official’s office at (760) 346-2489 and a copy will be mailed at no cost to you.

By: STEPHEN P. DEITSCH, City Attorney

— Indian Wells City Attorney

Arguments FOR

The Indian Wells Golf Resort is currently projecting a loss of $800,000 in FY 2015-2016 due in large part to the high maintenance and upkeep of our IW Golf Resort building. The former council members who planned the project assumed that long term maintenance costs would forever come from Redevelopment Agency funds which we no longer have and golf play income.

It is critical that action be taken at this time to prevent further decline of the city’s General Fund. The proposed increase of 1% one percent in the Transient Occupancy Tax (TOT) is paid entirely by hotel guests without any cost or impact to our residents.

Raising the TOT will have absolutely no effect on the residents. The proposed increase will keep Indian Wells Golf Resort competitive with other cities in the Coachella Valley and keep resident benefits intact.

As part of the Indian Wells Golf Resort Strategic Planning process, two revenue sources were identified and proposed, first an increase in the Hotel Resort Fee that hotel guests pay or through the proposed TOT increase. Because the city has no control over the Resort Fee, we are left with the only option available and that is an increase in TOT as the proposed solution.

By approving this proposed ballot measure, the Golf Resort will be able to implement its strategic plan which includes greater recreational activities for our hotel guests and residents while reducing the building maintenance cost burden on the General Fund. The addition of non-golf recreational facilities will enhance our Resort for both our residents and our hotel guests.

It is important that the increase in TOT is approved to prevent a possible reduction in Resident Golf Amenities and a possible increase in Golf Fees. Let’s prevent that from happening by voting in favor of this proposal.

By:   Richard Balocco
        Edward Peabody
        Douglas Hanson

— Riverside County Registrar of Voters

Arguments AGAINST

VOTE NO on Measure GG.

On August 11, at a hastily called special meeting, the City of Indian Wells placed Measure GG on this ballot – just hours before the legal deadline. 

Measure GG was never reviewed by the City’s Finance Committee, or any other committee.

Few residents knew anything about Measure GG; many were out-of-town and only one audience member spoke.

Measure GG imposes one of the HIGHEST HOTEL TAX RATES in Riverside County.

Indian Wells’ hotels already struggle to fill their rooms, especially in the “off” season.

Measure GG will make it even harder for them to compete against lower cost destinations such as Palm Desert and La Quinta.

Supporters say Measure GG is needed to bail out our Golf Resort, which, along with public safety costs, has become a troublesome drain on our City’s finances.

But, because Measure GG was rushed through, there was no time to fully explore other options.

For example, an existing hotel is expanding and a brand new hotel should be on line within five years. Those two projects alone, should generate $Millions.

Why can’t Indian Wells simply earmark those new dollars to the Golf Resort?

While written to solve our Golf Resort problem, Measure GG does NOTHING to address the City’s increased costs of public safety.

And, Measure GG prohibits the City from ever redirecting, repealing or reducing this new tax.

Even if the Golf Resort no longer needs the money, Measure GG mandates another public vote to REDUCE or REPEAL it.

That makes no sense, whatsoever.

The City is expected to remain fiscally solvent into the next decade. If higher taxes become necessary, we can always reconsider Measure GG in 2018, or 2020.

Please help protect our tourism industry; vote NO on Measure GG.

By:   RICHARD R. OLIPHANT
        Former Indian Wells Mayor
        WILLIAM T. POWERS
        Former Indian Wells Mayor Pro Tem
    
        DANA W. REED
        Indian Wells Mayor

        MARY T. ROCHE
        Former Indian Wells Mayor

— Riverside County Registrar of Voters

Replies to Arguments FOR

Measure GG states all the proceeds of this new tax are earmarked exclusively for the Indian Wells Golf Resort until repealed by voters.

It is true, as the proponents of Measure GG claim, that the Golf Resort is hemorrhaging red ink. This bleeding of our general fund is NOT sustainable.

The Council has already asked our Golf Resort management company to bring forth, and execute, a strong strategic plan to make the IWGR self-sustaining. Why take away their impetus to perform?

The city faces several economic concerns, such as our public safety budget, which continues to increase each year at an alarming rate. Measure GG does nothing to address this shortfall.

There was virtually NO opportunity for public input due to the short notice of the meeting.

There was NO review by the Finance Committee, or any other committee.

This TOT increase would place Indian Wells at the upper end of Coachella Valley cities.

Don’t penalize our partner hotels which are already struggling to fill their rooms, especially in the “off” season. Measure GG could make our hotels less competitive.

What the city needs is a holistic, reasoned, and public analysis of its finances, under the direction of our City Manager, with full input from stakeholders, residents, taxpayers and Councilmembers.

From this analysis, a solution should evolve to address both the Golf Resort revenue problem and our public safety cost shortfall.

Vote NO on Measure GG. It is NOT in our city’s best interest.

By:   Ted Mertens
        Councilmember
        City of Indian Wells

        Dana W. Reed
        Mayor
        City of Indian Wells

— Riverside County Registrar of Voters

Replies to Arguments AGAINST

Let’s not be fooled by the rhetoric and misstatements of the opponents to this measure.

By directing funds from Measure GG to the Golf Resort it will free up money in the General Fund to provide continued police and fire services.

The Golf Resort building as designed requires over $800,000 annually for maintenance cost. No Golf Course alone can support this huge operating expense.

This increase is needed to cover the maintenance cost of a building that was constructed as a community building and not to bail out the Golf Resort.

To say this issued was a rushed process is simply wrong. The Council addressed this in the Strategic Planning session in January and every council member voted in favor. Financial prudence required the council to place this measure on the ballot now. Addressing it now it will stop the drain on the General Fund, and allow us to capitalize on two years’ worth of revenue from hotel guests rather than waiting until the next general election.

Our City needs additional revenue now to maintain a balanced budget. Measure GG addresses that problem.

Indian Wells Hotels will remain competitive. Our TOT will be lower than Palm Springs, Scottsdale and San Diego and comparable to other cities.

The Hotel operators have not opposed a TOT increase.

Currently there are no plans to build any new hotels in Indian Wells. We can’t wait for the possibility of a new hotel being built in the next 10 years.

Protect the financial health of our City, vote yes on Measure GG.

By:     Richard Balocco
          Douglas Hanson
          Edward Ty Peabody

— Riverside County Registrar of Voters
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