SAN DIEGO: City Council set to hold TMD meeting Monday

(CNS) – The San Diego City Council is scheduled Monday to
discuss the economic impact of the city's Tourism Marketing District, which has
become a source of strife among some municipal office-holders.

The City Council approved a 40-year extension for the district late last
year, but Mayor Bob Filner has refused to release funds needed to administer
the agency. The inaction has put programs advertising San Diego as a vacation
destination on hold.

The mayor has outlined four changes he wants in the new deal before he
releases the funds.

TMD supporters, among them hoteliers, council President Todd Gloria and
Councilman Kevin Faulconer, say it is a vital part of marketing to prospective
tourists — and when more visitors come to the region, lodging houses and the
city earn extra money.

Faulconer and Gloria put the TMD issue on the City Council's agenda, but
it's unclear what kind of action might be taken, if any.

On Friday, the city's independent budget analyst released a report that
said there is no way to account for how much the TMD accounts for the city's
room tax revenue, known in government parlance as the Transient Occupancy Tax,
or TOT.

“While TMD promotions and marketing does support hotel room night
stays, which is the basis for TOT assessments, it is extremely difficult to
quantify the TOT receipts directly related to the TMD's activities,” the IBA
report states.

“There are many factors that drive the choice of destination for
travelers, such as local attractions, recreational opportunities, general
economic conditions, visitor age and income, transportation costs and available
alternatives. While marketing is surely one of these factors, it is very
difficult to isolate its impact.”

According to the IBA report, the city of San Diego collected $724.3
million in hotel room tax income during a five-year trial period for the TMD.
Revenue from the TOT is split between the general fund, which pays for basic
services like public safety and libraries, and a promotional fund.

The city's TOT is 10.5 percent. Hotels add an additional 2 percent to
fund TMD programs.

Since there is litigation over the collection of the extra 2 percent
tax, Filner wants to indemnify the city in case judges rule against the city.
He also wants to direct some of the TMD funds toward public safety; shorten the
term of the extension to a year or two; and have hoteliers pay their employers
a living wage.

At a news conference last week, City Attorney Jan Goldsmith said the
extension already offers the city indemnification and it would be illegal to
redirect the money. Filner's last two concerns could be addressed by the City
Council, Goldsmith said.

Categories: KUSI