Sebastopol residents get to vote on two tax measures in November

Sebastopol city officials say they're planning for financial security and future liabilities in submitting two tax measures for voter approval on Nov. 6.

One, Measure Q, would extend indefinitely an existing half-cent sales tax.

The other, Measure R, would raise the transient occupancy tax paid by hotel guests and other overnight visitors from 10 percent to 12 percent. Both require approval by a simple majority of voters to go into effect.

Combined, the two measures would account for about $2 million a year in mostly continued revenue for Sebastopol's general fund, through which the city pays for “essential services” like police and fire protection, roads, public infrastructure, recreational programs and city staff.

With a general fund of about $8.8 million this fiscal year, revenue collected through the two taxes makes up a significant chunk of what's needed to run the city, while setting aside emergency reserves exhausted during the recession a decade ago, officials said.

“We are a teeny, tiny city - $8.8 million general fund budget,” Councilwoman Una Glass said. “That's not that much money.”

Moreover, while the city counts about 7,500 people among its residents, Sebastopol is a hub for tens of thousands of others in the west county who shop and work there or simply travel through on a daily basis, contributing to wear and tear on roads and greater demand for police and other services, Glass and fellow council members said.

That same dynamic means much of the tax would be paid by the estimated 50,000 people who do business in Sebastopol.

“There's not a lot - at least that I've heard - a lot of controversy over it,” Mayor Patrick Slayter said. “I think the residents realize the council has been responsible and prudent with the funds.”

There are, however, scattered misgivings over the indefinite nature of the sales tax, first approved in 2012 as Measure Y with a sunset date of March 31, 2021.

The Sonoma County Taxpayers Association had drafted a ballot argument against the sales tax extension, objecting to it because it had no expiration date. The organization, however, missed the deadline to have it included on the printed November ballot, Assistant City Manager and Clerk Mary Gourley said.

The association said, in part, an indefinite extension robs voters of the chance to review their council's performance before each tax renewal vote and puts the onus on the public to collect voter signatures if, at some point, they want the tax repealed. Gourley said four of five council members also could take action to repeal the tax if they decided to do so at some point.

Council members said the city's reliance on various general and special sales tax revenues - which, combined, account for more than $4 million or nearly half of the general fund amount - means it's unlikely there ever will be a time the city doesn't need the special sales tax in place, particularly with a looming pension liability estimated at more than $12 million, Mayor Patrick Slayter said.

Renewing the special tax over and over takes time and money to put on the ballot, and risks having it lapse and cause a budget shortfall, Vice Mayor Neysa Hinton said.

“We would have to cut city services, so it just didn't make sense to have a (end) date,” she said.

Given a state cap on how much local sales tax can be charged in any jurisdiction, the city also could lose the right to capture the half-cent revenue if another taxing entity, such as the county or a countywide agency steps in and snags that increment instead.

“You sort of have to stake a claim to that,” Glass said.

Meanwhile, transient occupancy taxes, often called the bed tax, in California are applied to hotels, motels, bed and breakfasts and any other lodging occupied for 30 consecutive days or less.

The Sebastopol tax stands at 10 percent and is projected to generate city revenue of about $500,000 in the 2018-19 fiscal year.

Raising it to 12 percent would align it with the hotel tax rates of Sonoma County, Rohnert Park and Windsor. Healdsburg has a tax rate of 14 percent. Most other Sonoma County municipalities have a 10 percent rate, though in Santa Rosa the tax is still 9 percent.

The increased transient occupancy tax would raise an additional $100,000 a year or so for Sebastopol. There is no formal opposition.

“I've campaigned for every earlier tax measure,” 14-year council veteran Sarah Glade Gurney said, “and our voters have been generous in their support for our city. So I'm hoping for the same positive results this election.”

You can reach Staff Writer Mary Callahan at 707-521-5249 or mary.callahan@pressdemocrat.com. On Twitter @MaryCallahanB.