Friday, October 29, 2010


On Tuesday, November 2nd, you will step into the voting booth and make choices that will affect our nation, state, county and city for decades to come.

In Costa Mesa this time around, in addition to State, City Council, School Board and special district candidates to consider, we will have Measure "L" on the ballot - a rare proposal to increase the Transient Occupancy Tax (TOT) - sometimes known as the "bed tax". You'll find it at the very back of the Sample Ballot.

In my opinion, it's critical that all Costa Mesa voters give serious consideration to voting YES on Measure "L". Unless you've been on another planet for the past couple years you know that Costa Mesa, like most other cities, is in deep financial difficulty. Presently the city staff is trying to figure out how to overcome a nearly $6 million shortfall that remains after trimming most of the flesh off our municipal skeleton and re-negotiating contracts with our public employees. The city has drained more than $30 million from it's reserves in the past three years to come up with a balanced budget. Much of this is due to the condition of our national economy and the inability of our State legislators to put aside partisan bickering, make tough decisions and pass a budget. Costa Mesa is one of the cities who suffer from the State's incompetence - monies properly due the city have been commandeered by the State to help "fix" it's problems.


This brings us back to Measure "L". This measure, if passed, would increase the Transient Occupancy Tax in Costa Mesa from 6% (the lowest in Orange County and nearly the lo
west in the entire state) to 8% and, based on projections by the proponents, it may generate an additional $1.3 million in annual revenue to the city's general fund. This increase will represent about a $2.00 tax increase on an average Costa Mesa hotel room. Presently the median TOT in Orange County is 10.25%, so this modest increase will still place Costa Mesa among the lowest in the county and state.


Costa Mesa has not had an increase in the Transient Occupancy Tax rate since 1974!
Back then The Towering Inferno was the top grossing movie at just under $49 million for the year. Today that would be a good weekend for many movies. Little House On The Prairie staring the late Michael Landon debuted, beginning a nine-year run, and Johnny Miller was the PGA top money winner for the year with earnings of $353,022. That would be a winning purse for almost any tour event today. Since that time, as we all know, costs have increased dramatically, the population has doubled and the demand for municipal services has increased. Each time the issue of increasing the TOT was raised in the recent past it was rejected by the City Council. It finally took a financial crisis unlike anything previously seen in our city to get the current City Council to agree to place this issue before you, the voters, for your consideration.

Keep in mind that, unless you personally spend time in Costa Mesa hotels, this
tax increase will not affect you at all. This increase will be charged to guests in our city, those staying in our hotels and other establishments on a temporary basis. There are no downsides to this increase for Costa Mesa residents. It will mean more money in our general fund to pay for critical staff and services.

There is no opposing position in the ballot statement, so recently I went to Ed Fawcett, President of the Costa Mesa Chamber of Commerce, to get his view on this tax increase. Ed told me that the Chamber completely understands why this modest increase is so essential to the financial well-being of our city and does not oppose it. No members of the Costa Mesa hospitality community - hotel owners and managers who collect it - have spoken against this measure.

After more than twenty years of not even having an opportunity to consider this subject, this is the year the voters of Costa Mesa finally have the chance to make their views known. This is the year that we all should vote YES on Measure "L".

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Anonymous Rob Dickson said...

Geoff, I'd like to make a quick clarification on the no increase since 1974 comment. Revenues from the TOT have increased dramatically since 1974, due to the naturally increasing rates and quality of the hotels and motels in Costa Mesa. The TOT is expressed in terms of a percentage of the bill, and increases in TOT revenue are designed to increase with the success of the hotel/motel sector.

Stating that it hasn't increased since 1974, and implying that Costa Mesa's failure to "increase" the TOT an irresposnible and politically motivated decision does not paint an accurate picture.

Technically, you are correct, in that the percentage has not increased, but it shouldn't be increasing on a regular basis simply to bolster general fund revenues. Everyone cites Anaheim's 15%, but conveniently fail to mention the fact that Anaheim spent hundreds of millions of dollars completely revitalizing their tourist disctrict around Disneyland.

TOT REVENUE has absolutely increased, the TOT percentage has not.

10/30/2010 10:28:00 AM  
Blogger The Pot Stirrer said...

Rob Dickson, you will note that I said the TOT RATE has not increased! Sure, TOT revenue had increased over the years because more hotels were built and more guests showed up. However, we presently have the LOWEST RATE in Orange County and, of all the cities throughout the state that do charge a TOT, we are nearly the lowest. Yap all you want, but we have fallen far, far behind unnecessarily and it has cost us dearly. I'm not suggesting that we frequently bump up the rate, but we only did half of what we should have this time around.

10/30/2010 10:32:00 AM  
Anonymous Rob Dickson said...

Geoff, it is important that the TOT issue is correctly characterized, which it often is not. I noted that you were correct about the RATE, so the "yap all you want" remark is unnecessary.

You and others have acted as if the council majority was placing the city in great financial risk because of their "ideological" opposition to TOT increases, when in fact - even a 4% bump several years ago would have not had a significant impact on our deficit. The TOT revenues were down, along with the economy.

More importantly, you and others have acted as if a TOT increase was some sort of fiscal panacea - which is far, far from reality. All I ask for is a fair and realistic portrayal of the TOT issue. Acknowledging that TOT revenues have increased significantly over time is an important first step.

That you and others jump up and down about the irresponsibility of not raising taxes, while remaining silent on the irresponsibility of not cutting costs is both frustrating and disingenuous.

10/30/2010 01:07:00 PM  
Anonymous Vicki said...

I would like to correct your thinking with regard to the locals not having to pay the TOT tax. That simply is not true, at least not in my case.

We have a large family and only a three bedroom house. In order to encourage family members to gather at our house for the holidays, it has been our custom to send family members hotel reservations that WE pay for. Not everyone in our family can afford the high hotel costs in this area.

Somehow I feel certain that our family is not the only one in town that does this. Those that have, need to help those that don't. That's probably why Costa Mesa has been reluctant to raise the TOT.

10/30/2010 01:18:00 PM  
Blogger The Pot Stirrer said...

Rob Dickson, as you attempt to deflect the responsibility for our dismal fiscal situation let me remind you that Mansoor has been on the dais for almost 8 years (seems like an eternity) and has NOT done a thing to enhance revenue opportunities despite constant counseling by the City Manager Allan Roeder and staff that those kind of issues needed to be addressed. Roeder frequently reminded them that the use of Fund Balance and Layoffs were not budget strategies, they were, in fact, the consequences of NOT properly managing our budgets.

For example, our municipal clown, Eric Bever, touted the RRIP program that forgave permit fees for remodel projects that cost the city more than $3 million over that period! Every "green " project had similar fee waivers. That's short-sighted! Back further, the council led by Libby Cowan was sweet-talked by Paul Freeman representing the Segerstroms into waiving more than $600,000 in fees for the Performing Arts Center with the semi-promise that their names would appear on a "wall of honor"... that's money we could have used for many things, including street repairs, etc.

Talk about disingenuous! Your hypocritical comment in your last paragraph about not cutting costs is would be laughable if I didn't know you actually believed it. The city has cut costs to the very bone! We are now at 489 staffers, down from 611. We are at 1980s staff levels! We've slashed Recreation programs, we've deferred maintenance, and on and on. You're always welcome here, but please try not to embarrass yourself with comments like that.

10/30/2010 04:46:00 PM  
Blogger The Pot Stirrer said...

I can guarantee you that the council members who refused, due to their party's position on NO TAXES, to even consider an increase in the TOT for decades gave absolutely NO consideration to whether Costa Mesa residents might have to pony up a couple bucks more per night per room for out-of-town guests. Sure, if you brought your family out for an event and put them up at local hotels it would have cost you some money. Are you actually asking me to believe that you even THOUGHT about the TOT when making those reservations? C'mon, girl - be serious. When you go on an exotic vacation to, like San Francisco or San Diego, to you EVER ask what their TOT rate is? Of course not!

10/30/2010 04:53:00 PM  
Anonymous Rob Dickson said...

Geoff, you and I both know what I am talking about with regard to cutting costs. Yes, we cut EVERYTHING to the bone, laid off many and eliminated unfilled positions, all while leaving employee pay and benefits largely untouched. Yes, there was a 5% haircut and furloughs, but that was after a 7% increase.While spending $50 million of our reserves, we gave raises and sweetheart retirement deals to firefighters - leaving fewer firefighters to protect us. We also, somehow, managed to spend months "negotiating" a deal that leaves salaries untouched, still has the city paying portions of the employee share of their pension contributions and millions of dollars in fire OT every year.

Geoff, all I ask is that you keep this in context. I have absolutely no problem with letting the voters decide the TOT issues, we should have done it earlier. My point is very simple - all the commentary, accusations and finger pointing about the TOT has been a total distraction and has allowed the real issue - the sustainability of our employee compensation practices - to remain unaddressed.

10/30/2010 05:29:00 PM  
Blogger Unknown said...

Vicky... don't tell me your family can't afford to stay at the ali Babba... rates there are rock bottom cheap... even a $2 increase won't break the bank there... even if you rented out the whole hotel... If the Ali Babba isn't up to youe standards, the motor in is a good alternative... cheap too... and the Sandpiper has a mini kitchen for just a like home feel

10/30/2010 07:49:00 PM  

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