The City Council in Red Bluff, Calif, Tuesday (July 19) will consider amending the city’s transient occupancy tax (TOT) code in an effort to end a controversy between the city and Durango RV Resort.
The Contra Costa Times reported that the proposed amendment to the TOT ordinance would explicitly include “recreational vehicle parks” in the definition of a hotel.
TOT is collected by hotel operators from guests who stay in hotels. The TOT is then remitted to the city as revenue.
As it is now, the city code does not explicitly include RV parks and campgrounds in its definition of a hotel, but the city has maintained the code implicitly includes those types of sites.
Ever since Durango opened it has not charged its occupants TOT, City Manager Martin Nichols said. Durango has taken the position that TOT does not apply to the RV park because they city’s ordinance does not say RV park.
“As far as we are concerned, they are covered,” Nichols said.
In a second letter of demand sent to Durango in June, City Finance Director Sandy Ryan estimates Durango owes about $42,000 in TOT between the period of June 2010 and May of this year.
The calculation is based on reservation prices listed on Durango’s website and the number of spaces occupied. For a certain number of days in June 2010, city building inspectors went and counted the occupancy, and the numbers were extrapolated from that data, Nichols said.
The TOT reportedly owed during Durango’s first two years of operation are not mentioned even though Nichols said Durango owes the city TOT from day one.
“We would certainly like to be paid for the whole time they have been open, but we hope to enter into some amicable discussions,” Nichols said. “In my position as the city manager, I don’t have the authority to just waive the payment, but we want to compromise. It’s more important to get the process started.”
Durango owner Gary Breen of GMB Realty Partners did not return messages Friday afternoon.
Other employees who were contacted, including GMB Chief Operating Officer Russell Taylor, declined to comment and referred questions to Breen.
In a letter obtained by the newspaper from the city, Taylor writes the TOT ordinance does not apply to Durango because it does not specifically list RV parks.
“Should the City amend the ordinance to cover the renting of RV spaces, we would then collect and pay the tax … but thus far nothing has been presented other than the City’s unilateral assertion that the ordinance imposes such a tax on our business,” Taylor wrote in the letter responding to the city’s first demand letter of June 2010.
Nichols said should the council adopt the amendment Tuesday, it would only reinforce the city’s code, as the ordinance already includes RV parks.
“Our position is, it doesn’t change anything,” Nichols said. “Let’s end this controversy.”
The council meeting will be 7 p.m. at City Hall.