$73,500 tax firm to be considered by City Council
By Amy D. Fienen amyfienen@yahoo.com
Kingsburg's city council members seem to be in favor of collecting more money from out-of-town guests through an increase in the tax at local motels. But there is some concern over the price tag to hire a consulting firm to help get the measure passed.
The city is considering placing a measure on the November ballot that would increase Kingsburg's transient occupancy tax from 8 percent to 12 percent -- an increase that could mean an additional $20,000 a year into the city's General Fund, 60 to 70 percent of which supports the police and fire departments.
Although the money is funneled into the city's coffers, it is paid by those staying in motels and hotels, not by a city's residents. Still, residents must vote for the tax to enact it.
On Wednesday night, the city council will vote on whether it would be advantageous to pay The Lew Edwards Group $73,500 to help get the ballot measure passed for the increased tax. The Oakland-based firm specializes in passing revenue measures throughout California and the Central Valley.
Officials believe that the money will be recovered quickly if the tax is approved, but in the meantime, the city council wants to ensure that city funds are not being spent unnecessarily.
"I'm not excited at all about spending the money, but I look at it as an investment because I know it will cover itself," said Councilman Bruce Blayney.
Mayor Pro Tem Paul Kruper agreed with Blayney that he hates to spend the money, but said that once the new motels that are slated to come in finally open next year, the city will easily recoup the money.
"I think one of the good reasons to spend the money is to see if it would pass," Kruper said, referring to the public opinion survey which will help The Lew Edwards Group determine if the ballot measure stands a chance of voter approval.
Councilman David Karstetter said that when the city put a planned growth initiative on the ballot several years ago, it passed with an overwhelming 83 percent without any type of formal campaign.
"But of course this is about taxes, and there's always a negative component with that," Karstetter said.
He went on to say that he is unsure how the council will decide to handle the issue, because while he sees the passage of the tax as an important issue, he thinks that the cost of hiring The Lew Edwards Group "seems to be quite a bit."
The Lew Edwards Group is proposing that the typical project costs would be as follows: $25,000 for public opinion research, $20,000 for two direct mailings, $3,500 for out-of-pocket costs, and a $25,000 consulting fee.
"I think we're probably going to have to run an information campaign since it's a tax," Karstetter said. "We want to make sure the people are properly educated."
Blayney and Kruper agreed that public education is crucial because the word "tax" makes voters nervous. Both said that if the tax doesn't pass the first time, it would be even harder to pass it the second time around.
Blayney said that rather than assuming that the Edwards group is the only option, he would like to see the city look into some competitive bids.
City Manager Don Pauley told the council during their last meeting that educating the voting public on what a transient occupancy tax would mean for them is essential in getting the measure to pass. He said that voters need to realize that the tax will be collected from visitors to Kingsburg -- not from the residents. He said that while he appreciates the council's desire to minimize the city's costs, he considers some of the costs "necessary and unavoidable."
Kingsburg currently has only two motels -- the Swedish Inn and the Tav Cam, but that will soon change.
By 2009, there should be three new motels in the business park adjacent to Kmart and Sonic. It is anticipated that a Fairfield Inn and a Microtel will break ground by the end of this year, and once those are completed, a Hawthorne Inn will follow. A fourth motel is being planned for acreage next to the Tav Cam as well.
The city council meeting will take place at 7 p.m. on Wednesday, May 7 in the council chambers.
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Kingsburg Resident wrote on May 7, 2008 9:44 AM: