RV Park Tax Dispute Heads to a Fall Solution?
A long-simmering dispute between the city of Red Bluff, Calif., and its only RV park over the transient occupancy tax may be settled on the November ballot.
The city council this week voted 4-1 to submit to voters an ordinance restating what's already on the books — that the 10 percent "bed" tax applies to RV parks, camping sites and campgrounds, the Redding Record-Searchlight reported.
The council's action stems from efforts over recent years to collect the tax from Durango RV Resort, which opened in 2008.
In June 2011, city Finance Director Sandy Ryan sent a letter to resort management demanding almost $42,000 of taxes, interest and penalties.
While the city has maintained such facilities have been covered by its ordinance all along, it wasn't until September that it was amended to specifically name RV parks and campgrounds in the definition of "hotel." Officials at the time deemed the move a clarification, not an expansion of the tax.
City Manager Rick Crabtree said Thursday (July 19) that Durango lawyers disagreed, arguing the move was illegal under Proposition 218, the 1996 Right to Vote on Taxes Act, and suggesting the matter be put on the ballot.
"Rather than entering into a potentially protracted and expensive legal battle over these issues, staff recommends that the City Council submit the issue to voters for resolution," Crabtree wrote in a report to the council.
He estimated the city's loss in revenue from the 174-space resort at $52,000 for the first six months of this year.
Contacted Thursday, Durango co-manager Pam Cappello said she was concerned about how the tax would affect the business and its "competitive edge."
"There's not so much consideration for the fiscal impact to the resort," she said. Still, Cappello looks forward to a resolution of the issue.
"We now have an opportunity to present this to the people of Red Bluff and let them make a decision," she said.
Red Bluff's original ordinance was adopted in 1965, setting the bed tax at 4 percent, and it was amended several times over the years.
The tax applies only to stays of 30 days or less and proceeds go into the general fund.
In Redding, RV parks pay a 10 percent bed tax, Deputy City Manager Greg Clark said.
Also Thursday, Councilman Bob Carrel said he dissented on Tuesday's vote because he believed a ballot measure was unnecessary.
"I just felt we had a strong enough ordinance," he said.
Meanwhile, Durango lawyers have since scheduled an Aug. 23 meeting with city officials, Crabtree said, well past the Aug. 10 deadline to drop it from the ballot.
The election is expected to cost about $5,000.