Title
Chief Administrative Office, in coordination with the Budget Ad Hoc Committee, recommending the Board receive information regarding revenue generating options and provide direction on options for staff to pursue.
FUNDING: N/A
Body
DISCUSSION / BACKGROUND
On February 11, 2025, with Legistar file 25-0236, the Board directed staff to work with the Budget Ad Hoc Committee to research increasing fees to reflect the actual costs to provide the services and explore revenue generating ideas that focus on tourists rather than residents and return to the Board with a recommendation.
The Budget Ad Hoc met on June 23, 2025, to discuss revenue generating options with the Chief Administrative Office, Planning & Building, and the Agricultural Commissioner. The Budget Ad Hoc determined that there were four revenue generating options that would be feasible to perform analysis on and pursue if the full Board approves. The four options are:
1. Tourism Improvement District (TID) - A TID levies a special benefit assessment on participating local businesses to be used for tourism marketing, destination development, and capital improvements to attract new visitors. This option would need to be analyzed to determine the location(s) of the TID(s), tourism business’ interest in levying the assessment, and the effective use of revenue generated by the TID(s). The Strategic Economic Enhancement Development (SEED) Committee would be a good resource to use to perform the analysis, however, Resolution 111-2024 would need to be updated to include this project in Article II - Roles & Responsibilities.
2. Agricultural Homestays/Ag Lodging -On September 24, 2024, with Legistar file 24-1534, the Agricultural Commissioner and Planning & Building Department were directed to work with the agricultural community on an Ag Lodging model. Our current Zoning Ordinance allows for two zoning use types that would allow for Ag Lodging. Agricultural Homestays zoning use allows for lodging facilities operated by the resident of the property on which the facility is located that is accessory and subordinate to the on-site, bona fide agricultural or grazing operation. Agricultural and Timber Resource Lodging zoning use allows for lodging arrangements, accessory and subordinate to on-site commercial agricultural operations for the purpose of educating and informing the public about local foods, fiber, flowers or timber. An increase in lodging options by allowing agricultural properties to offer Ag Lodging would increase Transient Occupancy Tax revenues.
3. Discretionary Transient Occupancy Tax (DTOT) on campgrounds - Currently, El Dorado County does not levy DTOT on campgrounds. Research done by CAO staff in 2022 found that 21 out 58 counties levy DTOT on campgrounds. State campgrounds are exempt from DTOT. Any changes to DTOT must be approved by the voters through a ballot measure. If the Board chose to place a measure on the ballot to extend DTOT to campgrounds, the measure would require approval by a simple majority for a general purpose tax or 2/3 vote for a special purpose tax.
4. DTOT Increase - The current DTOT is levied at a rate of 10% (an additional 4% is levied in the unincorporated portion of the Tahoe Area dedicated solely to snow removal and maintenance of existing roads in that area). The same research done by CAO staff in 2022 found that the average DTOT levied in all 58 counties is 9.7% and ranges from 4% to 14%. Some counties levy DTOT along with some form of Tourism Assessment like a TID. As mentioned previously, any changes to DTOT must be approved by the voters through a ballot measure. The Board placed Measure J on the ballot in November 2018 to increase DTOT countywide by 2% but the measure did not pass. Measures were placed on the ballot by the Board in November 2022 to increase DTOT on the West Slope by 2% (Measure R) and in the Tahoe Basin by 4% (Measure S). Measure R did not meet the 2/3 voter threshold for approval, but Measure S did.
Staff are requesting direction on the options the Board would like to pursue (or continue to pursue in the case of Ag Lodging) along with the prioritization of options selected.
ALTERNATIVES
N/A
PRIOR BOARD ACTION
Legistar file 24-0898 - July 16, 2024 - Board approved Resolution 111-2024.
Legistar file 24-1534 - September 24, 2024 - The Agricultural Commissioner and Planning & Building Department were directed to work with the agricultural community on an Ag Lodging model.
Legistar file 25-0236 - February 11, 2025 - The Board directed staff to work with the Budget Ad Hoc Committee to research increasing fees to reflect the actual costs to provide the services and explore revenue generating ideas that focus on tourists rather than residents.
OTHER DEPARTMENT / AGENCY INVOLVEMENT
Agriculture Department
Planning and Building
County Counsel
FINANCIAL IMPACT
There is no financial impact associated with this item.
CLERK OF THE BOARD FOLLOW UP ACTIONS
N/A
STRATEGIC PLAN COMPONENT
N/A
CONTACT
Alison Winter, Principal Management Analyst