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Monday, June 11, 2018

By Chris Frost

Special to the Tri County Sentry


Paying for the privilege took a step forward in the City of Oxnard, June 5, as the city council passed a resolution to hold an election about placing a tax on cannabis.

The cannabis tax question will be on the Nov. 6 ballot.

The Oxnard City Council approved delivery of medical cannabis in the city limits last April.

Interim Assistant City Manager Ashley Golden said the cannabis tax would be on cultivation, delivery, testing, laboratories, retail sales, distribution, and manufacturing.

"Although we currently do not allow any of these, with the timing of the ballot measures they need to be to the county by July 3," Golden said. "Putting this before the voters do not change the regulations we have in place today."

She said passing the resolution will keep the city's 'go slow' approach in place, but at the same time keep the options open if the council chooses to allow cannabis before the 2020 election.

She said on July 8, 2017, the council prohibited commercial cannabis in the city and incorporated medical cannabis into the zoning ordinance and revised regulations to allow for medical cannabis.

"Staff has carried out those items, and most recently to allow for medical delivery," she said.

A vote to decide if they should alter the city’s transient occupancy tax (TOT) to apply to short-term rentals failed, but the council will examine the issue in greater detail.

California charges a transient occupancy tax when someone occupies a hotel, inn, house, motel or other lodgings for up to 31 days.

During the last budget workshop, Interim City Manager Scott Whitney said the city undercharges on its Transient Occupancy Tax and leaves a lot of money on the table.

Golden said the city would examine the TOT tax issue at a study session during the July 10, city council meeting.

"To qualify for the Nov. 6, ballot, we have to have all the ballot measure language to the county by July 3," she said. "If we do not meet this deadline, we would not be able to put any ballot measures related to tax until the 2020 general election."

Golden said the transient occupancy tax goes straight into the general fund. The city has a TOT in place for the last 50 years, and the current rate is 10 percent.

"The ballot measure before you would not change the rate but would add the term 'short-term rentals' to explicitly allow that in the zone," she said. With the TOT ordinance being 50 years old, she said it didn't contemplate things like short-term rentals.

"Short-term vacation rentals have exploded not just in the city, but in cities throughout," she said.

During public comments, Diedre Frank said she was speaking as a private resident.

"Transient occupancy tax is expected to produce $5.5 million in the new budget," she said. "This is an increase of 5.7 percent from the current year collection of $5.2 million."

She accused the council of selling the shores for $300,000 (the anticipated increase from the TOT.)

"That's what this is," she said. "This is selling the shores. You're giving up your residents for transient occupants and investors coming into Oxnard."

Councilman Oscar Madrigal asked if the voters reject the items, what will happen.

"If they (the voters) reject this, the regulations stay as is," Golden said.

Mayor Pro Tem Carmen Ramirez wanted to hear about the TOT from City Attorney Stephen Fischer.

"This is more of a safeguard if other forces compel the city to accept short-term rentals in the coastal areas," he said. "The city may not have the last say on that issue. There may be courts stepping in ordering things. The coastal commission may come in with its own rule that would supersede any local ordinance."

Ramirez said she heard about short-term rental abuses.

"I'm concerned that we haven't made a decision and it's up in the air with the other authorities," she said.

Councilman Bryan MacDonald said if they don't pass the item, they don't get another chance to have the voters decide until 2020.

"It's not saying we're looking forward to short-term rentals," he said. "Short-term rentals have been in Oxnard since as long as I've been here."

He said there is going to be a lot of litigation about short-term rentals in the future.

"If this does get shoved down our throat and there is nothing we can do about it, we should be able to regulate it in some fashion."

He said money raised from short-term rentals pay for enforcement staff to manage the situation.

Councilman Bert Perello asked why the study session is on July 10 when the ballot language has to be to the county on July 3.

"We combined two issues, the Canibus, and short-term rentals," he said. "They should have been separated."

He called it common sense.

"A lot of people question my common sense," he said.

Perello agrees that the short-term rental should be a placeholder on the ballot, but it appears the council approves.

"When you hear of the people who have been abused by the current status, specifically in the beach area, because those are the people who are the most vocal at the time and those are where the biggest abuses are going on," he said. "I'm sure the two speakers will give us a date where they will invite the full council to come down and see if they can get through on the street they live on at 3 a.m. and the parties are rip-roaring because somebody has the right to have a short-term rental."

Mayor Tim Flynn said he is involved with the short-term rental issue, specifically with residents at the beach.

"We have our fiscal year beginning July 1, and we have to pass a budget," he said.

Flynn agrees with Perello and wants the items (marijuana and the TOT) to be separated and wants a special meeting.

"I am afraid by the contentiousness of this issue that there will be a couple of hundred people who show up for this special meeting," he said.

Golden said the items are separate.

"We can look at a special meeting," she said. "We probably need to look at a special location."

Interim City Manager Scott Whitney said there are 215 short term rentals in the city.

"It's happening now," he said. "There are 43 that are paying a TOT, and the average is about $6,000 per year."

He said if the TOT ordinance passes, the city will get about $1.3 million per year.