Item 23 - Resolution of Intention to Renew the Santa Ana Tourism Marketing District

Home Browse Search

SATMD Management District Plan 10 February 27, 2025 B. Annual Budget The total ten (10) year assessment budget is projected at approximately $1,600,000 annually, or $24,000,000 through the ten (10) year term of the SATMD if the maximum assessment rate increases are adopted. A similar budget is expected to apply to subsequent years, but this budget is expected to fluctuate as room sales do, as businesses open and close, and if the assessment rate is increased or decreased pursuant to this Plan. Every two (2) years during the operation of the SATMD, the assessment rate may be increased by the TSA Board to a maximum rate of four percent (4%) of gross short-term sleeping room rental revenue. If the assessment rate is increased, it may subsequently be decreased but shall not be decreased below a minimum of two percent (2%) of gross short-term sleeping room rental revenue. The maximum increase or decrease in any two-year period shall be one-half of one percent (0.5%). The table below demonstrates the estimated maximum budget with the assumption that the assessment rate will be increased at the earliest opportunity as it is a required disclosure, it is not the anticipated course of action. Alternate courses of action may be taken in regard to implementing the assessment rate increase other than what is demonstrated in the chart below, within the parameters of this Plan. Estimated Annual Budget if Maximum Assessment Rates Are Adopted Year Assessment Rate Budget 2026 2.00% $1,600,000 2027 2.00% $1,600,000 2028 2.50% $2,000,000 2029 2.50% $2,000,000 2030 3.00% $2,400,000 2031 3.00% $2,400,000 2032 3.50% $2,800,000 2033 3.50% $2,800,000 2034 4.00% $3,200,000 2035 4.00% $3,200,000 Total $24,000,000 C. California Constitutional Compliance The SATMD assessment is not a property-based assessment subject to the requirements of Proposition 218. Courts have found Proposition 218 limited the term ‘assessments’ to levies on real property.1 Rather, the SATMD assessment is a business-based assessment, and is subject to Proposition 26. Pursuant to Proposition 26 all levies are a tax unless they fit one of seven exceptions. Two of these exceptions apply to the SATMD, a “specific benefit” and a “specific government service.” Both require that the costs of benefits or services do not exceed the reasonable costs to the City of conferring the benefits or providing the services. 1 Jarvis v. the City of San Diego 72 Cal App. 4th 230 EXHIBIT 2