Council Subcommittee Recommends Taxing of Short-Term Home Rentals

• TOT Would Apply to 30-Day-or-Less Lease of Residences

BY BILL KOENEKER

The Administrative and Finance Subcommittee of the Malibu City Council finalized its recommendations last week for the proposed budget for fiscal year 2009-2010 that will now go to the full council for consideration.
Among the more innovative and potentially revenue rich proposals is the possible implementation of a law now on the books that allows the city to collect the so-called Transient Occupancy Tax, or TOT on the short-term rental of private residences.
As now written, the Malibu TOT law can be applied to short-term rentals that are 30 days or less per tenant.
This apparently means that residents who lease out homes or condos for the entire summer to one tenant may be exempt from the TOT, whereas those who lease to multiple tenants in the same time frame are subject to the tax.
This and other issues related to the TOT proposal are expected to be clarified when the city council holds a public hearing on next fiscal year’s budget at its meeting on Tuesday, May 26.
If the full council agrees to the TOT, the city would begin to notify property owners about the collection of the tax, which would become effective on July 1.
The subcommittee, which consists of Councilmembers Sharon Barovsky and John Sibert, recommended the TOT as another way to collect revenue as the city’s coffers shrink due to less revenue coming in this year and even less projected for next year.
Despite the law’s broader scope, Malibu has only been enforcing the TOT on hotels and motels, not on short-term private rent-outs.
Preliminary estimates of the revenue that could be generated by the collection of the tax are about $200,000, according to city staff.
The staff had recommended and the subcommittee concurred with a one-time $25 registration fee for each property to the city’s fee schedule to reflect the cost of providing the registration service.
Since the tax is already on the books, it requires no new action.
The subcommittee is also charged with suggesting to the council how much money and to whom general fund grants should be given. The city received 25 applications totaling $605,000. The proposed budget includes just $75,000 for the general fund grant program. Last year, the city budgeted and spent $200,000 before it realized revenues were going to be down.
The A&F subcommittee recommended some of the awards should be released only upon receipt of matching funds.
The panel recommended $8000 to Children’s Lifesaving Foundation as a matching grant and awarded $5500 as a matching grant to the Malibu Film Society, Malibu Foundation for Youth and Families got the nod for a $5500 matching grant and the Malibu Green Machine a $5000 matching grant. No strings were attached to grants of $5000 each to New Directions, Safety Harbor Kids and Meals on Wheels. Several groups received $2000 each including The Nature of Wildworks, One Book, One City, Malibu High School AVID. Friends of Malibu Urgent Care Center also received a $2000 matching fund grant.
Malibu High School Grad Night got $1000, while California Wildlife Center received a $1000 matching grant. Malibu Mountain Rescue was awarded a $1000 match and Operation Interdependence was awarded a $1500 matching fund grant. Children’s Creative Workshop was given a $1500 matching fund grant.