The Facts About Measure P

Q. What is Measure P?

A. Measure P is the City of Foster City ballot measure that proposes to increase Foster City’s Transient Occupancy Tax rate from 8 percent to 9.5 percent, effective Jan. 1, 2012.

The Measure P ballot language is, “To provide funding for general city services, including police, fire, parks, recreation, and repairing and maintaining the levee, lagoon, streets and other infrastructure, shall the City of Foster City approve an ordinance amending the Foster City Municipal Code to increase the transient occupancy tax rate from eight percent (8%) to nine and one-half (9.5%) percent on the rate charged to hotel guests staying within the City, to be effective Jan. 1, 2012?”

Q. When is the City election?

A. The Consolidated Municipal, School and Special District Election is Nov. 8, 2011. Voting polls will open at 7 a.m. and close at 8 p.m.

Q. What percentage of the vote is needed to pass the measure?

A. A simple majority of “Yes” votes, or at least 50 percent of voters, plus one.

Q. What is the transient occupancy tax?

A. It is a city tax paid by visitors who rent hotel rooms in Foster City.
Foster City’s transient occupancy tax is currently 8 percent of a hotel guest's bill. Voters will be given the opportunity to increase the tax to 9.5 percent.

The TOT is the city’s fourth largest single revenue source, producing over $1.3 million per year.

Q. Who pays the tax?

A. Business travelers and tourists who stay in Foster City hotels. Foster City’s proximity to San Francisco International Airport and many regional attractions makes the city a prime location for hotels serving business travelers and tourists. Foster City is home to two hotels, with a total of 509 rooms.

Hotels remit the tax to the city on a monthly basis. Hotel accounts are subject to audit on an annual basis and revenue collection reports are prepared and presented to the public.

Q. How is the tax collected?

A. The hotel adds the tax to a guest’s bill. The hotel then sends the funds directly to the city.

Q. How much will the 1.5% tax increase generate?

A. An additional $250,000 per year.

The TOT generated $1.3 million in fiscal year 2010-2011. As a major revenue source, the City uses the funds to provide police, fire, street and streetlight maintenance, and parks and recreation programs that serve not only our residents and local businesses, but also those that stay in our hotels.

Q. How will the additional funds be used?

A. To fund government services, especially police, fire and other essential services.

The current recession has reduced city revenues and created an annual deficit of $2.8 million. This amount could increase if the economy worsens, or if the State of California finds ways to borrow from cities or pass down the costs of services to balance the state budget. The new funds would be used to reduce the level of cuts required to balance the budget.

Q. When was the last time the TOT tax rate was increased?

A. Foster City’s TOT tax rate has never been increased. The City’s current TOT rate of 8 percent has not been changed since it was implemented in 1981.

Q. Will the higher tax result in Foster City’s hotels charging a higher TOT than other cities?

A. No, all the other cities in San Mateo County have TOT rates of either 10 or 12 percent. Increasing the TOT rate to 9.5 percent means that Foster City will still have the lowest rate in the county. Of the 15 cities in the county that have hotels, eight have a 12 percent TOT rate and seven have a 10 percent TOT rate. An increase in Burlingame’s rate from 10 to 12 percent will be on the ballot at the same time as Measure P. The City of San Francisco’s TOT rate is 14 percent.

Q. Why increase the TOT tax rate?

A. The TOT increase will ensure that visitors renting a hotel room will help fund the cost to provide city services.

Foster City residents pay property, sales and other taxes to fund the cost of City services. By paying the TOT, travelers and tourists staying in the City help fund the cost to provide services to them, such as fire, police, medical emergency, and others. This increase in the TOT tax rate, if adopted, will ensure that hotel guests continue to help fund the cost to provide these services.

Q. Where can I get more information about the TOT election?

A. Visit the City website or call City of Foster City Finance Director Steve Toler at 650-286-3214.

NOTE: Measure P is one of many items on the upcoming November ballot. Information about all the items is available at www.shapethefuture.org.