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Town Council gets tough on TOT enforcement

June 6, 2011

Imagine a Mammoth deep in debt and unable to collect its fair share of the Transient Occupancy Tax.

People don’t actually have to imagine that much.

It’s the reality.

But on Wednesday night, the Mammoth Lakes Town Council took action, approving a measure that would modify the town’s current TOT ordinance and maybe – maybe – put some teeth in it.

The town can’t do it alone, however, so it teamed up with the Mammoth Lakes Lodging Association, which offered its volunteer assistance in helping identify scofflaws.

But that doesn’t mean the town is powerless.

In the meeting, council approved hiring a staffer as a TOT “compliance officer,” whose job, beginning July 1, will be to enforce the rules.
That duty used to fall on the shoulders of former finance director Brad Koehn, whose job was eliminated in last summer’s round of staff cuts.

In terms of TOT enforcement, that was a critical vacancy, and helped contribute to a loss of up to $400,000 in TOT just in the winter season alone, according to a study by the Lodging Association.

“Recent staffing reductions in the Finance Department have made it impossible to actively enforce compliance of individual property owners with the Town’s ordinances that include TOT and the business tax,” wrote the town’s staff in a report to the council.

The council took another step by introducing a six-step program for enforcement, teaming up with the Lodging Association to increase its TOT collection efforts. The six steps are:

• Mail an informational letter to all property owners that describes what the tax pays for, and further explains what the town will be doing to increase the monitoring and collection of the tax. The letter would also be available to real estate agents, escrow agents and Mammoth Lakes Tourism for inclusion in welcome packets.

• The Lodging Association offered the help of volunteers to begin monitoring advertising web sites for transient rentals.
This effort could also be supplemented through a contract with an outfit that would earn a commission based on additional TOT revenue received by the town as a result of the discovery.

• The volunteers or contractor would provide a transient rental information sheet that would include copies of property location, advertisements, availability calendars and rental rates for all rental activity that could not be identified in the business tax certificate database.

• The town staff will accept information provided by the volunteers or contractor and attempt to match up the rental activity with a tax certificate.

• If the business owner or property owner or property owner does not respond within 10 business days, the staff will file an assessment for business tax, TOT, penalties and interest based on the information obtained from the Lodging Association volunteers or contractors.

• If the business or property owner does not respond within 15 days, town attorney Andrew Morris and the staff will file a certificate of tax delinquency with the Mono County clerk of court.

Never in the history of the town has there been litigation for TOT violations, said attorney Rick Wood, incredulously.

In addition to the steps, the council approved 10 modifications to the current TOT ordinance.

With the passage of the bill, the council still needs to have another hearing for it to come into action, but council members agreed that the final step would be a formality.

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