TRANSIENT OCCUPANCY TAX AUDIT SERVICES

The City of Monterey (“City”) is seeking proposals from qualified firms or individuals to provide TRANSIENT OCCUPANCY TAX AUDIT SERVICES.

The City is a charter city located in the County of Monterey. The City of Monterey is a waterfront community where citizens, civic organizations, businesses and the City government work together to ensure that the community retains its hometown identity, high quality of life, and natural beauty. The estimated residential population is 30,218 according to the U.S Census’ 2020 Decennial Census Population Estimate. Monterey is at the heart of the Monterey peninsula, serving as the region’s business core with urban amenities common to a city of much larger size. At the same time, the city provides a small-town atmosphere and distinct neighborhoods that range from historic adobes to mid-century modern abodes. The Monterey airport is located less than 10 minutes from downtown. Monterey offers an ocean-view recreation trail that connects with other cities, a harbor and marina, a sports center with two indoor pools, a world class conference center, 36 dedicated parks and open spaces, and El Encinal cemetery. Monterey is a charter city and operates under the Council-Manager form of government. The Mayor and City Council are responsible for establishing policy and providing direction to the City Manager. The Mayor is elected at-large and serves a two-year term. The City Council members are elected by district and serve staggered four-year terms. The Mayor presides at official meetings and work sessions.

The City desires to obtain the services of an outside firm to audit each of the hotels in the City of Monterey for compliance with the City’s ordinances and Tourism Improvement District (TID) Plan. The agreement will be for a three (3) year term. The audits will encompass :

Tourist Occupancy Tax (TOT)

All Visitor Accommodation Facility (VAF) operators in the City are required to file a TOT return and pay the 12% of rent due on a monthly basis pursuant to City of Monterey "Transient Occupancy Tax Ordinance" (No. 1405 C.S.). Total TOT revenues are the largest revenue source of the City’s General Fund revenue budget, making up approximately 27% or $30 million. These revenues are critical to providing funding to support vital City services and operations.

Conference Center Facilities District (CCFD)

In February 2014, VAF owners voted to authorize City Council to levy a special tax and to issue debt to finance the rehabilitation and upgrade of the Monterey Conference Center (MCC). As established in the Rate and Method of Apportionment (the "RMA"), the special tax went into effect July 1, 2014 with the following categories and rates;

• Adjacent Hotel - Hotel property within 100' of MCC (currently 3 hotels) have a rate of 4.15%
• Full-Service Hotel - Lodging with food & beverage as defined by Smith Travel Research have a rate of 1.60%
• Limited-Service Hotel - Neither adjacent nor full-service have a rate of 0.80%

Tourism Improvement District (TID)

The Monterey County Tourism Improvement District (MCTID) was established in 2007. The proceeds from the MCTID assessment are used to administer marketing programs to promote the County of Monterey as a tourism destination and to fund projects, programs and activities that benefit lodging businesses within the district. The assessment levied on all lodging businesses within the city of Monterey is $4.50 per occupied room night for non-luxury full service VAF and $1.50 per occupied night for limited-service VAF. All of the assessments imposed are reviewed by City Council annually, based on the annual reports prepared by the See Monterey (formerly Monterey County Convention and Visitors Bureau). The City is entitled to retain one percent (1%) of the assessments collected to defer the administrative costs incurred.