Westminster City Council
SUBJECT
Title
Consideration of a Resolution Submitting the Westminster City Services Measure to the Voters at the November 3, 2026 General Municipal Election to Seek Voter-Approval of an Increase to the City’s Transient Occupancy Tax.
End
From: Christine Cordon, City Manager
Requested by: Administration
Prepared by: Christine Cordon, City Manager; Erin Backs, Finance Director; Scott Porter, City Attorney
____________________________________________________________
RECOMMENDED ACTION
Recommendation
Provide direction on whether to move forward with placement of a measure on the November 3, 2026 ballot:
A. Adopt a Resolution entitled, “A RESOLUTION OF THE MAYOR AND CITY COUNCIL OF THE CITY OF WESTMINSTER, CALIFORNIA, SUBMITTING THE WESTMINSTER CITY SERVICES MEASURE TO THE VOTERS AT THE NOVEMBER 3, 2026 GENERAL MUNICIPAL ELECTION AND TAKING CERTAIN RELATED ACTIONS.”
end
BACKGROUND
On June 25, 2025, the City Council received a report on exploring opportunities to generate revenue for the City as part of Strategic Plan Goal #1 Achieve Financial Stability. One of the revenue sources reviewed was a possible increase to the City’s Transient Occupancy Tax (TOT).
The City’s Transient Occupancy Tax also known as the “hotel tax” is a tax imposed for the privilege of occupying a room(s) in a lodginghouse, hotel, motel, roominghouse, dormitory or public or private club containing guest rooms for lodging strangers or travelers, advertising or held out as a place where sleeping or rooming accommodations are furnished to the public, unless such occupancy is for a period of more than 30 consecutive days.
On February 25, 2026, the City Council received a report on engaging a consultant to conduct a scientifically valid community survey to gauge community perspective on potential revenue measures as part of Strategic Plan Goal #1 Achieve Financial Stability, including the TOT. At that time, the City Council voted to move forward with the survey.
On June 24, 2026, the City Council received a report providing additional information that several other Orange County and Los Angeles County cities are considering TOT measures in November 2026 in anticipation of the Olympics coming to Los Angeles in the summer of 2028.
Placentia and Orange have approved placing measures on the ballot to increase their from a 10% rate to 14%. Costa Mesa is considering an increase to their 8% rate of between 1% and 3%. Redondo Beach is considering an increase from 12% to 14% or 15%.
According to The California Municipal Revenue Sources Handbook from the League of California Cities, more than 400 cities and 55 counties impose a TOT. The most common rate is 10%, but rates throughout California range from 4% to 15.5%. Anaheim at 15% and Inglewood, Palo Alto, and Menlo Park at 15.5% are the highest rates imposed. The City of Westminster's rate is the lowest of the cities that were surveyed at 8%.
The following table shows the TOT rates of some Orange County and Los Angeles County cities from highest to lowest.
|
City* |
TOT Tax Rate (%) |
|
Inglewood |
15.50 |
|
Anaheim |
15.00 |
|
Santa Monica |
15.00 |
|
Garden Grove |
14.50 |
|
Culver City |
14.00 |
|
Laguna Beach |
14.00 |
|
Los Angeles |
14.00 |
|
Long Beach |
13.00 |
|
Monterey Park |
13.00 |
|
Tustin |
13.00 |
|
West Hollywood |
12.50 |
|
Alhambra |
12.00 |
|
Buena Park |
12.00 |
|
La Palma |
12.00 |
|
San Gabriel |
12.00 |
|
Seal Beach |
12.00 |
|
Stanton |
12.00 |
|
Santa Ana |
11.00 |
|
Aliso Viejo |
10.00 |
|
Brea |
10.00 |
|
Cypress |
10.00 |
|
Dana Point |
10.00 |
|
Fullerton |
10.00 |
|
Huntington Beach |
10.00 |
|
Laguna Hills |
10.00 |
|
Laguna Woods |
10.00 |
|
Lake Forest |
10.00 |
|
La Mirada |
10.00 |
|
Newport Beach |
10.00 |
|
Orange |
10.00 |
|
Placentia |
10.00 |
|
San Clemente |
10.00 |
|
San Juan Capistrano |
10.00 |
|
Whittier |
10.00 |
|
Yorba Linda |
10.00 |
|
Bellflower |
9.00 |
|
Downey |
9.00 |
|
Fountain Valley |
9.00 |
|
Costa Mesa |
8.00 |
|
Irvine |
8.00 |
|
Laguna Niguel |
8.00 |
|
Los Alamitos |
8.00 |
|
Mission Viejo |
8.00 |
|
Westminster |
8.00 |
*Orange County cities in grey.
Westminster received $912,099 in TOT revenue during Fiscal Year (FY) 2024-25 and is projected to receive $905,000 in FY 2025-26. A 1% increase would generate approximately $113,000 in additional TOT revenue annually. If the City were to enact a 12% rate, the average in California, an additional $452,000 could be generated; and a rate of 14% could generate an additional $678,000 annually.
|
Increase |
New Rate |
Additional Revenue |
|
1% |
9% |
$113,000 |
|
2% |
10% |
$226,000 |
|
3% |
11% |
$339,000 |
|
4% |
12% |
$452,000 |
|
5% |
13% |
$565,000 |
|
6% |
14% |
$678,000 |
|
7% |
15% |
$791,000 |
Enacting a Tax
Any new or increased tax requires voter approval to become effective. The procedures for enacting any of these taxes are essentially the same. There are three possible routes to voter approval for any of these taxes:
1. Council-Initiated General Tax
A general tax is a tax imposed for “general government purposes” (i.e., a tax where proceeds of the tax are deposited into the City’s general fund and are not legally earmarked for a specific purpose) (Cal. Const. Art. XIII C, Sec. 1(a)). Such a tax requires the approval of a majority (50% + 1) of the votes cast on the measure at the election (Cal. Const. Art. XIII C, Sec. 2(b)).
The tax is proposed by Council adoption of a resolution submitting a tax ordinance to the voters. Unless the City Council declares by a unanimous vote that there is an emergency (usually a “fiscal emergency”), the election on the tax measure must be an election where a City Council seat is also on the ballot. (Ibid.). If the Council does declare an emergency, then the tax measure may appear on any ballot.
In either event, the resolution placing the matter on the ballot must be approved by a two-thirds vote of all members of City Council (i.e. four “yes” votes) (GC 53724(b)). The Council does not need to itself adopt the tax ordinance.
The resolution placing the measure on the ballot must be adopted no less than 88 days prior to the election date (EC 9222).
The deadline to file with the Orange County Registrar of Voters for the November 3, 2026 General Election is August 7, 2026.
Community Survey Results
FM3 Research, Inc., also known as Fairbank, Maslin, Metz & Associates, conducted a survey gauging the policy preferences of residents and their interest in an increased TOT. The survey took place from July 12-20, 2026. At the time of this report, FM3 Research was still analyzing results of the survey. Early numbers show that both 12% and 14% TOT rates polled between 51-58% approval. A 14% TOT rate polled at 51% approval without any explanation and increased to 58% after additional information. A 12% TOT rate polled at 58% approval.
FISCAL IMPACT
There is no fiscal impact with this report; however, each 1% increase to the transient occupancy tax rate would provide approximately $113 thousand annually to the City of Westminster. The estimated costs associated with placing a measure on the November 2026 ballot as provided by the Registrar of Voters Office is $8,500-$17,000.
LEGAL REVIEW
The City Attorney’s Office has reviewed as to form.
CONCLUSION
Each 1% of TOT rate generates approximately $113 thousand in additional revenue annually. A measure to increase the TOT rate to 14% from the existing 8% rate would be estimated to generate approximately $678 thousand and a measure to increase the TOT rate to 12% from the existing 8% rate would be estimated to generate approximately $452 thousand.
Based on the survey results of residents and their interest in an increased TOT, the City Council is requested to consider the results and provide direction. If the City Council is interested in pursuing a TOT increase measure, the deadline for placement on the November 3, 2026 ballot is August 7, 2026.
ATTACHMENTS
1. Presentation from June 24, 2026 City Council meeting
2. Proposed Resolution - Submitting City Services Measure to the Voters at 12%
3. Proposed Resolution - Submitting City Services Measure to the Voters at 14%
4. Proposed Draft Ordinance 12%
5. Proposed Draft Ordinance 14%
REVIEWED BY
Erin Backs, Finance Director
City Attorney’s Office
Christine Cordon, City Manager