WATSONVILLE — Voters will decide in November if the city should increase its transient occupancy tax by one percent after the Watsonville City Council agreed to put the issue on the ballot Tuesday.
The transient occupancy tax, or TOT, is charged to travelers when they stay in a hotel for 30 days or less.
In November 2016, Watsonville voters agreed to increase the tax from 10 percent to 11 percent. If the tax increase passes this November, the TOT will be raised to 12 percent, effective Jan. 1.
According to Administrative Services Director Cindy Czerwin, the extra percentage is expected to generate about $130,000 annually, adding to the roughly $1.4 million the city receives from the tax every year.
The tax currently applies to eight hotels in Watsonville, City Manager Matt Huffaker said. Revenue is expected to increase slightly once the two hotels slated for construction on West Beach Street are operational, he added. One of the hotels, a Hampton Inn, recently pulled its building permit and is expected to open in summer 2019.
Other cities in Santa Cruz County are also looking at raising their TOT, according to Huffaker, with Capitola eyeing a two percent increase to 12 percent and Scotts Valley considering placing an increase to 11 percent on the ballot.
TOT revenue goes to Watsonville’s general fund, crucial in a time when the city could find itself in the red by 2020 due to rising pension and staffing costs, according to Huffaker.
“There are very few unrestricted revenue options available to cities,” he said. “It’s our intent to use these funds to help support the many great services that fall within our general fund, such as parks and community services and police and fire.”
Also during Tuesday’s meeting, the council agreed to establish a sister city relationship with Jocotepec in Mexico.
Jocotepec is located in the state of Jalisco, and includes the townships of San Pedro Tesistan, San Juan Cosala, San Cristobal Zapotitlan, Chantepec and Zapotitlan de Hidalgo. It has a population of roughly 46,521.
Farmer Peter Navarro said his parents came to Watsonville from Jocotepec in the 1950s to farm strawberries, adding that people from San Pedro Tesistan would migrate to Watsonville to work on the farm.
“There is a very strong connection between Watsonville, San Pedro, Jocotepec and that general area,” he said.
Jocotepec is the second sister city relationship the council has formed with a Mexican city in less than a year. In late 2017, the council agreed to forge a relationship with Tangancícuaro, a city located in Michoacán, México.
Watsonville has three other sister city relationships: Kawakami-Mura, Japan; Pinghu, China; and San Pedro Masahuat, El Salvador.
