Politics Report: Hotel Tax Hike Just Wants Life | Voice of San Diego

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Politics Report: Hotel Tax Hike Just Wants Life

We asked the former city councilwoman about the report she consulted for a vacation rental tracking firm. Also the hotel tax lives.

Mayor Kevin Faulconer, Assemblyman Todd gloria and Councilman Scott Sherman hold a press conference in support of Measure C. / Photo by Adriana Heldiz

Supporters of Measure C have sent a letter to San Diego Mayor Todd Gloria and the City Council asking them to declare that the hotel-tax increase actually, officially, passed now that court cases elsewhere have more clearly established that similar measures only needed a simple majority to pass.

It got 65.24 percent of the vote on March 3, in the Before Times. That was short of the two-thirds that would have made it law without all this hassle.

The City Council never declared that it actually failed to pass.

Why? Background: The California Supreme Court ruled in 2017 that citizens initiatives aren’t governed by the same lines in the California Constitution that require a super-majority of voters to support special tax increases. The ruling seemed to indicate that you could raise taxes for a special purpose – like a new stadium or Convention Center – with just a simple majority.

Tax increases for special projects or specific purposes have needed a two-thirds vote for decades and it’s part of the reason building things like stadiums or raising taxes for, say, education and teacher pay, is so hard to do. What this theory held was that the Constitution only governed how local governments could raise taxes. So if the City Council wanted to raise money, it would have to get two-thirds. But if you ran it as a citizens initiative, it could pass with just a majority of citizens, like any initiative.

It was unclear, though, because the ruling wasn’t about that issue specifically. That was just the conclusion some legal minds had noticed. The first to notice and discuss this possibility in San Diego was attorney Cory Briggs. The Chargers also became aware of this case and what its implications were and the team was ready to pursue the logic in court except for its ballot measure didn’t even get 50 percent of the vote.

As they built the plan to raise hotel taxes to fund a Convention Center expansion, homeless services and road repair, supporters of what became Measure C went far out of their way to make sure it was a citizens initiative that could qualify under this interpretation of the law. They spent a lot of money basically betting that this very situation may arise.

The news now: A San Francisco citizens initiative to raise taxes did get more than 50 percent and the San Francisco city attorney argued successfully that the measure passed. It went to the Supreme Court, which declined to even consider that it didn’t.

So supporters of Measure C are now making the same case: The court cases are now clear that this is the correct interpretation of the Constitution, and Measure C got a majority of the vote.

“Now that consistent judicial guidance has been received, the City Council can and should move forward to declare that Measure C met the constitutionally prescribed voter approval threshold, and hence is enacted,” wrote attorney George M. Yin, who represents supporters of Measure C. It was backed by local tourism industry interests, labor unions and other business leaders.

Yin went on to argue that action was required and the city could, if it wanted to, pursue a validation lawsuit: an effort to kind of sue itself to make sure a court agrees that it is legal.

Supporters are thrilled: Keith Maddox, the outgoing executive treasurer-secretary of the San Diego Imperial Counties Labor Council, told the Politics Report that this was exactly why they argued it should be a citizens initiative and now multiple court cases have validated that decision.

Implications: Other people who want to see taxes increased for specific purposes, like, say, transit, will surely take notice. SANDAG’s Measure A from 2016 got support from a majority of voters for a half-cent sales tax increase for transit and highways. But it didn’t get two-thirds.

Opponents: Aren’t pleased. Alliance San Diego, which has challenged the ballot measure procedurally since before the city decided to put it on the March primary instead of November ballot, sent a letter of its own. Voters had been told in official materials that the measure would need two-thirds of the vote.

“To declare an outcome different than what the voters decided would be akin to members of Congress attempting to upend the vote in the presidential race. In both instances, election integrity is at stake and the decision of voters is at risk.

More to Consider

Maybe we shouldn’t be so focused on the tourism industry. The amount of money pouring into San Diego startups is quite staggering. San Diego “can build a better version of Silicon Valley,” argues Mike Krenn, from Connect.

Speaking of tourism: All signs seem to point to Brigette Browning taking over the leadership of the Labor Council when Maddox leaves. Browning has been the leader of Unite HERE, the hotel and restaurant workers union. We’ll see if we can get some questions in to her soon about her plans. It’s not official.

The 79th

We hosted a debate between the five candidates hoping to succeed Shirley Weber representing the 79th Assembly District. It was mostly just about schools and criminal justice. Time flies when you have a sometimes free-flowing conversation about these issues with five people and the moderator. Sara wrote about their takes on getting money and endorsements from police officer unions, and that turned out to be a very interesting demarcation. Scott pulled out some highlights in his weekly Friday Five video.

Vacation Rentals Are Back in the News, and So Is Bry

Councilwoman Barbara Bry, who is running for San Diego mayor, speaks to supporters at a neighborhood event in North Park just days before the election. / Photo by Adriana Heldiz

Former Councilwoman Barbara Bry made banning short-term vacation rentals a central plank of her unsuccessful bid for mayor of San Diego last year. That came to mind when The Reader this week reported she had been paid up to $100,000 a year by a company that provides cities with data to help them enforce vacation rental bans.

But it appears that’s not quite right.

For the last three years, Bry reported collecting between $10,000 and $100,000 in consulting fees from Deckard Technology, a firm that collects and sells data to help sniff out unpermitted construction and code violations, or to enforce vacation rental regulations.

Bry has never consulted for Deckard, both she and the company’s CEO, Nick Del Pego, told Voice of San Diego.

Rather, Neil Senturia, Bry’s husband, had been an investor in and consultant to the company through his firm, Blackbird Ventures. He consulted for the company as its CEO until February of last year, then stayed on as an adviser until the summer, when he left and divested from it.

“We never had a relationship with Barbara,” Del Pego said. “I can’t speak to why she would list that she was a consultant.”

City officials are required to disclose their spouse’s income on their statements of economic interests, and they are considered potential sources of conflicts of interest that could require a recusal from city decisions.

In an interview, Bry said she must have simply forgot to check the box in the yearly disclosures indicating it was her spouse’s income source.

“It was Neil’s income, I never had anything to do with the company,” she said.

The company’s ambition: Deckard is now seeking a city contract to help it police vacation rentals. It hired lobbyist Jim Madaffer to help secure a deal, as the Reader reported.

“They never applied to work for the city while I was on the Council, and now I’m not on the Council and Neil no longer owns any stock in the company so I have no idea what they might do now,” Bry said.

There’s still a conceivable way Senturia’s involvement could have raised a conflict of interest.

In July 2018, Bry and the rest of the Council voted to sharply curtail vacation rentals citywide. Three months later, they voted to undo their vote, when facing a potential referendum.

It’s possible Bry should have recused herself from those votes. That would depend on whether the San Diego Ethics Commission, the body that enforces the city’s ethics ordinances, determined after an investigation that it was “reasonably foreseeable” that the votes represented a “material financial impact” on Deckard.

But the company didn’t begin offering a vacation rental product to cities for another year. It began work on it in August 2019 and inked its first client in December 2019. Del Pego said bans aren’t great for the company.

“The cities who ban short term rentals pay me a lot less than people who allow them,” he said.

Sharon Spivak, the Ethics Commission’s executive director, said the commission encourages officials to seek advice on potential conflicts before taking any actions.

“Those situations are always fact specific, and we always need to analyze those facts, and any potential actions an official or staffer might be considering,” she said. “And that could be something that could have a positive or a negative effect on financial holdings, all that matters is that it affects their interest.”

On Drought and Politics

A dispatch from VOSD contributor Randy Dotinga: As we enter a month that offers the last chance for us to reverse a super-dry rainy season, local politicians should be careful about what they wish for.

Exactly 30 years ago, a mayor predicted that late-arriving rain would put a huge dent in the state’s drought. “Miracle March” proved her right, and it was good. But decades earlier, city leaders discovered the folly of trying to fool around with Mother Nature. They ended up forever tied to the worst natural disaster in our recorded history.

Here are some lessons for those in charge:

Go Big or Go Home …

In March 1991, amid a historic drought, Mayor Maureen O’Connor called for city residents to conserve water, but she refused to require them to take shorter showers and let their lawns dry out. The regional water agency was almost ready to mandate water use be cut by half and considered banning outdoor water use.

Critics pounced: A water official in Los Angeles called San Diego “fairly obnoxious” for going rogue. But O’Connor stuck to her guns, declaring that “I’m beginning to think that the weather is a-changing.”

More scoffing ensued. The local edition of the L.A. Times describes what happened next: “a San Diego Tribune cartoonist drew the mayor dressed in long robes holding a sign that said, ‘The Drought Will End Today.’ Underneath, the caption read, ‘Her Honor the Optimist.’”

A few days later came the revelation that Her Honor may not have been the ideal messenger for water conservation. As the Times discovered, she was actually one of the city’s 100 largest water users. (No. 1, the Times revealed, was Helen Copley, the wealthy publisher of the San Diego Union and Evening Tribune.)

Still, O’Connor – who relied on advice from a Mesa College meteorologist – got a chance to gloat when 7 inches fell on the city during “Miracle March,” the second-wettest March ever. The city met its conservation goals. “If she pulls off one more miracle, I’m going to convert to Catholicism … If she says it’s going to snow on Mt. Helix, by gosh, I’ll get my skis out,” raved a former city manager.

The drought continued, though, until it ended in early 1993 – right after “Mayor Mo” left office.

But, for the Love of All that Is Holy, Don’t Outsource

San Diego was a fast-growing city in December 1915 and mighty proud of its ongoing Panama-California Exposition at Balboa Park. But, as always, our water supply was a big hitch. We relied on the Morena Reservoir, which still exists out in East County by Campo, and it was running too dry for comfort.

So the City Council decided to hire a rainmaker by the name of Charles Hatfield on commission – he’d get paid $10,000 if it rained enough to fill the reservoir. “If he fails to fulfill his contract, the city isn’t out anything,” reasoned a councilman. “It’s heads the city wins, tails Hatfield loses.”

Talk about famous last words. Actually, everybody lost. A few weeks after Hatfield did some hocus-pocus with chemicals at the reservoir, the rain began to fall and wouldn’t stop. Houses, streetcar lines, railroad tracks, telegraph and telephone lines, bridges and highways were washed out. The San Diego River grew to a mile-wide torrent – try to imagine that today! – and the train to L.A. didn’t run for a month. Everything had to come into town by boat.

Worst of all, the dam at Lower Otay Lake in South Bay gave way, flooding a settlement of Japanese people. Perhaps 20 were killed, possibly as many as 60.

San Diego should be happy, Hatfield declared, since all the rebuilding would stimulate business. “He was an economist ahead of his time!” cracked a historian.

The City Council did not greet the rainmaker as a liberator. They refused to pay him his $10,000, most likely because they’d be financially responsible for the damage if they did, and sued him for $3.5 million. He sued them back but ultimately lost his case in 1938 – 22 years later.

Hatfield had the last laugh: He kept working as rainmaker, inspired a movie starring Hollywood hunk Burt Lancaster, and lived for another 42 years. But he was still bitter. “To this day,” he told a reporter in the 1940s, “I’ve never felt right about that San Diego City Council.”

If you have any ideas or feedback for the Politics Report, send them to scott.lewis@voiceofsandiego.org or andrew.keatts@voiceofsandiego.org. 

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