Seaside council shifts short‑term rental TOT allocation, gives council 15% authority over funds

The Seaside City Council on May 15 approved an ordinance changing how transient occupancy tax (TOT) revenue from short‑term rentals is allocated, moving 15% of net TOT to projects directed by the City Council while preserving 50% for affordable housing and dedicating 35% to neighborhood park or neighborhood improvements recommended by the Neighborhood Improvement Commission (NIC). The ordinance passed on a 3‑2 roll call vote.

Assistant City Manager Dan Milas summarized the amendment during the second reading, saying the change would reserve 35% of net TOT for neighborhood park improvements recommended by NIC, 15% for council‑determined projects of the same general type, and leave the existing 50% allocation for affordable housing intact. Milas also said 10% of allocated funds already go to general administration of the short‑term rental program.

Why it matters

Supporters argued the move lets elected officials respond directly to constituent requests for neighborhood improvements, especially as TOT revenues grow. Opponents — including current and former NIC members who spoke during public comment and council debate — said the change weakens the commission appointed to represent neighborhood priorities, reduces transparency and community engagement, and risks confusing residents about the purpose of NIC recommendations.

Discussion and public comment

Public commentators and several council members pressed staff for dollar figures during the second reading. Milas said the estimated total net TOT for the upcoming fiscal year from short‑term rentals was roughly $400,000 after an administrative 10% allocation; that would translate to about $200,000 for affordable housing, roughly $140,000 for NIC‑recommended neighborhood improvements (35%), and about $60,000 under the council’s 15% allocation.

Several members of the public urged the council to delay or table the ordinance, saying the change subverts a voters‑backed allocation and sidelines NIC, which was created to accept and vet resident requests. Carla Lobel, a public commenter and NIC ally, said the ordinance “takes checks and balances out of the equation” and expressed concern that the move rewards the council with written authority it already effectively had in practice.

Council debate

Councilmembers split along two lines. Several members said they supported the change because it provides the council a limited ability to fund community projects that might not otherwise meet NIC’s process or timing, and because the pool of TOT funds has grown. Opponents said NIC’s role and the clarity of a voter‑established allocation would be undermined and that the council should not reduce the commission’s recommendation responsibility.

Vote and implementation

The ordinance passed on a 3‑2 roll call vote (Councilmember Miller voted no; Councilmember Burks voted yes; Councilmember Garcia Arizola voted yes; Councilmember Mullen and another councilmember recorded no votes during debate), with the council chair announcing the motion carried. Staff said the amendment is a second reading and will go into effect per the municipal code’s timelines for ordinance adoption.

What remains unclear

Commenters and some council members asked for clearer staff reports and more complete revenue figures before action. Staff presented estimated totals during the meeting and said staff would continue to provide additional budgetary detail as the program and fiscal year progress.

Ending

Councilmembers and public commenters said they expect ongoing discussion about NIC’s role, transparency and how the council will use the 15% council‑directed allocation. The ordinance revises the municipal code to reassign a portion of short‑term rental TOT revenue to direct council control while preserving the half for affordable housing.