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Public raises legal challenge during Rancho Cordova TBID management-plan meeting; council defers action
Summary
At a public meeting on proposed amendments to the Rancho Cordova Tourism Business Improvement District management plan, a member of the public alleged the TBID's hotel assessments violate law after the 30th day and said he has filed litigation; staff advised the council not to discuss pending litigation and the council took no action tonight.
Amanda Noren of the Economic Development Department presented proposed amendments to the Rancho Cordova Tourism Business Improvement District (TBID) management plan: splitting the district into two zones and changing the assessment rate for hotels in Zone 2 to 6% while keeping Zone 1 at 4.5%. Noren said this meeting was a public meeting to collect testimony and that no council action was required this evening; a formal public hearing is scheduled for July 6.
Howard Hershps, the only public speaker on the item, raised multiple legal claims about TBID assessments and the TBID management organization's compensation. He asserted that TBID assessments applied after the 30th day of occupancy are contrary to California law and cited California Revenue and Tax Code and the Court of Appeal decision Britt v. City of Pomona. Hershps alleged the TBID entity pays excessive salaries and said he had filed an IRS complaint and litigation challenging the practice.
The city attorney, Adam Lindgren, told the council that litigation involving Mr. Hershps has been filed and advised the council to avoid discussing the specifics of an active claim at the dais. "We don't ever want to talk about existing claims that might interfere with the litigation," Lindgren said. The council deferred further discussion to allow legal counsel and staff time to review before the scheduled final hearing.
Why it matters: The TBID assessment affects hotel operators and tourism funding in Rancho Cordova; allegations of improper taxation periods and litigation could affect the timeline and substance of any subsequent council action on the management plan.
Next steps: Staff and the city attorney will review the legal questions raised, consolidate public testimony, and the council will consider the TBID amendments at the public hearing on July 6.
