DEL MAR — With a 4-1 vote at a special meeting Aug. 11, City Council approved an ordinance only slightly modified from one considered the previous week to place a measure on the November ballot allowing an increase in the transient occupancy tax, or TOT. The new ordinance includes a subsection in which council agrees to consider other fees before setting the TOT. If the measure passes, council will have the flexibility to raise the tax by an amount up to 13 percent, however, the increase is not automatic and not necessarily for the full 13 percent.

The Finance Committee requested the increase — which could add an estimated $417,000 to city coffers — during the annual budget workshop in June. Council unanimously approved resolutions at the July 21 meeting to put the measure on the Nov. 4 ballot. No one spoke for or against the increase at that meeting.

“We’re doing this with the knowledge that there may be a tourism marketing district formed by the hotels — a TMD — that would in fact supplant this,” Councilman Richard Earnest said.

Speaking on behalf of hotel owners at the Aug. 4 meeting, Thomas Mackey from Clarion Carriage House Del Mar Inn told council members $28,000 had been placed in an escrow account to begin forming the TMD.

“We want to assure you that we are going forward,” Mackey said. “I would like you to give us an opportunity to proceed with what we’ve promised.”

Mackey said he and other hotel operators were hoping council would take the TOT measure off the ballot and allow them to charge visitors a TMD fee that would go back to the hotels to be used exclusively for marketing.

Mackey said TMD funds would not be used to attract guests to their hotels, but rather “to market the village of Del Mar (so) we can compete with other local coastal cities.”

“The funds will not be used to supplement individual hotel marketing budgets,” Mike Slosser, general manager of L’Auberge, said.

TOT money goes into the city’s general fund to pay for services and facilities such as law enforcement, firefighters, beaches and parks. Since visitors use those amenities, Councilman Henry Abarbanel said he supported the TOT increase as a backup.

“When people come here, they’re not just going to the hotels or shopping at the shops,” said Abarbanel, who Aug. 4 voted against the ordinance because he felt the subsection was an attempt “to legislate sensible behavior and common sense.”

Mackey said when corporate bookers and guests call for room rates they want the bottom-line price, including all taxes and fees. “That’s all they care about,” he said. “And if we’re above … hotels that have opened within a five-mile perimeter of our hotel, we lose.” He said increased competition has caused the occupancy rate in Del Mar hotels to decline approximately 2 percent per year. “By you increasing an occupancy tax … we’ll ultimately lose more,” he said.

But according to a staff report based on figures provided by the hotels, the average annual hotel vacancy rate, excluding L’Auberge during its closure, has remained between 28 percent and 32 percent since 2002.

The issue of trust came up at the Aug. 4 meeting. Council members said putting the measure on the ballot gave the city flexibility if it passed.

“The problem is the visceral reaction … from the hotel people,” Councilman Carl Hilliard said. “They put up $28,000 to say, ‘Trust us. … If you adopt that resolution putting the TOT on the ballot, we’ll regard it as a lack of faith in us.’”

“I would hope that the business community doesn’t view this as a breach of trust,” Councilwoman Crystal Crawford said. “For me it’s about looking at our city’s efforts as a whole. I’m looking at tools for our community.”

“We don’t trust the business people to do what they say they’re going to do, and they don’t trust us either,” Earnest said. “And that is not going to help anybody — us, the voters, the businesses — nobody.”

Earnest and Hilliard met with hotel operators, and the subsection was added to the ordinance to ensure that when TOT and TMD are combined, visitors pay fees that total 13 percent, or an amount consistent with what neighboring cities are charging.

The addition seemed to restore trust. “I think the fundamental issue is that you’ve got to protect yourself against making sure we implement the TMD,” Slosser said. “If I were in your shoes, I would do that.

“Go ahead and put it on the ballot, get it voted on … and then trust us to go ahead and implement the TMD,” Slosser said.

The TOT can only be increased by a majority vote during a general election. Del Mar voters last approved an increase in 2002, when the rate went from 8 percent to the current 10.5 percent. Currently, the city of San Diego charges visitors a 10.5 percent TOT plus a 2 percent TMD. Solana Beach is expected to raise its TOT to 13 percent in January. It has no TMD.