Recording in progress.
Although it's 4 o'clock, we're going to wait 5 more minutes for our remaining calling who is not arrived.
Thank you.
Good afternoon, everyone. It's now 405 p.m. This is the actually a regular city council meeting
on August 4th of 2026 held a special time for p.m. and I would like to ask our clerk to call the
roll please. Marisa? Councilmember Lance Burke? Here. Councilmember Garcia Cadena? Here. Mayor Stollard? Here. Councilmembers Vega and Marino are absent.
All right. We expect councilmember Marino momentarily, but councilmember Vega is out of town.
All right. Well, now we begin with the pledge of allegiance. I will lead it today. Please join me.
And our heart. I pledge allegiance to the flag of the United States of America. And to the Republic, we'll reach a stance.
More emanation under your eye. In divisible, we'll deliver it to you. And it's just horrible.
I don't know what that means. Pardon me?
Yeah. Okay. All right.
And this brings us to item D, which is public comment. Public comment is the time in the meeting
for people who wish to address the council on items not on our agenda to stand up and do so.
Madam Clerk, do we have any expressions of public comment today? I have two speakers signed up to speak. First is a male, Ben Hodg.
Okay. And your first name is Amel? Yeah. Welcome.
Come right up and speak into that microphone or no one on watching remote. They will be able to hear you.
Okay. Hello. My name is Amel Ben Hodg. And I'm here to support Valley Valley.
Valerie Cantaro's proposal for fourth and hope. So my family has been volunteering there for the last year.
Most teaching art and just hanging out with the residents and talking and there are some of the kindest people I've ever met.
In spite of some of the hard things they have faced, they never complain. They tell their stories with humor and dignity.
Residents are often seniors battling cancer, depression, dementia and other difficulties that are not their fault.
Many grow up in abusive homes or suffer from domestic abuse. Many were injured when they were doing military service.
So you show that lack of green space increases risk of anxiety and depression and worsens mental health conditions.
The tiny homes are of course a blessing. But as you drive there, you notice just one small tree out front with many trees squeezing into the little bit of shade.
You also often see people trying to get into the city on busy roads in their real chairs so that they can get their groceries.
I would be so proud if our city could show the rest of California how to better treat vulnerable people with dignity by making this place a little greener and safer.
After all we are the city of the trees. Thank you.
Thank you. Appreciate your coming.
And you said we have another card to today.
Next speaker is Fatima Benhash.
All right.
Welcome.
I'm Fatima.
I'm Fatima, a resident of Woodland.
And I'm also here in support of Valerie Kenteros with Fourth and Hope to give some reasons that Woodland should increase trees in nature along roads,
especially near the East Beamer and Code 102 area.
First of all, it's important that the city of Woodland considered the mental and physical health of unhoused and formerly unhoused populations in city planning decisions.
Research done by the USDA has shown that spending time around trees reduces stress and anxiety, lowers blood pressure and improves mood.
This is especially important for senior populations.
California's unhoused senior populations are growing rapidly with adults over 50 making up nearly 40% of those needing shelter.
Having more nature will lead to better physical and mental well-being for these populations.
Secondly, trees can make cities feel up to 14 degrees cooler, which is especially important in this weather.
We're here in an air conditioned room, which is this, we're here in an air conditioned room, but imagine what it's like to be constantly outside without shelter when it's consistently in the hundreds.
Thank you.
Are there additional cards?
I do have one additional speaker, Valerie Kenteros.
All right.
Please proceed.
You have three minutes.
We may still be signing up to speak.
Next speaker is Valerie Kenteros.
All right.
We're going to start the clock over.
All right.
It's a technical dipty.
Oh, sorry.
Okay.
I guess my breath.
We have to take the beeline.
It was late.
Sorry about that.
Good evening.
City Council members.
My name is Valerie Kenteros.
Thank you for giving me the opportunity to speak tonight.
I am here because I care deeply about the community I live in.
I live at the community of Hope Tiny Homes on East Beamer.
The community has made up of seniors.
Those who have gone through hardships and people with mental disabilities.
Like, for example, myself by polar disorder in PTSD.
We, I don't even need these cards.
Let me just tell you.
We cannot travel out of the tiny homes.
Some of the seniors have not left in three years.
Only when a case manager picks them up to take them to a doctor's appointment.
The path holes are severe.
I go to college and I pass on the scooter.
The path holes are all through the street.
There's no way of avoiding them going around them.
The street is horrible.
There's no sidewalks on my way home from school on several occasions.
I see Frankie on his.
Usually he's in a wheelchair.
He's on a scooter today.
But in his wheelchair trying to get to AMPM.
A couple feet away from semi trucks.
I, too, have almost been hit on my way to and from school.
There's no sidewalks.
There's no safe area.
The bike lanes have debris in them.
Glass weeds growing up through them on East Beamer itself.
And also green areas.
There's no trees.
There's no sitting areas.
For the people.
I know when they brought the plan to you.
It looked like a lot of community areas.
A lot of green areas.
I've seen those pictures.
It's not what it is today.
It's a hard paved.
Hard paved.
Hard scape.
Not a landscape.
And I see some of my senior neighbors.
Health.
The dressing.
I take care of one of the seniors across the way from me.
He's in his 70s.
I bring him dinner every night.
I'm not.
I just worker.
I go to school.
We just share our dinner with him.
And his health is digressing.
He has nowhere to walk and sit and enjoy his life.
They're isolated in their apartments.
He's not the only one.
I brought one of my friends.
Robert Telly.
He's going to speak as well.
But the seniors are isolated in their apartments.
They're air conditioned.
I tried to just deliver the Zoom ID to all the apartment just right.
And I had to come home.
It was so hot for me.
My dog to be out there.
There needs to be more trees.
And I have an idea for that is to partner with the community.
The community gardens that are in the area with them community gardens.
Maybe they can partner with us because a lot of the people that live there are not physically or mentally capable to maintain a landscape plot.
So if we partnership with the schools or companies foundations as well as when my son passed away.
My job had sponsored a bench for him with his name on it.
It didn't just become somewhere to sit.
It was a remembrance of my son.
And if you have others that would like to sponsor a bench or a treat that they can have their family name on or their company name to support the community of hope.
There's ideas that we can do that are not going to be funded, you know, the community can help us.
But we need to humanize the people that are out there.
They think of us as a community of 50 more seconds.
Okay, we're not delinquents where people, let's not just survive, let's thrive.
Thank you for coming.
All right.
And where was anyone else wishing to speak tonight?
Today.
I'm going to say you have an additional card.
Apologies.
I do have two more cards.
Next is Frankie Silva.
Come on up.
Mr. Silva, pull that microphone down to you if you can.
If you can't, we'll bring you a portable one.
The clerk is bringing you a portable mic.
Okay.
Thank you.
That way you can you can look at us.
My name is Frank Silas and I two live in the tiny homes.
And I was very difficult for me to get to the store.
I'm barely a mile.
The roads are all messed up and it's hard for me to get out.
And I want to get out and explore more things.
I do dialysis four times a week where I have to go around the corner.
It's just around the corner, but still a lot just to get there.
And I only have this to give me there.
And I already were broken my wheelchair.
And my medical alone and covered so much.
And I really want to get out and do more stuff.
Now, just beginning to be better my health wise.
And so I want to enjoy whatever time I do have, you know.
Yeah, I want to give you guys to help any health assistance, please.
We appreciate you coming today.
We know it probably takes a big effort for you to be here.
Yeah.
Thank you.
Thank you, sir.
Next speaker I have is Robert Talley.
It's pretty much the same, but he was saying too.
You know, just people out to it like me.
I got a wheelchair, a walker, because I can't walk.
My legs get out coming here.
The knee.
Some things down out to really bad.
By the sidewalk for one, people have been killed.
Don't know already for three or four people trying to come out there.
There's no sidewalk to walk on.
You got to walk on in the road with a white line.
My friend just got run over it this last year by 18.
You got killed.
Something needs to be down out there, because people can't.
It's dangerous out there.
It's a worse road to drive on through.
And we need some trees out there at the tiny home, something to grow for shade.
There's nothing out there.
No shade at all.
And the bugs are starting to come in out there.
It's really bad.
But the main concern is my friend.
He can't get around.
You know, I appreciate it if you guys think about that.
Very much.
Thank you.
And thank you for coming, sir.
I have no further comment or sign up to speak.
Any further public comment from the audience today?
Okay.
We'll conclude public comment.
Thanks you for the input.
With all respect, we are well aware of the condition of the road,
the absence of sidewalks, the absence of shade.
But we do have housing there now, which we didn't have.
We're crawling before we walk and we're walking before we run.
Unless we're rolling.
Okay.
We love you.
You're part of our community.
We care about you.
We put our caring into first things first.
It's time to get on with some of the things.
We'll see what we can do as we go forward.
Right now, I know they're building the new restrooms and shower rooms.
You know, we can't even hear you because you're not at the mic.
But that's all right.
We understand what you're saying.
All right.
We'll conclude public hearing with that and move along to the next item of the agenda,
which is item E communications.
And I don't believe anyone today wishes to speak.
Is that correct?
Yeah, we're not.
Council has no communications.
But it's just national night out.
We might mention that.
Mr.
Yeah.
We're just going to mention two things.
One national night out.
We have about 29 block parties throughout the community.
It'll be celebrating this evening in the heat.
So I encourage neighbors to get out and get to know each other and stay hydrated.
And then on that topic as well, cooling centers for this heat wave we're experiencing.
Anybody needs access to cooling center or a place to cool down.
The city and the county both have a map that we sponsor where you can identify different locations throughout the community,
where you can go and cool off.
So please access those resources if needed.
Thank you, Mr. Manager.
All right.
That brings us to public hearings.
We only have a single item today, which is why we're meeting.
It's a...
Now, item 2, the subject is the appeal of determination of transit occupancy tax amount for shadow-oax hospitality ink. Mr. Manager, do you want to introduce the thing?
Actually, before we move on to this next item, we need about five more minutes. It sounds like for our IT department to figure out why the system is not.
We're working on a technical problem. The council will stand in recess for five to ten minutes. Hopefully we can get back as soon as the problem is resolved.
We'll be briefly recessed.
Thank you.
All right, it is now 52425.
Councilman Moreno has joined us. Just when we got to the business of the meeting, David.
So the timing is perfect apologies to all that we had to take a little time.
A little delay there, but now Mr. Manager would you proceed with item F.
Yeah, and the interest of time, I'm just going to hand it over to Ms. McKinney who will walk the council through the presentation.
Thank you.
Good afternoon. I'm Kim McKinney administrative services director and this afternoon we're here for an appeal hearing on the determination of a transient occupancy tax amount do for shadow ox hospitality.
As indicated in the staff report, whether recommended action is to conduct the public hearing.
For the appeal for the determination of the tax amount following administrative hearing for shadow in transient occupancy tax audit assessment issued on July 1st, 2026.
Concerning violation of municipal code chapter 3.12 for unpaid taxes penalties fraud penalties and interest and then to adopt the resolution to uphold the tax administrators determination and deny the appeal.
So briefly here, the municipal code chapter that we're talking about 3.12 is for our transient occupancy tax or TOT and also related is the tourism business improvement district or T bit on here.
So our woodland municipal code section 312 establishes our TOT program, which is a 10% charge on room rents at primarily at hotels here in town.
Per the ordinance the amounts collected for TOT must be held in trust in account for the city until they are remitted to the city.
Also require that monthly tax returns be prepared and that they are due by the 15th of each calendar month to the city finance department.
Similarly to TOT, it is 2% of the room rents and is also collected reported and enforced in the same manner as the TOT.
When there are delinquent payments of the tax, the municipal code outlines 4 areas that can be included in the calculation.
There's an original delinquency, so for the first 4 weeks that an amount is delinquent, there's an additional 10% late payment penalty that is added on to the original taxes do.
If there continues to be a delinquency after that first 4 weeks there's an additional 10% of a continued delinquency payment so total of 20% between the two for late payment penalties.
There's also a section for a fraud penalty which is 25% of the tax do when non payment is determined to be fraudulent.
And finally there's a allowance for interest on the unpaid taxes which is 1 half of a percent per month or portion of a month on any of the unpaid taxes but not on any of the penalties associated with that tax.
So a little history I went here tonight specific to shadow ends to excuse me to shadow oaks hospitality and they own and operate best western shadow in here in town.
We have been struggling for some time to get timely remittance of reports and payments starting in fall of 2022.
They did eventually get caught up but then ceased remitting payments for TOT and T-Bid in May of 2023.
From that time through June 30, 2026 there would have been 37 monthly payments that were due.
The city has received two payments during that time.
One in July of 2023 for partial payment of the May taxes due.
And a second in October 2023 for partial payment of August 2023 taxes due.
There was a third payment but the check was returned for insufficient funds so it's not included on here.
And there was just in the staff report we noted that there were three payments but one of those actually didn't count as a payment.
So since October 2023 we have received no money, no payment from shadow oaks.
During our communication with them via email and we're requesting reports and updates on payments.
The hotel management didn't note in several emails to the city manager and staff that economic hardship was a reason for nonpayment.
Noting increased utility costs, lending costs and general economic factors as a reason for nonpayment.
As I noted earlier, the requirements of the ordinance.
There are supposed to be a monthly TOT or tax return filed by the 15th following the end of each month.
During the period of May 2023 through now.
We received some of those those tax returns but many of them were laid if we received them in all.
And in many cases in lieu of filling out the return we did get a turnout from the hotel management software that was provided by shadow oaks.
So that we could do the calculations ourselves rather than the management completing their own forms.
So when we got those reports from shadow oaks and we reviewed them and we can see separate line items on those reports denoting that TOT and Tbit were collected by shadow oaks from the hotel guests, but they have not been remitted to the city.
No information of any kind has been provided since January 2026.
So we have reports up through January 2026 that allow us to determine what the TOT and Tbit is but for the months of May through June.
I'm sorry February through June we have received no reports.
There are taxes due that we have no information to calculate what those might be.
And I guess I'll just note that July's report and remittance will be due next week so we're coming up on another one.
So the determination of the amounts due that we're here to talk about today included taxes and assessment owed.
Late payment penalties fraud penalties assessed and interest on the unpaid tax balances.
And this is based on a point in time calculation.
And as I just mentioned we've only received reports through January of 2026.
The actual taxes owed through January 2026 of 695,580 dollars.
Late payment penalties which I described earlier, which is an original 10% and additional 10% for continued delinquency of 141,793 dollars.
And we've included a fraud assessment penalty here of 173,895 dollars.
And then interest on those balances of unpaid taxes of 78,371 dollars for a total due of 1,899,640 dollars.
And again that's a point in time actually.
Oh currently more than that but we don't have the information to calculate that currently.
And as every month goes by additional interest accrues on the unpaid balances as well.
I'd also want to note that the the appellant here tonight has not disputed any of the amounts for taxes owed.
Late payment penalties are interest calculation but they do indicate that they dispute the fraud penalty.
So this language in the when the municipal code is clear that all cult money collected from guests for taxes and assessment must be held separately for remittance to the city.
At the time the money is collected it isn't the hotels money anymore but rather funds owed to the city.
It's clear from the reports that the appellant has provided to the city that they did in fact charge their guests for the TOT and Tbit assessments.
It's also clear that they have not remitted those funds to the city.
As I noted earlier the appellant has previously stated through email community.
Education that their non-payment is due to their ongoing financial hardship, which really should not affect remittance of the funds held specifically for another entity.
The appellant does not dispute that they owe money, or any of the calculated taxes, late payment penalties or interest.
The appellant has recently indicated that it has made payments and intends to pay, but no payments have been made to the city for 33 months at this point.
They may know indication of when they intend to pay the city, even though these amounts have been collected by them and intentionally, they continue to retain the money legally owed to the city.
I believe if they were genuine and interest to comply with the municipal code, they would at a minimum pay the amounts that they do not dispute, which is the majority of the balance due at this point.
The appellant also continues to ignore the requirements of the municipal code, and it does not provide monthly tax returns or any information that the city could use to calculate taxes owed through current day.
It's based on these items, it's the termination of the tax administrator, the fraud penalty authorized by the Woodland Municipal Code is warranted.
And then this is all in the staff report, and I won't go through every one of it, but it's kind of a history of how we got here.
There is following a process that's outlined in the municipal code that allows for an administrative hearing when we when there are notified by the tax administrator of total amounts due.
We did hold that administrative hearing and tonight is the the appellants appeal of the finding based on that.
In addition to that, we also have filed tax leans for dealing with amounts through the January 2026 amount.
And it is likely we would continue to do that as we have more information available for amounts that were not covered on the leans before.
And so back here, we're just going to the recommended action is to conduct a public hearing.
And following the public hearing, we recommend that you adopt the resolution to uphold the tax administrators determination and deny the appeal.
Thank you, does that include your report?
It does.
Thank you, members of the council, you've heard the staff report.
Are there any questions that you have a staff.
I do.
Cost member Lansburg.
Thank you, Mayor.
Besides penalties, etc.
What other sanctions are available to the city when a business owner refuses to pay a due amounts?
For example, pulling their business license, pulling their occupancy permits.
Yeah, I don't believe the municipal code speaks to allowing anything like that.
Really, it ultimately says that any unpaid amounts become debt owed to the city.
And we have a ability to pursue legal collection of any debt that's owed to us.
But outside of that, it doesn't have provisions for the operating.
I don't know if the attorney wants to weigh in.
I declare counsel, but we can do it there.
We can take a closer look at those other options, but maybe available to the city.
I don't know the city, municipal code off the top of my head, unfortunately.
However, I think in terms of the interest and penalties, those are in the ordinance that governs the transient occupancy tax collection.
Or allow for in your ordinance outside of that particular ordinance.
That's the topic today.
We can take a look and explore that as well.
Additional questions?
Yes.
Who makes the call regarding the issue of fraud?
Per the municipal code is the attacks administrator, which is our city clerk.
What is the standard used to determine fraud?
There is no standard that's defined in the code.
Is there an amount pointing fingers trust me?
This has been since 2023.
This is August of 2026.
Why weren't you here six months after they didn't pay?
Well, like many businesses, right, we work with them to try to bring them current on past due taxes.
We've been communicating regularly with the hotel operator.
They indicated their intent to pay.
We have filed several leans for the past due taxes.
And we got to the point where they finally contested the amounts calculated, which prompted the administrative hearing,
which was held in front of the city clerk.
And then they appealed the determination of the city clerk.
So here we are before the council to make a determination.
Okay.
I may have others in a minute.
Go ahead.
Okay.
Thank you.
All right.
I don't believe the rest of us have questions.
So I think at this point it's appropriate for me to open the public hearing.
I invite the event to come forward and to state their case.
Normally speakers have three minutes for this purpose, but especially hearing, I think you can take a little more time.
And by the way, my name is Craig Hanson.
I'm council.
I'm council for the.
And your name Craig Hanson.
Next to me too.
Thank you very much.
Mr. Mayor.
Council members.
Just to remember where with the format, I have some some legal argument to make.
I brought Mr. Darshan Patel who is the corporate representative for Shadow Oaks.
He's prepared to talk about some things as well.
Is there a time parameter or format that we should be aware of.
Council respond.
I can speak to that.
There is no formal set time parameter.
You have about the same time that's.
I have to present your side so that would be about 15 minutes or so.
Okay. Thank you.
So I think I think what we'll do is we'll begin with with kind of my general legal discussion.
Of of how we see things.
And then I'll invite my client, Mr. Patel.
To talk a little bit about the financial hardship and the lack of fraud that we're dealing with here.
So you know as was made clear by the opening statements.
There are have been assessed the outstanding taxes.
There have been late penalties at $141,000 assessed.
Fraud penalties of 173,895 dollars.
That's what we're testing here today.
An interest of 78,000.
So the underlying principle amount, the late penalties and the interest are not contested.
My client intends to pay those is containing financing that we expect to have close by the end of this month to pay those.
And what we're here to talk about today is a lack of fraud.
So there were two code sections that were cited to support the fraud.
One, it's just section 3.12.070 with returns and remittances.
Makes no reference to the term fraud.
The term fraud actually appears in section 3.12.080.
Sub-C, which reads, if the tax administrator determines that the non-payment of any remittance due under this chapter is due to fraud.
A penalty of 25% of the amount of the tax shall be added there to in addition to the penalties stated in sub-sections A and B of this section.
Fraud is a serious term and it is defined under the law if it's not defined under the code.
And it's a term that refers to dishonesty and deceit.
And that involves a misrepresentation, a fact, or an omission, a material fact.
Everything that was contained in this report and that you'll hear from my client is that my client was always honest.
Submitted reports that the city was used to determine the taxes owed.
Was up front about the financial circumstances that my client and his family and the hotel were facing.
My client will talk a little bit more about that.
But never misrepresented anything.
There was never a false TOT return submitted.
There was never any under-reporting of taxable room revenue.
Never any concealed transactions.
Never every never any fabricated or altered financial record.
A no false statement that the taxes had been paid when they were not.
No representation intended to mislead the city.
And there's no secret diversion of funds to shadow oaks for their personal benefit.
And no deceptive device that caused or facilitated the nonpayment.
So the critical questions that remain unanswered are what was the lie.
What was concealed?
What record was falsified?
What false statements did shadow oaks make?
What, how was the city deceived?
The answer to the questions is none of those things happened here.
This is not an issue of fraud.
To put this in perspective, there's already obviously significant late penalties that my client will need to pay.
And if the standard that the city so far has been applying were these standard, which is, hey, you didn't pay them.
You knew you need to pay them and they remain unpaid.
Then late penalties and fraud penalties would be merged into one standard.
And there would be no segregation between the two.
That would render the fraud penalty meaningless.
Basically, anyone who didn't pay TOT on time would be guilty of fraud and subject to a 25% penalty.
Meanwhile, those folks who were dishonest with the city who submitted false information or misled the city would be held to the same standard as those who were honest.
And submitted the information and didn't pay because they couldn't, not because they were lying or dishonest.
So fraud means something.
Our legal counsel for the city knows that.
And as was submitted in the presentation, this standard of fraud was applied without really understanding what fraud is.
Because there's no definition of in the code, but there's certainly a definition of law.
And it is deceit and is dishonesty that did not occur here.
So I'd like to bring my client, Mr. Patel, I've been proud enough to represent Shadow Oaks and the Patel family for over 10 years.
He's going to talk a bit about the financial circumstances that led to the inability to pay.
And the efforts to obtain financing that were hopeful are going to manifest within weeks to allow full repayment of the TOT.
So can you just tell the council who you are and how you relate to the hotel?
Absolutely.
So my name is Marshall and Patel.
I am the owner representative for Shadow Oaks.
Is it too close?
Stay close.
Can you hear me?
My name is Marshall and Patel.
I'm the owner representative for Shadow Oaks Hospitality.
And Mr. Patel, were you always, you and Shadow Oaks were always honest with the city with regard to financial reporting TOT and your financial hardship.
Absolutely.
Did Shadow Oaks ever falsify any records or reduced tax with room revenue shown in the reports of the city?
No.
Did Shadow Oaks creating false exemptions?
Or keep a second set of books for concealed room transactions from the city?
No.
Did Shadow Oaks ever miss identified the operator or his seal that who won't demand to hotel?
No.
And during the delinquency, did Shadow Oaks continue providing the city with information from which the city could calculate the taxes do?
Absolutely.
Let's talk about the financial distress.
What happened with the...
Was there a renovation that occurred in 2021?
That is correct.
And what renovation was that going?
Refreshing gas bedrooms with new furniture, new carpeting wall textures and such.
And about how many rooms were being renovated?
At that time, 30.
And was there any difficulties with the contractor working on that project?
Absolutely.
We left.
We made way.
So the contractor abandoned the work during a remodel of approximately 30 rooms, which I write.
And the lobby.
Yes.
What effect did that have on the lobby in the breakfast operation?
Guess what after checking in at Kiosk in one of the guest bedroom, there is no breakfast offerings.
The lobby opened until May of 2023.
And how did that affect the guest experience?
It affected them.
I mean, guests stay with us for breakfast and a bedroom and a lobby to get away from the bedroom.
So it definitely affected them fully.
And it's construction expanded what happened to the number of rooms available to guests.
It kept shrinking. At the largest one in shrinkage about how many rooms were on the bill? 60 out of how many? 122. So about half the hotel was shut down. Correct.
And that obviously eliminated revenue, producing inventory during the market recovery is that right? That is correct.
And approximately how long did Shadowlbs obtain financing to continue the renovation in September 22?
That is correct, yes. And who did obtain financing through?
State Bank of Texas.
Okay. And fortunately, what was the interest rate?
6.75% five-year term.
Interest only.
And was that variable?
Yes.
And what did that ultimately climb to?
15%.
Okay.
And at times was the monthly payment up to $120,000 a month?
Yes. 120,000 plus.
Okay.
And about what were the monthly revenues during the time that you were paying a $120,000 on lender fees?
Anywhere from 98,000 to 200,000?
What happened to the annual revenues by 2025?
It had gone down over 40% in revenue.
So what was it before and after of the decline?
It went from 3.5 million down to 1.9 million.
And besides the construction costs and the lender costs,
what were the general expenses just to keep the hotel going?
First obligation is your lender.
Then your second one is your franchise and your OTAs.
Your third would be your payroll and your taxes afterwards regarding your payroll taxes.
And then after that you have your utilities.
And even though revenues decreased by half, did the expenses decrease?
No, they actually increased with inflation.
After making all the payments were absolutely necessary to keep the...
Well, let me ask you this, in addition to paying the expenses just to keep the hotel going,
did you and your family fund any personal funds into the business?
Yes, my wife and I funded it.
Out of your own personal savings?
That is correct.
So after all these payments and funding the operations from your personal savings,
was there any money left over to pay the TOT?
No.
Did you and your family divert any income to your pockets rather than paying the TOT?
No.
And if you had not paid the franchise fees, the ongoing operational expenses,
the lender fees, what would have happened to the business?
First obligation if I didn't pay the lender, they would take the keys the following day of the day.
Third or second one would be franchise.
If you do not pay your franchise fees, they take you off the public or the OTA or your online.
So there's no reservations coming in.
After that, if you don't pay payable, you have no staff.
Nobody's cleaning the rooms.
Nobody's at the front desk.
After that, if you don't pay your PG&E or water bills or something.
And during this time of hardship, what measures did Shadow Oaks take to reduce costs?
Shadow Oaks got rid of all senior management, all revenue management, all marketing.
Did anyone at Shadow Oaks ever instruct the hotel personnel to hide room revenue from the city?
No.
Did anyone at Shadow Oaks ever knowingly submit a false report to reduce tax?
No.
Did Shadow Oaks ever make any false statement to induce the city refrain from collecting the TOT?
No.
What are the current efforts right now to obtain financing to pay the city?
Absolutely.
So we're looking at the whole intentions have been to find financing that's feasible, not just financing to get out to get to another.
You know, Jack to pay Jill or Jill to pay Jack.
How long have you been making efforts to re-finance the hotel?
Since 2023.
And what is the current status of those efforts?
We have a lender, such a close at the end of the month.
And assuming that we arrive at a figure that includes the taxes, the late payment penalties and the interest
is it Shadow Oaks's intention to use the refinancing funds to pay off those demands?
That's correct.
And even with the money from the refinance, we still be working with limited funds to keep the business going.
We'll be continuing to work the business, yes, with funds.
And would a late or fraud penalty, almost $174,000, impeded the business's ability to recover from its financial hardship?
Absolutely.
Also, I am just interjecting since it's been about 15 minutes.
So if you could wrap up your opening and then you'll have a chance for a re-bottle after the cities re-bottle as well.
Okay.
So thank you.
And I just, just to close, you know.
Obviously, businesses suffer from hardship.
It happens.
Unexpected situations, contractors leaving the job.
Lenders having sometimes predatory loan terms.
This is a business that is a well-mitting family that employs a lot of folks and is doing what it can
to recover from this.
And intends to make the city whole on the outstanding taxes of it did not commit fraud.
It's never been dishonest with the city.
It hasn't concealed anything.
It hasn't just represented anything.
So we asked that the city not issue un-supported fraud penalties against this decision.
Thank you.
At this point, I suppose the city has the opportunity to respond.
I don't know if there's much to respond to.
Do you wish to respond to any of the statements made?
We do have a couple of comments, yeah.
First, I would say that in regards to what the appellan just mentioned here.
This would not be the first time that we've heard that financing was imminent to pay amount
due to the city.
We've been hearing that for almost three years now that it was imminent.
We were having, you know, into the month we're going to pay you.
We're going to pay you.
And like I mentioned before, it's been almost three years since we received any payment whatsoever
from the appellant.
They walked through here the financial hardships that they are facing
and in doing so basically admitted that they took the city's money and spent it on other things
that they were required to admit, remit the money to us,
but they instead spent it for other items to run the hotel business.
And also, you know, one of the questions that was asked there was whether or not the
appellant had ever, or had they been providing information to the city all along
so that we could count or do an accounting of how much they owe us.
And Mr. Patel responded, absolutely.
They've provided the information to us and we have not found that to be accurate along the way.
They have not provided the information in a timely manner.
In many cases, it took finally their attorneys sending it to us.
Sometimes, you know, six, seven, eight months late, and they still refuse to provide the data to us.
So I think it's dishonest for him to say that they absolutely have provided the information to the city to allow us to do the calculations for the TOT.
I think that covers it just ultimately and all the information they provided about their operations is really essentially irrelevant.
It is not their money to spend.
Thank you.
I think probably rather than asking Council to comment at this point,
we'll go for a rebuttal and then it comes back to us to resolve.
Okay.
So you have a few more minutes if you wish to respond to the things that Kim has said.
Thank you.
And again, it comes down to they haven't paid.
There's there's a remedy for that and it's the late payment penalty and the interest,
which are not insignificant, which my client acknowledges will be paid.
Yes, there have been prior efforts to refinance.
There have been hope that those efforts would manifest.
I've been closely working with my client to get that refinancing done.
And my client is here to tell you under oath today that those efforts are manifesting.
There's there's final walkthroughs.
There's we're at the point now.
We're ready to have a funding actually by the end of this month.
So we're all going to get this resolved.
Thank you, sir.
And thank you.
All right.
That brings it back to us.
And we have to decide whether to sustain the decision of the staff or to sustain the appeal.
And Mr. Mayor, since this is a public hearing.
If we have any comments from the public generally, that would be a good time to.
All right.
It is a public hearing.
So I'm going to open the public hearing.
Are there any comments?
I see no one in the room.
I met him clerk.
Is there anybody online?
Oh, I apologize.
You know, something you were perfectly covered by these two gentlemen.
So I didn't even see you.
I apologize.
Since I'm here.
I think that what the city is saying was fraught that they collected the money and didn't
get to them.
And I don't think that was touched on.
And I do houses and stuff all over the place.
I like the body and say, oh, I can't tell my linden.
I'm going to pay you in no pain.
And 33 months.
Nobody would step along to collect.
And did you identify yourself for the record?
Oh, my name is Dr. John Jackson.
I'm a resident of Woodman.
Thank you.
All right.
Okay.
Any additional public comment?
All right.
I apologize for missing you.
All right.
There being no further public comment.
The hearing is closed.
And now that we've heard from both the staff and from the appellant.
And we've been back and forth.
It had heard from the public.
It's now in the council's hands to decide.
Is anybody wish to speak?
Are we allowed to ask the appellant or it's council questions?
Yes.
You're allowed to ask questions.
Tell me.
Council, you would have dreamed that your client runs a hotel.
That's correct.
And you would have dreamed that your client is aware that the city of Woodland has a TOT.
That's correct.
And you agree that your client had paid TOT in the past while they're up to yes.
You, you, you relied heavily on the word honesty.
And I, I think you should.
But one of the questions I have is, if your client collected the TOT from the guest,
I wasn't that put aside knowing it doesn't belong to him.
Would you like to respond?
So the TOT funds are deposited with the whole entire deposit.
It's not a separate account.
It goes into.
So when you get, when you come in to the best Western, when you hotel,
$100 plus tax.
So let's say it's 12% tax.
That's 12 dollars.
So the deposit's going to be $120.
Now if that came through at OTA, they're going to subtract their 25%
20% OTA is like booking.com.
Expedient such.
Then, you know, and, and so forth.
So, unfortunately, there's no way for us to extract your TOT or the any tax
dollars to the side.
It automatically goes.
It gets deposit as one lump sum.
Mr. Patel, it's my to stand here.
The only hotel in City of Woodland who's behind in their TOT.
How do other hotels do it?
Pardon me?
How do other hotels collect and set aside their TOTs?
So for us, I mean, I'm not sure how other people operate their hotel.
Do you ever ask another hotel how they do it?
No, they, their deposits come in the same way our deposits come in.
Let me ask you a question.
Is that 10% your money or it's belong to the city?
It belongs, I mean, it's, I'm not denying it.
It doesn't, it doesn't belong to me.
Not your money is it?
I never said I'm denying it.
Okay.
Why don't you set it aside?
In some other fashion, talk to an account, talk to your lawyer.
To figure out a way to set that money aside.
And you would be here today.
Had you done that?
To be honest, there's no possible way for us.
Because they make it, or I don't believe that, sir, at all.
There's other hotels are doing it.
You collected the 10% from your guest.
There has to be an accounting, a method, a banking method.
Talk to your counsel about setting that aside and giving it to the properties.
Sir, we take in 180,000 maximum deposit or overhead is fixed up to 40.
I'm not asking that.
I'm asking you, if that's your money.
I never denied.
I never said it was my money.
My question is, why wasn't it set aside?
In some fashion.
I'm explaining to yourself, sir.
I'm not buying that explanation.
It's the problem, sir.
Did you look at methods of finding a way to set it aside?
Sir, there is no way for us to set it aside.
That's what I'm trying to convey to you.
Is that if the 240 break even, right?
And monthly income is 180.
There's a negative loss of 60,000 a month.
Is this...
This is your first venture in hotel business. No, sir. Have you run into the same problem in other hotels,
collecting TOTs? No. It's the first time. Yeah. Okay. And it's been going on for like, three,
three or four, three plus years. What have you done to change the method of collecting the TOT and
setting aside? To be, we've been trying to seek financing. We've been trying to work with it,
but there's an influx of room capacity in town. So, we don't, our argument isn't where it is.
How we're supposed to, I mean, revenues and where it used to be over half, we, we already explained
we're going to 3.3 million dollars per dollar down to less than 1.9 million.
What's up, okay? Do you have a, I just, yes, I just respectfully say, you, you, you collected
the TOTs that wasn't your money, but you used it for your needs. To me, that's fraud. It isn't that you're
not a nice person and that you're not working very hard to save a business, but it seems to me,
the business may be more gone than you think anyway, but that's not our issue today. The issue is,
you collected TOTs that was, to which we were entitled at the city of Woodland and you didn't give
it to the city of Woodland. You instead converted that money for other purposes. I don't know, but to me,
that's fraud. So, that's all I have to say and it isn't that it wouldn't like to help you, but the fact of
the matters, we've already gone way, way too long. We have issues here too to fund the city,
meet the needs of all of the residents here and things real tight for us too. So, we have to depend
that TOTs collected is TOTs delivered and it wasn't delivered. It was converted to other purposes.
Now, you're, however you're accounting, you have to own up to that. That's your business, but the
fact of matter is the city was entitled this money month by month by month and now we're pushing
three years. So, I feel like we cannot extend more good will to you. We have to give us what the law
and TOTs us too and that's how I intend to vote today. Anybody else want to speak?
Now, Mara, I had the same question. So, those taxes were collected in, from what I understand,
were to be held in trust and that clearly was not happening. So, they were, they were divided and used
for another purpose, which in my mind comes across this fraud. All right, are you ready for motion?
David? Well, to add on to everybody. But why the delay in communication, it seems like it was patchy.
And there's a disconnect of you saying that you were, you know, providing these reports but staff is
letting us know that you weren't providing this information and that could have prevented
this from escalating here. So, aside from myself, there was a mentoring team,
management team, that was operating now. That's no longer there. That's correct. That took over October
2025. October. Okay. Thank you. My wife, Dad, sorry.
We have a question for staff.
Okay. The, the business owed the city besides the TOT reports. Correct.
Could the appellant have submitted reports on a regular basis as they're due without paying the tax?
Yes, absolutely. And you failed to pay even filed a report. Correct. I mean, and as I mentioned a
number of times in here, we have received no reports from February through June so far this year either.
I'm going to turn to council. Please explain why the appellant did not file reports when they were due.
It looks like there were quite a few that were due late and not at all.
Because the city sued my client prematurely before allowing the public hearing.
And so the reports were submitted through council as part of the litigation process and as part of the
discovery process. So, one of the things we're dealing with right now in this superior court is why
did the city sue my client before exhausting its remedies and allowing this public hearing. We have
the motion to dismiss pending before the court right now because the city did what it was not supposed
to do, which was sue my client before giving it the right to a public hearing. So the reports were submitted
to council who submitted them to council for the city. That explains the delay.
Good.
Ms. McKinney?
I still believe that our council has not received reports for the last six months either.
So even if it's what he said is true that council is submitted to council.
I don't believe that they have submitted the most recent reports either.
Even if there was a delay, we'd be happy to receive them but we have not.
All right. So we have a conflict of perspective on that issue.
Mason, we need at this point, it's time to make a decision. I've tipped my hand. I think
one of us has as well. Someone want to make a motion.
I move that we uphold the tax of administrative determination and divide this appeal.
Thank you.
Madam, our legal council does that motion accommodate the objective here?
Yes, that's the motion that is attached to the staff report by way of resolution. So yes, that's.
All right. Thank you. That's the motion for today.
Thank you. Is there a second?
Oh, you have a second. I'd like a second and then we'll have further discussion.
I'll second that motion. Oh, we have a motion on the floor to sustain the staff's action at
the in this matter. And now we're going to have further discussion.
The former mayor. Thank you. Regarding the fraud portion of the
170,000 dollars in fraud fees, is there a way to stay that pending payment?
That is due for TOT penalties and interest.
Yes. So that could be part of the motion that you make today. It could be a motion to approve the
resolution with that addition. That could be included in the resolution. It could be reviewed by the
city attorney's office before adoption. And as far as I don't want to come back here in the
year to be in the same situation, can there be a requirement in any resolution that the
appellant be timely with his payments as well as his reports?
We can include that in the resolution. However, it would be up to a
appellant to be timely with the payments.
Can you stand in my concern council? Absolutely. How could we address that?
Well, frankly, with regard to a agreement to have the timely reports submitted, the payments
submitted, and particularly in making, for example, stay the fraud penalty subject to compliance.
And if there is non-compliance, then have that reinstated?
Yes. And lastly, council, I'm very concerned about your client's answers.
Do my questions about how to remedy this in the future? I didn't get a good answer.
Other hotels do it every day. They set that money aside. They must have an accountant or a
bookkeeper or some method of doing that. And then you take care of business at the end of the month.
I didn't hear anything solid or that assures me that this is going to occur again.
Well, we can say is that the renovations that it caused all the distress and the issues are
complete at this point, that the funds will be used to further strengthen the business.
And I will tell you that I will be working with my client to ensure that we avoid this sort of thing going forward.
So, one of the renovations get done.
They're incomplete.
Well, they're incomplete.
They're incomplete.
Well, the 22 rooms. Yeah, those are incomplete. That's right.
What is your current occupancy rate?
My current occupancy.
30 to 50 percent.
Pretty low. Pretty low. Yeah.
And you have an explanation why?
Over supply, both ends, you know, a varies, but I think supply has a lot to do with it.
Okay. All right. There's a motion on the floor. It's been seconded. We've had some further
discussion. Is there any one else a whistle to weigh in?
I read a devote on the basic motion.
All in favor, say aye. I pose.
We can only wish you the best as you go forward, but I would suggest the whole's bigger
than you may think it is. And you may have to pursue other remedies for your situation.
But the city of Woodland, the people who depend on this revenue have it are entitled to have it.
It was not given to them in timely fashion. And now we're worth the end of the road.
So we're doing what we need to do. You can do what you need to do.
And I apologize for all the hassle, but we didn't create the situation. Okay.
With that, anybody have a moral German or anything else?
All right. We're adjourned.