1
00:05:03,660 --> 00:05:05,020
Recording in progress.

2
00:10:32,620 --> 00:10:37,860
Although it's four o'clock, we're going to wait five more minutes for our remaining colleague who has not arrived.

3
00:15:38,100 --> 00:15:49,940
Good afternoon, everyone. It's now 4.05 p.m. This is the, actually, a regular city council meeting on August 4th of 2026, held at a special time, 4 p.m.

4
00:15:50,680 --> 00:15:55,700
And I would like to ask our clerk to call the roll, please. Marisa?

5
00:15:56,100 --> 00:15:57,000
Councilmember Lansberg?

6
00:15:57,300 --> 00:15:57,560
Here.

7
00:15:57,960 --> 00:15:59,080
Councilmember Garcia-Cadena?

8
00:15:59,480 --> 00:15:59,640
Here.

9
00:16:00,080 --> 00:16:00,700
Mayor Stollard?

10
00:16:00,900 --> 00:16:01,320
Here.

11
00:16:02,140 --> 00:16:04,500
Councilmembers Vega and Moreno are absent.

12
00:16:04,500 --> 00:16:12,580
All right, we expect Councilmember Moreno momentarily, but Councilmember Vega is out of town

13
00:16:14,300 --> 00:16:20,620
All right, well now begin with the Pledge of Allegiance. I will leave it today. Please join me

14
00:16:20,620 --> 00:16:21,300
I

15
00:16:24,210 --> 00:16:30,590
pledge allegiance to the flag of the United States of America and to the Republic for which it stands

16
00:16:30,590 --> 00:16:35,590
One nation under God indivisible with liberty and justice, Carl.

17
00:16:36,590 --> 00:16:38,110
I don't know what that means, guys.

18
00:16:38,510 --> 00:16:38,870
Pardon me?

19
00:16:39,690 --> 00:16:39,770
No.

20
00:16:40,050 --> 00:16:40,370
Yeah.

21
00:16:40,650 --> 00:16:40,890
Okay.

22
00:16:41,430 --> 00:16:41,890
All right.

23
00:16:44,780 --> 00:16:48,860
And this brings us to item D, which is public comment.

24
00:16:49,380 --> 00:16:57,780
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.

25
00:16:57,780 --> 00:17:01,580
So Madam Clerk, do we have any expressions of public comment today?

26
00:17:01,960 --> 00:17:03,580
I have two speakers signed up to speak.

27
00:17:04,140 --> 00:17:05,720
First is Amel Ben-Hodge.

28
00:17:07,340 --> 00:17:07,860
Okay.

29
00:17:10,210 --> 00:17:11,790
And your first name is Amel?

30
00:17:12,290 --> 00:17:12,450
Yeah.

31
00:17:12,610 --> 00:17:13,350
Yeah, welcome.

32
00:17:14,130 --> 00:17:19,690
Come right up and speak into that microphone or no one on watching remotely will be able

33
00:17:19,690 --> 00:17:20,150
to hear you.

34
00:17:20,330 --> 00:17:20,410
Okay.

35
00:17:20,870 --> 00:17:21,150
Okay.

36
00:17:21,570 --> 00:17:22,090
Hello.

37
00:17:22,330 --> 00:17:23,470
My name is Amel Ben-Hodge.

38
00:17:23,850 --> 00:17:28,730
And I'm here to support Valerie Quintero's proposal for Fourth in Hope.

39
00:17:28,730 --> 00:17:33,990
So, my family has been volunteering there for the last year, mostly teaching art and

40
00:17:33,990 --> 00:17:35,670
just hanging out with the residents and talking.

41
00:17:36,290 --> 00:17:38,270
And they are some of the kindest people I've ever met.

42
00:17:38,790 --> 00:17:42,130
In spite of some of the hard things they have faced, they never complain.

43
00:17:42,670 --> 00:17:44,410
They tell their stories with humor and dignity.

44
00:17:45,330 --> 00:17:50,790
Residents are often seniors battling cancer, depression, dementia, and other difficulties

45
00:17:50,790 --> 00:17:51,850
that are not their fault.

46
00:17:52,370 --> 00:17:55,970
Many grow up in abusive homes or suffer from domestic abuse.

47
00:17:55,970 --> 00:17:58,890
Many were injured when they were doing military service.

48
00:17:59,390 --> 00:18:05,290
Studies show that lack of green space increases risk of anxiety and depression and worsens

49
00:18:05,290 --> 00:18:06,390
mental health conditions.

50
00:18:07,050 --> 00:18:12,050
The tiny homes are of course a blessing but as you drive there you notice just one small

51
00:18:12,050 --> 00:18:16,050
tree out front with many trees squeezing into the little bit of shade.

52
00:18:16,610 --> 00:18:22,950
You also often see people trying to get into the city on busy roads in their wheelchairs

53
00:18:22,950 --> 00:18:24,150
so that they can get their groceries.

54
00:18:24,150 --> 00:18:29,390
trees. I would be so proud if our city could show the rest of California how to better treat

55
00:18:29,390 --> 00:18:34,690
vulnerable people with dignity by making this place a little greener and safer. After all,

56
00:18:34,710 --> 00:18:37,210
we are the city of the trees. Thank you.

57
00:18:37,730 --> 00:18:43,130
Thank you. Appreciate your coming. And you said we have another card too today?

58
00:18:43,390 --> 00:18:45,290
Next speaker is Fatima Ben-Hash.

59
00:18:46,770 --> 00:18:47,510
All right.

60
00:18:50,020 --> 00:18:52,340
Welcome. I'm Fatima.

61
00:18:56,430 --> 00:18:59,790
I'm Fatima, a resident of Woodland, and I'm also here

62
00:18:59,790 --> 00:19:04,910
in support of Valerie Quinteros with Forth & Hope to give some reasons that Woodland should

63
00:19:04,910 --> 00:19:10,530
increase trees in nature along roads, especially near the East Beamer and Coroad 102 area.

64
00:19:11,310 --> 00:19:15,440
First of all, it's important that the city of Woodland consider the mental and

65
00:19:15,440 --> 00:19:19,920
health of unhoused and formerly unhoused populations in city planning decisions.

66
00:19:20,680 --> 00:19:24,640
Research done by the USDA has shown that spending time around trees reduces

67
00:19:24,640 --> 00:19:29,320
stress and anxiety, lowers blood pressure, and improves mood. This is especially

68
00:19:29,320 --> 00:19:33,500
important for senior populations. California's unhoused senior populations

69
00:19:33,500 --> 00:19:38,340
are growing rapidly with adults over 50 making up nearly 40% of those

70
00:19:38,340 --> 00:19:43,200
needing shelter. Having more nature will lead to better physical and

71
00:19:43,200 --> 00:19:48,060
mental well-being for these populations. Secondly, trees can make cities feel up

72
00:19:48,060 --> 00:19:52,340
to 14 degrees cooler, which is especially important in this weather. We're here in an

73
00:19:52,340 --> 00:19:53,160
air-conditioned room.

74
00:19:56,180 --> 00:19:57,960
We're here in an air-conditioned room, but imagine

75
00:19:57,960 --> 00:20:01,260
what it's like to be constantly outside without shelter when it's

76
00:20:01,260 --> 00:20:07,460
consistently in the hundreds. Thank you. Thank you. Are there additional cards?

77
00:20:07,460 --> 00:20:10,420
I do have one additional speaker Valerie Quinteros.

78
00:20:11,180 --> 00:20:14,760
All right. Well, please proceed. You have three minutes.

79
00:20:19,210 --> 00:20:21,110
They may still be signing up to speak.

80
00:20:35,080 --> 00:20:37,200
Next speaker is Valerie Quinteros.

81
00:20:43,290 --> 00:20:43,730
Welcome.

82
00:20:46,780 --> 00:20:47,560
I'm so sorry.

83
00:20:50,730 --> 00:20:52,350
We're going to start the clock over.

84
00:20:53,170 --> 00:20:54,950
We're having some technical deputies on our side.

85
00:20:54,970 --> 00:20:55,130
Okay.

86
00:20:57,210 --> 00:20:57,590
Okay.

87
00:20:57,790 --> 00:21:00,730
That's my breath. We had to take the beeline and it was late. Sorry about that.

88
00:21:01,730 --> 00:21:03,550
Good evening, City Council members.

89
00:21:03,810 --> 00:21:05,610
My name is Valerie Quinteros. Thank you.

90
00:21:05,610 --> 00:21:08,750
for giving me the opportunity to speak tonight.

91
00:21:08,950 --> 00:21:12,450
I am here because I care deeply about the community

92
00:21:12,450 --> 00:21:13,230
I live in.

93
00:21:13,310 --> 00:21:16,530
I live at the community of Hope Tiny Homes on East Beamer.

94
00:21:22,570 --> 00:21:25,210
The community is made up of seniors,

95
00:21:25,910 --> 00:21:27,750
those who have gone through hardships

96
00:21:27,750 --> 00:21:31,350
and people with mental disabilities,

97
00:21:32,110 --> 00:21:35,750
like for example, myself, bipolar disorder and PTSD.

98
00:21:37,110 --> 00:21:38,990
We, I don't even need these cards.

99
00:21:39,210 --> 00:21:43,730
Let me just tell you, we cannot travel out of the tiny home.

100
00:21:43,910 --> 00:21:46,070
Some of the seniors have not left in three years,

101
00:21:46,150 --> 00:21:48,430
only when a case manager picks them up

102
00:21:48,430 --> 00:21:49,950
to take them to a doctor's appointment.

103
00:21:50,830 --> 00:21:52,370
The potholes are severe.

104
00:21:52,650 --> 00:21:54,670
I go to college and I pass on the scooter.

105
00:21:55,150 --> 00:21:57,690
The potholes are all through the street.

106
00:21:57,910 --> 00:22:00,390
There's no way of avoiding them going around them.

107
00:22:00,930 --> 00:22:04,330
The street is horrible and there's no sidewalks

108
00:22:04,330 --> 00:22:12,030
On my way home from school on several occasions, I see Frankie on his, usually he's in a wheelchair,

109
00:22:12,290 --> 00:22:16,970
he's on a scooter today, but in his wheelchair trying to get to A.M.P.M.,

110
00:22:17,430 --> 00:22:24,530
a couple feet away from semi-trucks. I too have almost been hit on my way to and from school.

111
00:22:24,950 --> 00:22:30,350
There's no sidewalks, there's no safe area. The bike lanes have debris in them,

112
00:22:30,350 --> 00:22:37,490
glass weeds growing up through them on East Beemer itself and also green areas.

113
00:22:37,930 --> 00:22:43,910
There's no trees, there's no sitting areas for the people. I know when they

114
00:22:44,650 --> 00:22:49,250
brought the plan to you it looked like a lot of community areas, a lot of green

115
00:22:49,250 --> 00:22:53,850
areas. I've seen those pictures. It's not what it is today. It's a hard paved

116
00:22:54,910 --> 00:23:01,370
hard pavement, hardscape, not a landscape, and I see some of my senior neighbors health

117
00:23:01,370 --> 00:23:07,230
digressing. I take care of one of the seniors across the way from me. He's in his 70s. I

118
00:23:07,230 --> 00:23:12,710
bring him dinner every night. I'm not an IHS worker. I go to school. We just share

119
00:23:12,710 --> 00:23:18,810
our dinner with him. And his health is digressing. He has nowhere to walk and sit and enjoy

120
00:23:18,810 --> 00:23:25,310
his life. They're isolated in their apartments and he's not the only one. I brought one of

121
00:23:25,310 --> 00:23:30,910
my friends, Robert Talley, he's going to speak as well. But the seniors are isolated in their

122
00:23:30,910 --> 00:23:36,410
apartments, their air condition. I tried to just deliver the Zoom ID to all the apartment

123
00:23:36,410 --> 00:23:40,110
chest area and I had to come home. It was so hot for me and my dog to be out there.

124
00:23:40,670 --> 00:23:45,050
There needs to be more trees and I have an idea for that is to partner with the

125
00:23:45,050 --> 00:23:51,590
community, the community gardens that are in the area, Woodland community gardens,

126
00:23:51,990 --> 00:23:56,670
maybe they can partner with us because a lot of the people that live there are

127
00:23:56,670 --> 00:24:03,590
not physically or mentally capable to maintain a landscaped plot. So if we

128
00:24:03,590 --> 00:24:09,590
partnership with the schools or companies, foundations, as well as when my

129
00:24:09,590 --> 00:24:15,850
my son passed away. My job had sponsored a bench for him with his name on it. It didn't

130
00:24:15,850 --> 00:24:21,590
just become somewhere to sit. It was a remembrance of my son. And if you have others that would

131
00:24:21,590 --> 00:24:26,930
like to sponsor a bench or a tree that they can have their family name on or their company

132
00:24:26,930 --> 00:24:33,470
name to support the community of hope, there's ideas that we can do that are not going

133
00:24:33,470 --> 00:24:38,230
to be funded, you know, that the community can help us,

134
00:24:38,750 --> 00:24:41,810
but we need to humanize the people that are out there.

135
00:24:42,290 --> 00:24:44,270
They think of us as a community of delinquents.

136
00:24:44,270 --> 00:24:45,830
About 15 more seconds, okay.

137
00:24:46,190 --> 00:24:47,730
We're not delinquents, we're people,

138
00:24:48,150 --> 00:24:50,350
let's not just survive, let's thrive.

139
00:24:51,670 --> 00:24:54,330
Thank you for coming, all right.

140
00:24:55,010 --> 00:24:59,190
And was anyone else wishing to speak tonight, today?

141
00:25:03,930 --> 00:25:05,610
Marissa, do you have an additional card?

142
00:25:06,010 --> 00:25:06,430
Apologies.

143
00:25:06,430 --> 00:25:07,650
I do have two more cards.

144
00:25:07,790 --> 00:25:09,110
Next is Frankie Silva.

145
00:25:10,590 --> 00:25:11,930
Come on up, Mr. Silva.

146
00:25:12,190 --> 00:25:14,510
Pull that microphone down to you if you can.

147
00:25:14,570 --> 00:25:16,410
If you can't, we'll bring you a portable one.

148
00:25:21,290 --> 00:25:23,470
The clerk is bringing you a portable mic, okay?

149
00:25:24,850 --> 00:25:25,770
Thank you.

150
00:25:26,030 --> 00:25:27,630
That way you can look at us.

151
00:25:28,570 --> 00:25:32,030
My name is Frank Silva, and I too live in the tiny homes.

152
00:25:32,610 --> 00:25:35,530
And it's very difficult for me to get to the store

153
00:25:35,530 --> 00:25:37,270
while I'm barely a mile.

154
00:25:37,950 --> 00:25:39,290
The roads are all messed up.

155
00:25:39,290 --> 00:25:43,690
and it's hard for me to get out and I want to get out and explore more things.

156
00:25:43,890 --> 00:25:48,190
I do dialysis four times a week where I have to go around the corner.

157
00:25:48,330 --> 00:25:50,870
It's just around the corner, but it's still a lot just to get there.

158
00:25:51,590 --> 00:25:54,090
And I only have this to get me there.

159
00:25:54,230 --> 00:25:55,770
And I already have broken my wheelchair.

160
00:25:57,910 --> 00:26:00,630
And my Medi-Cal along in cover so much.

161
00:26:01,130 --> 00:26:03,510
And I really want to get out and do more stuff.

162
00:26:03,730 --> 00:26:08,010
And I'm just beginning to better my health wise.

163
00:26:08,010 --> 00:26:16,210
and so I want to enjoy what every time I do have you know and yeah I wanted if you

164
00:26:16,210 --> 00:26:23,530
guys could help any help assistance please we appreciate your coming today we

165
00:26:23,530 --> 00:26:28,690
know it probably takes a big effort for you to be here yeah thank you thank you

166
00:26:28,690 --> 00:26:34,050
sir next speaker have is Robert tally hi

167
00:26:41,570 --> 00:26:44,490
it's pretty much the same what he was

168
00:26:44,490 --> 00:26:47,410
saying to, you know, there's people out there like me.

169
00:26:47,530 --> 00:26:49,230
I got a wheelchair and a walker because I can't walk.

170
00:26:49,430 --> 00:26:50,970
My legs get out coming here.

171
00:26:53,150 --> 00:26:59,310
You need some things done out to really bad, like the sidewalk

172
00:26:59,310 --> 00:26:59,830
for one.

173
00:27:00,350 --> 00:27:02,150
These people have been killed on there already for three

174
00:27:02,150 --> 00:27:03,950
or four people trying to come out there.

175
00:27:05,010 --> 00:27:06,810
There's no sidewalk to walk on.

176
00:27:06,910 --> 00:27:09,850
You've got to walk in the road with a white line.

177
00:27:10,850 --> 00:27:13,770
My friend just got run over this last year by an 18

178
00:27:13,770 --> 00:27:21,070
or got killed. Something needs to be done out there because people can't, it's dangerous

179
00:27:21,070 --> 00:27:28,490
out there. It's the worst road to drive on to. And we need some trees out there at the

180
00:27:28,490 --> 00:27:35,270
tiny home, something to grow for shade. There's nothing out there, no shade at all. And the

181
00:27:35,270 --> 00:27:39,890
bugs are starting to come in out there. It's really bad, but you mentioned Cern is

182
00:27:41,030 --> 00:27:47,250
my friend he can't get around you know I'll appreciate if you guys think about

183
00:27:47,250 --> 00:27:55,980
that very much thank you and thank you for coming sir I have no further comment

184
00:27:55,980 --> 00:28:02,160
or sign up to speak any further public comment from the audience today okay

185
00:28:02,160 --> 00:28:08,200
we'll conclude public comment thank you for the input with all respect we are

186
00:28:08,200 --> 00:28:13,120
well aware of the condition of the road, the absence of sidewalks, the absence of

187
00:28:13,120 --> 00:28:22,900
shade, but we do have housing there now, which we didn't have. So we're crawling

188
00:28:22,900 --> 00:28:30,060
before we walk and we're walking before we run, unless we're rolling. Okay, we

189
00:28:30,060 --> 00:28:34,640
love you, you're part of our community, we care about you, and we put our

190
00:28:34,640 --> 00:28:38,980
caring and do first things first it's time to get on with some other things

191
00:28:38,980 --> 00:28:42,960
we'll see what we can do as we go forward right now I know they're building

192
00:28:42,960 --> 00:28:45,660
the new restrooms and shower rooms you

193
00:28:48,990 --> 00:28:51,570
know we can't even hear you because

194
00:28:51,570 --> 00:28:54,370
you're not at the mic but that's all right we understand what you're saying

195
00:28:54,370 --> 00:28:58,190
all right well we'll conclude public hearing with that and move along to

196
00:28:58,190 --> 00:29:02,970
the next item of the agenda which is item e communications and I don't

197
00:29:02,970 --> 00:29:06,970
believe anyone today wishes to speak is that correct yeah we're not council

198
00:29:06,970 --> 00:29:11,150
has no communications but it is national night out. You might mention that, Mr.

199
00:29:11,670 --> 00:29:15,870
Manager. Yeah, we're just going to mention two things. One, national night out. We have

200
00:29:15,870 --> 00:29:20,910
about 29 block parties throughout the community. We'll be celebrating this

201
00:29:20,910 --> 00:29:24,990
evening in the heat. So encourage neighbors to get out and get to know

202
00:29:24,990 --> 00:29:29,870
each other and stay hydrated. And then on that topic as well, cooling

203
00:29:29,870 --> 00:29:35,070
centers for this heat wave we're experiencing. If anybody needs access to

204
00:29:35,070 --> 00:29:40,410
cooling center or a place to cool down. The city and the county both have a map

205
00:29:40,410 --> 00:29:43,190
that we sponsor where you can identify different locations throughout the

206
00:29:43,190 --> 00:29:47,410
community where you can go and cool off. So please access those resources if

207
00:29:47,410 --> 00:29:55,670
needed. Thank you Mr. Manager. All right that brings us to public hearings. We

208
00:29:55,670 --> 00:29:59,610
only have a single item today which is why we're meeting. It's

209
00:30:00,240 --> 00:30:05,160
Item two, the subject is the appeal of determination of transit occupancy tax

210
00:30:05,160 --> 00:30:10,540
amount for shadow Oaks hospitality Inc. Mr. Manager, do you want to introduce the

211
00:30:10,540 --> 00:30:15,460
item? Actually, before we move on to this next item, we need about five more minutes,

212
00:30:15,540 --> 00:30:20,780
it sounds like, for our IT department to figure out why the system's not

213
00:30:20,780 --> 00:30:23,840
working. We're working on a technical problem. The council will stand in

214
00:30:23,840 --> 00:30:28,300
recess for five to ten minutes. Hopefully we can get back as soon as

215
00:30:28,300 --> 00:30:33,360
the problem is resolved. We'll be briefly recessed.

216
00:36:02,960 --> 00:36:07,400
All right, it's now 4.25. Councilman

217
00:36:07,400 --> 00:36:11,540
Moreno has joined us just when we got to the business of the meeting, David. So the timing

218
00:36:11,540 --> 00:36:17,480
is perfect. Apologies to all that we had to take a little time, a little delay there.

219
00:36:17,800 --> 00:36:21,500
But now, Mr. Managry, would you proceed with item F?

220
00:36:22,540 --> 00:36:25,440
Yeah, in the interest of time, I'm just going to hand it over to Ms. McKinney,

221
00:36:25,440 --> 00:36:27,420
who will walk the council through the presentation.

222
00:36:27,840 --> 00:36:28,540
Thank you.

223
00:36:29,160 --> 00:36:30,240
Hi, Kim.

224
00:36:30,520 --> 00:36:31,100
Good afternoon.

225
00:36:31,320 --> 00:36:33,540
I'm Kim McKinney, administrative services director.

226
00:36:34,260 --> 00:36:37,860
And this afternoon, we're here for an appeal hearing

227
00:36:37,860 --> 00:36:40,620
on the determination of a transient occupancy tax

228
00:36:40,620 --> 00:36:43,420
amount due for shadow oaks hospitality.

229
00:36:44,660 --> 00:36:46,880
As indicated in the staff report,

230
00:36:47,180 --> 00:36:50,780
the recommended action is to conduct the public hearing

231
00:36:50,780 --> 00:36:56,820
for the appeal, for the determination of the tax amount following administrative hearing

232
00:36:57,260 --> 00:37:03,960
for shadow in transient occupancy tax audit assessment issued on July 1st, 2026 concerning

233
00:37:03,960 --> 00:37:10,020
violation of municipal code chapter 3.12 for unpaid taxes penalties, fraud penalties and

234
00:37:10,020 --> 00:37:15,180
interest and then to adopt the resolution to uphold the tax administrator's determination

235
00:37:15,180 --> 00:37:17,020
nation and deny the appeal.

236
00:37:19,140 --> 00:37:24,780
So briefly here, the municipal code chapter that we're talking about, 3.12 is for our

237
00:37:24,780 --> 00:37:31,760
transient occupancy tax or TOT and also related is the Tourism Business Improvement District

238
00:37:31,760 --> 00:37:33,040
or TBIT on here.

239
00:37:34,520 --> 00:37:40,600
So our Woodland Municipal Code, Section 312, establishes our TOT program which is a 10%

240
00:37:40,600 --> 00:37:48,180
charge on room rents at primarily at hotels here in town per the ordinance the

241
00:37:48,180 --> 00:37:54,440
amounts collected for TOT must be held in trust in account for the city until

242
00:37:54,440 --> 00:37:59,840
they are remitted to the city. Also require that monthly tax returns be

243
00:37:59,840 --> 00:38:04,660
prepared and that they are due by the 15th of each calendar month to the

244
00:38:04,660 --> 00:38:05,920
city finance department.

245
00:38:07,360 --> 00:38:13,400
Similarly to TOT, TBIT is 2% of the room rents and is also collected, reported and enforced

246
00:38:13,400 --> 00:38:15,440
in the same manner as the TOT.

247
00:38:18,420 --> 00:38:24,200
When there are delinquent payments of the tax, the municipal code outlines four areas

248
00:38:24,200 --> 00:38:26,800
that can be included in the calculation.

249
00:38:27,280 --> 00:38:31,800
There's an original delinquency, so for the first four weeks that an amount is delinquent,

250
00:38:31,800 --> 00:38:39,080
There's an additional 10% late payment penalty that is added on to the original taxes due.

251
00:38:39,920 --> 00:38:44,440
If there continues to be a delinquency after that first four weeks, there's an additional

252
00:38:44,440 --> 00:38:51,860
10% of a continued delinquency payment, so a total of 20% between the two for late payment

253
00:38:51,860 --> 00:38:52,420
penalties.

254
00:38:53,180 --> 00:38:59,180
There's also a section for a fraud penalty, which is 25% of the tax due when nonpayment

255
00:38:59,180 --> 00:39:05,560
is determined to be fraudulent and finally there's allowance for interest on the unpaid

256
00:39:05,560 --> 00:39:11,260
taxes which is one half of a percent per month or portion of a month on any of the unpaid

257
00:39:11,260 --> 00:39:15,000
taxes but not on any of the penalties associated with that tax.

258
00:39:18,100 --> 00:39:24,920
So a little history over here tonight, specific to shadow ends, excuse me, to shadow Oaks

259
00:39:24,920 --> 00:39:33,680
hospitality. They own and operate the best western shadow in here in town. We have been

260
00:39:33,680 --> 00:39:39,860
struggling for some time to get timely remittance of reports and payments starting in the fall of

261
00:39:39,860 --> 00:39:47,440
2022. They did eventually get caught up but then ceased remitting payments for TOT and TBID in May

262
00:39:47,440 --> 00:39:56,400
of 2023. From that time through June 30, 2026 there would have been 37 monthly payments that

263
00:39:56,400 --> 00:40:03,920
were due. The city has received two payments during that time. One in July of 2023 for partial

264
00:40:03,920 --> 00:40:11,540
payment of the May taxes due and a second in October 2023 for partial payment of August 2023

265
00:40:11,540 --> 00:40:17,680
23 taxes due. There was a third payment but the check was returned for insufficient funds

266
00:40:17,680 --> 00:40:22,520
so it's not included on here. And then there was a just in the staff report we noted that

267
00:40:22,520 --> 00:40:28,120
there were three payments but one of those actually didn't count as a payment. So since

268
00:40:28,120 --> 00:40:36,060
October 2023 we have received no money, no payment from Shadow Oaks. During our communication

269
00:40:36,060 --> 00:40:42,580
with them via email when we're requesting reports and updates on payments. The Hotel

270
00:40:42,580 --> 00:40:47,340
Management did note in several emails to the City Manager and staff that economic

271
00:40:47,340 --> 00:40:55,960
hardship was the reason for non-payment, noting increased utility costs, lending

272
00:40:55,960 --> 00:41:00,680
costs, and general economic factors as a reason for non-payment.

273
00:41:04,090 --> 00:41:04,810
As I noted

274
00:41:04,810 --> 00:41:12,050
earlier per the requirements of the ordinance, there is supposed to be a monthly TOT or tax

275
00:41:12,050 --> 00:41:15,330
return filed by the 15th following the end of each month.

276
00:41:16,810 --> 00:41:26,390
During the period of May 2023 through now, we received some of those tax returns, but

277
00:41:26,390 --> 00:41:28,630
many of them were laid if we received them at all.

278
00:41:29,270 --> 00:41:33,630
And in many cases, in lieu of filling out the return, we did get a printout from the

279
00:41:33,630 --> 00:41:39,130
hotel management software that was provided by Shadow Oaks so that we could do the calculations

280
00:41:39,130 --> 00:41:44,570
ourselves rather than management completing their own forms.

281
00:41:51,250 --> 00:41:57,780
So when we got those reports from Shadow Oaks, we reviewed them and we can see separate

282
00:41:57,780 --> 00:42:03,220
line items on those reports denoting that TOT and TBID were collected by Shadow Oaks

283
00:42:03,220 --> 00:42:07,100
from the hotel guests, but they have not been remitted to the city.

284
00:42:09,790 --> 00:42:13,890
No information of any kind has been provided since January 2026.

285
00:42:14,110 --> 00:42:18,990
So we have reports up through January 2026 that allow us to determine what the TOT and

286
00:42:18,990 --> 00:42:24,470
TBIT is, but for the months of May through June, I'm sorry, February through June, we

287
00:42:24,470 --> 00:42:25,630
have received no reports.

288
00:42:25,790 --> 00:42:29,990
So there are taxes due, but we have no information to calculate what those might be.

289
00:42:31,390 --> 00:42:37,390
And I guess I'll just note that July's report and remittance will be due next week, so we're

290
00:42:37,390 --> 00:42:38,490
coming up on another one.

291
00:42:42,320 --> 00:42:49,540
So the determination of the amounts due that we're here to talk about today included taxes

292
00:42:49,540 --> 00:42:55,640
and assessment owed, late payment penalties, fraud penalties assessed, and interest on

293
00:42:55,640 --> 00:42:56,980
the unpaid tax balances.

294
00:42:57,860 --> 00:43:04,260
This is based on a point-in-time calculation, and as I just mentioned, we've only received

295
00:43:04,260 --> 00:43:06,380
reports through January of 2026.

296
00:43:06,580 --> 00:43:15,200
So this includes the actual taxes owed through January 2026 of $695,580.

297
00:43:17,000 --> 00:43:22,500
Late payment penalties, which I described earlier, which is an original 10 percent

298
00:43:22,500 --> 00:43:27,640
an additional 10 for continued delinquency of $141,793.

299
00:43:28,960 --> 00:43:36,860
We've included a fraud assessment penalty here of $173,895 and an interest on those balances

300
00:43:36,860 --> 00:43:46,380
of unpaid taxes of $78,371 for a total due of $1,089,640 and again, that's a point

301
00:43:46,380 --> 00:43:46,740
in time.

302
00:43:46,740 --> 00:43:49,320
I'm actually currently more than that,

303
00:43:49,320 --> 00:43:50,640
but we don't have the information

304
00:43:51,180 --> 00:43:52,760
to calculate that currently.

305
00:43:53,360 --> 00:43:55,040
And as every month goes by,

306
00:43:55,160 --> 00:43:58,060
additional interest accrues on the unpaid balances as well.

307
00:44:05,530 --> 00:44:08,350
I'd also want to note that the appellant here tonight

308
00:44:08,350 --> 00:44:12,790
has not disputed any of the amounts for taxes owed,

309
00:44:13,110 --> 00:44:15,390
late payment penalties or interest calculation,

310
00:44:15,570 --> 00:44:19,730
but they do indicate that they dispute the fraud penalty.

311
00:44:19,730 --> 00:44:29,430
So this language in the Woodland Municipal Code is clear that all money

312
00:44:29,430 --> 00:44:34,330
collected from guests for taxes and assessment must be held separately for

313
00:44:34,330 --> 00:44:38,810
remittance to the city. At the time the money is collected it isn't the hotel's

314
00:44:38,810 --> 00:44:43,910
money anymore but rather is funds owed to the city. It's clear from the reports

315
00:44:43,910 --> 00:44:48,310
that the appellant has provided to the city that they did in fact charge

316
00:44:48,310 --> 00:44:53,590
to their guests for the TOT and TBIT assessments. It's also clear that they have not remitted

317
00:44:53,590 --> 00:44:59,430
those funds to the city. As I noted earlier, the appellant has previously stated through

318
00:44:59,430 --> 00:44:59,870
email communication.

319
00:45:00,000 --> 00:45:04,540
The application that their nonpayment is due to their ongoing financial hardship, which really

320
00:45:04,540 --> 00:45:07,980
should not affect remittance of the funds held specifically for another entity.

321
00:45:10,780 --> 00:45:11,520
The appellant

322
00:45:11,520 --> 00:45:16,520
does not dispute that they owe money or any of the calculated taxes, late payment penalties

323
00:45:16,520 --> 00:45:22,480
or interest. The appellant has recently indicated that it has made payments and intends to

324
00:45:22,480 --> 00:45:28,720
pay, but no payments have been made to the city for 33 months at this point. They may

325
00:45:28,720 --> 00:45:32,860
no indication of when they intend to pay the city, even though these amounts have been

326
00:45:32,860 --> 00:45:37,780
collected by them and intentionally they continue to retain the money legally owed to the city.

327
00:45:39,000 --> 00:45:43,620
I believe if they were genuine in their interest to comply with the municipal code, they would

328
00:45:43,620 --> 00:45:47,780
at a minimum pay the amounts that they do not dispute, which is the majority of the

329
00:45:47,780 --> 00:45:49,060
balance due at this point.

330
00:45:50,620 --> 00:45:54,260
The appellant also continues to ignore the requirements of the municipal code and

331
00:45:54,260 --> 00:45:58,080
it does not provide monthly tax returns or any information that the city could use

332
00:45:58,080 --> 00:46:05,440
to calculate taxes owed through the current day, and it's based on these items that's

333
00:46:05,440 --> 00:46:09,820
the termination of the tax administrator, that the fraud penalty authorized by the Woodland

334
00:46:09,820 --> 00:46:11,600
Municipal Code is warranted.

335
00:46:15,410 --> 00:46:18,210
And then this is all in the staff report, and I won't go through every one of it, but

336
00:46:18,210 --> 00:46:20,530
it's kind of a history of how we got here.

337
00:46:21,770 --> 00:46:26,370
There is following a process that's outlined in the Municipal Codes that allows for an

338
00:46:26,370 --> 00:46:32,230
administrative hearing when we when they're notified by the tax administrator of

339
00:46:32,230 --> 00:46:37,590
total amounts due. We did hold that administrative hearing and tonight is the

340
00:46:37,590 --> 00:46:42,630
the appellants appeal of the finding based on that. In addition to that we

341
00:46:42,630 --> 00:46:47,030
also have filed tax liens for delinquent amounts through the January

342
00:46:47,030 --> 00:46:52,210
2026 amount and it is likely we would continue to do that as we have more

343
00:46:52,210 --> 00:46:55,310
information available for amounts that were not covered on the liens before.

344
00:46:58,270 --> 00:47:02,270
And so back here we're just getting to the recommended action is to conduct a

345
00:47:02,270 --> 00:47:08,510
public hearing and following the public hearing we recommend that you adopt

346
00:47:08,510 --> 00:47:11,450
the resolution to uphold the tax administrator's determination and

347
00:47:11,450 --> 00:47:12,170
deny the appeal.

348
00:47:14,320 --> 00:47:17,640
Thank you. Does that include your report? It does. Thank you.

349
00:47:17,800 --> 00:47:21,620
Members of the council you've heard the staff report. Are there any

350
00:47:21,620 --> 00:47:30,040
questions that you have of staff. I do. Council Member Lansberg. Thank you, Mayor.

351
00:47:33,040 --> 00:47:39,980
Besides penalties, etc., what other sanctions are available to the city when

352
00:47:39,980 --> 00:47:44,120
a business owner refuses to pay due amounts?

353
00:47:47,940 --> 00:47:50,020
For example, pulling their

354
00:47:50,020 --> 00:47:56,500
business license pulling their occupancy permits yeah I don't believe the

355
00:47:56,500 --> 00:48:01,980
municipal code speaks to allowing anything like that really it ultimately

356
00:48:01,980 --> 00:48:06,920
says that any unpaid amounts become debt owed to the city and we have a ability

357
00:48:06,920 --> 00:48:10,780
to pursue legal collection of any debt that's owed to us but outside of that

358
00:48:10,780 --> 00:48:17,100
it doesn't have provisions for the operating I don't know if the attorney

359
00:48:17,100 --> 00:48:17,940
he wants to weigh in.

360
00:48:19,600 --> 00:48:22,420
I inquire from the Council what we can do with air.

361
00:48:22,580 --> 00:48:27,260
We can take a closer look at those other options that may be available to the city.

362
00:48:27,420 --> 00:48:31,560
I don't know the city municipal code off the top of my head, unfortunately.

363
00:48:33,020 --> 00:48:39,600
However, I think in terms of the interests and penalties, those are in the ordinance

364
00:48:39,600 --> 00:48:42,240
that governs the transient occupancy tax collection.

365
00:48:42,240 --> 00:48:48,080
So those are allowed for in your ordinance outside of that particular ordinance. That's the topic today

366
00:48:48,080 --> 00:48:50,180
We can take a look and explore that as well

367
00:48:52,310 --> 00:48:53,930
additional questions yes

368
00:48:55,350 --> 00:49:00,030
Who makes the call regarding the issue of fraud?

369
00:49:02,730 --> 00:49:06,630
Per the municipal code. It's the attacks administrator, which is our city clerk

370
00:49:07,250 --> 00:49:10,450
What is the standard used to determine fraud?

371
00:49:13,700 --> 00:49:16,280
Yeah, there is no standard. That's defined in the code.

372
00:49:18,840 --> 00:49:20,140
Is there a

373
00:49:20,240 --> 00:49:22,860
And I'm not pointing fingers, trust me.

374
00:49:23,840 --> 00:49:25,600
This has been since 2023.

375
00:49:26,800 --> 00:49:29,640
Why is, this is August of 2026.

376
00:49:30,540 --> 00:49:31,920
Why weren't you here, you know,

377
00:49:32,520 --> 00:49:33,900
six months after they didn't pay?

378
00:49:39,490 --> 00:49:41,310
Well, like many businesses, right?

379
00:49:41,370 --> 00:49:43,270
We work with them to try to bring them

380
00:49:43,270 --> 00:49:44,710
current on-pass due taxes.

381
00:49:45,310 --> 00:49:47,490
We've been communicating regularly

382
00:49:47,490 --> 00:49:49,390
with the hotel operator.

383
00:49:49,830 --> 00:49:51,570
They indicated their intent to pay.

384
00:49:52,410 --> 00:49:57,110
we have filed several liens for the past few taxes and we got to the point

385
00:49:57,110 --> 00:50:02,750
where they finally contested the amounts calculated which prompted the

386
00:50:02,750 --> 00:50:07,030
administrative hearing which was held in front of the City Clerk and then they

387
00:50:07,030 --> 00:50:09,710
appealed the determination of the City Clerk so here we are before the

388
00:50:09,710 --> 00:50:11,390
Council to make a determination.

389
00:50:16,690 --> 00:50:18,610
Okay I may have others in a minute but go

390
00:50:18,610 --> 00:50:20,030
ahead. Okay thank you.

391
00:50:22,640 --> 00:50:24,720
All right I don't believe the rest of us have

392
00:50:24,720 --> 00:50:27,980
questions. So I think at this point it's appropriate for me to open the public

393
00:50:27,980 --> 00:50:33,380
hearing, invite the appellant to come forward and to state their case.

394
00:50:37,500 --> 00:50:37,880
Normally

395
00:50:37,880 --> 00:50:41,260
speakers have three minutes for this purpose but this special hearing I

396
00:50:41,260 --> 00:50:45,120
think you can take a little more time. And by the way, my name's Craig Hansen.

397
00:50:45,200 --> 00:50:50,220
I'm counsel for the appellant. And your name? Craig Hansen.

398
00:50:50,580 --> 00:50:56,620
Nice to meet you. Thank you very much. Mr. Mayor, council members, just so

399
00:50:56,620 --> 00:50:58,280
I'm aware with the format.

400
00:50:58,540 --> 00:51:01,720
I have some legal argument to make.

401
00:51:02,300 --> 00:51:04,780
I brought Mr. Darshan Patel,

402
00:51:05,040 --> 00:51:08,140
who is the Corporate Representative for Shadow Oaks.

403
00:51:08,280 --> 00:51:10,520
He's prepared to talk about some things as well.

404
00:51:11,060 --> 00:51:13,240
Is there a time parameter or format

405
00:51:13,240 --> 00:51:14,760
that we should be aware of?

406
00:51:16,060 --> 00:51:17,440
Council respond to that.

407
00:51:17,540 --> 00:51:18,440
I can speak to that.

408
00:51:18,560 --> 00:51:20,660
There is no formal set time parameter.

409
00:51:21,020 --> 00:51:23,420
You have about the same time that staff did

410
00:51:23,420 --> 00:51:28,600
present your side so that would be about 15 minutes or so. Okay thank you so I

411
00:51:28,600 --> 00:51:33,180
think I think what we'll do is we'll begin with with kind of my general legal

412
00:51:33,180 --> 00:51:39,460
discussion of you know how we see things and then I'll invite my client

413
00:51:39,460 --> 00:51:45,060
Mr. Patel to talk a little bit about the financial hardship and the lack of

414
00:51:45,060 --> 00:51:51,160
fraud that we're dealing with here. So you know as was made clear by the

415
00:51:51,160 --> 00:52:02,540
the opening statements. There have been assessed the outstanding taxes. There have been late

416
00:52:02,540 --> 00:52:12,920
penalties of $141,000 assessed. Fraud penalties of $173,895. That's what we're contesting

417
00:52:12,920 --> 00:52:19,880
here today. An interest of $78,000. So the underlying principal amount, the late penalties

418
00:52:19,880 --> 00:52:22,540
and the interest are not contested.

419
00:52:23,060 --> 00:52:27,660
My client intends to pay those is attaining financing

420
00:52:27,660 --> 00:52:31,500
that we expect to have closed by the end of this month to pay those.

421
00:52:32,020 --> 00:52:34,980
And what we're here to talk about today is a lack of fraud.

422
00:52:35,860 --> 00:52:40,760
So there were two code sections that recited to support the fraud,

423
00:52:41,320 --> 00:52:42,080
alleged fraud.

424
00:52:42,080 --> 00:52:51,680
One, it's just section 3.12.070 with returns and remittances, makes no reference to the

425
00:52:51,680 --> 00:52:52,220
term fraud.

426
00:52:52,980 --> 00:53:02,980
The term fraud actually appears in section 3.12.080, sub C, which reads, if the tax

427
00:53:02,980 --> 00:53:08,240
administrator determines that the nonpayment of any remittance due under this chapter

428
00:53:08,240 --> 00:53:17,260
is due to fraud. A penalty of 25% of the amount of the tax shall be added there to in addition

429
00:53:17,720 --> 00:53:22,120
to the penalties stated in subsections A and B of this section.

430
00:53:24,260 --> 00:53:25,760
Fraud is a serious term

431
00:53:26,340 --> 00:53:31,780
and it is defined under the law if it's not defined under the code. And it's a term that

432
00:53:31,780 --> 00:53:35,660
refers to dishonesty and deceit.

433
00:53:36,540 --> 00:53:40,520
And that involves a misrepresentation of fact

434
00:53:41,220 --> 00:53:43,220
or an omission of material fact.

435
00:53:44,200 --> 00:53:47,160
Everything that was contained in this report

436
00:53:47,540 --> 00:53:49,340
and that you'll hear from my client

437
00:53:49,700 --> 00:53:51,500
is that my client was always honest.

438
00:53:52,180 --> 00:53:56,900
Submitted reports that the city was used

439
00:53:56,900 --> 00:54:00,440
to determine the taxes owed was up front

440
00:54:00,440 --> 00:54:05,740
about the financial circumstances that my client and his family in the hotel were facing.

441
00:54:06,440 --> 00:54:08,160
My client will talk a little bit more about that.

442
00:54:08,880 --> 00:54:11,040
But never misrepresented anything.

443
00:54:19,680 --> 00:54:23,220
There was never a false TOT return submitted.

444
00:54:23,920 --> 00:54:27,540
There was never any underreporting of taxable room revenue.

445
00:54:28,080 --> 00:54:29,920
Never any concealed transactions.

446
00:54:30,740 --> 00:54:34,700
Never any fabricated or altered financial record.

447
00:54:34,700 --> 00:54:40,860
unanswered, no false statement that the taxes had been paid when they were not, no representation

448
00:54:40,860 --> 00:54:47,140
intended to mislead the city, and there's no secret diversion of funds to shadow Oaks

449
00:54:47,440 --> 00:54:53,760
for their personal benefit, and no deceptive device that caused or facilitated the nonpayment.

450
00:54:54,780 --> 00:54:59,820
So the critical questions that remain unanswered are what was the lie?

451
00:55:00,760 --> 00:55:02,040
What was concealed?

452
00:55:02,800 --> 00:55:10,460
what record was falsified? What false statements did Shadow Oaks make? How was

453
00:55:10,460 --> 00:55:15,480
the city deceived? The answer to the question is none of those things happened

454
00:55:15,480 --> 00:55:23,880
here. This is not an issue of fraud. To put this in perspective, there's already

455
00:55:23,880 --> 00:55:30,520
obviously significant late penalties that my client will need to pay. And if

456
00:55:30,520 --> 00:55:38,460
If the standard that the city so far has been applying were these standard, which is, hey,

457
00:55:39,020 --> 00:55:46,560
you didn't pay them, you knew you needed to pay them and they remain unpaid, then late

458
00:55:46,560 --> 00:55:52,640
penalties and fraud penalties would be merged into one standard and there would be no segregation

459
00:55:52,640 --> 00:56:01,220
between the two. That would render the fraud penalty meaningless. Basically anyone who didn't

460
00:56:01,220 --> 00:56:09,340
pay TOT on time would be guilty of fraud and subject to a 25% penalty. And meanwhile those

461
00:56:09,340 --> 00:56:15,920
folks who are dishonest with the city, who submitted false information or misled the

462
00:56:15,920 --> 00:56:22,600
city would be held to the same standard as those who were honest and submitted the information

463
00:56:23,180 --> 00:56:27,940
and didn't pay because they couldn't, not because they were lying or dishonest.

464
00:56:29,160 --> 00:56:31,420
So fraud means something.

465
00:56:32,120 --> 00:56:34,920
Our legal counsel for the city knows that.

466
00:56:35,680 --> 00:56:41,860
And as was submitted in the presentation, this standard of fraud was applied without

467
00:56:41,860 --> 00:56:45,680
really understanding what fraud is because there's no definition of in the

468
00:56:45,680 --> 00:56:50,700
code but there's certainly a definition of the law and it is is deceit and is

469
00:56:50,700 --> 00:56:57,720
dishonesty that did not occur here. So I'd like to bring my client Mr. Patel.

470
00:56:58,160 --> 00:57:02,120
I've been proud enough to represent Shadow Oaks and the Patel family for over

471
00:57:02,120 --> 00:57:08,060
10 years. He's going to talk a bit about the financial circumstances that

472
00:57:08,060 --> 00:57:13,880
led to the inability to pay and the efforts to obtain financing that we're

473
00:57:13,880 --> 00:57:18,380
hopeful are going to manifest within weeks to allow full repayment of the

474
00:57:18,380 --> 00:57:20,700
TOT. Can you come forward?

475
00:57:24,120 --> 00:57:26,880
So can you just tell the council who you are and how

476
00:57:26,880 --> 00:57:30,580
you relate to the hotel? Absolutely. So my name is Darshan Patel. I am the

477
00:57:30,580 --> 00:57:36,320
owner representative for Shadow Oaks. Is it too close? Stay close. Can you hear me?

478
00:57:36,320 --> 00:57:41,640
close my name is Darshan Patel I'm the owner representative for shadow Oaks

479
00:57:41,640 --> 00:57:52,580
hospitality and mr. Patel were you always you and shadow looks we're always

480
00:57:52,580 --> 00:57:59,100
honest with the city with regard to financial reporting t.o.t. Ode and

481
00:57:59,100 --> 00:58:03,020
your financial. Absolutely.

482
00:58:05,040 --> 00:58:05,420
Did

483
00:58:05,420 --> 00:58:08,280
Shadow Wolves ever falsify any

484
00:58:08,280 --> 00:58:11,100
records or reduce taxable room

485
00:58:11,100 --> 00:58:13,340
revenue shown in reports to the

486
00:58:13,340 --> 00:58:16,060
city? No. Did Shadow Wolves

487
00:58:16,060 --> 00:58:17,760
creating false exemptions or

488
00:58:17,760 --> 00:58:19,160
keep a second set of books or

489
00:58:19,160 --> 00:58:20,300
concealed room transactions

490
00:58:20,300 --> 00:58:22,380
from the city? No. Did

491
00:58:22,380 --> 00:58:23,880
Shadow Wolves ever misidentify

492
00:58:23,880 --> 00:58:25,940
the operator or conceal who

493
00:58:25,940 --> 00:58:26,980
owned or managed the hotel?

494
00:58:26,980 --> 00:58:27,780
No.

495
00:58:28,720 --> 00:58:33,240
And during the delinquency, did shadow oaks continue providing the city with information

496
00:58:33,840 --> 00:58:36,060
from which the city could calculate the taxes due?

497
00:58:36,500 --> 00:58:36,980
Absolutely.

498
00:58:38,680 --> 00:58:41,260
Let's talk about the financial distress.

499
00:58:42,320 --> 00:58:46,820
What happened with the, was there a renovation that occurred in 2021?

500
00:58:47,760 --> 00:58:48,420
That is correct.

501
00:58:48,800 --> 00:58:50,020
And what renovation was undergoing?

502
00:58:51,200 --> 00:58:56,740
Refreshing gas bedrooms with new furniture, new carpeting, wall tech, you know, the

503
00:58:56,740 --> 00:58:58,400
wall textures and such.

504
00:58:58,940 --> 00:59:01,060
And about how many rooms are being renovated?

505
00:59:01,440 --> 00:59:02,860
At that time, 30.

506
00:59:05,200 --> 00:59:07,960
And was there any difficulties with the contractor

507
00:59:07,960 --> 00:59:09,100
working on that project?

508
00:59:09,920 --> 00:59:12,040
Absolutely, we left midway.

509
00:59:12,720 --> 00:59:16,240
So the contractor abandoned the work

510
00:59:16,240 --> 00:59:18,840
during a remodel of approximately 30 rooms,

511
00:59:18,980 --> 00:59:19,320
is that right?

512
00:59:19,860 --> 00:59:20,740
And the lobby, yes.

513
00:59:21,200 --> 00:59:22,380
And what effect did that have

514
00:59:22,380 --> 00:59:23,920
on the lobby and the breakfast operations?

515
00:59:26,000 --> 00:59:32,360
Guests would have to check in in a kiosk in one of the guest bedrooms. There's no breakfast offerings. No lobby

516
00:59:33,040 --> 00:59:34,020
open until

517
00:59:35,680 --> 00:59:36,780
May of

518
00:59:39,120 --> 00:59:40,400
2023 and

519
00:59:41,540 --> 00:59:44,740
How did that affect the guest experience?

520
00:59:46,650 --> 00:59:54,290
It affected them. I mean guests stay with us for breakfast and a bedroom and a lobby to get away from the bedroom

521
00:59:54,290 --> 00:59:59,970
So it definitely affected them fully and its construction expanded what happened to the number of rooms available to guests

522
01:00:00,560 --> 01:00:06,120
It kept shrinking. At the largest point of shrinkage about how many rooms were

523
01:00:06,120 --> 01:00:12,200
unavailable? Sixty. Out of how many? 122. So about half the hotel was shut down?

524
01:00:12,560 --> 01:00:12,880
Correct.

525
01:00:15,140 --> 01:00:20,400
And that obviously eliminated revenue producing inventory during the

526
01:00:20,400 --> 01:00:22,300
market recovery, is that right? That is correct.

527
01:00:24,960 --> 01:00:28,820
And approximately how long did

528
01:00:34,520 --> 01:00:40,020
Did Shadow Oaks obtain financing to continue the renovation in September 22?

529
01:00:40,300 --> 01:00:41,180
That is correct, yes.

530
01:00:41,540 --> 01:00:43,340
And who did obtain financing through?

531
01:00:43,520 --> 01:00:44,360
State Bank of Texas.

532
01:00:45,240 --> 01:00:47,940
Okay, and possibly what was the interest rate?

533
01:00:48,360 --> 01:00:52,600
6.75% five-year term, interest only.

534
01:00:53,280 --> 01:00:54,120
And was that variable?

535
01:00:54,900 --> 01:00:55,260
Yes.

536
01:00:55,580 --> 01:00:57,280
And what did that ultimately climb to?

537
01:00:58,160 --> 01:00:58,760
15%.

538
01:00:58,760 --> 01:00:59,400
Okay.

539
01:00:59,400 --> 01:01:05,940
And at times was the monthly payment up to $120,000 a month?

540
01:01:06,460 --> 01:01:08,120
Yes, $120,000 plus.

541
01:01:09,020 --> 01:01:14,380
And what were the monthly revenues during the time that you were paying $120,000 on lender fees?

542
01:01:14,980 --> 01:01:17,560
Anywhere from $98,000 to $200,000.

543
01:01:19,080 --> 01:01:21,920
What happened to the annual revenues by 2025?

544
01:01:22,780 --> 01:01:28,120
It had gone down over 40% in revenue.

545
01:01:29,040 --> 01:01:32,860
So what was it before and after the decline?

546
01:01:33,020 --> 01:01:36,280
It went from 3.5 million down to 1.9 million.

547
01:01:38,300 --> 01:01:43,300
And besides the construction costs and the lender costs,

548
01:01:43,940 --> 01:01:49,080
what were the general expenses just to keep the hotel going?

549
01:01:49,080 --> 01:01:54,440
First obligation is your lender then your second one is your franchise and

550
01:01:54,440 --> 01:01:58,560
your OTAs. Your third would be your payroll and your taxes afterwards

551
01:01:58,560 --> 01:02:02,640
regarding your payroll taxes and then after that you have your utilities.

552
01:02:04,920 --> 01:02:12,740
And even though revenues decreased by half, did the expenses decrease?

553
01:02:12,740 --> 01:02:15,160
know they actually increased with inflation.

554
01:02:18,690 --> 01:02:20,830
After making all the payments

555
01:02:20,830 --> 01:02:27,430
were absolutely necessary to keep the well let me ask you this in addition to

556
01:02:27,430 --> 01:02:34,470
paying the expenses just to keep the hotel going did you and your family

557
01:02:34,470 --> 01:02:40,450
fund any personal funds into the business? Yes my wife and I funded it. Out

558
01:02:40,450 --> 01:02:41,370
of your own personal savings?

559
01:02:41,530 --> 01:02:41,950
That is correct.

560
01:02:42,650 --> 01:02:46,670
So after all these payments and funding the operations

561
01:02:46,670 --> 01:02:47,730
from your personal savings,

562
01:02:47,890 --> 01:02:50,190
was there any money left over to pay the TOT?

563
01:02:50,990 --> 01:02:51,310
No.

564
01:02:51,790 --> 01:02:55,190
Did you and your family divert any income

565
01:02:56,030 --> 01:02:59,570
to your pockets rather than paying the TOT?

566
01:02:59,890 --> 01:03:00,230
No.

567
01:03:03,240 --> 01:03:07,540
And if you had not paid the franchise fees,

568
01:03:07,840 --> 01:03:09,500
the ongoing operational expenses,

569
01:03:09,500 --> 01:03:11,780
the lender fees, what would have happened to the business?

570
01:03:12,540 --> 01:03:16,240
First obligation, if I didn't pay the lender, they would take the keys the

571
01:03:16,240 --> 01:03:20,520
following day of the due date. Third or second one would be

572
01:03:20,520 --> 01:03:24,320
franchise. If you do not pay your franchise fees, they take you off the public

573
01:03:24,320 --> 01:03:27,660
or the OTA or your online. So there's no reservations coming in.

574
01:03:28,240 --> 01:03:31,500
After that, if you don't pay payroll, you have no staff. Nobody's cleaning

575
01:03:31,500 --> 01:03:34,960
the rooms, nobody's at the front desk. After that, if you don't pay your

576
01:03:34,960 --> 01:03:36,920
PG&E, your water bills, there's nothing.

577
01:03:36,920 --> 01:03:37,060
to reduce the cost of the

578
01:03:38,020 --> 01:03:39,900
And during this time of

579
01:03:39,900 --> 01:03:41,600
hardship, what measures did

580
01:03:41,600 --> 01:03:43,200
Shadow Oaks take to reduce

581
01:03:43,200 --> 01:03:44,320
costs?

582
01:03:45,760 --> 01:03:47,200
Shadow Oaks got rid of all

583
01:03:47,200 --> 01:03:49,100
senior management, all revenue

584
01:03:49,100 --> 01:03:50,400
management, all marketing.

585
01:03:56,400 --> 01:03:58,780
Did anyone at Shadow Oaks

586
01:03:58,780 --> 01:03:59,700
ever instruct the hotel

587
01:03:59,700 --> 01:04:01,580
personnel to hide room revenue

588
01:04:01,580 --> 01:04:02,140
from the city?

589
01:04:02,760 --> 01:04:03,160
No.

590
01:04:03,540 --> 01:04:04,580
Did anyone at Shadow Oaks

591
01:04:04,580 --> 01:04:05,680
ever knowingly submit a

592
01:04:05,680 --> 01:04:08,260
falls report to reduce tax?

593
01:04:08,660 --> 01:04:08,860
No.

594
01:04:09,220 --> 01:04:11,180
Does shadow looks ever make any false statement

595
01:04:11,180 --> 01:04:13,660
to induce the city to refrain from collecting the TOT?

596
01:04:13,940 --> 01:04:14,100
No.

597
01:04:16,300 --> 01:04:18,320
What are the current efforts right now

598
01:04:18,800 --> 01:04:23,060
to obtain financing to pay the city what is owed?

599
01:04:23,840 --> 01:04:24,260
Absolutely.

600
01:04:24,780 --> 01:04:27,240
So we're looking for the whole intentions

601
01:04:27,240 --> 01:04:29,940
have been to find financing that's feasible,

602
01:04:29,940 --> 01:04:33,140
not just financing to get out to get to another,

603
01:04:33,140 --> 01:04:35,580
you know, Jack to pay Jill or Jill to pay Jack.

604
01:04:36,400 --> 01:04:39,740
How long have you been making efforts to refinance the hotel?

605
01:04:40,100 --> 01:04:41,200
Since 2023.

606
01:04:41,940 --> 01:04:43,960
And what is the current status of those efforts?

607
01:04:44,900 --> 01:04:47,860
We have a lender set to close at the end of the month.

608
01:04:49,020 --> 01:04:55,000
And assuming that we arrive at a figure that includes the taxes,

609
01:04:56,080 --> 01:04:58,540
the late payment penalties and the interest,

610
01:04:58,540 --> 01:05:04,300
is it Shadow Oaks' intention to use the refinancing funds to pay off those

611
01:05:04,300 --> 01:05:09,840
amounts? That is correct. And even with the money from the refinance will you

612
01:05:09,840 --> 01:05:15,920
still be working with limited funds to keep the business going? We'll be

613
01:05:15,920 --> 01:05:21,160
we'll be continuing to work the business yes with funds. And would a

614
01:05:21,160 --> 01:05:25,400
a late fraud penalty of almost $174,000

615
01:05:26,420 --> 01:05:29,180
impede the business's ability to recover

616
01:05:29,180 --> 01:05:30,380
from its financial hardship.

617
01:05:30,640 --> 01:05:31,000
Absolutely.

618
01:05:32,140 --> 01:05:35,960
Council, I am just interjecting, since it's been about 15 minutes.

619
01:05:36,180 --> 01:05:37,900
So if you could wrap up your opening,

620
01:05:37,900 --> 01:05:39,980
and then you'll have a chance for rebuttal

621
01:05:39,980 --> 01:05:42,500
after the city's rebuttal as well.

622
01:05:43,620 --> 01:05:44,800
So thank you.

623
01:05:45,680 --> 01:05:48,320
And I just to close.

624
01:05:48,320 --> 01:05:59,120
you know. Obviously businesses suffer from hardship. It happens. Unexpected

625
01:05:59,120 --> 01:06:07,880
situations, contractors leaving the job, lenders having sometimes predatory loan

626
01:06:07,880 --> 01:06:14,660
terms. This is a business that is a well-meaning family that employs a lot

627
01:06:14,660 --> 01:06:19,420
of folks and is doing what it can to recover from this and intends to make

628
01:06:19,420 --> 01:06:25,840
the city hold on the outstanding taxes owed. It did not commit fraud. It's never been dishonest

629
01:06:25,840 --> 01:06:31,880
with the city. It hasn't concealed anything. It hasn't misrepresented anything. So we

630
01:06:31,880 --> 01:06:41,240
asked that the city not issue unsupported fraud penalties against this citizen. Thank

631
01:06:41,240 --> 01:06:41,380
you.

632
01:06:41,380 --> 01:06:42,260
at

633
01:06:48,050 --> 01:06:55,350
this point I suppose the city has the opportunity to respond I don't know if

634
01:06:55,350 --> 01:06:59,230
there's much to respond to do you wish to respond to any of the statements made

635
01:07:00,450 --> 01:07:07,190
we do have a couple of comments yeah first I would say that in regards to

636
01:07:07,190 --> 01:07:10,570
what the appellant just mentioned here this would not be the first time that

637
01:07:10,570 --> 01:07:14,550
we've heard that financing was imminent to pay amounts due to the

638
01:07:14,550 --> 01:07:19,570
city we've been hearing that for almost three years now that it was imminent we

639
01:07:19,570 --> 01:07:22,510
would be having you know end of the month we're gonna pay you we're gonna pay

640
01:07:22,510 --> 01:07:26,490
you and then like I mentioned before it's been almost three years since we

641
01:07:26,490 --> 01:07:33,570
received any payment whatsoever from the appellant they walked through here

642
01:07:33,570 --> 01:07:37,670
the financial hardships that they are facing and in doing so basically admitted

643
01:07:37,670 --> 01:07:42,270
that they took the city's money and spent it on other things that they

644
01:07:42,270 --> 01:07:47,690
were required to admit, remit the money to us, but they instead spent it for other

645
01:07:47,690 --> 01:07:54,530
items to run the hotel business. And also, you know, one of the questions that was

646
01:07:54,530 --> 01:08:02,850
asked there was whether or not the appellant had ever, or had they been

647
01:08:02,850 --> 01:08:07,670
providing information to the city all along so that we could count or do an

648
01:08:07,670 --> 01:08:13,430
accounting of how much they owe us. And Mr. Patel responded, absolutely. They've

649
01:08:13,430 --> 01:08:17,310
provided the information to us and we have not found that to be accurate along the way.

650
01:08:17,830 --> 01:08:21,030
They have not provided the information in a timely manner.

651
01:08:21,630 --> 01:08:27,850
In many cases, it took finally their attorneys sending it to us, sometimes six, seven, eight

652
01:08:27,850 --> 01:08:31,590
months late, and they still refuse to provide the data to us.

653
01:08:31,790 --> 01:08:35,890
So I would think it's dishonest for him to say that they absolutely have provided

654
01:08:35,890 --> 01:08:39,630
the information to the city to allow us to do the calculations for the TOT.

655
01:08:39,630 --> 01:08:40,690
I

656
01:08:45,620 --> 01:08:49,300
think that covers it just ultimately all the information they provided about

657
01:08:49,300 --> 01:08:54,040
their operations is really essentially irrelevant. It is not their money to

658
01:08:54,040 --> 01:08:59,560
spend. Thank you. I think probably rather than asking council to comment at this

659
01:08:59,560 --> 01:09:06,580
point we'll go for rebuttal and then it comes back to us to resolve okay. So

660
01:09:06,580 --> 01:09:10,180
you have a few more minutes if you wish to respond to the things that Kim has

661
01:09:10,180 --> 01:09:16,360
said. Thank you. And again, it comes down to they haven't paid. There's there's a

662
01:09:16,360 --> 01:09:20,800
remedy for that. And it's late payment penalty and the interest, which are not

663
01:09:20,800 --> 01:09:26,860
insignificant, which my client acknowledges will be paid. Yes, there have been

664
01:09:26,860 --> 01:09:30,120
prior efforts to refinance. There have been hope that those efforts would

665
01:09:30,120 --> 01:09:35,240
manifest. I've been closely working with my client to get that refinancing

666
01:09:35,240 --> 01:09:42,100
And Mike Lyne is here to tell you under oath today that those efforts are manifesting.

667
01:09:43,060 --> 01:09:44,600
There's final walkthroughs.

668
01:09:44,840 --> 01:09:50,380
We're at the point now where we're ready to get a funding commitment, funding actual by the end of this month.

669
01:09:50,820 --> 01:09:52,200
So we're hoping to get this resolved.

670
01:09:52,540 --> 01:09:53,980
Thank you, sir. And thank you.

671
01:09:54,740 --> 01:09:56,920
All right. That brings it back to us.

672
01:09:56,920 --> 01:10:03,220
and we have to decide whether to sustain the decision of the staff

673
01:10:03,220 --> 01:10:05,440
or to sustain the appeal.

674
01:10:05,620 --> 01:10:07,900
And Mr. Mayer, since this is a public hearing,

675
01:10:08,080 --> 01:10:10,380
if we have any comments from the public generally,

676
01:10:10,660 --> 01:10:12,500
that would be a good time to accept those.

677
01:10:12,500 --> 01:10:12,900
All right.

678
01:10:13,280 --> 01:10:14,540
It is a public hearing.

679
01:10:14,800 --> 01:10:17,620
So I'm going to open the public hearing.

680
01:10:17,840 --> 01:10:18,540
Are there any comments?

681
01:10:18,800 --> 01:10:19,880
I see no one in the room.

682
01:10:20,240 --> 01:10:21,840
Madam Clerk, is there anybody online?

683
01:10:22,100 --> 01:10:22,720
He's there.

684
01:10:23,540 --> 01:10:24,440
Oh, I apologize.

685
01:10:24,440 --> 01:10:30,640
You know something you were perfectly covered by these two gentlemen, so I didn't even see you. I apologize

686
01:10:30,640 --> 01:10:33,460
Since I'm here. I

687
01:10:33,460 --> 01:10:39,440
Think that what the city is saying was fraud that they collected the money and didn't send it to them

688
01:10:40,300 --> 01:10:45,060
And I don't think that was touched on and I do houses and stuff all over the place

689
01:10:45,060 --> 01:10:50,000
I like to buy and sale. I can't tell my Linda. I'm gonna pay you and don't pay him and

690
01:10:51,000 --> 01:10:51,960
33 months

691
01:10:51,960 --> 01:10:54,260
No body waits that long to collect.

692
01:10:55,460 --> 01:10:57,920
And did you identify yourself for the record?

693
01:10:58,180 --> 01:11:01,440
My name is Dr. John Jackson and I'm a resident of Woodland.

694
01:11:01,940 --> 01:11:02,620
Thank you.

695
01:11:03,320 --> 01:11:03,740
All right.

696
01:11:04,240 --> 01:11:04,700
Okay.

697
01:11:05,320 --> 01:11:06,600
Any additional public comment?

698
01:11:07,920 --> 01:11:08,700
All right.

699
01:11:09,080 --> 01:11:10,400
I apologize for missing you.

700
01:11:11,140 --> 01:11:11,580
It's okay.

701
01:11:11,980 --> 01:11:12,620
All right.

702
01:11:12,740 --> 01:11:15,040
All right.

703
01:11:15,500 --> 01:11:17,260
There being no further public comment,

704
01:11:18,140 --> 01:11:19,640
the hearing is closed.

705
01:11:19,640 --> 01:11:24,520
and now that we've heard from both the staff and from the appellant and

706
01:11:25,300 --> 01:11:31,520
We've been back and forth it and heard from the public. It's now in the council's hands to decide

707
01:11:32,360 --> 01:11:33,840
Does anybody wish to speak?

708
01:11:34,440 --> 01:11:37,500
Are we allowed to ask the appellant or its council questions?

709
01:11:40,860 --> 01:11:43,800
Yes, you're allowed to ask questions. I'm as you know that with staff

710
01:11:50,480 --> 01:11:52,320
Council you would agree that your client

711
01:11:53,500 --> 01:11:54,440
Runs a hotel

712
01:11:55,840 --> 01:11:56,560
That's correct.

713
01:11:57,020 --> 01:12:01,620
And you would agree that your client is aware that the city of Woodland has a TOT?

714
01:12:02,500 --> 01:12:03,060
That's correct.

715
01:12:03,540 --> 01:12:08,320
And would you agree that your client had paid TOT in the past?

716
01:12:09,260 --> 01:12:10,540
While they're able to, yes.

717
01:12:10,900 --> 01:12:16,860
You relied heavily on the word honesty, and I think you should.

718
01:12:17,760 --> 01:12:23,280
But one of the questions I have is if your client collected the TOT from the guest,

719
01:12:23,280 --> 01:12:27,760
First, why wasn't that put aside knowing it doesn't belong to him?

720
01:12:31,920 --> 01:12:35,620
So the TOT funds are deposited with the whole entire deposit.

721
01:12:35,940 --> 01:12:37,700
It's not a separate account, it goes into.

722
01:12:38,100 --> 01:12:43,140
So when you come in to the Best Western, any hotel, it's $100 plus tax.

723
01:12:43,580 --> 01:12:45,480
So let's say it's 12% tax, so it's $12.

724
01:12:46,040 --> 01:12:48,160
So the deposit's going to be $112.

725
01:12:48,700 --> 01:12:52,860
Now if that came through OTA, they're going to subtract their 25%, 20%.

726
01:12:52,860 --> 01:12:59,860
OTAs like booking.com, Expedia and such. Then, you know, and so forth. So, unfortunately,

727
01:13:00,040 --> 01:13:05,620
there's no way for us to extract your TOT or any tax dollars to the side. It automatically goes.

728
01:13:06,200 --> 01:13:14,040
It gets deposited as one lump sum. Mr. Patel, it's my understanding you're the only hotel

729
01:13:14,660 --> 01:13:19,540
in the city of Woodland who's behind in their TOT. How do other hotels do it?

730
01:13:21,120 --> 01:13:25,020
How do other hotels collect and set aside their TOTs?

731
01:13:25,900 --> 01:13:29,180
So for us, I mean, I'm not sure how other people operate their hotels.

732
01:13:29,560 --> 01:13:31,460
Do you ever ask another hotel how they do it?

733
01:13:32,180 --> 01:13:35,640
No, their deposits come in the same way our deposits come in.

734
01:13:35,700 --> 01:13:36,500
Let me ask you a question.

735
01:13:37,240 --> 01:13:39,640
Is that 10% your money or does it belong to the city?

736
01:13:41,240 --> 01:13:42,040
It belongs.

737
01:13:42,500 --> 01:13:43,820
I mean, I'm not denying it.

738
01:13:44,140 --> 01:13:45,000
It doesn't belong to me.

739
01:13:45,060 --> 01:13:45,960
Not your money, is it?

740
01:13:46,040 --> 01:13:47,260
I never said I'm denying it.

741
01:13:47,580 --> 01:13:48,820
Why don't you set it aside?

742
01:13:48,820 --> 01:13:51,240
in some other fashion, talk to an accountant,

743
01:13:51,440 --> 01:13:53,960
talk to your lawyer to figure out a way

744
01:13:53,960 --> 01:13:56,860
to set that money aside and you would be here today,

745
01:13:57,180 --> 01:13:58,020
had you done that?

746
01:13:59,120 --> 01:14:02,280
To be honest, there's no possible way for us

747
01:14:02,280 --> 01:14:04,120
because they think our lawyer.

748
01:14:04,120 --> 01:14:05,820
I don't believe that, sir, at all,

749
01:14:06,120 --> 01:14:07,720
because other hotels are doing it.

750
01:14:08,180 --> 01:14:10,940
You collected the 10% from your guest.

751
01:14:11,500 --> 01:14:15,220
There has to be an accounting method, a banking method,

752
01:14:15,580 --> 01:14:17,860
talk to your counsel about setting that aside

753
01:14:17,860 --> 01:14:19,880
and given it to the proper authorities.

754
01:14:20,740 --> 01:14:24,100
Sir, we take in 180,000 maximum deposits,

755
01:14:24,260 --> 01:14:26,160
our overhead is fixed up to 40.

756
01:14:26,400 --> 01:14:30,260
I'm not asking you that, I'm asking you if that's your money.

757
01:14:31,420 --> 01:14:33,440
I never denied, I never said it was my money.

758
01:14:33,740 --> 01:14:36,620
My question is why wasn't it set aside in some fashion?

759
01:14:37,320 --> 01:14:38,980
I'm explaining to yourself, sir.

760
01:14:39,180 --> 01:14:41,380
I'm not buying that explanation, it's the problem, sir.

761
01:14:42,040 --> 01:14:46,140
Did you look at methods of finding a way to set it aside?

762
01:14:47,100 --> 01:14:50,020
Sir, there is no way for us to set it aside.

763
01:14:50,660 --> 01:14:58,880
That's what I'm trying to convey to you is that if the 240 break even, right, and our monthly income is 180, there's a negative loss of 60,000 a month.

764
01:14:58,880 --> 01:14:59,960
Is this

765
01:15:00,000 --> 01:15:06,360
First venture in hotel business? No, sir. Have you run into the same problem in other hotels

766
01:15:06,360 --> 01:15:15,820
collecting TOTs? No. It's the first time. And it's been going on for like three plus years.

767
01:15:16,660 --> 01:15:21,860
What have you done to change your method of collecting the TOT and setting it aside?

768
01:15:25,950 --> 01:15:26,390
We've

769
01:15:26,390 --> 01:15:31,710
been trying to seek financing. We've been trying to work with it, but there's an influx

770
01:15:31,710 --> 01:15:38,650
of room capacity in town so we don't our occupancy isn't where it is how are we

771
01:15:38,650 --> 01:15:42,790
supposed I mean revenue isn't where it used to be over a half we already

772
01:15:42,790 --> 01:15:46,910
explained we were doing 3.3 million dollars we're down to less than 1.9

773
01:15:46,910 --> 01:15:49,270
million that's

774
01:15:53,210 --> 01:16:05,000
it yeah I'll just respectfully say you you collected the

775
01:16:05,000 --> 01:16:08,740
tax that wasn't your money, but you used it for your needs.

776
01:16:09,480 --> 01:16:10,640
To me, that's fraud.

777
01:16:11,420 --> 01:16:13,160
It isn't that you're not a nice person

778
01:16:13,690 --> 01:16:16,680
and that you're not working very hard to save a business,

779
01:16:16,880 --> 01:16:21,860
but it seems to me the business may be more gone

780
01:16:21,860 --> 01:16:22,820
than you think anyway.

781
01:16:23,380 --> 01:16:25,320
But that's not our issue today.

782
01:16:25,480 --> 01:16:31,120
The issue is you collected tax to which we were entitled

783
01:16:31,120 --> 01:16:33,040
to the city of Woodland, and you

784
01:16:33,040 --> 01:16:36,840
didn't give that to the city of Woodland you instead converted that money for

785
01:16:36,840 --> 01:16:42,440
other purposes I don't know but to me that's fraud so that's all I have to say

786
01:16:42,440 --> 01:16:46,420
and it isn't that I wouldn't like it to help you but the fact of the matter is

787
01:16:47,340 --> 01:16:52,680
we've already gone way way too long we have issues here too to fund the city

788
01:16:52,680 --> 01:16:58,000
meet the needs of all of the residents here and things are real tight for us too

789
01:16:58,000 --> 01:17:04,040
So we have to depend that tax collected is tax-delivered, and it wasn't delivered.

790
01:17:04,380 --> 01:17:06,560
It was converted to other purposes.

791
01:17:07,460 --> 01:17:11,540
Now, however you're accounting, you have to own up to that.

792
01:17:11,620 --> 01:17:12,360
That's your business.

793
01:17:12,500 --> 01:17:17,540
But the fact of the matter is, the city was entitled this money month by month by month,

794
01:17:17,760 --> 01:17:19,380
and now we're pushing three years.

795
01:17:20,120 --> 01:17:24,700
So I feel like we cannot extend more goodwill to you.

796
01:17:24,700 --> 01:17:28,620
we have to give us what the law entitles us to

797
01:17:28,620 --> 01:17:30,840
and that's how I intend to vote today.

798
01:17:31,680 --> 01:17:33,020
Anybody else want to speak?

799
01:17:36,250 --> 01:17:38,030
Mayor, I had the same question.

800
01:17:38,270 --> 01:17:39,950
So those taxes were collected

801
01:17:39,950 --> 01:17:43,270
and from what I understand were to be held in trust

802
01:17:43,270 --> 01:17:45,410
and that clearly was not happening.

803
01:17:45,770 --> 01:17:49,410
So they were diverted and used for another purpose

804
01:17:50,110 --> 01:17:52,970
which in my mind comes across as fraud.

805
01:17:56,350 --> 01:17:59,370
Hi. Are we ready for a motion? David?

806
01:18:00,830 --> 01:18:06,570
Well, to add on to everybody, but why the delay in communication? It seems like it was patchy,

807
01:18:06,850 --> 01:18:11,610
and there's a disconnect of you saying that you were providing these reports,

808
01:18:11,750 --> 01:18:16,170
but staff is letting us know that you weren't providing this information,

809
01:18:16,350 --> 01:18:20,650
and that could have prevented this from escalating.

810
01:18:21,850 --> 01:18:27,350
So, aside from myself, there's a management team that was operating that hotel.

811
01:18:27,730 --> 01:18:28,550
That's no longer there.

812
01:18:29,510 --> 01:18:30,010
That is correct.

813
01:18:30,190 --> 01:18:31,730
I took over October 2025.

814
01:18:32,510 --> 01:18:32,890
October.

815
01:18:33,650 --> 01:18:33,850
Okay.

816
01:18:35,710 --> 01:18:36,250
Thank you.

817
01:18:36,530 --> 01:18:37,110
My wife did.

818
01:18:37,330 --> 01:18:37,410
Sorry.

819
01:18:41,930 --> 01:18:43,230
We have a question for staff.

820
01:18:50,800 --> 01:18:55,780
The business owed the city, besides the TOT, reports.

821
01:18:56,960 --> 01:18:57,520
Correct?

822
01:18:57,720 --> 01:18:57,880
Correct.

823
01:19:01,160 --> 01:19:09,420
Could the appellant have submitted reports on a regular basis, as they do, without paying the tax?

824
01:19:09,900 --> 01:19:10,760
Yes, absolutely.

825
01:19:11,520 --> 01:19:13,980
And he failed to even file the reports?

826
01:19:14,720 --> 01:19:21,520
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.

827
01:19:21,520 --> 01:19:28,620
I'm going to turn to council. Please explain why the appellant did not file reports when

828
01:19:28,620 --> 01:19:35,220
they were due. It looks like there were quite a few that were due late and not at all.

829
01:19:35,680 --> 01:19:43,160
Because the city sued my client prematurely before allowing the public hearing. And so

830
01:19:43,160 --> 01:19:51,500
the reports were submitted through council as part of the litigation process and as

831
01:19:51,500 --> 01:19:56,700
right now in the superior court is why did the city sue my client before

832
01:19:56,700 --> 01:20:01,080
exhausting its remedies and allowing this public hearing. We have a motion to

833
01:20:01,080 --> 01:20:04,880
dismiss pending before the court right now because the city did what it was not

834
01:20:04,880 --> 01:20:08,600
supposed to do which was sue my client before giving it the right to a public

835
01:20:08,600 --> 01:20:12,540
hearing. So the reports were submitted to counsel who submitted them to

836
01:20:12,540 --> 01:20:14,860
counsel for the city. That explains the delay.

837
01:20:14,860 --> 01:20:15,680
Okay,

838
01:20:27,550 --> 01:20:28,290
Ms. McKinney.

839
01:20:31,510 --> 01:20:36,270
I still believe that our council has not received reports for

840
01:20:36,270 --> 01:20:40,610
the last six months either. So even if it's what he said is true that council

841
01:20:40,610 --> 01:20:43,630
is submitting it to council, I don't believe that they have submitted the

842
01:20:43,630 --> 01:20:47,290
most recent reports either. Even if there was a delay, we'd be happy to

843
01:20:47,290 --> 01:20:52,810
receive them, but we have not. So we have a conflict of perspective on that

844
01:20:52,810 --> 01:21:00,490
issue information we need. At this point, it's time to make a decision. I've

845
01:21:00,490 --> 01:21:05,730
tipped my hand. I think one of us has as well, so someone want to make a

846
01:21:05,730 --> 01:21:10,710
motion. I move that we uphold the tax administrator's determination and

847
01:21:10,710 --> 01:21:11,430
deny this appeal.

848
01:21:13,760 --> 01:21:20,440
Thank you. Madam, our legal counsel, does that motion

849
01:21:20,440 --> 01:21:22,520
and accommodate the objective here?

850
01:21:24,100 --> 01:21:26,600
Yes, that's the motion that is attached

851
01:21:26,600 --> 01:21:28,620
to the staff report by way of resolution.

852
01:21:29,060 --> 01:21:31,440
So yes, that's the motion for today.

853
01:21:31,700 --> 01:21:31,840
Thank you.

854
01:21:32,220 --> 01:21:32,940
Is there a second?

855
01:21:33,740 --> 01:21:34,220
Not yet.

856
01:21:35,260 --> 01:21:36,560
Oh, I do have additional.

857
01:21:36,980 --> 01:21:39,060
I'd like a second and then we'll have further discussion.

858
01:21:39,800 --> 01:21:40,660
I'll second that motion.

859
01:21:40,860 --> 01:21:42,780
Oh, we have a motion on the floor

860
01:21:42,780 --> 01:21:45,300
to sustain the staff's action in this matter.

861
01:21:45,700 --> 01:21:47,240
And now we're gonna have further discussion.

862
01:21:49,700 --> 01:22:02,760
Thank you. Regarding the fraud portion of the $171,000 in fraud fees, is there a way

863
01:22:02,760 --> 01:22:15,500
to stay that pending payment that is due for TOT penalties and interest?

864
01:22:16,620 --> 01:22:20,820
Yes. So that could be part of the motion that you make today. It could be a motion to approve

865
01:22:20,820 --> 01:22:27,140
the resolution with that addition that could be included in the resolution. It could

866
01:22:27,140 --> 01:22:29,520
be reviewed by the city attorney's office before adoption.

867
01:22:29,520 --> 01:22:35,260
And as far as, I don't want to come back here in the year to be in the same

868
01:22:35,260 --> 01:22:43,740
situation. Can there be a requirement in any resolution that the appellant be

869
01:22:43,740 --> 01:22:50,200
timely with his payments as well as his reports? We can include that in the

870
01:22:50,200 --> 01:22:53,800
resolution however it would be up to appellant to be timely with the

871
01:22:53,800 --> 01:22:54,220
payments.

872
01:22:55,400 --> 01:22:57,460
You understand my concern, Council?

873
01:22:57,760 --> 01:23:00,300
Absolutely. How can we address that?

874
01:23:01,040 --> 01:23:01,940
Well, frankly,

875
01:23:04,080 --> 01:23:11,540
with regard to an agreement to have the time we report submitted, the

876
01:23:11,540 --> 01:23:21,860
payment submitted, and particularly in make, for example, stay the fraud penalty subject

877
01:23:21,860 --> 01:23:27,300
to compliance. And if there's non-compliance, then have that reinstated?

878
01:23:27,700 --> 01:23:34,260
Yeah. And lastly, counsel, I'm very concerned about your client's answers to my questions

879
01:23:34,260 --> 01:23:41,080
about how to remedy this in the future. I didn't get a good answer. Other hotels do

880
01:23:41,080 --> 01:23:46,980
it every day. They set that money aside. They must have an accountant or a bookkeeper

881
01:23:46,980 --> 01:23:53,340
or some method of doing that, and then you take care of business at the end of the month.

882
01:23:54,040 --> 01:24:02,180
I didn't hear anything solid that assures me that this is going to occur again.

883
01:24:02,860 --> 01:24:08,280
Well, what we can say is that the renovations that did cause all the distress and the issues

884
01:24:08,280 --> 01:24:14,740
are complete at this point, that the funds will be used to further strengthen the business.

885
01:24:14,740 --> 01:24:20,280
And I will tell you that I will be working with my client to ensure that we avoid this sort of thing going forward

886
01:24:21,080 --> 01:24:23,280
So one of the renovations get done

887
01:24:25,460 --> 01:24:28,800
They're incomplete when they're incomplete

888
01:24:28,800 --> 01:24:37,160
They're incomplete. Well the 22 rooms. Yeah, those are complete. That's correct. Yeah, what is your current occupancy rate?

889
01:24:38,240 --> 01:24:39,520
my current occupancy

890
01:24:41,440 --> 01:24:43,420
30 to 50 percent

891
01:24:44,120 --> 01:24:58,560
30. Pretty low. Pretty low. Yeah. And you have an explanation why? Over supply, both ends, so, you know, it varies, but I think supply has a lot to do with it.

892
01:25:03,610 --> 01:25:12,010
Okay. All right. There's a motion on the floor. It's been seconded. We've had some further discussion. Is there anyone else who wishes to weigh in?

893
01:25:12,930 --> 01:25:15,790
Are you ready to vote on the on the on the basic motion?

894
01:25:18,820 --> 01:25:20,140
All in favor say aye.

895
01:25:20,720 --> 01:25:22,080
Aye. Opposed?

896
01:25:24,140 --> 01:25:32,140
We can only wish you the best as you go forward. But I would suggest the hole's bigger than you may think it is.

897
01:25:32,420 --> 01:25:37,860
And you may have to pursue other remedies for your situation.

898
01:25:37,860 --> 01:25:44,280
But the City of Woodland, the people who depend on this revenue are entitled to have it.

899
01:25:44,620 --> 01:25:46,620
It was not given to them in timely fashion.

900
01:25:47,180 --> 01:25:52,000
And now we're at the end of the road, so we're doing what we need to do.

901
01:25:52,240 --> 01:25:53,660
You can do what you need to do.

902
01:25:54,280 --> 01:25:59,480
And I apologize for all the hassle, but we didn't create the situation, okay?

903
01:26:00,340 --> 01:26:04,160
With that, anybody have a memorial adjournment or anything else?

904
01:26:04,800 --> 01:26:06,160
Alright, we're adjourned.