Everyone is tightening their belts, and the city of Solvang is no different.
On Friday, the Solvang Chamber of Commerce hosted its annual State of the City at Craft House at Corque in Solvang, where city officials gave local business owners and residents an update on the city and its future.
Speaking to an audience of more than 100 people, Mayor Mark Infanti laid out the finances of Solvang and promoted Measure E – an increase in the transit occupancy tax for hotels.
During his address, Infanti showed slides of the city’s expenses and tax revenue. Even though the finances were not dire, they showed that expenses were catching up to the city’s revenue.
“We have to be able to handle the finances that … run this city on a day-to-day basis, and we’re running out of that room,” Infanti said.
He continued by saying that despite expenses going up, revenue is not following.
One slide showed that the city is taking in $10,932,272 in total revenue toward its general fund, but its expenses are $10,577,311.
One way the city hopes to offset rising costs is by introducing Measure E, which will be on the ballot in November.
The measure will raise the TOT from 12% to 14% if approved by voters. The TOT is paid by tourists who rent rooms at hotels, motels or other short-term rentals.
Infanti told the audience that the county of Santa Barbara and the city of Buellton are also raising the TOT to 14%. So, no city will have an advantage over another.
Other projects and services will also impact expenses in the future, including roadwork that will cost the city $4 million.
The city’s contract with the Santa Barbara County Sheriff’s Department also increased by 30% this year.
Infanti also said that the city has not been reimbursed by FEMA after storms damaged roads.
The mayor finished his speech by listing a series of commercial projects that are planned to begin in Solvang. The projects range from housing, hotels, markets, and more.
The increase in the TOT was met with mixed responses from the crowd. One of the people who expressed displeasure at the idea was Robert Rauchhaus, who works in real estate. He says that the plan to raise the TOT is “backward.”
“Nobody mentioned cutting city costs,” Rauchhaus said. “Nobody mentioned how do we get overall revenues up for hotels. They’re looking at how to tax existing revenue streams rather than growing revenues.”
Rauchhaus also said he wants to see officials do more to encourage a business-friendly environment and streamline the permitting process.
Rauchhaus said regulations have made it harder for his clients who want to start businesses in the area. Over the past few months, some of his customers have canceled projects due to the difficulty of gaining permits.
The keynote speaker for the event was Jesper Kamp, a CEO and consul general of Denmark.
In his speech, Kamp explained the relationship between Denmark and the United States and how the two benefit each other economically.
He said that Danish companies and trade provide about 149,300 jobs to Americans. On the other hand, U.S. companies provide 135,800 jobs to people in Denmark.
Kamp also praised human connections as the foundation of the relationship between the United States and Denmark.
“[This] relationship is a shining example of what can be achieved when two nations come together in friendship and cooperation,” Kamp said.
City officials also honored Alvin Salge, known for his volunteer work in the veteran community. Salge is a retired lieutenant colonel from the Air Force and chair of the Santa Barbara County Veterans Advisory Commission.
