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2003-907-Minutes for Meeting May 12,2003 Recorded 5/28/2003COUNTY TES FICIAL NANCYUBLANKENSHIP,FCOUNTY CLERKS CJ 1003'901 COMMISSIONERS' JOURNAL 05/28/2003 04:21:00 PM 11111111111111111111111111111111 2 01 DESCHUTES COUNTY CLERK CERTIFICATE PAGE This page must be included if document is re-recorded. Do Not remove from original document. Deschutes County Board of Commissioners 1130 NW Harriman St., Bend, OR 97701-1947 (541) 388-6570 - Fax (541) 388-4752 - www.deschutes.org MINUTES OF ROOM TAX MEETING DESCHUTES COUNTY BOARD OF COMMISSIONERS MONDAY, MAY 129 2003 Commissioners' Hearing Room - Administration Building - 1130 NW Harriman St., Bend The purpose of the meeting was to discuss the possible adoption of an ordinance that would clarify the way in which transient room taxes are collected in Deschutes County. Present were Commissioners Dennis R. Luke, Tom DeWolf and Michael M. Daly. Also present were Mike Maier, County Administrator; and Marty Wynne, Finance Director. Also present were Tom Luersen, Sunriver; Loy Helmly, , Black Butte Ranch; Jeff Colburn, Eagle Crest; and media representative Chris Barker of the Bulletin. No other citizens were in attendance. The meeting began at 8:00 a.m. Marty Wynne gave a brief overview of the proposed ordinance. He explained that the current ordinance is inconsistent in the way transient room taxes are collected. This was brought to his, and then to the Commissioners', attention because of recent audits and also because representatives of some local resorts noted the inconsistencies. The transient room tax ordinance goes back over twenty years, and has not been reviewed for nearly that long. Some of the inconsistencies relate to the recreation fee charged by resorts; although these recreation fees are usually not optional to the guest, in most cases tax has not been paid on those amounts. Each of the larger resorts charge differing recreation fees; and residential properties are handled differently. Another issue that was brought up is when should tax be paid on housekeeping services, which are usually, but not always, built in to the cost of the lodging. Minutes of Room Tax Ordinance Meeting Monday, May 12, 2003 Page 1 of 4 Pages A task force had been formed to try to understand and verify the practices of the various resorts. Information was gathered, and the goal was to simplify the way in which taxes are paid to make it simpler for auditors and easier for the resort operators to understand; as well as to reach a point of fairness and consistency. The group met four times for two hours each time, and discussed the variable and compared the way room taxes are handled in Deschutes County as compared to other areas and states. Mr. Wynne said he, along with Cheryl Circle of his department and County Legal Counsel Mark Amberg were a part of the task force. Mr. Amberg has indicated the language in the current ordinance is clear in that room -related, non -optional charges should be assessed a tax. However, since there seems to be some confusion, it could be clarified. The ordinance should specifically state that all non -optional room related charges should be assessed. Commissioner DeWolf stated that Tom Luersen has indicated that in his opinion the existing ordinance is unclear. Mr. Wynne suggested a compromise could be made to allow resorts adequate time to make changes in their computer and accounting systems, contracts with vendors and billing practices. Mr. Luersen said that the ordinance has not changed, and taxes have been collected without debate or scrutiny for years. The fee charged by Sunriver to visitors in part goes to the homeowners' association, to cover the maintenance of recreational amenities such as pathways, trails, pools and so on. He added that Sunriver Resort has not been charging a tax, but this varies with the property management companies handling properties within Sunriver. Also, the people living within Sunriver do not pay a recreation fee but utilize the amenities and the infrastructure. Mr. Luersen further said that in regard to housekeeping services being taxed, it is obvious to him that the ordinance was written with the hotel industry in mind. The scenario is that the guest checks in,, fully expecting to have daily housekeeping services. In a resort where guests may rent a condominium or house for a week, they typically do not receive daily housekeeping services unless they pay an additional amount specifically for that service; normally they will only receive towels daily. In this case, the housekeeping fee is based on the number of people, the size of the residence and the length of the stay. Minutes of Room Tax Ordinance Meeting Monday, May 12, 2003 Page 2 of 4 Pages Jeff Colburn said that owners used to pay the housekeeping fee, but over time that fee was transferred to the guests. Mr. Luersen observed that how fees are charged to or shared with the homeowner is market driven, as are fees charged to guests. Commissioner Daly asked how some of the property management firms handling Sunriver properties deal with the fees. Mr. Luersen explained that the guests using those properties have access to the community recreational amenities that are owned the homeowners' association; however, they do not automatically have access to the spa, one of the pools, or the golf courses. Mr. Wynne added that some of these firms have rolled the fees into the room rate, and therefore have been paying tax on the entire amount. Loy Helmly stated that the situation is more complicated in Black Butte Ranch. The corporation serves the needs of the homeowners. There is typically a per day charge for each guest for the use of recreational facilities; this fee can change according to demand and the time of the year. The same situation applies to housekeeping services. There are also two other rental pools handling properties, along with individual owners who rent out their residences on their own. Mr. Colburn said that there is a recreation fee at Eagle Crest, but no separate housekeeping fee; it is included in the cost of the room. Mr. Wynne stated that the purpose of this clarification is not to increase the amount of tax, but to make the ordinance fair and consistent. It is obvious that some have been paying the appropriate tax, and others have not, due to a variety of reasons. Much of the tax collected is for Sheriff patrols and also goes to the Central Oregon Visitors Association. Mr. Luersen said there is room for compromise on the housekeeping fee; however, the recreation fee depends on the structure of the resort. Commissioner DeWolf stated that he prefers to see a single charge. Commissioner Luke said that he'd like to see a recommendation in writing from the committee. Commissioner Daly said that some of the smaller property managers might not think the same way that the representatives of the big resorts do; especially since some of them have been paying tax on recreational and housekeeping fees all along. Minutes of Room Tax Ordinance Meeting Monday, May 12, 2003 Page 3 of 4 Pages Commissioner DeWolf explained that there seems to be no way to reach a consensus that satisfies everyone, but he'd like to see a reasonable decision, one that would be fair and legally defensible. Commissioner Luke added that resorts are an important part of the local economy, and this ordinance needs to be clarified so that it can be understood and handled consistently. Being no further discussion, the meeting concluded at 8:45 a.m. DATED this 12th Day of May 2003 for the Deschutes County Board of Commissioners. ATTEST: I Recording Secretary R. Luke, Tom DeWolf, Michael M' Daly, ssioner issioner Minutes of Room Tax Ordinance Meeting Monday, May 12, 2003 Page 4 of 4 Pages