HomeMy WebLinkAbout2008-02-27 Business Meeting MinutesDeschutes County Board of Commissioners
1300 NW Wall St., Bend, OR 97701 -1960
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MINUTES OF BUSINESS MEETING
DESCHUTES COUNTY BOARD OF COMMISSIONERS
WEDNESDAY, FEBRUARY 27, 2008
Commissioners' Hearing Room - Administration Building - 1300 NW Wall St., Bend
Present were Commissioners Dennis R. Luke, Tammy Melton and Michael M.
Daly. Also present were Dave Kanner, County Administrator; Erik Kropp, Deputy
County Administrator; David Givans, Internal Auditor; Robin Marshall and Robin
Marshall, Commission on Children & Families; Timm Schimke, Solid Waste
Department; Debbie Legg, Personnel; Sheriff Larry Blanton; Tom Blust, Road
Department; Dan Despotopulos, Fair & Expo; Mike Dugan, District Attorney;
Anna Johnson, Communications; Tom Anderson and Kristen Maze, Community
Development Department; Laurie Craghead, Legal Counsel; media representative
Hillary Borrud of The Bulletin, several other County employees and approximately
twelve other citizens.
Chair Luke opened the meeting at 10:00 a.m.
1. Before the Board was Citizen Input.
None was offered.
2. Before the Board was Consideration of Chair Signature of an Intent to
Award Contract Letter for Crushed, Pre - coated Rock for Chip Seal
Projects.
Tom Blust gave an overview of the item; he said that the bid amounts were
varied. Commissioner Daly commented that he is a proponent of the low bid
process, and this item shows why.
MELTON: Move approval.
DALY: Second.
Minutes of Board of Commissioners' Business Meeting Wednesday, February 27, 2008
Page 1 of 19 Pages
VOTE: DALY: Yes.
MELTON: Yes.
LUKE: Chair votes yes.
3. Before the Board was Consideration of Chair Signature of Document No.
2008 -092, a Grant Agreement with the Oregon Department of
Environmental Quality for Construction and Demolition Materials Salvage
Project.
Timm Schimke said the State of Oregon DEQ offers grants to local
governments for this purpose. The funding is passed through to the entity doing
the work. The project will establish relationships with five building contractors
to separate usable lumber and other waste material that can be sold through the
Habitat ReStore. The overall project is about $55,000; the grant amount is
about $45,000, with the Solid Waste Department covering the shortfall.
Commissioner Daly asked how the new solid waste facility will allow
reclaiming of this type of material. Mr. Schimke said they fully expect to be
able to separate out a lot of this waste in the near future. Some is already being
removed before it goes into the building.
Commissioner Melton stated that this is a win -win; it costs the contractors less,
Habitat gains material to use or sell, and the landfill is not filled up as quickly.
Mr. Schimke said that the County has to meet diversion goals for the State, but
this is beyond what is required.
MELTON: Move approval.
DALY: Second.
VOTE: DALY: Yes.
MELTON: Yes.
LUKE: Chair votes yes.
4. Before the Board was Consideration of Chair Signature of Document No.
2008 -020, a Contract for Subgrant with Bend Metro Park & Recreation
District for an After - school Substance Abuse Program for Middle School
Girls.
Robin Marshall gave a brief overview of the item.
Minutes of Board of Commissioners' Business Meeting Wednesday, February 27, 2008
Page 2 of 19 Pages
MELTON: Move approval.
DALY: Second.
VOTE: DALY: Yes.
MELTON: Yes.
LUKE: Chair votes yes.
5. Before the Board was Consideration of Signature of Order No. 2008 -019,
Creating a Retirement Incentive for Community Development Employees.
Dave Kanner said there will be a revenue shortfall in the Community
Development Department this year and next, directly related to the decline in
construction activity and fewer permits. The Department is fee supported.
There are six positions unfilled at this time. In an effort to avoid layoffs in the
Department, employees who might be thinking about retiring in the near future
will be offered an incentive to retire early.
It will be offered to those employees who are paid out of Fund 295, and they
must be 55 or older, have worked for the County for at least five years, and
must be eligible to receive PERS benefits.
Incentive is one week's salary for each year of service, with a minimum of
twelve weeks' salary. It decreases the PERS benefits, which offsets the cash
payoff. Also a portion of the health insurance is covered by the County,
depending on years of service. There are sixteen employees who may be
eligible, and they will have 45 days to consider it.
The savings relates to who chooses to take the package. It is presumed that a
less experienced and therefore less expensive employee will fill some positions;
however, some positions may not be filled right away.
Commissioner Melton said that they are a very professional, dedicated staff and
she would prefer none of them leave. This is not a push or wanting anyone to
leave. It is hoped there are savings and some jobs can be kept. Perhaps some
of these employees have been thinking about retiring anyway.
Tom Anderson said that an informational meeting is scheduled in March to talk
about the program. It is clear that they don't do this lightly, and recognize that
the expertise of these employees will be missed. He is hoping for a win -win
situation. No one will be forced to do this.
Minutes of Board of Commissioners' Business Meeting Wednesday, February 27, 2008
Page 3 of 19 Pages
Commissioner Daly asked if it might be possible to hire these people back in
the future. Mr. Andersons said under PERS rules employees can come back
under certain circumstances.
Debbie Legg said that they must retire with PERS to participate in the program.
This has been done this in the past. To be eligible for the health insurance plan,
they have to retire from PERS.
Erik Kropp clarified the amount of the County's contribution towards the
medical insurance.
MELTON: Move approval.
DALY: Second.
VOTE: DALY: Yes.
MELTON: Yes.
LUKE: Chair votes yes.
6. Before the Board was Consideration of Chair Signature of Document No.
2008 -054, an Intergovernmental Agreement with the Oregon Department
of Human Services Extending Tort Liability Insurance Coverage to
Deschutes County.
Sherri Pinner explained that this is offered by the State for the Mental Health
Department, specifically for providers of certain services.
MELTON: Move approval.
DALY: Second.
VOTE: DALY: Yes.
MELTON: Yes.
LUKE: Chair votes yes.
7. Before the Board was Consideration of Signature of Document No. 2008-
049, an Amendment to an Intergovernmental Agreement with the Oregon
Department of Human Services for Mental Health, Development Disability
and Addiction Services.
Ms. Pinner gave an overview of the increase in payment for programs having to
do with assisting children of parents involved in the welfare system.
Minutes of Board of Commissioners' Business Meeting Wednesday, February 27, 2008
Page 4 of 19 Pages
MELTON: Move approval.
DALY: Second.
VOTE: DALY: Yes.
MELTON: Yes.
LUKE: Chair votes yes.
8. Before the Board was Consideration of Signature of Document No. 2008-
088, an Amendment to an Intergovernmental Agreement with the Oregon
Department of Human Services regarding Funding and Guidelines for
Mental Health Services.
Ms. Pinner stated that this addresses the COLA for the biennium.
MELTON: Move approval.
DALY: Second.
VOTE: DALY: Yes.
MELTON: Yes.
LUKE: Chair votes yes.
9. Before the Board was Consideration of Signature of Resolutions No. 2008-
014, 2008 -015 and 2008 -016, regarding the Deschutes County Planning
Authority's Use of Deadly Force.
Sheriff Blanton explained that each entity is charged with, by July 2008, a set of
policies regarding the use of deadly force. The Deschutes County Sheriff's
Office is already accredited, as is Sunriver, Bend and Redmond, far ahead of
other police agencies.
The initial meeting was held in November 2007. A hearing was publicized and
held on January 31, 2008. The draft policies need to be approved and sent to
the Attorney General.
Mike Dugan said that this issue came up in 2002 and again in 2003. The
legislature tried to pass House Bill 3426, then Senate Bill 311 in 2005. This
eventually became Senate Bill 111. The use of force issue caused the Attorney
General to create a task force in 2003 and with the help of various law
enforcement people and some from the Department of Justice, a plan was
developed.
Minutes of Board of Commissioners' Business Meeting Wednesday, February 27, 2008
Page 5 of 19 Pages
Among the important things it addresses is requiring training of attorneys in the
District Attorney's Office. The County has had a major incident team in place
since 1988. The legislature set aside funding for line officers to attend, but not
District Attorney personnel.
Sheriff Blanton added that a meeting date has already been set to review the
adopted policy. The last Thursday of each January will be the meeting date
each year.
MELTON: Move adoption.
DALY: Second.
VOTE: DALY: Yes.
MELTON: Yes.
LUKE: Chair votes yes.
10. Before the Board was a Public Hearing and Consideration of Signature of
Document No. 2008 -053, a Noise Permit for the Bend Municipal Airport.
Kristen Maze gave an overview of the item. She said that this is the second
permit asked for by Knife River Company to complete work being done at the
airport. This is required in order to operate equipment after hours. Depending
on funding, work should begin in April or early May. The Board must make
findings regarding a public necessity and safety, or that peace of the neighbors
won't be disturbed or can be mitigated.
Commissioner Luke stated that after the issuance of the last noise permit,
citizens in the area wanted to be notified of this hearing. Ms. Maze said that
just as before, it was noticed in the newspaper and all of the neighbors were
advised by mail. The Airport Manager has been working with the neighbors as
well. No comments by mail or e -mail have been received.
Commissioner Luke then opened the hearing.
Hap Taylor of Knife River Company said that the new runway is completed and
operating. The next phase is to remove the old runway and make a swale to
remove water. The taxiways have to be adjusted for access as well.
Susan Palmeri, Airport Manager, said that they are waiting for funding from the
FAA to begin the additional work. Some money was left over from last year
but the work just can't stop and start.
Minutes of Board of Commissioners' Business Meeting Wednesday, February 27, 2008
Page 6 of 19 Pages
Funding should come by June or July, so they are trying to determine what
construction can start earlier. (She referred to an oversized display of the layout
of the actual construction of the project.)
Commissioner Daly asked if the City had explored borrowing against the grant
so the work can start. Ms. Palmeri said yes, but the FAA won't reimburse
anything that is pre- spent.
Ms. Palmeri stated that they have met with the neighbors, sent out notifications
after the new runway opened to approximately 1/2 mile around the airport,
asking for questions or concerns. She is committed to reaching out again to
them as soon as she knows they can start work again, in an effort to mitigate
whatever they can. There was not a good showing at the neighborhood
meeting; just five or six people attended. She said even if they have to go door
to door, they want to get more input. There will be noise associated with the
project. Knife River has done some additional boring so that the locations that
might be a problem can be addressed.
Hap Taylor said that they hit between 30 -40% rock on the north end, and will
have to hammer most of it out. Crushing will happen on site.
Commissioner Melton said they learned a lot the last time. One question she
has is safety. The situation can be confusing for pilots, and it is essential to
have a good, functioning runway. She is concerned about takeoffs and
landings, as there was testimony that there are some pilots that clearly pushed
the envelope in that regard. She wants to be sure it is safe for pilots and others.
Ms. Palmeri replied that they are working with the Bend Police Department and
have a plan in place to address situations where pilots might take off or land
when the runway is closed. There will be a report to the FAA and to local law
enforcement who will follow -up and process the incident.
Mr. Taylor added that it would be perfect if there was a controller. After dark it
is hard to monitor the planes. Two operators will have radios but they are hard
to hear if you are operating heavy equipment.
Sheriff Blanton observed that there is no problem with the Bend Police
Department taking the information and referring it to the District Attorney. It
could be called disorderly conduct or something similar. If anything else
happens on the property, though, it is handled by the Sheriff's Office.
Minutes of Board of Commissioners' Business Meeting Wednesday, February 27, 2008
Page 7 of 19 Pages
Ms. Palmeri said that there is a project management company handling the
engineering; they have a radio on at all times and will handle the information if
there is a violation. The plan is to allow as much daylight time as possible for
the work to be done. There will not be much construction noise over the
weekend. The airport tenants have been advised and accepted the plan.
Mr. Taylor said that his company may do some offsite work during the hours
that the airport is open. The airport is not manned at night and there are lighted
x's on both ends of the runway. Ms. Palmeri added that pilots are advised to
check advisories. Mr. Taylor stated that if the project is delayed by funding, it
will go longer into the year. If the funds come in June or July, they should be
done by September. He needs about a 90 -day window.
Kristen Maze said that the permit becomes null and void if work is not started
within 30 days; she would prefer to delete that part. Laurie Craghead asked for
clarification regarding the types of findings needed to support the permit, which
can be approved by the Board next week.
DALY: Move that findings be written for approval of the permit.
MELTON: Second.
VOTE: DALY: Yes.
MELTON: Yes.
LUKE: Chair votes yes.
11. Before the Board was Discussion of a Proposed Increase in the Transient
Lodging Tax.
Dave Kanner said that this has been an ongoing discussion. With federal timber
payments going away, Tom Blust came up with a list of various options to help
replace the lost revenue, in addition to just cutting the budget.
The Board selected three options to pursue: increasing the solid waste tipping
fee, transportation system development charges, and an increase in the transient
lodging tax. It is now 7 %, but is 9% in the cities. The County hopes to match
the 9% and dedicate it to maintenance of the roads in Deschutes County that
can be tied to tourist - related facilities.
Minutes of Board of Commissioners' Business Meeting Wednesday, February 27, 2008
Page 8 of 19 Pages
He said that the County reached out to lodging providers in a series of meetings.
Many of the participants are at today's meeting. It is clear from the meetings
and e -mails that they want a further opportunity to speak to the Board directly
about their feelings on the proposal, which is the purpose of today's meeting.
There is a divergence of opinion as to whether the use of these funds for road
maintenance that is tourist - related is allowable under ORS 320. There are two
major advantages of the transient lodging tax; the administration is already in
place to implement and collect the tax; and it generates a fairly significant
amount of money, much more than some of the other options that were
examined.
He added that the Board has not made any decisions in this regard and he
doesn't know what they might decide.
Commissioner Luke said that anyone can testify, whether or not they are a
lodging industry professional. Commissioner Melton observed that it has not
been easy, looking for something that results in change and is difficult. She
feels this has been examined in an objective manner. Commissioner Daly
added that he is willing to hear what everyone has to say.
Commissioner Luke stated that he is proud of the County regarding the amount
of money that is dedicated towards tourism, which is a vital part of the
economy. He likes the process that has been done thus far; this has been
discussed for several years with the operators, and he appreciates the working
relationship they have with the industry.
Chair Luke then opened the hearing.
Greg Mindt, President and CEO of the Oregon Lodging Association, located in
Wilsonville, said they represent all types of lodging facilities. He wanted to
testify on behalf of the Deschutes County resort community.
Per his letter, there is a significant slowdown of the economy; additionally,
research shows that occupancy growth is flat across the country. Deschutes
County has been fairly flat for several years, at about 50 -53% occupancy.
He added that he does not see support or a need to increase the tax, and that
fairgrounds and roads are not an appropriate use for those dollars.
Minutes of Board of Commissioners' Business Meeting Wednesday, February 27, 2008
Page 9 of 19 Pages
Commissioner Luke asked if the motor coach events are not related to tourism.
Mr. Mindt replied that it is not a destination and therefore not tourists as defined
by the law. He added that COVA is in the best position to decide how to
allocate the funds.
Commissioner Melton asked if there was a drop when the rate went from 7% to
9% in the cities. Mr. Mindt said he doesn't know when that happened and
doesn't have the answer. He feels the funds should be pumped back into
marketing.
Commissioner Daly stated that Oregon law is clear regarding tourism - related
facilities, and doesn't say strictly lodging. He asked if other tourism - related
facilities, such as museums, should be included. Some counties in Oregon do
allow dollars to go to historical societies and museums. Mr. Mindt replied that
this decision is made on a jurisdictional basis, and can be different across the
State. He said that of the last 1% increase imposed by the State, 70% must go
to tourism, the rest as appropriate.
Commissioner Luke said that Mr. Minke mentioned that raising room taxes can
impact tourism activities, yet the industry supported the 1% across the board tax
at the State. Mr. Minke replied that it was put right back into the industry for
marketing. This was a positive move to counteract competition from other
states. He said that given the economic situation and slowdown, there is a lot
of fear about the County increasing the tax locally.
Commissioner Melton asked how the group he represents views the importance
of the local road system. The road system needs to be strong enough to be
viable and endure tourism. Mr. Minke stated that transportation in general is a
priority, and the State needs good infrastructure. This is a difficult decision to
make. He doesn't see where the roads are part of this except if they are
impacted by weather.
Commissioner Luke observed that Road 45 goes from Sunriver to Mt. Bachelor.
Deschutes County contributed about $1.2 million into this $12 million project,
and agreed to maintain it forever at a cost of about $200,000 per year. The
County is taking a big hit in road funding. Road 45 benefits mostly Sunriver
and south County tourism. This is one location that is justified to use the tax.
Minutes of Board of Commissioners' Business Meeting Wednesday, February 27, 2008
Page 10 of 19 Pages
Mr. Minke agreed that roads are important, but other industries benefit from
them as well. Just because there is a convenient way to fund something through
the taxing mechanism, it should not be just the responsibility of the lodging
industry.
Commissioner Daly said that he is concerned about the language in the letter
from the lodging industry attorney that basically says if the County continues to
move forward, there will be a lawsuit. Mr. Minke replied that this was said to
stress how important this is, and that the funds would be used outside of the
scope of what they think it should be.
Commissioner Luke said the Board recognizes the importance of tourism. The
local economy is diverse now and should far better in this downturn.
Dave Kanner said that he was struck by the line, using the money for
promotion. A fairly significant part would be used to promote tourism here. If
there is a measurable benefit, perhaps the budget should be increased. Mr.
Minke replied that there are some measurements through Travel Oregon.
COVA uses different measurements. This will vary by jurisdiction.
Commissioner Luke asked Dan Despotopulos if he feels the Fairgrounds is a
destination, and what the impact is on Deschutes County. Mr. Despotopulos
replied that in 2001 they had 97 events; in 2007 they had 416. They are very
busy now. They don't always come to the Fairgrounds as tourists, but there is a
definite economic impact. The motor coach people use a lot of hotel rooms,
and the estimated impact of those events was $53 million. The Fairgrounds is
certainly a major player.
Commissioner Daly pointed out that the State gave the County a grant for
$650,000 to expand the parking lots. The cost was $1.4 million and they were
built to host the motor coach events. This is definitely tourism.
Dan Despotopulos added that those are booked out to 2019. This has a huge
economic impact not only locally, but on the State.
Larry Browning of Discover Sunriver Vacation Rentals said he had agreed not
to speak today but wanted to discuss Road 45 and the Fairgrounds. He asked
about the contribution the destination resort absentee owners make to the
County through their property taxes.
Minutes of Board of Commissioners' Business Meeting Wednesday, February 27, 2008
Page 11 of 19 Pages
He manages about $80 million worth of properties but doesn't come close to
some of the others. He feels this needs to be considered. He pointed out that
within destination resorts property owners pay to maintain their own roads. He
is against an increase in lodging tax. He realizes the system is in place and
residents of the County would pass it easily. However, it will affect his
business. He had to lay off five people recently. Deschutes County is blessed
by having destination resorts and all of that property tax money coming from
outside the County.
In regard to Road 45, he has been involved in the project the last ten years. The
County knew it would have to maintain it and should have been putting funds in
reserve for this. Everyone knew the timber receipts problem was coming, too.
And this can't be the fastest growing area forever.
Commissioner Luke pointed out that the Board knows the impact of destination
resorts. Road 45 was a long project; the County knew it would have to do
maintenance but didn't know the federal funds would be lost.
He pointed out that the County would maintain the roads within Sunriver if they
were County standard. He does not dispute the impact, and there are things that
can't be measured such as medical facilities, good restaurants and so on.
Commissioner Daly said that there are a lot of roads in the County that the
County does not maintain. A lot of property owners maintain them themselves,
not just in the destination resorts. And their taxes are probably equal to those
who do have County- maintained roads.
Commissioner Melton stated that the County is good about keeping reserves
well - funded; much better than most areas of the State.
Commissioner Daly said that there are not a lot of options. That road money
will be lost forever. Most tax increases going before the voters won't pass. He
said he would like to hear suggestions.
Scott Pence of Sunset Realty in Sunriver said that taxes in neighborhoods
compared to revenue generated at resorts is not really a balance equation.
Roads are important in the overall guest experience. The question is not
whether they are important, but whether using these funds meets the
requirements of law. He does not believe it does.
Minutes of Board of Commissioners' Business Meeting Wednesday, February 27, 2008
Page 12 of 19 Pages
In regard to the Fairgrounds, they do bring in a lot of events, but don't meet the
threshold regarding the law. Most events are local; the criteria is 50% of the
visitors corning 50 miles or more and spending the night.
He asked if the folks coming in for the RV rallies pay a room tax.
Commissioner Luke replied that they pay the 9% to Redmond.
Mr. Pence said that the 7% in the county and 9% in the cities are apples and
oranges. Money goes to the local infrastructure in the cities. The resorts have
to tax themselves in addition to the room tax to take care of the resorts and
infrastructure. The relative number is much higher. It is not fair for the resorts
to make up the infrastructure costs.
He pointed out that about 90% of the income generated from lodging tax is
from facilities in the County. He feels the additional revenue would be
misappropriated. This may be the easiest target to generate money, but the
down side is tying it all up in legal battles.
Loy Helmly, the General Manager of Black Butte Ranch, said that any increase
in tourism funding should be used for promotion. It will be difficult to show
that the Fairgrounds and roads are tourist - related. His facility does not benefit
from Road 45 and very little from the Fairgrounds. The property owners pay
for many needs at the Ranch. They do get support from the Sheriff's Office and
Search & Rescue, but other uses do not benefit them.
Jim Kinney, the General Manager of the 7th Mountain, said that in regard to the
Fairgrounds, why not increase the cost of events and charge additional fees for
the RV rallies. The resorts call it a user fee or resort fee. That could generate
funds for the Fairgrounds.
Dave Kanner explained that the Fairgrounds gives away about $500,000 each
year to nonprofits and other organizations. It is a public resource as well as a
revenue generator. Ticket prices at the Fair were increased but they donate a lot
to seniors and veterans. The Fair is a conference center as well, even though
the Oregon Lodging Association may dispute that. They also have to compete
with the private sector. There is more competition in Central Oregon now.
Minutes of Board of Commissioners' Business Meeting Wednesday, February 27, 2008
Page 13 of 19 Pages
Commissioner Luke said that they tried to charge a parking fee, and it was a
loss. Vendors usually pay for it. The Fairgrounds does have to compete with
the private sector and tries to play on a level field. A reserve fund is building
for maintenenance of the Fairgrounds facilities. They also have obtained
advertisers and sponsors for the buildings. Most fairgrounds in other counties
are not doing well.
Mr. Kinney said he appreciates what the Fairgrounds contributes. There has
been discussion regarding how to raise $500,000 at the Fairgrounds, and this is
a significant number. Mr. Kanner said this has not been discussed. He added
that when you look at all of the organizations that use the facilities at no cost, it
amounts to about $500,000. Most of these are nonprofit agencies, or the
facilities are used for military funerals, high school graduations and other
community functions.
Mr. Despotopulos said that this issue is about room tax. The Fair and Expo
Center is financially in pretty good shape. He added that the donated space is
worth probably closer to $1 million. However, they are not meant to make
money but don't want to lose money. They do all they can to generate new
ideas and income.
Mr. Kinney said they would like to hear ideas. He fears that a 2% increase in
lodging tax means a 2% increase in pricing. The Fairgrounds should have to
pay also. It is a competitive disadvantage.
Commissioner Luke said that County residents pay debt service on the bond for
the Fairgrounds, and the County pays 9% room tax on the RV park to the City
of Redmond.
Mr. Kinney stated he is a believer in user fees and feels the Fairgrounds should
increase ticket prices and add a resort fee for the RV park.
Commissioner Melton pointed out that it may sound softer, but a user fee is still
a tax. Mr. Kinney's facility has a conference area and rooms at 7% tax. The
Fairgrounds has this but pays 9 %.
Mr. Kinney said that the restaurants are getting a free ride since there is no
restaurant tax here.
Minutes of Board of Commissioners' Business Meeting Wednesday, February 27, 2008
Page 14 of 19 Pages
Commissioner Luke stated that as they raise fees and ask for more taxes, they
don't do it lightly. None of the Commissioners want to raise anything, but they
are out of options.
Mr. Kinney said that they are interested in partnering and realize there are
money issues. They are not anti -tax but it is a tough time for them. Other ideas
for creative funding are needed.
Commissioner Daly stated that it is now $9 to get into the Fair while other
locations charge just $3 to $5. It is the best fair; however, there is a huge
number of families in the area that can't afford it anymore.
Mr. Kinney said that it is the same for his industry. There must be other
options.
Commissioner Luke stated that they want to continue to work with the
operators and consider all options.
Jay Lyche of Eagle Crest said he is not a big advocate of raising taxes, and
strongly opposes using the money for road maintenance. It does not meet the
threshold of the law in his opinion.
No further testimony was offered, so the hearing was closed.
Commissioner Luke said that if the Board moves forward and this goes on the
November ballot, the starting date could be set for a later time It is possible that
they would not have to do the two cents all at once, which would reduce the
impact.
This issue will be discussed again in another work session.
Before the Board was Consideration of the Consent Agenda.
MELTON: Move approval.
DALY: Second.
VOTE: DALY: Yes.
MELTON: Yes.
LUKE: Chair votes yes.
Minutes of Board of Commissioners' Business Meeting Wednesday, February 27, 2008
Page 15 of 19 Pages
Consent Agenda Items
12. Signature of Order No. 2008 -017, Accepting a Petition and Setting a Date for a
Public Hearing for an Annexation into Deschutes County Rural Fire Protection
District #2
13. Signature of Order No. 2008 -018, Accepting a Petition and Setting a Date for a
Public Hearing for an Annexation into Deschutes County Rural Fire Protection
District #1
14. Signature of Documents No. 2008 -090 and 2008 -091, Amendments to the
State Marine Board Facility Grant Cooperative Agreement regarding Pass -
through Funding to the U. S. Forest Service for Wickiup Boating Improvements
15. Signature of Order No. 2008 -016, Assigning the Name of Caldera Springs
Court to an Unnamed Access Road
16. Signature of Resolution No. 2008 -022, Establishing a Petty Cash Fund in the
Road Department Fund
17. Signature of Resolution No. 2008 -023, Transferring Appropriations within the
Sheriff's Office Fund (Work Center)
18. Signature of Resolution No. 2008 -024, Transferring Appropriations within the
Community Justice — Juvenile Fund
19. Signature of Resolution No. 2008 -025, Transferring Appropriations within the
Sheriff's Office Fund (Communications)
20. Chair Signature of an Oregon Liquor Control Commission License
Application for Tetherow Golf Club
21. Approval of Minutes:
• Business Meetings: January 28 and 30; and February 4, 6 and 11, 2008
• Work Sessions: August 15, October 15, and December 5, 2007; January 2,
28 and 30; and February 4, 6, 11 and 13, 2008
22. Economic Development Grant Requests:
• Central Oregon Youth Investment Foundation — Challenge Obstacle Course
— Commissioners Luke and Daly granted $1,500 each; Commissioner
Melton granted $500
• Bend Area Habitat for Humanity — Alford Village, Initial Engineering —
Commissioner Melton granted $1,000 and Commissioners Luke and Daly
granted $500 each
Minutes of Board of Commissioners' Business Meeting Wednesday, February 27, 2008
Page 16 of 19 Pages
• Family Access Network Foundation — Breakfast Fundraiser — the three
Commissioners granted $1,000 each
• 4 -H Leaders' Association — Five C's Project — the three Commissioners
granted $1,000 each.
• Big Brothers Big Sisters of Central Oregon — 2008 Bowl for Kids' Sake —
the Commissioners granted $500 each.
CONVENED AS THE GOVERNING BODY OF THE SUNRIVER
SERVICE DISTRICT
23. Before the Board was Consideration of Signature of Resolution No. 2008-
015, regarding the Deschutes County Planning Authority's Use of Deadly
Force — Sunriver Police Department.
DALY: Move approval.
MELTON: Second.
VOTE: DALY: Yes.
MELTON: Yes.
LUKE: Chair votes yes.
CONVENED AS THE GOVERNING BODY OF THE BLACK BUTTE
RANCH COUNTY SERVICE DISTRICT
24. Before the Board was Consideration of Signature of Resolution No. 2008-
016, regarding the Deschutes County Planning Authority's Use of Deadly
Force — Black Butte Ranch Police Department.
DALY: Move approval.
MELTON: Second.
VOTE: DALY: Yes.
MELTON: Yes.
LUKE: Chair votes yes.
Minutes of Board of Commissioners' Business Meeting Wednesday, February 27, 2008
Page 17 of 19 Pages
CONVENED AS THE GOVERNING BODY OF THE 9 -1 -1 COUNTY
SERVICE DISTRICT
25. Before the Board was Consideration of Approval of Accounts Payable
Vouchers for the 9 -1 -1 County Service District for Two Weeks, in the
Amount of $3,219.27.
MELTON: Move approval, subject to review.
DALY: Second.
VOTE: DALY: Yes.
MELTON: Yes.
LUKE: Chair votes yes.
CONVENE AS THE GOVERNING BODY OF THE EXTENSION /4 -H
COUNTY SERVICE DISTRICT
26. Before the Board was Consideration of Approval of Accounts Payable
Vouchers for the Extension /4 -H County Service District for Two Weeks, in
the Amount of $1,321.69.
MELTON: Move approval, subject to review.
DALY: Second.
VOTE: DALY: Yes.
MELTON: Yes.
LUKE: Chair votes yes.
RECONVENE AS THE DESCHUTES COUNTY BOARD OF
COMMISSIONERS
27. Before the Board was Consideration of Approval of Accounts Payable
Vouchers for Deschutes County for Two Weeks, in the Amount of
$1,341,657.65.
MELTON: Move approval, subject to review.
DALY: Second.
VOTE: DALY: Yes.
MELTON: Yes.
LUKE: Chair votes yes.
Minutes of Board of Commissioners' Business Meeting Wednesday, February 27, 2008
Page 18 of 19 Pages
28. ADDITIONS TO THE AGENDA
None were offered.
Being no further items to come before the Board, Chair Luke adjourned the
meeting at 12:30 p.m.
DATED this 11th Day of February 2008 for the Deschutes County Board
of Commissioners. .--
ATTEST:
Recording Secretary
Dennis R. Luke, Chair
itte f
Tammy (Baney) Melton, Vice Chair
Minutes of Board of Commissioners' Business Meeting Wednesday, February 27, 2008
Page 19 of 19 Pages
IF YOU WISH TO TESTIFY
Please complete this card & turn
it in to a County staff person.
Name: GLEGG
Mailing Address: 8t c o st:
5"ekls 4 L.4,4£ 41'5 W
Phone #: 2;5.7_19'
E -mail Address: G_ be L
Date: 7.f 2.t -10,8
Subject: i ,2,4,E 1. ( ( goc
IF YOU WISH TO TESTIFY
Please complete this card & turn
it in to Cou9t yy staff person.
Name: _ >
Mailing Add ess: j r ge),
J (fit 0/-977g
Phone #: f95—/Z53
E -mail Addre s:
Date: 2 27
Subjects
IF YOU WISH TO TESTIFY
Please complete this card & turn
it in to a County staff person.
Name: Wit
Mailing Address: fp, P99K 39I
L,;.1 rIV , CI- 9-7-70-7
Phone #: ( I rzq-2s eU
E -mail Address: 5co f@� ,-- Lu ;cow
Date: 42, -7 (07
Subject: - f,-a.�, 14k <<se�
IF YOU WISH TO TESTIFY
Please complete this card & turn
it in to a County staff person.
Name: ,:p,7
Mailing Address: Pa 1215
ReLo1, OR 97756
Phone #: (5,'J Pf tc- 9?o
E -mail Address. : a v„, ("AA AL'A
Date: 2127/2_04
Subject: Tr,�Arl
IF YOU WISH TO TESTIFY
Please complete this card & turn
it in to a County staff person.
Name:,id,,,�za�Cr
Mailing Address: po 2 ??
Phone #: 2efg�
E -mail Address: ' -- ��---
Sk(Jl�r✓ •C elks
Date: 7J27/0
Subject: gip- , Ate,
IF YOU WISH TO TESTIFY
Please complete this card & turn
it in to a County staff person.
Name: -e7 Nom -ta,vt &o2r
Mailing Address: /Rs7 -.3' s�
Phone # 5q e
E -mail Address: ,,,,,,,,k 40N,,,Awv,,
Date: .2 AO /v er G°ti`.
Subject: TRT
IF YOU WISH TO TESTIFY
Please co
it in to
Name:
Mailing Ad • res
lete this card & turn
unt person.
Phone #:
E -mail Address:
Date:
Subject:
IF YOU WISH TO TESTIFY
Please complete this card & turn
it in to a County staff person.
Name: ,,asell,e 411016,--4`
Mailing Address: lie juw wai( -
1/41 O
Phone #: , -y' ei( -7 77h
E -mail Address: 5 paimie,c;d,,,,or.4,
Date: 2 2-7-09`
Subject: gUidle_ rr
a. The retirement incentive pay will be based upon a 40 -hour week.
b. Retirement incentive pay will be based upon the eligible person's
base compensation as of March 28, 2008.
2. Medical Insurance Allowance
Employees electing to retire under this Retirement Incentive Program will
receive a County contribution toward their monthly insurance premiums
(medical only; no dental) in accordance with the following schedule.
Years of Service
5 -10_
10 - 15
15 -20
20 -25
25129
30 +
Car frn ' Retirement Incentive Contribution
50.00
0 1-00-.00
# 111. 35
aag. (01
3'13_ o a
Pr app °se J
This contribution will be provided until the employee reaches the age of sixty -
five or is eligible for Medicare, whichever is earlier.
E. ASSUMPTIONS
1. The program is a Board Policy, not a negotiated contract item. When and if it is
to be made available is at the discretion of the Board of County
Commissioners.
2. The Board of Commissioners and the Department Director may establish a limit
in the number of employees who can participate in the program. Such a
limitation would be based on Countywide seniority.
3. With final approval, eligible persons will be required to sign a retirement
incentive contract. Eligible persons can take up to 45 days to decide if they
wish to sign the document. Once they sign the contract, they then have seven
days to back out of the agreement.
4. All decisions made on actions undertaken by the County pursuant to this
program are final and binding on all parties, and shall not be subject to
grievance or arbitration.
Department of Administrative Services
Dave Kanner, County Administrator
February 19, 2008
TO: BOARD OF COMMISSIONERS
FROM: DAVE KANNER
RE: TLT QUESTION AND OPTION 3
1300 NW Wall St, Suite 200, Bend, OR 97701 -1960
(541) 388 -6570 - Fax (541) 385 -3202
wwvv.co.deschutes.or.us
Countywide vs. unincorporated vote
During our last discussion of transient lodging tax, a question was raised as to whether a
vote to increase the TLT would be a countywide vote or would go only to those voters
living in unincorporated areas. According to Nancy Blankenship, it would be a
countywide vote.
Option 3
In my February 6 memo to you on this subject, I suggested two options for how the funds
from an increased TLT might be used. These were provided for illustrative purposes and
if we go forward we are by no means limited to only those two options; we can mix and
match. There is a third option that I had suggested in my first couple of meetings with
representatives of the local lodging industry, however their reaction was vehemently
negative and I set it aside. That option, which I still believe is worthy of your
consideration, is to increase the transient lodging tax to 9% and divide the increased
revenue thusly:
• All of the unrestricted revenue (30% or $270,000) to the Road Department
• Of the restricted 70% ($630,000), $200,000 would come "off the top" for the
maintenance of River Summit Drive (FS Road 45). The remainder of the
restricted 70% ($430,000) would go to tourism promotion and tourism related
facilities, with the exact split to be determined by the Board and the Budget
Committee.
The amount that comes "off the top" under this option would change annually, depending
on the projected actual cost of maintenance activities on River Summit Drive. This
option provides increased first -year revenues of $470,000 to the Road Department, while
still providing a significant increase in funding for COVA and other tourism functions.
Enhancing the Lives of Citizens by Delivering Quality Services in a Cost - Effective Manner
Department of Administrative Services
Dave Kanner, County Administrator
1300 NW Wall St, Suite 200, Bend, OR 97701 -1960
(541) 388 -6570 - Fax (541) 385 -3202
www.co.deschutes or. us
February 6, 2008
TO: Board of Commissioners
FROM: Dave Kanner
RE: Proposed transient lodging tax increase
I have now had the opportunity to speak to each of the three of you individually about the
above subject and I think it is fair to say that there is divergence of opinion on the path
forward. I believe there are some basic questions that need to be answered and perhaps
we can use this as a starting point for a work session discussion.
It has been proposed that we ask the voters to increase our transient lodging tax from 7%
to 9 %. This would generate (approximately) an additional $900,000 per year. Under
legislation adopted in 2003, 70% of any new or increased TLT must be spent on tourism
promotion or tourism related facilities. The remaining 30% can be spent on anything the
County chooses. This discussion, of course, began last year as we were looking at
options for replacing lost timber receipts in the Road Department budget. We have
already cut the Road Department budget and increased the solid waste tipping fee and we
will have an SDC ordinance in front of you this spring. However, these measures are
likely not enough to replace all of the lost revenue.
The questions to be answered are:
1. Should we go forward with asking the voters for an increase in the TLT?
2. If the answer is "yes," should we seek a 1% ($450,000), 2% ($900,000) or 3%
($1,350,000) increase?
3. Again, if the answer is "yes," should we seek voter approval in May or November?
4. If voters approve, how should the new revenue be allocated?
These questions are intertwined, but here's a discussion of each, in order:
1. Should we go forward with asking the voters for an increase in the TLT?
Discussion:
Transient lodging taxes may be considered a relatively easy sell to the voters, because
local voters typically do not pay the taxes. The TLT rate in the cities of Bend and
Redmond is already 9 %, so if we got voter approval to raise the county rate to 9 %, we
Enhancing the Lives of Citizens by Delivering Quality Services in a Cost - Effective Manner
would simply be raising our rate to the same level as that in the incorporated areas.
Lodging industry providers will argue that an increase in the tax rate will hurt business,
and have told me in earlier meetings that there have been studies done that show a 4%
decrease in bookings for each 1% increase in the tax rate. Although I have asked for
them, I have not been provided with copies of these studies. (I have also talked to others
in the lodging industry who tell me those studies are very old and the results are not
considered solid.) The large resort areas further argue that they already charge additional
assessments to their guests to provide services that might otherwise be provided by local
governments and that they are already among the largest property tax payers in the
County and should not be singled out for additional taxes.
However, transient lodging taxes are assessed for the purpose of compensating local
governments for the impacts on county services that are created by tourists and for which
the local government is either not compensated or not adequately compensated by
property taxes. Even this premise will be disputed by some in the lodging industry, who
will argue that transient lodging taxes are assessed for the purpose of tourism promotion
and should not be increased except at the lodging industry's request. Clearly, the 2003
legislation that restricted the use of new or increased TLTs was a direct response to two
large local governments enacting increases for general fund purposes, although I believe
that even this will be disputed by some members of the lodging industry. In either case,
the split in the 2003 legislation was a compromise and both premises have some validity.
A ballot measure seeking an increase in the TLT may face an opposition campaign from
individual lodging purveyors or from the Oregon Lodging Association, which is
generally opposed to increases in TLTs, much as the Builder's Association is generally
opposed to increased SDCs. However, based on my conversations with local providers, I
do not believe there would be a widespread, locally based opposition campaign.
Even if the County does not use all of the increase for road maintenance (see discussion
of question 3, below), I think there is merit in seeking an increase in the TLT and
continuing to diversify our revenue base.
2. If the answer to question 1 is "yes," should we seek a 1% ($450,000), 2% ($900,000)
or 3% ($1,350,000) increase?
Discussion:
An increase to 9% puts the county at the same level as the cities. I believe this is
reasonable. Note, too, that it is only the county that has lost timber revenues. The cities
are not affected by the loss of this revenue stream.
3. Again, if the answer to question 1 is "yes," should we seek voter approval in May or
November?
Discussion:
A double majority is not required for a TLT increase (the double majority applies only to
property tax increases), so this request can go to the voters at any election. I believe we
can expect voter turnout in the 75 % -80% range in the November election, so if the goal is
to have the maximum number of voters weigh in on this question, then November would
be the choice. Too, there is a likelihood that there will be a 9 -1 -1 levy request on the
May ballot, and it may be prudent for the County to not place any other tax requests on
that ballot, no matter how dissimilar. On the other hand, the November ballot is likely to
contain more tax measures than the May ballot.
If approved by voters in May, we could begin collecting the tax in July '08. A November
election would mean we would not begin collecting significant sums of increased TLT
until peak season begins after Memorial Day '09. This is purely a judgment call on the
Board's part.
Note that COVA as an organization will not take a position on this or any other ballot
measure. However, individual COVA board members may oppose any increase in the
TLT or may work in concert with the Oregon Lodging Association to oppose an increase
in the TLT. Per the Board's request, I met with the OLA and representatives of the local
lodging industry last fall to discuss this idea. I believe their opposition can be
summarized as follows:
1. The county's large resorts already charge resort and recreation fees in addition to
the TLT and these fees allow them to offer services that might otherwise have to
be provided by the county. It places an undue burden on them to have to charge
an increased TLT in addition to these resort and recreation fees.
2. Since it is not a foregone conclusion that the Secure Rural Schools money really
is gone, we should wait for some closure on that issue before asking voters to
raise the TLT.
3. The resorts are already among the county's largest property tax payers and given
the relatively low occupancy rates, these properties are already contributing more
in property tax than they demand in service.
4. An increase in the TLT puts county lodging providers at a competitive
disadvantage at a time when gross receipts from TLT collections are increasing.
5. It was argued by one COVA board member at their most recent meeting that the
TLT should be increased only at the request of the industry (because, ostensibly,
that was the intent of the 2003 legislation).
I have attached e-mails from Larry Browning (Sunriver), Jim Kinney (Inn at the Seventh
Mountain) and Loy Helmly (Black Butte Ranch) that expand on these arguments.
4. If voters approve, how should the new revenue be allocated?
Discussion:
This is the question that gets to the heart of the issue. The original proposal was to
increase the TLT and use the increased revenue for maintenance of particular roads that
qualify as "tourism related facilities" (list attached). A plain reading of the statutory
language would indicate that many of the roads in Deschutes County qualify as "tourism
related facilities" and that we would be well within the law to use an increased TLT for
maintenance activities on these roads. You have previously been provided with
confidential legal advice on this question. Additional legal advice will be forthcoming in
a separate, confidential memo. In addition, shortly after the passage of ORS 320.300 in
2003, the Association of Oregon Counties distributed a memo (attached) advising all
counties to begin documenting which roads could be deemed "tourism related facilities."
According to AOC, it was the legislative intent that these increased TLTs could be used
for road maintenance activities under certain circumstances, a position that will be
strenuously disputed by the lodging industry.
Even if the use of these funds for road maintenance activities is allowable and justified, I
believe an attempt by the County to do so will immediately bring litigation by the Oregon
Lodging Association, as well as an all -out effort by the OLA to further refine the law in
the 2009 legislative session to expressly prohibit the use of TLT for road maintenance.
This could tie us up in litigation for years, during which time we might either be denied
access to the TLT revenue or be forced into the position of not spending the increased
TLT collections until the litigation is resolved. We might also wind up with legislation
even more restrictive than what is already on the books, which would be a very negative
outcome not only for us, but for all local governments.
Here are a couple of options we might consider:
Option 1
Voters approve an increase in the TLT to 9 %. The increased revenue is distributed as
follows:
• 30% of the increase ($270,000) is given to the Road Department.
• 35% of the increase ($315,000) is given to the Fair and Expo Center.
• 35% of the increase ($315,000) is given to COVA.
Discussion
This option offers a couple of benefits to the County. It would allow us to supplant the
money we currently provide to the Fair and Expo Center from the general fund ($270,000
this year; $300,000 last year) and it would increase our contribution to COVA for
marketing, at a time when increased marketing is probably a good idea. Note, too, that
this option was tested in the recent community survey which showed overwhelming
support.
Opponents of this option, in addition to the arguments elucidated above, may argue that
the Fair does not qualify as a tourism related facility that is eligible to receive TLT funds.
I believe this argument is easily refuted. In fact, in the first six months of FY '08, more
than 80% of the visitors to the Fairgrounds fit the statutory definition of "tourist."
However, there may be additional pressure from other organizations for some of this TLT
and we may want to consider a means by which to address that.
Option 2
Voters approve an increase in the TLT to 9% and 100% of the new revenue is given to
the Road Department for maintenance of roads that qualify as tourism related facilities.
Discussion
As stated above, I believe that doing this would instantly make us a statewide test case in
court and lead to a legislative battle in the '09 session. During this time, we would be
prudent to escrow any increased collections in case a court ordered us to pay them back
should we lose the legal fight. That means we could collect increased TLT but be unable
to spend it for a period of perhaps years, with no guarantee that we'd ever be able to
spend it at all.
More recently a local lodging provider (and member of the COVA board) has offered that
an attorney general's opinion stated that it is specifically prohibited for a local
jurisdiction to spend TLT on road maintenance. I checked with the Attorney General's
office and they say no such opinion exists. However, the AG's Office did issue an
opinion in 1985 that stated a local government is limited to spending TLT on only those
things enumerated in the ballot title. Thus, if we were to pursue this second option, I
believe we would have to clearly state in the ballot title that the increased collection
would be spent on maintenance of roads that qualify as tourism related facilities.
Next steps:
I have attached a decision tree that might be useful to you in determining where you'd
like to go with this very important issue. I would also like to suggest inviting local
lodging industry providers in to meet with you face -to -face in a work session so that you
can hear from them directly. (I would note that they were invited to the stakeholder
meeting you held last March at which you discussed road maintenance funding, but none
attended.) The deadline for the Board to submit a measure to the May ballot is March 20,
so I would hope such a meeting could be held in February, if it is the Board's wish to
proceed.
Shall we ask the voters for a TLT increase?
No Yes
2% i crease
May November May November
A/.-.---'---.-----1 AAt /\*. 'Ti■
Option 1 Option 2 Option 1 Option 2 Option 1 Option 2 Option 1 Option 2
Road #
Road Name
Tourist Roads in Deschutes County
From
To
Attraction
Distance (mi.)
4106
4107
2174
7864
4182
5105
3535
4112
1110
Burgess Rd
Cascade Lakes Hwy
Crooked River Dr
FS Rd 45 / 40
Paulina Lake Rd
Pine Mountain Rd
Skyliners Rd
South Century Dr
Three Creek Rd
FS Boundary
Mt. Bachelor
Wilcox Ave
FS Boundary
Highway 97
Highway 20
Bend City Limits
Deschutes River
Sisters City Limits
South Century Dr
Klamath County Line
End County Maint.
Century Dr
End County Maint.
End County Maint.
End County Maint.
Burgess Rd
End County Maint.
Access to Cascade Lakes
Cascade Lakes
Smith Rock State Park
Winter Parks Access
Paulina -East Lake
Pine Mountain Observatory
Tumalo Falls
Access to Cascade Lakes
Three Creek
6.9
38.9
1.1
13.7
18.7
33,
8.4
10.9
3.7
Total Miles
Printed 3/5/07, by John Anderson File: C: \Data \EXCEL \County Mileages
Deschutes County Road Department
105.6
LOCAL TRANSIENT LODGING TAX
INCREASE OR NEW ADOPTION AFTER JULY 1, 2003
Brief overview of requirements of House Bill 2267(2003)
After July 1, 2003, a county may increase an existing county transient
lodging tax (CTLT) or adopt a new one under the following limitations.
• Permit the transient lodging provider to retain a collection reimbursement
charge of at least five percent of all collected CTLT revenues [HB 2267
sec. 10(2) &(3)].
• An increased CTLT may not decrease the percentage of revenues actually
expended to fund "tourism promotion" or "tourism- related facilities"
[Sec. 11(3)].
• At least 70% of net revenue shall be used to fund "tourism promotion" or
"tourism- related facilities "; or to finance /refinance debt of "tourism -
related facilities" and pay reasonable administrative costs incurred [Sec.
11(5) &(6)].
• Not more than 30% of net revenue shall be used to fund general county
services [Sec. 11(5) &(6)].
• "Tourism promotion" means [Sec. 1(7)]:
1. Advertising, publishing, or distributing information to attract
"tourists ". A "tourist" travels more than 50 miles from the
community of residence or stays overnight [Sec. 1(10)].
2. Strategic planning and research.
3. Operating "tourism promotion agencies ". A "tourism promotion
agency" includes a nonprofit organization or governmental unit
responsible for year -round promotion; a nonprofit entity that manages
tourism - related economic development plans, programs, and projects;
and a regional or statewide tourism- related business association [Sec.
1(8)].
4. Marketing special events and festivals designed to attract tourists.
• "Tourism- related facility" means [Sec. 1(9)]:
1. "Conference center" — at least partially owned by a unit of local
government, governmental agency, or nonprofit organization; and
meets the membership criteria of the International Association of
Conference Centers [Sec. 1(2)].
2. "Convention center" — new or improved facility; capable of
attracting and accommodating conventions from international,
national, and regional markets requiring exhibition, ballroom, meeting
rooms, lobby, and registration space; has meeting room and ballroom
space between one -third and one -half of total size of exhibition space;
generates a majority of business from tourists; has room -block
relationship with local lodging industry; and is owned by unit of local
government, governmental agency, or nonprofit organization [Sec.
1(3)].
3. "Visitor information center" — building or portion of building for
the main purpose of distributing or disseminating information to
tourists [Sec. 1(13)].
4. "Other improved real property that has a useful life of 10 or more
years and has a substantial purpose of supporting tourism or
accommodating tourist activities ".
Note 1. "Substantial purpose" is not defined. In law, "substantial"
has a wide range of meanings, from not imaginary to valuable.
Comments in committee and on the floor indicate that facilities that
fall within this definition include county fairgrounds; improvements
and access to natural and recreational facilities; historical and cultural
facilities; and the Hult Center, Keller Auditorium, and the planned
Salem Conference Center.
Note 2. A tip to consider through county counsel: The county
governing body should take official action listing improved real
property within the county that has a useful life of 10 or more years
and has a substantial purpose of supporting tourism or
accommodating tourist activities (e.g., county roads leading to public
land trail heads or viewpoints, the county fairgrounds, improvements
at viewpoints, historical and cultural museums and structures, and
access to attractions).
Association of Oregon Counties (9 -8 -03)
OREGON
ASSOCIATION
February 26, 2008
Deschutes County Board of Commissioners
1300 NW Wall Street
Bend, Oregon 97701
Dear Commissioners,
Thank you for the opportunity to provide the lodging industry's perspective on a proposed transient
lodging tax increase as outlined by County Administrator Dave Kanner in his memorandum dated
February 6, 2008 (the "Memorandum "). As you know, tourism is one of Oregon's leading industries
generating $7.9 billion to our state's economy. In Deschutes County, the impact is $533 million.
Tourism is critical to the continued economic growth of Deschutes County.
The slow down in the economy is clearly beginning to have an adverse effect on the tourism industry
as a whole, and the lodging sector in particular. Smith Travel Research, the lodging industry's leading
information and data provider, closely scrutinizes occupancy rates and trends in the lodging industry.
Smith Travel Research's analysis shows occupancy growth at 0 percent in 2008 nationwide. This flat
projection comes on the heels of relatively flat occupancy rates over the past four years. Smith Travel
Research shows occupancy in Deschutes County at 50.5% in 2004, 51.7% in 2005, 53.3% in 2006
and 52.6% in 2007. Many Central Oregon resort operators predict that the industry is experiencing the
worst economy in 8 -plus years. These factors indicate that the timing for an increase in the transient
occupancy tax is not in the best interest of the Deschutes County tourism economy, including
restaurants, gifts shops, lodging facilities, and other businesses that rely on tourism to survive. As a
result of these issues and the current economic times, the Oregon Lodging Association (OLA) and
Central Oregon lodging operators do not support a transient lodging tax increase.
A 2003 study titled Room Taxes and Economic Impact of the Lodging Industry, conducted by the
American Economics Group, Inc. ( "AEG "), also sheds some light on the impact that a tax increase
may have on the overall tourism industry in Deschutes County. The study suggests that an increase in
the lodging tax causes some travelers to stay fewer days, visit less often and/or make other
adjustments in their spending (i.e. retail, restaurants, entertainment, etc.). The executive summary to
the AEG report states that "Econometric analysis reveals that on average a 2.0% increase in the
combined tax on hotel and motel rooms will cause about a 2.4% reduction in sales and associated
visitor spending." While a considerable amount of complex economic data was analyzed to produce
this report, the conclusion is clear that an increase in lodging taxes results in a negative impact acro
broad spectrum of tourism- related businesses.
In considering an increase to the existing 7% transient room tax in Deschutes County, it is also
important to consider the specific statutory criteria and restrictions set forth in ORS 320.300 — 350.
These statutes require that at least 70% of any new transient occupancy tax increase must be dedicated
OLA 1 8600 SW Salish Lane, Suite 3 I Wilsonville, Oregon 97070 I T: 503- 783 -2797 I F: 503- 783 -2798 f E: info @oregonlodgin ;.com
II' II' II' .0 0 00lodging.cOw
to tourism related purposes and no more than 30% of any new tax may be used to fund county
services.
Attached for your reference is a letter from OLA's legal counsel dated March 16, 2007, which
discussed these statutes and expressed concerns over anticipated uses by Deschutes County for a
proposed lodging tax increase. The critical issue addressed in that letter, which is also discussed in the
Memorandum, is the definition of a "tourism- related facility" and whether county roads, the county
fairgrounds, and other county -owned and maintained assets fit within this statutory definition. To fit
within that definition, the facility must have "a substantial purpose of supporting tourism promotion
or accommodating tourist facilities." ORS 320.305(9)(b). Therefore, the facility must be substantially
used by "tourists" defined as those persons who come to the facility from over 50 miles away or
spend the night in Deschutes County when visiting the facility. ORS 320.305(10). In short, prior to
determining that any facility constitutes a "tourism- related facility," it is incumbent upon Deschutes
County to provide evidence that the facility, in fact, falls within the statutory definition of the same as
discussed above. It is the collective view of the lodging industry that neither roads nor the fairgrounds
qualify as an appropriate use of room tax allocations as suggested in the Memorandum.
Notwithstanding whether a given facility is properly defined as a tourism- related facility, we urge the
Commissioners to recognize that Deschutes County has in place an organization that is vested with
the authority and responsibility for determining the proper expenditure and allocation of tourism
funds. As the destination marketing organization charged with marketing and promoting the region,
the Central Oregon Visitors Association (COVA) is in the best position to determine what constitutes
tourism in Deschutes County. Therefore, COVA should be the entity that receives tourism funds
outlined in statute (i.e. the 70 %). COVA is well positioned to maximize the return on public and
private investments in tourism marketing. We encourage the County to support COVA's ongoing
marketing efforts with the current transient occupancy tax and that all existing programs remain in
tact.
Members of the lodging industry are community leaders and sensitive to the needs and issues local
governments face throughout the state. The OLA and members of the local lodging industry look
forward to our continued partnership with Deschutes County.
Sincerely,
J. Gregg Mindt
President & CEO
cc: Deschutes County Lodging Operators
Matthew Lowe, Esq., O'Donnell, Clark & Crew
O'DONNELL
Mark P. O'Donnell
Kelly W.G. Clark
Matthew D. Lowe*
Kristian S. Roggendorf
Jonathan A. Clark
Via facsimile and U.S Mail
Mark Amberg
Deschutes County Legal Counsel
1300 NW Wall Street, Suite 200
Bend, Oregon 97701
(--)-CLARKIAP
�---J liMMUS At LAW
J
March 16, 2007
Re: Transient Lodging Taxes - ORS 320.300 - 320.350; DCC §4.08.010 - 4.08.340
Dear Mr. Amberg:
Phone: 503. 306 -0224
Fax: 503 - 306-0257
www.oandc.com
Fremont Place II, Suite 302
1650 NW Naito Parkway
Portland, OR 97209-2534
We are legal counsel to the Oregon Lodging Association and have been requested by our client to
review recent statements made by County Administrator Dave Kanner regarding the proposed
use of transient room tax receipts. We understand from an article dated March 15, 2007, in the
Bend Bulletin that the Deschutes County Commissioners are considering increasing the transient
lodging tax in Deschutes County from 7% to 9% and then appropriating amounts in excess of
statutory limits to pay for construction and maintenance of County roads.
As you may know, ORS 320.300 - 320.350 governs the levy and application of transient lodging
taxes by local jurisdictions. Pertinent provisions of ORS 320.350 state:
(2) A unit of local government that imposed a local transient lodging tax on July 1,
2003, may not increase the rate of local transient lodging tax on or after July 2,
2003, to a rate that is greater than the rate in effect on July 1, 2003, unless the
increase was approved on or before July 1, 2003.
(3)
A unit of local government that imposed a local transient lodging tax on July 1,
2003, may not decrease the percentage of total local transient lodging tax revenues
that are actually expended to fund tourism promotion or tourism- related facilities
on or after July 2, 2003. A unit of Local government that agreed, on or before
July 1, 2003, to increase the percentage of total local transient lodging tax
revenues that are to be expended to fund tourism promotion or tourism - related
facilities, must increase the percentage as agreed.
O :\Clients.O &C\Oregon Lodging Association \Trans Tax Use\Deschutes County TRT tssue\Descutes County nr 3- 16- 07.wpd
*Also Admitted to Practice in Washington
O'DONNELL &CLARKLLP
Mark Amberg
March 16, 2007
Page 2
(5)
Subsections (1) and (2) of this section do not apply to a new or increased local
transient lodging tax if all of the net revenue from the new or increased tax ... is
used consistently with subsection (6) of this section to:
(a) Fund tourism promotion or tourism- related facilities;
(b) Fund city or county services; or
(c) Finance or refinance the debt of tourism- relate facilities...
(6) At least 70 percent of the net revenue from a new or increased local transient
lodging tax shall be used for the purposes described in subsection 5(a) or (c) of
this section. No more than 30 percent of net revenue from a new or increased
local transient lodging tax may be used for the purpose described in subsection
(5)(b) of this section.
Importantly, ORS 320.305 provides the following key defmitions:
(6) "Tourism" means economic activity resulting from tourists.
(7) "Tourism promotion" means any of the following activities:
(a) Advertising, publicizing or distributing information for the purpose of
attracting and welcoming tourists;
(b) Conducting strategic planning and research necessary to stimulate future
tourism development;
(c) Operating tourism promotion agencies; and
(d) Marketing special events and festivals designed to attract tourists.
(9) "Tourism- related facility":
(a) Means a conference center, convention center or visitor information
center; and
G:\Clients.0 &C10regon Lodging Association\Trans Tax Use\Deschutes County TRT issue\Descutes County tir 3- 16 -07.wpd
O'DONNELL &CLARKLLP
Mark Amberg
March 16, 2007
Page 3
(b)
Means other improved real property that has a useful life of 10 or more
years and has a substantial purpose of supporting tourism promotion or
accommodating tourist facilities.
(10) "Tourist" means a person who, for business, pleasure, recreation or participation
in events related to the arts, heritage or culture, travels from the community in
which that person is a resident to a different community that is separate, distinct
from and unrelated to the person's community residence, and that trip:
(a)
(b)
Requires the person to travel more than 50 miles from the community of
residence; or
Includes an overnight stay.
The specific language of the applicable statutes cited above is important to consider. A local
jurisdiction is precluded from imposing new or increased transient lodging taxes after July 1,
2003, unless such new or increased taxes are allocated at least 70 percent for the purposes set
forth in the statute.
The proposed use of increased transient lodging taxes to fund roadway construction and
maintenance does not fall within the definition of "tourism- related facilities." The key term is
whether the roadways have "...a substantial purpose of supporting tourism or accommodating
tourist activities." While it is difficult to precisely determine what constitutes "substantial," we
know that such improvements must be used by "tourists" to a fairly large extent—that is, those
persons who come to Deschutes County from over 50 miles away or spend the night in Deschutes
County for the purposes enumerated in ORS 320.305(10). Therefore, the County must show that
the proposed improvements would be so used. Local residents that work at local tourist
facilities, and other local residents who use such roadways are not "tourists" as defined by State
law.
In short, it would appear that the County is considering using transient room tax revenues to fund
capital improvements not authorized under applicable State law. While the Oregon Lodging
Association and the lodging industry as a whole have always had as their primary goal to work
closely with local jurisdictions for the benefit of all, and will continue to do so, the Association
will have no choice but to take appropriate legal action to enjoin any misappropriation of
transient room taxes as discussed in this letter.
G:\Clients.O &C\Oregon Lodging Association \Trans Tax Use'Deschutes County TRT issue\Descutes County tir 3- 16- 07.wpd
O'DONNELL &CLARKLLP
Mark Amberg
March 16, 2007
Page 4
Should you have any questions, please do not hesitate to contact me. As indicated above, the
Oregon Lodging Association and its members are committed to working closely with County
officials to come to a reasonable and fair resolution of this issue.
Sincerely,
Matthew D. Lowe
/mdl
cc: Oregon Lodging Association
Mark P. O'Donnell
a;\Clients.O&C \Oregon Lodging Association \Trans Tax Use\Deschutes County TRT Issue\Descutes County tlr 3- 16- 07.wpd
0 .< Deschutes County Board of Commissioners
1300 NW Wall St., Bend, OR 97701 -1960
(541) 388 -6570 - Fax (541) 385 -3202 - www.deschutes.org
BUSINESS MEETING AGENDA
DESCHUTES COUNTY BOARD OF COMMISSIONERS
10 :00 A.M., WEDNESDAY, FEBRUARY 27, 2008
Commissioners' Hearing Room - Administration Building - 1300 NW Wall St., Bend
1. CITIZEN INPUT
This is the time provided for individuals wishing to address the Board, at the Board's
discretion, regarding issues that are not already on the agenda. Citizens who wish to speak
should sign up prior to the beginning of the meeting on the sign -up cards provided. Please
use the microphone and also state your name and address at the time the Board calls on you
to speak. PLEASE NOTE: Citizen input regarding matters that are or have been the subject
of a public hearing will NOT be included in the record of that hearing.
2. CONSIDERATION of Chair Signature of an Intent to Award Contract Letter
for Crushed, Pre - coated Rock for Chip Seal Projects — Roger Olson, Road
Department
3. CONSIDERATION of Chair Signature of Document No. 2008 -092, a Grant
Agreement with the Oregon Department of Environmental Quality for
Construction and Demolition Materials Salvage Project — Timm Schimke, Solid
Waste Department
4. CONSIDERATION of Chair Signature of Document No. 2008 -020, a
Contract for Subgrant with Bend Metro Park & Recreation District for an After -
school Substance Abuse Program for Middle School Girls — Hillary Saraceno,
Commission on Children & Families
5. CONSIDERATION of Signature of Order No. 2008 -019, Creating a
Retirement Incentive for Community Development Employees — Erik Kropp,
Deputy County Administrator
Board of Commissioners' Business Meeting Agenda Wednesday, February 27, 2005
Page 1 of 8 Pages
6. CONSIDERATION of Chair Signature of Document No. 2008 -054, an
Intergovernmental Agreement with the Oregon Department of Human Services
Extending Tort Liability Insurance Coverage to Deschutes County — Sherri
Pinner, Mental Health Department
7. CONSIDERATION of Signature of Document No. 2008 -049, an Amendment
to an Intergovernmental Agreement with the Oregon Department of Human
Services for Mental Health, Development Disability and Addiction Services —
Sherri Pinner, Mental Health Department
8. CONSIDERATION of Signature of Document No. 2008 -088, an Amendment
to an Intergovernmental Agreement with the Oregon Department of Human
Services regarding Funding and Guidelines for Mental Health Services — Sherri
Pinner, Mental Health Department
9. CONSIDERATION of Signature of Resolutions No. 2008 -014, 2008 -015 and
2008 -016, regarding the Deschutes County Planning Authority's Use of Deadly
Force — Capt. Tim Edwards, Sheriff's Office
10. A PUBLIC HEARING and Consideration of Signature of Document No.
2008 -053, a Noise Permit for the Bend Municipal Airport — Kristen Maze,
Community Development Department
11. DISCUSSION of Proposed Increase in Transient Lodging Tax — Dave Kanner,
County Administrator
CONSENT AGENDA
12. Signature of Order No. 2008 -017, Accepting a Petition and Setting a Date for a
Public Hearing for an Annexation into Deschutes County Rural Fire Protection
District #2
13. Signature of Order No. 2008 -018, Accepting a Petition and Setting a Date for a
Public Hearing for an Annexation into Deschutes County Rural Fire Protection
District #1
14. Signature of Documents No. 2008 -090 and 2008 -091, Amendments to the
State Marine Board Facility Grant Cooperative Agreement regarding Pass -
through Funding to the U. S. Forest Service for Wickiup Boating Improvements
Board of Commissioners' Business Meeting Agenda Wednesday, February 27, 2008
Page 2 of 8 Pages
15. Signature of Order No. 2008 -016, Assigning the Name of Caldera Springs
Court to an Unnamed Access Road
16. Signature of Resolution No. 2008 -022, Establishing a Petty Cash Fund in the
Road Department Fund
17. Signature of Resolution No. 2008 -023, Transferring Appropriations within the
Sheriff's Office Fund (Work Center)
18. Signature of Resolution No. 2008 -024, Transferring Appropriations within the
Community Justice — Juvenile Fund
19. Signature of Resolution No. 2008 -025, Transferring Appropriations within the
Sheriff's Office Fund (Communications)
20. Chair Signature of an Oregon Liquor Control Commission License
Application for Tetherow Golf Club
21. Approval of Minutes:
• Business Meetings: January 28 and 30; and February 4, 6 and 11, 2008
• Work Sessions: August 15, October 15, and December 5, 2007; January 2,
28 and 30; and February 4, 6, 11 and 13, 2008
22. Economic Development Grant Requests
• Central Oregon Youth Investment Foundation — Challenge Obstacle Course
— Commissioners Luke and Daly granted $1,500 each; Commissioner
Melton granted $500
• Bend Area Habitat for Humanity — Alford Village, Initial Engineering —
Commissioner Melton granted $1,000 and Commissioners Luke and Daly
granted $500 each
• Family Access Network Foundation — Breakfast Fundraiser — the three
Commissioners granted $1,000 each
• 4 -H Leaders' Association — Five C's Project
• Big Brothers Big Sisters of Central Oregon — 2008 Bowl for Kids' Sake
CONVENE AS THE GOVERNING BODY OF THE SUNRIVER SERVICE
DISTRICT
23. CONSIDERATION of Signature of Resolution No. 2008 -015, regarding the
Deschutes County Planning Authority's Use of Deadly Force — Sunriver Police
Department — Capt. Tim Edwards, Sheriff's Office
Board of Commissioners' Business Meeting Agenda Wednesday, February 27, 2008
Page 3 of 8 Pages
Wednesday, February 27, 2008
10:00 a.m. Board of Commissioners' Meeting
1:30 p.m. Administrative Work Session — could include executive session(s)
Monday, March 3, 2008
10:00 a.m. Board of Commissioners' Meeting
1:30 p.m. Administrative Work Session — could include executive session(s)
3:30 p.m. Regular Meeting of LPSCC (Local Public Safety Coordinating Council)
Wednesday, March 5, 2008
10:00 a.m. Board of Commissioners' Meeting
1:30 p.m. Administrative Work Session — could include executive session(s)
Thursday, March 6, 2008
9:00 a.m. Regular Department Update — Mental Health
10:00 a.m. Regular Department Update — District Attorney
11:00 a.m. Regular Department Update — Community Development
1:30 p.m. Regular Department Update — Road Department
2:30 p.m. Regular Department Update — Clerk
Wednesday, March 12, 2008
10:00 a.m. Board of Commissioners' Meeting
1:30 p.m. Administrative Work Session — could include executive session(s)
Thursday, March 13, 2008
1:00 p.m. Regular Department Update — Health Department
Monday, March 17, 2008
1:30 p.m. Administrative Work Session — could include executive session(s)
Tuesday, March 18, 2008
10:00 a.m. Regular Meeting of the Employee Benefits Advisory Committee
Board of Commissioners' Business Meeting Agenda Wednesday, February 27, 2008
Page 5 of 8 Pages
Wednesday March 19, 2008
1:30 p.m. Administrative Work Session — could include executive session(s)
6:00 p.m. Public Hearing regarding South County Groundwater Issues, La Pine High School
Thursday, March 20, 2008
10:00 a.m. Regular Department Update — Community Justice
11:00 a.m. Regular Department Update — Assessor
Monday, March 24, 2008
10:00 a.m. Board of Commissioners' Meeting
1:30 p.m. Administrative Work Session — could include executive session(s)
Wednesday, March 26, 2008
7:00 a.m. Regular Meeting with the City of Redmond Council, Redmond Council Chambers
10:00 a.m. Board of Commissioners' Meeting
1:30 p.m. Administrative Work Session — could include executive session(s)
Thursday, March 27, 2008
9:00 a.m. Regular Department Update — Fair & Expo
11:00 a.m. Regular Department Update — Commission on Children & Families
Monday, April 7, 2008
10:00 a.m. Board of Commissioners' Meeting
1:30 p.m. Administrative Work Session — could include executive session(s)
3:30 p.m. Regular Meeting of LPSCC (Local Public Safety Coordinating Council)
Wednesday, April 9, 2008
10:00 a.m. Board of Commissioners' Meeting
1:30 p.m. Administrative Work Session — could include executive session(s)
Board of Commissioners' Business Meeting Agenda Wednesday, February 27, 2008
Page 6 of 8 Pages
Thursday, April 10, 2008
12:00 noon Audit Committee Meeting
Tuesday, April 15, 2008
10:00 a.m. Regular Meeting of the Employee Benefits Advisory Committee
Wednesday, April 16, 2008
1:30 p.m. Administrative Work Session — could include executive session(s)
Monday, April 21, 2008
10:00 a.m. Board of Commissioners' Meeting
1:30 p.m. Administrative Work Session — could include executive session(s)
Tuesday, April 22, 2008
7:00 a.m. Bend Chamber of Commerce Forecast Breakfast, Bend Country Club
Wednesday, April 23, 2008
10:00 a.m. Board of Commissioners' Meeting
1:30 p.m. Administrative Work Session — could include executive session(s)
Monday, April 28, 2008
10:00 a.m. Board of Commissioners' Meeting
1:30 p.m. Administrative Work Session — could include executive session(s)
Wednesday, April 30, 2008
10:00 a.m. Board of Commissioners' Meeting
1:30 p.m. Administrative Work Session — could include executive session(s)
Monday, May 5, 2008
10:00 a.m. Board of Commissioners' Meeting
1:30 p.m. Administrative Work Session — could include executive session(s)
3:30 p.m. Regular Meeting of LPSCC (Local Public Safety Coordinating Council)
Board of Commissioners' Business Meeting Agenda Wednesday, February 27, 2008
Page 7 of 8 Pages
Wednesday, May 7, 2008
10:00 a.m. Board of Commissioners' Meeting
1:30 p.m. Administrative Work Session — could include executive session(s)
Thursday, May 8, 2008
7:00 a.m. Regular Meeting with the City of Redmond Council, Redmond Council Chambers
Deschutes County meeting locations are wheelchair accessible.
Deschutes County provides reasonable accommodations for persons with disabilities.
For deaf, hearing impaired or speech disabled, dial 7 -1 -1 to access the state transfer relay service for TTY.
Please call (541) 388 -6571 regarding alternative formats or for further information.
Board of Commissioners' Business Meeting Agenda Wednesday, February 27, 2008
Page 8 of 8 Pages