<div dir="ltr"><div dir="ltr"><div dir="ltr"><div dir="ltr" style="color:rgb(0,0,0);font-family:arial,sans-serif"><div style="font-family:Arial,Helvetica,sans-serif">Here is the log-in for tomorrow's 8am Zoom Wednesday Morning Meeting - the same log-in we always use unless Hannah is out of town. </div><div style="font-family:Arial,Helvetica,sans-serif"><br></div><div style="font-family:Arial,Helvetica,sans-serif">Date/Time: June 2, 2021 08:00 AM Join Zoom Meeting at<br></div><div style="font-family:Arial,Helvetica,sans-serif"><a href="https://us02web.zoom.us/j/3843649054" target="_blank">https://us02web.zoom.us/j/3843649054</a></div><p style="margin:0px"></p><div style="font-family:Arial,Helvetica,sans-serif"><div dir="ltr"><div dir="ltr"></div></div></div><p style="font-family:Arial,Helvetica,sans-serif"></p><div style="font-family:Arial,Helvetica,sans-serif">By Phone, dial<br>253-215-8782<br>Meeting ID: 384 364 9054</div></div><div dir="ltr" style="color:rgb(0,0,0);font-family:arial,sans-serif"><br></div><div dir="ltr" style="color:rgb(0,0,0);font-family:arial,sans-serif"><br></div><p style="margin:0px 0px 8px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192)"><span><b>TO: Cannon Beach Residents</b></span></p>
<p style="margin:0px 0px 8px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192)"><span><b>FROM: Bruce St.Denis, City Manager</b></span></p>
<p style="margin:0px 0px 8px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192)"><span><b>DATE: May 31, 2021</b></span></p>
<p style="margin:0px 0px 8px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192)"><span><b>SUBJECT: Information regarding alternative funding sources </b></span></p>
<p style="margin:0px 0px 8px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192);min-height:17px"><span><b></b></span><br></p>
<p style="margin:0px 0px 8px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192)"><span>People have asked me to provide accurate information regarding the current discussions regarding potential funding sources for the Cannon Beach Rural Fire District and the City’s major projects. </span></p>
<p style="margin:0px 0px 8px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192)"><span>What I am providing here is an advance look of an article that will go into tomorrow’s edition of the City’s newsletter, The Bulletin.</span></p>
<p style="margin:0px 0px 8px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192)"><span style="text-decoration:underline"><b>Executive summary</b></span></p>
<p style="margin:0px 0px 8px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192)"><span>If I had to summarize it I would say that the city is at a historically important point where the possibility exists to significantly increase the capabilities of our Fire District and develop a survivable city hall/police station that can function as an EOC if nature hands us a really bad situation. The most important point is that all these things can potentially be funded by visitors who, unless they are staying in lodging accommodations, currently pay nothing.</span></p>
<p style="margin:0px 0px 8px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192)"><span>If you review the real alternatives below, it appears the best options tends to be a Food and Beverage Tax and that is the primary option being considered at this point. </span></p>
<p style="margin:0px 0px 8px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192)"><span>If a Food and Beverage Tax is not approved, then the logical funding source for both of those needs would be Property Taxes. </span></p>
<p style="margin:0px 0px 8px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192)"><span style="text-decoration:underline"><b>Introduction</b></span></p>
<p style="margin:0px 0px 8px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192)"><span>This is my attempt to bring many of the pieces together to try to provide accurate information about what has been happening regarding alternative funding sources at the City Council level. If I am at least partly successful in doing so it is hoped we can have a meaningful, collective conversation about many things that are important to our community.</span></p>
<p style="margin:0px 0px 8px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192)"><span>There have been several discussions about funding options, but few decisions have been made. That’s why there is so much confusion in the community and especially on social media. That lack of available specifics is what makes writing about this subject hard. I can only talk about what is being discussed but not what has been decided. </span></p>
<p style="margin:0px 0px 8px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192)"><span>What follows are only my thoughts and impressions so it is important to ZOOM in on the Council meetings or go to the city’s website where you can find them on YouTube to get the latest information. An important discussion will happen at the Tuesday, June 1</span><span style="font-stretch:normal;font-size:9.3px;line-height:normal"><sup>st</sup></span><span> at 6:00 City Council meeting so please tune in. Click on this link to join via ZOOM.</span></p>
<p style="margin:0px 0px 8px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(111,48,160)"><span><a href="https://zoom.us/j/99261084699?pwd=TkpjbGcxS0pCOGlMOCtSbSsxVWFMZz09" target="_blank">https://zoom.us/j/99261084699?pwd=TkpjbGcxS0pCOGlMOCtSbSsxVWFMZz09</a> </span></p>
<p style="margin:0px 0px 8px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192)"><span>A short while back the Cannon Beach Rural Fire District (FD) approached the city for help in identifying an on-going, unrestricted funding source that would help them accomplish what their available funding sources could not. They explained that 77% of calls are for visitors (others than residents or second homeowners) and those folks pay nothing towards the service.</span></p>
<p style="margin:0px 0px 8px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192)"><span>The District’s major funding source comes from property taxes. The FD’s current tax rate is $0.89 per $1,000 in assessed valuation. For comparison, the average tax rate for fire districts in this area is $1.35 per $1,000. I strongly recommend that you go to the FD website, </span><span style="color:rgb(111,48,160)"><a href="http://cbfire.com" target="_blank">cbfire.com</a></span><span>, to get specifics about how they plan to use the additional funding should it become available.</span></p>
<p style="margin:0px 0px 8px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192)"><span>The city also has some important public safety needs and would prefer to find a funding source other than property taxes to meet those needs. Please note that there has not been a decision what, if any projects will receive funding from this effort.</span></p>
<p style="margin:0px 0px 8px;font-stretch:normal;font-size:16px;line-height:normal;font-family:Calibri;color:rgb(1,112,192);min-height:19px"><span style="text-decoration:underline"><b></b></span><br></p>
<p style="margin:0px 0px 8px;font-stretch:normal;font-size:16px;line-height:normal;font-family:Calibri;color:rgb(1,112,192)"><span style="text-decoration:underline"><b>An analysis of viable funding options</b></span></p>
<p style="margin:0px 0px 8px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192)"><span><b>Property Tax </b></span></p>
<p style="margin:0px 0px 8px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192)"><span>It appears that even if the city were to sponsor a referral (a vote) giving residents the option to increase their city taxes to support the CBRFD, the City would not actually have the ability of forwarding the funding to the Fire District, so this is not a viable option for that specific plan.</span></p>
<p style="margin:0px 0px 8px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192)"><span>However, it would be possible for both the City and the Fire District to hold separate referrals for property tax increases to address their needs. In the case of the Fire District, it would be a levy that could be in place for up to 5 years if approved and a new levy would eventually be required to continue that funding. They currently have one levy in place.</span></p>
<p style="margin:0px 0px 8px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192)"><span>The City could also schedule a referral for a specific purpose. For example, the voters could vote on an increase in their property taxes to fund debt service for a new facility or infrastructure project. In these examples, the funds would come from additional costs to taxpayers.</span></p>
<p style="margin:0px 0px 8px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192);min-height:17px"><span></span><br></p>
<p style="margin:0px 0px 8px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192)"><span><b>Tourist Lodging Tax (TLT) </b></span></p>
<p style="margin:0px 0px 8px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192)"><span>TLT funds are collected <i>from tourists</i> as a tax on the cost for each lodging night. The collections are forwarded quarterly by the lodging establishments. They keep 5% of what they have collected as a servicing fee. </span></p>
<p style="margin:0px 0px 8px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192)"><span>Some simple math:</span></p>
<p style="margin:0px 0px 8px 36px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192)"><span>Based on 2019 data, each 1% TLT increase would raise: <span style="white-space:pre-wrap"> </span>$572,570</span></p>
<p style="margin:0px 0px 8px 36px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(192,25,0)"><span style="text-decoration:underline">70% <b>is required</b> to be spent for tourism related purposes: <span style="white-space:pre-wrap"> </span>$400,799</span></p>
<p style="margin:0px 0px 8px 36px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192)"><span><b>30% discretionary revenue available to the city:<span style="white-space:pre-wrap"> </span>$171,771</b></span></p>
<p style="margin:0px 0px 8px 36px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192);min-height:17px"><span><b></b></span><br></p>
<p style="margin:0px 0px 8px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192)"><span>The city anticipates that the debt service on a new CH/PD could be up to $700,000 per year. This means that the TLT would need to be raised an additional 4 % to come close to that level of revenue.</span></p>
<p style="margin:0px 0px 8px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192)"><span>If the CBRFD is to receive a similar amount, the city would have to raise the TLT an additional 4% to provide their funding for a total TLT increase of 8%.</span></p>
<p style="margin:0px 0px 8px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192)"><span>8% is the total levy the city currently imposes on an annual basis. Essentially we would have to double this tax on folks staying in hotels, etc.,</span></p>
<p style="margin:0px 0px 8px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192)"><span>If this option were chosen only visitors staying in hotels or short-term rentals would pay a tax. People visiting for the day would pay nothing. </span></p>
<p style="margin:0px 0px 8px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192);min-height:17px"><span><b></b></span><br></p>
<p style="margin:0px 0px 8px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192)"><span><b>Food and Beverage Tax </b></span></p>
<p style="margin:0px 0px 8px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192)"><span><i>A food and Beverage Tax is a tax paid by the diner, not the restaurant.</i> It is a pass-through tax collected in a similar method as is used with the TLT. Discussions to this point tend to favor a 5% servicing fee for the collecting restaurant but that has not yet been decided. </span></p>
<p style="margin:0px 0px 8px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192)"><span>In order to determine the potential income from a Food and Beverage Tax the Fire District and City jointly commissioned a study prepared by ECONorthwest. A copy of the ECONorthwest Report is available on both the City and Fire District websites. Bob Whelan, who developed the report for ECONorthwest, presented his methodology at </span></p>
<p style="margin:0px 0px 8px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192);min-height:17px"><br><span></span></p>
<p style="margin:0px 0px 8px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192)"><span>the May 18</span><span style="font-stretch:normal;font-size:9.3px;line-height:normal"><sup>th</sup></span><span> City Council meeting. You can see that presentation by going to the city’s website.</span></p>
<p style="margin:0px 0px 8px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192)"><span>The ECONorthwest report estimates that each 1% of a Food and Beverage Tax imposed could generate $431,590. It is important to note that this information is very preliminary, and the actual revenues will be impacted by many factors. </span></p>
<p style="margin:0px 0px 8px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192)"><span>If the ECONorthwest estimate is accurate then a 4% F & B tax would generate approximately $863,180 each for both the City and Fire District. The ECONorthwest report estimates that 96% of the Food and Beverage tax would be collected from tourists and 4% from locals dining out. </span></p>
<p style="margin:0px 0px 8px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192)"><span>Several years ago, the City’s Finance Department did a study that was less sophisticated than the one completed by ECONorthwest that estimated F & B revenues would come in at $851,625 based on a 4% levy. This is approximately half of the ECONorthwest estimate.</span></p>
<p style="margin:0px 0px 8px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192);min-height:17px"><span><b></b></span><br></p>
<p style="margin:0px 0px 8px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192)"><span><b>Summary comments and other thoughts that will be expanded upon in later articles</b></span></p>
<p style="margin:0px 0px 8px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192)"><span>A Food and Beverage Tax is paid by people consuming the food, not the restaurant. The restaurant is paid to collect the tax. </span></p>
<p style="margin:0px 0px 8px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192)"><span>The earliest that I have heard suggested for the implementation date is January 1, 2022.</span></p>
<p style="margin:0px 0px 8px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192)"><span>If a smaller operation needs to buy a system to keep track of the tax it will cost between $1,300 and $1,400. The City Council is exploring ways to assist with that purchase. </span></p>
<p style="margin:0px 0px 8px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192)"><span>There are industry trade organizations that will fight the efforts of local communities (that means you) to stop them from spreading the burden of the cost of government services to visitors who currently get the services for free. They feel that is advantageous to their constituents even though it means that city residents will be forced to fund the bill for the visitors.</span></p>
<p style="margin:0px 0px 8px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192)"><span>The recent push to have the City Council approve the F&B tax quickly was to make sure that the food and lodging trade group could not lobby the state legislature to preclude the voters of Cannon Beach from voting on a Food and Beverage Tax in November. That possibility may still exist.</span></p>
<p style="margin:0px 0px 8px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192)"><span>Other funding sources such as parking fees have been suggested. If the city were to make $10 per vehicle we would need to collect from 160,000 cars to match what has been projected from Food and Beverage Tax. A parking fee is certainly a viable funding source but probably for smaller projects. </span></p>
<p style="margin:0px 0px 8px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192);min-height:17px"><span></span><br></p>
<p style="margin:0px 0px 8px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192)"><span><b>The city manager’s rant about the city hall/police station. (Included because there is a lot of misinformation out there)</b></span></p>
<p style="margin:0px 0px 8px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192)"><span>The reader’s digest version of <i>my</i> concerns is that because of the construction materials (hollow block) and age of the current building (</span><span style="text-decoration:underline">+</span><span> 70 years) it is possible the facility will not survive a small to medium seismic event. (Can that really happen? In the last year southern Oregon experienced between a 5.9 and a 6.3 earthquake located 190 miles offshore. The tremors were felt in Eugene, 280 miles from the epicenter.) </span></p>
<p style="margin:0px 0px 8px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192)"><span>If the City Hall/Police Station were to fail we would lose our ability to communicate with the outside world, much of our information resources and equipment, a place to centralize information gathering about the event, our ability to develop/coordinate rescue locations and priorities, to deploy resources as they became available, assess damage to our utilities and to plan for water and wastewater restoration.</span></p>
<p style="margin:0px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192)"><span><b>A new City Hall/Police Station is not about the comfort or convenience of staff.</b></span></p>
<p style="margin:0px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192);min-height:17px"><span><b></b></span><br></p>
<p style="margin:0px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192)"><span><b>I strongly suggest that the degree to which we equip our team should be in proportion to our expectations of their performance when it comes time to manage an emergency. </b></span></p>
<p style="margin:0px 0px 8px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192);min-height:17px"><span></span><br></p>
<p style="margin:0px 0px 8px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192)"><span>You will be hearing more about the City Hall/Police Station in future Bulletin articles. </span></p>
<p style="margin:0px 0px 8px;font-stretch:normal;font-size:14px;line-height:normal;font-family:Calibri;color:rgb(1,112,192);min-height:17px"><span style="font-size:14px">Thanks for your attention and I look forward to our future discussions. </span><br></p><div><div dir="ltr"><div dir="ltr"><div><br></div>George Vetter<br><div>503-739-1415</div><div><a href="https://gvfa.smugmug.com" target="_blank"><font size="1">GeorgeVetterPhotography</font></a><br></div><div><img src="https://drive.google.com/uc?id=1mOej0EufzUW9RLcYb3aEbQWtC05h16wDqw&export=download" width="96" height="96"><br></div></div></div></div></div></div></div>