Okay, great.

Can you guys hear me?

Yeah.

That's World Cup World Cup work session.

No worries.

I like it.

I am great.

Okay, I'm going to call it.

Did I?

I'm sorry.

I just had a question for Council Falcon.

But you're starting to meet, so I can talk to you later.

Okay.

I would like to call to order this work session of the Forest Grove State Council.

No public comment will be taken, and the council will take no formal action.

Our first work session for the night is on transient lodging tax, TLT.

And I'm going to turn it over to our assistant city manager, Kim Ezel.

Thank you, Mayor.

Good evening, Mayor and Council.

Tonight we're going to be talking about the transient lodging tax, similar to how we were talking about the building improvement grant program a couple of months ago.

This is part of just annual reviews of what we're putting some of our dedicated revenue sources towards, and if there's any changes that council would like to see in our programs, it's also an opportunity for staff to bring forward recommendations to the council.

Talk a little bit about the purpose for tonight, Vision 2040 connections, some background information on what TLT is, as well as some legislative changes.

We'll talk about our revenue source as well as the program and expenses, so where the money comes in, where the money goes out, some case studies from some uh neighboring jurisdictions, and we'll have time for discussion.

So purpose of tonight's work session, like I decided uh just described, deliver some background information on the TLT update council and legislative uh changes, review both review uh revenue and expense projections and discuss current programming and possible changes.

TLT connects up with a lot of key Vision 2040 plans, um, specifically around the economy, but as well as community connection.

So we talk a lot about strengthening partnerships with local small businesses, incentive programs to help retain business, encourage and attract more events, increase wayfinding, update the tourism strategic plan, uh, develop mural and public arts and cultural district uh pursue grants to support all of this work, and then with community connection, explore opportunities to create a central community gathering space and develop a festival street or pedestrian mall in downtown Forest Grove.

And you'll notice that a lot of these will be repeated in the next work session around placemaking.

So these conversations are really great to be having at the same night because they dovetail really um nicely into one another.

Uh a little bit of background about TLT.

Um it was established primarily to fund, and this will come up quite a few times during the presentation.

Two things uh tourism promotion and tourism related facilities.

Uh some uh cities had already created uh TLT, but the state of Oregon began regulating TLT in 2003 and established a neat statewide TLT, which is currently one and a half percent, um, and that funds the travel organ.

Washington County established the TLT in 1972, which is currently at 9%.

It funds a variety of uh tourism related facilities, um, as well as an equal portion going or an equal portion going to the general fund, and that is available to Washington County cities through the Explore to Walton Valley grants program uh is also helping to fund um a portion of the Hillsborough Hops uh ballpark expansion.

In local history, uh Forest Grove established a TLT in 2017 on the advice of an ad hoc committee.

It was uh first created at two and a half percent.

Uh between 2017 and 2025, many modifications have been made to the program elements, similar to the conversation we're having this evening.

And then in November 2025, a uh TLT increase from 2.5% to 3.5% was done to help fund Vision 2040 action items related to tourism.

And I would be remiss if I didn't talk about what when we say this percentage, what that is.

So it's when folks pay for a hotel room, they pay an additional tax on top of that.

So right now that total tax for somebody who is coming into a hotel room in Forest Grove is 14%.

That's the state um percentage plus the um county percentage plus the city of Forest Grove percentage.

So you expect to have a little bit 14 and a half, I think, percent on top.

There has been have been a few legislative changes.

So I mentioned that the state uh began regulating TLT.

Part of that regulation was requiring that 70% of collected TLT revenue be used specifically for tourism promotion and tourism related facilities.

Uh, there's been some pushback from some cities that um, especially in the coastal communities that because they have so much tourism, they want to be able to use more of that funding in order to support infrastructure that supports the tourism.

So things like better street maintenance, cleanup, um, law enforcement, those kinds of things.

So in the uh most recent legislative session, it says 60% up there, but that is the typo.

This state amended the law to allow up to 50% of local TLT revenue to be used outside of direct tourism promotion and tourism related facilities.

Next slide.

So now we're going to dig into forest grove specific TLT revenue.

So TLT revenues are collected by Washington County and then distributed to Forest Grove monthly.

Revenue between 2021 to 2025 has been pretty steady, around 140,000, a little lower in 2122 coming out of the pandemic, but then stayed pretty level.

And then we are anticipating higher revenues this year due to that increase in TLT rate.

Right now we're sitting about 100,000 has been collected year to date, that is for eight months out of the year.

We're anticipating four more months of revenue.

And we know from past revenue sources that June is our highest earning TLT month.

So in those remaining four months of the year, we expect to see about 80,000 to 100,000 more come in.

We'll put us at about 180 to 200K for the year, significantly higher than our anticipated 140,000 current revenue source.