This work session was the second of two planned sessions on the Transient Lodging Tax (TLT). Staff presented recommendations for program refinements, sought council consensus on an event series sponsorship program, and discussed financial projections for TLT-funded programs. No public comment was taken, and no formal action was taken.
Program Refinements: Staff proposed two changes: (1) expand eligibility to allow government entities to apply for the tourism sponsorship grant, and (2) reduce the application submission deadline from 90 days to 30 days prior to the event. Council discussed the first proposal and reached consensus to limit expanded eligibility to the Forest Grove School District only, not all government entities. The rationale was to support school-hosted tournaments that draw tourism while avoiding dilution of funds for nonprofits. The 30-day deadline change was accepted without objection.
Event Series Sponsorship Program: Staff introduced a new program offering up to $20,000 maximum per event series, with a maximum of $5,000 per event with sponsorship tiers and $2,000 per event without. To qualify, an event series must meet at least three of six criteria (e.g., same location, same day of week, same target audience) and be organized by the same entity within one year. Council clarified that a series is defined as two or more events. The program was approved as proposed, with a note to include the “two or more” definition explicitly.
Financial Overview and Future Funding: The TLT fund currently has an unallocated balance of $180,000, with expected annual revenue of $160,000 (projected to grow 3% annually). Current allocations: public arts ($11,050), event sponsorship ($44,200), tourism marketing ($44,200), capital grant program ($11,050), and a portion of the economic development coordinator salary ($28,460). Total expenses are $138,960, leaving savings of ~$200,000. Staff proposed sunsetting the capital grant program due to low usage and redirecting its funds to event sponsorship. A five-year forecast was presented showing increasing reserves. Council expressed support for the proposed allocations.
Main Street Program Funding: A council member suggested allocating TLT funds to the Main Street program, referencing prior budget discussions. Other members noted the program was not part of the current proposal and that the work session was not a venue for formal motions. No consensus was reached to include Main Street funding at this time.
Okay, good evening. I'd like to call this work session, the Force Growth City Council to order. It's on transient launching tax. No public comment will be taken. And the council will take no formal action. And I will turn it over to our assistant city manager, Kim Hazel. Good evening, Mayor and Council. This is the second of two planned work sessions around the transient lodging tax. Next slide. And next slide. And the purpose of tonight's work session is to do three things. We want to talk a little bit about some recommended program refinements from staff. One to amend eligibility to allow government entities to apply for the tourism sponsorship grant, and the other to allow applications to be submitted 30 days prior to the event rather than 90. We also want to have follow-up conversations to reach council consensus about expand expanding the TLT event sponsorship program and reach council consensus on policy direction for the future of TLT funded programs. Next slide. The work session this evening aligns with the 2040 plan in several ways. Most importantly, the impact to the economy of this the sponsorship program as well as some of the other TLT programs, strengthen partnerships with local small businesses, incentivize program and create incentive programs to support retain small and local businesses, encourage and attract more events, increase wayfinding signage, updates to the tourism strategic plan, helping to develop a mural corridor, other public art and cultural district, and contribute to pursuing grants to support tourism. Also a heavy connection with the community connection goal in the plan, including exploring opportunities to create a central community gathering space, as well as developing a festival street and pedestrian mall in downtown Forest Grove. A little bit of background on the TLT. In 1972, Washington County established the first countywide TLT. This is still in place and is at 9%. In 2003, the state of Oregon regulated TLT and established the 70-30 ratio for expenses. That is 70% must go to tourism promotion, 30% can go into general fund and establish the 1.5% statewide TLT. In 2017, Forest Grove City Council established a 2.5% city TLT. And in 2025, Forest Grove City Council raised that city TLT to 3.5% to fund previously mentioned Vision 2040 action items. In 2026, the state legislator changed the TLT expenses ratio from the previous 70-30 to 50-50. And the Forest Grove City Council has been having work sessions on TLT funded programs. Next slide. Some more background from our previous work session. TLT revenues are collected by Washington County and distributed back to Forest Grove monthly. Revenue has been about 140,000 per year post-pandemic, although the higher revenue is likely this year due to increases in the TLT rate. So that increased from 2.5% to 3.5%. We received 154,000 in 2526 and expect 160,000 or higher in 2627. The fund also has an unallocated balance today of about 180,000. During our previous work session, we had a couple of takeaway items from council. First being a request for more data about tourism in Forest Grove to improve future policy decision making. And there was a request to ensure that the program is broad enough to include a wide variety of event series types, which we hope we have captured in the staff recommendation. There was support for sunsetting the current tourism capital grant program because there's been very low applications, including no applications in FY25 to 26. Interest in exploring TLT program future funding and interest in setting funding aside for future capital programs. Moving into our discussion items for this evening. The first is program refinement. So staff has taken the opportunity, because we are looking at our TLT to really look at all aspects of our tourism sponsorship program and propose any changes. Staff is always looking to review programs and receiving feedback from the community, and this was a good opportunity to bring these back to council. The first is to expand eligibility to allow government entities to apply for the program. They are not at this time specifically named as an allowed entity, although they could be captured in the nonprofit status. So the current program doesn't allow for government agencies specifically, but government agencies do host events that create tourism and meet the goals of the overall tourism program, as do other nonprofit entities. The second uh proposed staff refinement is to allow applications to be submitted 30 days prior to the event. Currently it is 90. Uh staff have found that this creates a heavy burden on applicants, and that 30 days does allow staff enough time to review applications and bring them to council for consideration. Next line, this is where I'll pause.