The Cannon Beach City Council at its May 18 meeting discussed how to pay for the budget shortfalls at the fire district and a new city facility.
The council has been wrestling with this question for some time.
City Manager Bruce St. Denis said to use the Transient Lodging Tax to pay for these items would require an 8 percent increase. A 1 percent increase is estimated to generate $572,000, -- 70 percent of which must be spent on tourism – leaving $171,000 for the city facility and the district. The debt service on a new city hall/police station would cost about $700,000 annually.
The current TLT is 8 percent, St. Denis said.
The city manager dismissed the idea of charging for parking as too insubstantial to generate the necessary funds, he said.
Councilor Brandon Olgilvie said he would like to see presented as many options as possible and more detail on the parking option. Perhaps the city might consider a combination of options.
Mayor Sam Steidel said: “We need to look at the restaurants as partners in this.”
The mayor said the restaurants are in “crisis mode” and he would not want to instigate a food and beverage tax now. “Although I understand the reasons for a hurry up.”
He said he has been “hearing the servers are concerned that their tips would be cut” if customers think the F&B tax is a gratuity to the wait staff. The restaurant owners are concerned they will lose employees.
Councilor Robin Risley raised the issue of getting the public involved in this discussion.
Risley said people are holding back their comments because they think they will be given the opportunity to vote on the tax.
The council has the power to instigate a tax without a vote from the public, the city attorney said.
Risley said she would not support the tax without public comment or a vote.
The mayor said he hesitates to move forward on an F&B tax “without some sort of community vote. I wouldn’t feel good about just up and doing it.”
Steidel said the restaurants are “planning to fight it (the tax).”
The city manager suggested instituting the tax and then putting it to an advisory vote afterwards.
Councilor Mike Benefield said he would like to see a tax in place before the “opposition” has a chance to “prevent us from doing it.”
The opposition is trying to pass legislation to prevent a tax without a vote, council discussed.
The mayor said he wants to hold public hearings on this and provide representatives from the restaurants an opportunity to “air their concerns.”
The city manager said they can hold the hearings but it is possible the city will be prevented from instituting the tax if they don’t act sooner.
“I am more concerned with alienating our citizens – I won’t vote for this unless the public is involved,” Mayor Steidel said.
The council discussed various times to hold the hearings.