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County weighs TLT allocation changes after state law shift; staff to propose repayment plan for $8M Hops payment
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Summary
County staff briefed commissioners on how House Bill 4148’s move to a potential 50/50 tourism/non‑tourism split affects transient lodging tax (TLT) allocations and presented options to cover an $8 million Explore Tualatin Valley (ETV)/Hops stadium payment. The board signaled preference for adjusting an interfund‑loan repayment plan and asked staff for cash‑flow and legal analysis.
Washington County financial staff told commissioners that a recent state law change — House Bill 4148 — gives counties more flexibility in using transient lodging tax (TLT) revenue but that the practical effect depends on earlier, grandfathered TLT increments and existing contracts.
"House Bill 4148 changed the revenue usage ratios, allowing tourism going from a seventythirty to a fiftyfifty split," John Steiner, the county chief financial officer, said. Staff explained that some TLT amounts adopted before 2003 remain grandfathered and therefore are not entirely subject to the new 50/50 allocation, making county impacts uneven.
Steiner reviewed an outstanding financial arrangement tied to the Explore Tualatin Valley (ETV) contract and the Hops/Hop Stadium project. The county owes two tranches related to prior agreements: a first tranche of approximately $2.79 million already paid and a second tranche of about $5.3 million due in the next fiscal year, for a combined $8 million obligation tied to the prior board authorization.
Because current TLT receipts have flattened relative to earlier projections, staff presented a menu of options to cover the payment: (1) renegotiate the ETV agreement (staff said this was unlikely), (2) maintain current repayment to the county’s Strategic Investment Program (SIP) but reduce the transfer to the general fund in the short term, (3) revise the interfund‑loan repayment schedule to smooth payments over the 10‑year legal repayment window, (4) make a one‑time SIP budgeted payment without expecting repayment, or (5) pursue a future lodging tax increase.
Commissioners repeatedly stressed they do not want to reduce general‑fund services. After discussion, the board indicated it favored option 3 — adjusting the SIP interfund‑loan repayment plan — possibly combined with a one‑time SIP payment if needed, and asked staff to return with concrete cash‑flow models, a repayment schedule that meets the 10‑year interfund requirement, and any auditor/legal constraints.
Staff also noted immediate interest costs the county incurred by delaying payment to Hillsboro and that they would coordinate with auditors on interfund accounting and interest treatment. No final decision was made; staff will return with the repayment options for the board to consider before budget adoption.
