Council addresses pot, growth and permits

City Manager Andrew Gorayeb and city attorney Steve Bryant told the city council on Thursday that they need to take proactive measures before the vote on the statewide pot-legalizing Measure 91 if the city wishes to keep its taxation options open.

Bryant reported at a Thursday-morning workshop that the closely watched November 4 ballot Measure 91 is now predicted to pass, despite widely varying polls leading up to what promises to be a very close election. If the city does not have a "rate-specific" tax on the books before passage, state law will prohibit the city from enacting a city tax on marijuana sales in the city limits. The same prohibition will apply if the city follows the lead of several other Oregon cities and adopts a "place-holder" tax measure with a zero fee.

It is Bryant's considered opinion that if Measure 91 passes, the state will task Oregon Liquor Control Commission (OLCC) with devising and overseeing the distribution of marijuana, either through current OLCC liquor stores, or through other OLCC-controlled outlets.

City staff was directed to draw up a fee-specific local tax measure working for council discussion and decision before the November 4 election. This issue is totally separate from the medical marijuana licensing and siting issue, which is currently on a moratorium within the city.

Sisters Economic Development Manager Caprielle Foote-Lewis and Roger Lee, executive director of Economic Development for Central Oregon (EDCO) gave the council a detailed PowerPoint update of their activities for the 2013-2014 fiscal year.

Since most economic development work involves confidential and often sensitive business and real estate information, the presentations in this area are typically vague on detail.

Using EDCO's newly adopted "Move, Start, Grow" format, Foote-Lewis reported significant work on seven potential "moves" to Sisters, four of which are going to happen.

Foote-Lewis worked on 10 potential "starts" in Sisters, with five being successful to date, including Thompson Guitars and Latigo restaurant.

There were eight local businesses that Foote-Lewis worked with that showed significant growth, including Mohr Solutions, ENERGYneering Solutions Inc., Three Creeks Brewing Co., and Thompson Guitars.

There is also now an EDCO advisory board in place for Sisters that includes: Brad Boyd, City of Sisters; Marcea DiGregorio, Sisters Chamber of Commerce; County Commissioner Tony DeBone; Jim Golden, Sisters School District Superintendent; Benny Benson, president ENERGYneering; Brad King, founder, Lakeview Millworks; Stephen King, president & CEO, OpenMake Software.

The ongoing development of a rational city code for the licensing of non-brick-and-mortar business temporary business activity got some additional input on Thursday with city finance officer Lynne Fujita-Conrads' talking paper, which was based on earlier workshop discussions.

The council still appears to be unclear on their exact purpose for the temporary business license (TBL) and the resulting fee structure. It is clear that the council would like to move away from the contentious land-use based temporary-use permit (TUP), and toward a city licensure format that would accomplish a similar purpose.

The lack of clarity comes in whether the fee structure should strictly reflect the direct and easily defined costs to the city for processing, supervising and enforcing the TBL, including cost for incremental city services that the TBL might require (public works, security, etc.) This would be an "impact" fee approach.

The other approach being considered is setting the fees to reflect parity with the actual costs of running a brick-and-mortar business in Sisters - a "level playing field" model. Since temporary vendors do not pay many of the expenses incurred by permanent businesses (e.g. property tax, rent, payroll taxes, parking district taxes, etc.) they could potentially sell the same items as brick-and-mortar businesses at a lower price.

The fee structure for the 45-day TBL proposed by Fujita-Conrads breaks down fees based on the size of the event, whether it is held on public or private property, and further if the vendor is a nonprofit or a for-profit enterprise.

Under the proposed scheme, some nonprofits would see very little change in their fees while others would see a modest increase. For-profit multi-day businesses could potentially see a significant increase in fees.

City staff will bring a refined proposal to the council in two weeks.