About 10 years ago, when the city decided to raise its transient room tax to 9%, the hotel owners pleaded for - and got - a $10-per-person credit for the supposed cost of providing complimentary breakfasts to guests. For example, if a couple rented a room for $100 a night, the hotel could knock off $20 for the meal credit and thus owe room tax on only $80.
The exemption, the hotel owners argued, was needed to keep Bend hotels and motels competitive with those in other resort areas of the state. If they didn't get it, they claimed, tourists would desert Bend in favor of someplace like Seaside or Ashland, or perhaps Fossil.
The meal credit was largely ignored until last year, when the city council took another look at it. Again, the local hoteliers moaned they would be devastated by out-of-town competition if the credit went away. The council, unpersuaded this time, decided to eliminate it.
Here's where things get really interesting.
After removing the credit the city did an audit and discovered that - surprise, surprise - Purcell's Riverhouse and a number of other Bend hostelries had been charging guests the full room tax all along and simply pocketing the extra money instead of turning it over to the city. The cash drained off in this fashion added up to a pretty nice bit of change - more than $300,000 by the city's reckoning, in amounts ranging from almost $19,000 to about $120,000 and in some cases more for owners of multiple properties like Evert. (The total sum could be much higher, because by law the city audit can go only three years back.)
Purcell and the other hotel operators insist they did nothing wrong, claiming they had some sort of nebulous understanding with city officials that they didn't have to pay the tax. That argument is laughable. If they didn't have to pay the city the tax, why did they make their guests pay it to them?
"We're not saying they're liars or anything like that," City Finance Director Sonia Andrews told the Source. We're not going to be so polite. The hotel operators are liars. They lied about why they needed the meal credit, they lied to their guests when they collected excessive room tax and they lied to the city when they said they weren't collecting it. The whole tawdry scam reeks of mendacity.
The hotel owners have lawyered up, retaining Neil Bryant, a former state senator and one of Bend's legal top guns. City officials are supposed to meet with the owners July 8 to try to work something out. We hope they won't be too eager to accommodate them. In the first place, the city needs the money. In the second place, such flagrant dishonesty should not be rewarded. It deserves from the city what it is hereby receiving from us: THE BOOT.