TO: Mayor and City Council
THROUGH: Krishna Namburi, City Manager
FROM: Dan Atchison, City Attorney
SUBJECT:
title
Second Reading of ENGROSSED Ordinance No. 4-25 amending SRC chapter 38 - Salem Tourism Promotion Area (STPA) to modify the remonstrance (“objection”) procedure to allow operator to file objections based on their number of available rooms.
Ward(s): All Wards
Councilor(s): All Councilors
Neighborhood(s): All Neighborhoods
Result Area(s): Good Governance; Strong and Diverse Economy; Welcoming and Livable Community.
end
SUMMARY:
summary
The proposed engrossed (amended) ordinance modifies the system for objecting (remonstrating) to the continuation of the Salem Tourism Promotion Area (STPA). The inclusion of Accessory Short Term Rental and Short Term Rental (STR) operators has been removed from this ordinance. Enacting the engrossed ordinance will implement the modified proportional objection system, and the proposed inclusion of STRs will be brought back to Council for a public hearing in early 2026.
end
ISSUE:
Shall City Council engross Ordinance Bill No. 4-25, amending SRC chapter 38 to modify the objection procedures for transient lodging operators to allow operator objections based on their number of available rooms instead of one objection per operator, and conduct second reading of the ordinance as engrossed?
RECOMMENDATION:
recommendation
Engross Ordinance Bill No. 4-25, amending SRC chapter 38 to modify the objection procedures for transient lodging operators to allow operator objections based on their number of available rooms instead of one objection per operator, and conduct second reading of the ordinance as engrossed.
body
FACTS AND FINDINGS:
City Council conducted first reading of Ordinance Bill No. 4-25 on November 10, 2025. As originally drafted, the ordinance would amend SRC chapter 38 to include Accessory Short Term Rentals and Short Term Rentals in the STPA, requiring them to collect the STPA fee from guests, and modify the process for raising objections to the continuation of the STPA to provide that an operator’s number of objections will be based on the number of rooms available for rent as opposed to one objection per operator. A public hearing on the proposed changes and second reading of the ordinance were scheduled for November 24, 2025 City Council meeting. However, due to concerns that some operators did not receive notice of the hearing and proposed changes, the hearing and second reading were postponed.
Staff are reviewing the process for identifying potential transient lodging operators in Salem (both registered and unregistered operators) and the hearing on whether to include STR operators in the STPA will be rescheduled for early 2026.
The ordinance has been amended (engrossed) to only modify the objection process as originally outlined, and the inclusion of STRs will be brought forward as a separate ordinance after the public hearing is conducted.
BACKGROUND:
The Salem Tourism Promotion Area (STPA) was created by City Council in 2019 at the request of Travel Salem, the City’s destination tourism marketing organization and area hotel operators. The TPA imposes a 2% fee on overnight stays at hotels and other types of transient lodging. A TPA is a form of economic improvement district (EID), which are permitted under state law. When creating or renewing a TPA, state law requires the City to allow people subject to the fee an opportunity to remonstrate or object to the imposition of the fee. If more than 33% of persons subject to the fee object, the fee may not be created or renewed.
In 2019 when the STPA was formed, the Code was drafted with the intent that short term rental operators would be subject to the fee. However, due to ambiguity in the Code, short term rental operators were not required to collect the fee from their guests. In December 2024, the STPA was extended until 2029. At that time, the Code was amended to remove short term rentals from the STPA, with the intent that they would be added back with a modified remonstrance (objection) methodology to provide operators to have objections based on the number of available units.
The proposed ordinance will include short term rental operators in the STPA and provide a proportional remonstrance procedure to ensure fair and equitable administration of the STPA. Staff have worked with Travel Salem on the proposed amendments and recommend that the proposed ordinance be passed. Under the proposed remonstrance process, operators’ objections, including short term rental operators, will be based on the total number of rooms or units the operator has available. A hotel with 50 rooms will be entitled to 50 objections, whereas a short term rental operator with a single available unit will be entitled to one objection. If objections are received totaling more than 33% of the total number of potential objections from eligible operators, the STPA will be rescinded.
Dan Atchison
City Attorney
Attachments:
1. Engrossed Ordinance Bill No. 4-25
2. Exhibit A to Engrossed Ordinance Bill No. 4-25