PAC Auction / OLCC Presentation / Lodging Tax Accountability

One Big Night in Less than 2 Months
ORLA's largest fundraiser of the year will be here in less than 2 months. One Big Night will be held at the Portland Doubletree Hotel, Tuesday, June 7. ​

​Presentation to OLCC Commission
ORLA representatives had an opportunity to present an industry update to the seven-member OLCC (Oregon Liquor and Cannabis) Commission last week. The presentation focused on the importance of OLCC staff extending liquor service footprints outdoors through a user friendly online process during Covid, their approach to license fee flexibility, and the emergence of to-go cocktails as another sales opportunity permanently available to the industry in Oregon to increase sales. We also flagged both ongoing inflation concerns and the importance of Economic Injury Disaster Loan extensions in helping our industry just barely keep our heads above water. ORLA remains focused on explaining the nature of invisible piles of debt on the shoulders of our operators while we all start seeing restaurants busy and even bustling. Today's sales numbers hopefully serve as a constant reminder that ongoing relief is necessary and warranted.

Industry Coverage in The Hill
The Hill published an op-ed from Sean Kennedy, Executive Vice President of Government Affairs for the National Restaurant Association. Sean hit the mark in covering what the industry needs to get back on track. It was a timely article right before industry operators head to DC this week.

Accountability for Local Governments on Local Lodging Taxes
ORLA remains committed to doing what we need to do in getting local governments to commit to transparency in how they spend industry tax dollars. We are currently in the middle of a disagreement with staff from one city in the Willamette Valley on how much of their lodging tax money is restricted for tourism promotion and facilities. A multitude of other local governments are also on our list in our pursuit of additional transparency.

Have questions? Give us a call at 503.682.4422 or email us if you have any questions. | ORLA

Local Lodging Tax Watchdog Work / The Fate of RRF / Workforce Storytelling / 77% of the Way

​Yesterday, the House of Representatives approved a bill to replenish the Restaurant Revitalization Fund (RRF). Details on what to expect in DC as well as other updates from the week are below. Don’t forget to sign up and support our largest ORLAPAC fundraiser of the year, One Big Night. If you haven’t already, register to attend and/or consider donating an auction package and help us make a difference in the upcoming election cycle in support of our industry recovery efforts.

Local Lodging Tax Watchdog Work
ORLA’s successful win in court at both the Circuit Court and Oregon Court of Appeals level has helped usher in a new chapter of relevance for the association in ramping up our watchdog role for our lodging members and the broader tourism industry. As a reminder, ORLA won on all counts against the City of Bend which helped cement our legal standing in holding local governments accountable for how they expend local lodging tax dollars even though ORLA itself does not collect local lodging taxes directly. With the help of legal counsel, ORLA is actively seeking more transparency in the Cities of Gladstone, Gresham, Cannon Beach, and Albany. Watch ORLA's explanatory video as a refresher on how local lodging taxes are to be spent. This video has proven to be a helpful resource to help educate newly appointed local elected leaders or city administrative staff so please share with your contacts whenever helpful.

The Fate of RRF Replenishment
As anticipated, the U.S  House of Representatives passed H.R. 3807 - replenishment of the Restaurant Revitalization Fund. The challenge of getting replenishment over the finish line continues to be in the Senate. On Tuesday, Senator Ben Cardin (D-MD) introduced The Small Business COVID Relief Act of 2022 (SBCRA) (S. 4008). The SBCRA would allocate $40 billion for RRF replenishment and $8 billion for other small businesses impacted by COVID. It would partially offset (pay for) the $48 billion through $5 billion in unspent Payroll Protection Program funds. In the interim, we will encourage Senate Republicans and Democrats to reach an agreement on replenishing the RRF. The largest hurdle remains overcoming vast differences between the parties on whether the spending must be paid for, and how. If you haven't already, tell Senators to replenish the RRF. A special thanks to a contingent of ORLA current and past board members for joining ORLA President & CEO Jason Brandt and ORLA Director of Government Affairs Greg Astley at the National Restaurant Association Public Affairs Conference coming up at the end of this month in Washington D.C. RRF, as well as several other key issues will be a part of our discussions as we meet with lawmakers.
 
Workforce Storytelling
We have a big challenge at our doorstep which revolves around reclaiming the narrative around jobs and careers in the hospitality industry. There are incredible stories all around us about the positive and lasting impact hospitality jobs have for Oregonians from all backgrounds. The Spring edition of the Oregon Restaurant & Lodging Association magazine focuses in on the importance of mentors and the opportunities we all have to do more in sharing the opportunities in our industry with both high school and community college students. On page 24 is our Industry Champions article, The Essential Role Of Industry Mentors For High School Culinary Classrooms, where four of our ProStart mentors were interviewed. They each had great stories to tell, worthy of a broader share than just in print, so we repurposed the article as a blog post as well.
 
77% of the Way Back
The hardest hit sector, accommodation and food services, has regained 77% of the many jobs lost in the initial COVID crisis. In addition, the following article is featured on the Oregon Employment Department’s website regarding youth employment trends in our industry. It’s worth a read to learn about our history and our efforts to regain traction in employing high school youth over the course of the past decade.
 
Oregon OSHA Fixes Workforce Housing Caps
ORLA has been advocating for our hospitality businesses who provide housing for workers as a benefit of employment. This predominately impacts our resort members who leverage visas and provide work experience to citizens from other countries with those opportunities ramping up in the Spring and Summer seasons. Thankfully Oregon OSHA has answered the call to repeal the Covid rule that capped the amount of workers we were allowed to house in each dwelling unit due to concern over Covid spread. This will greatly assist members in controlling costs associated with the number of vacation homes/dwelling units that must be rented out for the purposes of workforce housing. 

Give us a call at 503.682.4422 or email us if you have any questions. | ORLA

The Oregon Hospitality Foundation (OHF), in conjunction with the Oregon Restaurant & Lodging Association, supports a career technical education program called ProStart. This national curriculum is available to all schools in Oregon interested in growing their culinary and restaurant management programming for high school students. The Foundation is fortunate to work with many hospitality industry mentors integrated with this program. We interviewed four of these mentors who shared their stories about how they got involved with ProStart here in Oregon and continue to inspire our students to jump into the hospitality industry.

Josh Archibald, Executive Chef, Tillamook Creamery
Mentor, Seaside High School 
OHF: What motivated you to get involved as a ProStart mentor?
Archibald: I was drawn to the program for a few different reasons. I actually graduated from Seaside High School in 1999. I took a simple Home Economics class, but no further food education or hospitality courses were offered at the time. I went on to continue cooking and eventually attend culinary school, but if I had the opportunity to be exposed to a program like ProStart, it would have provided better guidance in my own career path. From an operations standpoint, we were wise enough to recognize the need for skilled restaurant labor in our local community far ahead of the curve. We knew that investing in the program and its students would be not only beneficial to our own operations, but perhaps even the restaurant community in our tourism-based, beach economy. While that was absolutely part of the decision to support the program, it also goes along with the fundamentals of cooking for a living, and we’re able to provide opportunities to teach the next generation of culinarians. One of the most valuable things about the program is that even if a student decided to pursue another career path, the lessons it teaches are good life skills that are important for a life of feeding themselves, and the people they love.
 
OHF: What value can someone from the restaurant industry bring to the classroom? 
Archibald: I think by having access to industry experts, students can see the vast opportunities available to them in our field. At their impressionable age many think of the hospitality industry as just a hotel or pizza shop. While there is nothing wrong with that, they haven’t been exposed to much beyond their local community. Access to industry experts helps them understand our industry better, and the broad career paths offered within the field of hospitality–whether that means food stylist photographer or cruise ship concierge and all of the in-betweens. As an industry, our possibilities are endless, and giving students a glimpse into that can have huge benefits.
 
OHF: What experience do you have of hiring ProStart students? 
Archibald: We were fortunate, especially in the years of our back-to-back state championships, to have great success in not only hiring, but retaining some of our students. It was a great way for us to source colleagues that we already had a relationship with, and in turn, who already knew us and our expectations. The timing of the tourism “season” works really well for their seasonal employment, and if they returned to the program in following years those students were already showing vast improvement in knowledge and leadership skills and became even larger assets to the program. As an industry this program can be one of our greatest solutions to continued workforce struggles as it allows us to teach, inspire, and cultivate the people that will run this industry in the future. 

Chef Michael Thieme
Mentor, North Eugene High School
OHF: What were you able to bring to the classroom as an industry member?
Thieme: I bring my knowledge and experience. I’ve been a mentor working with Miho (ProStart instructor) for 19 years. And even when we weren’t in the competition, we still worked with the students on development of their skills. It’s kind of like, when we're in the classroom and we're preparing for a competition, it's more than just a competition. It’s also about how you market yourself and get your resume built. I try to get the students to do their part. It's their competition and so they need to create it and they need to build it– I just guide them and tell them where I think things are good and what we need to work on. I also try to give them a reality of what the industry is like. They learn how to be a team player and understand there's ups and downs throughout our process, so we have a lot of meetings to talk about those things and how to receive feedback. 

OHF: What experience do you have in hiring ProStart students?
Thieme: I’ve hired many of them. When I was the Executive Chef at the Valley River Inn, we practiced there, and a lot of those students became employees. In fact, one of them just opened a restaurant of her own, and another just graduated from the culinary school at Johnson & Wales University on the East Coast. I've sent people all over the place and I keep in touch with them. Some of them gravitated towards management, in fact, one student worked his way up to be restaurant manager at the hotel and he continues to work in the industry to this day.

OHF: What would you say is the most rewarding part of being a mentor?
Thieme: Seeing the students grow. There are so many that come in not knowing much or anything really, except they have a desire and it's initiated. I used to tell them ‘your DNA is going to change when you go through this process. And when you come out the other side, you'll be a different person.’ Some are so shy and timid, and they don't have a lot of self-esteem. To see them come out saying, ‘wow, this was a great experience and I know so much more’ really sets them up for life and beyond. ProStart is great for the restaurant industry but it’s also great for creating and helping people get into a whole bunch of different professions. ProStart has been a great vehicle to allow me and allow the students to actually achieve some huge goals in life. Not to mention, they know how to cook, and they know how to feed themselves at the end of the day. I couldn't do this without Miho, she is awesome! It really takes the two of us.

Will Leroux, Brewmaster, Public Coast Brewing
Mentor, Seaside High School 
OHF: How did you get involved as a mentor for the ProStart culinary program?
Leroux: I kind of fell into it. When I first started working in Cannon Beach, I worked with Chef John Newman, who actually taught the culinary class at the high school, and he asked me to help with the class and do some mentoring and teaching with him. John helped with the team a couple of years until he opened his own restaurant, and then he asked if Josh (Archibald) and I would do it. We actually liked going in and helping out with the kids and doing extra things, so it kind of just fell into place.

OHF: How does this program help prepare students for a job in hospitality?
Leroux: Teamwork is the biggest part of it. The thing with ProStart is that the kitchen really is a team. I played sports in high school and the teamwork part of it is having each other's backs. It's achieving something together as a group. I think the cool thing about it, is a lot of these kids aren't the athletic kids. They’re the kids that may have problems at home, where life hasn't given them a good hand of cards, you know. So, for them to be able to have something to work on with other people, and to trust other people–and us as mentors–was a big deal. That was worth every bit of it. When we prepped for the competitions, we’d try to do things that didn’t seem possible. We figured out a way to make a consummate in an hour. We made marshmallows by hand with a little hand eggbeater, just to make them see that there are possibilities and a way to do things that aren't always the norm. 

OHF: What are some lessons students can learn from industry mentors?
Leroux: Leadership, accountability, teamwork and just being a good human. This was one of the highlights in my life and the fact that we were able to be successful and to share that success with those kids was pretty amazing too. The company that I work for is super, super supportive of the program as well. The class at the high school didn't have a lot of funds, so my company backed it up a huge amount, helping pay for all the food. If somebody is going to be a chef mentor, they need to integrate those kids into their kitchens. This industry can teach them a trade that they can then go out and use in their immediate adult life. Where most people would have to acquire an education in a college or trade school, these kids are able to walk out of this program and have an opportunity to get hired almost anywhere in any kitchen with skills.

Andrea Loeffler, ProStart Instructor, Forest Grove High School
Former Mentor, Tualatin High School
OHF: What motivated you to originally get involved as a mentor?  
Loeffler: I was asked by a coworker of mine at the time if I wanted to take her place of mentoring as she could no longer commit. I thought it would be something I would do once and then move on, but I ended up mentoring for about 12 years. I worked with Heidi McManus where she teaches at Tualatin High School. I really enjoyed the break from the busy kitchen to just slow down a bit and get to know the students and teach them new skills. It was fun to watch the students each year learn and grow and become passionate about food. The time I spent in the classroom mentoring students prepared me for my own career change to run my own culinary program at Forest Grove High School. I would say I gained more from my mentoring experience than I ever thought possible. 
 
OHF: How valuable are mentors in helping provide real-world experiences to students?
Loeffler: Now that I have been on both sides of this (past mentor-current teacher) I see how industry mentors help the teacher and the students greatly. Industry mentors give a real glimpse into what working in the industry is really like. Just by their drive and passion for food that they bring into the classroom, they really can get a group of students excited about food and working hard for what they want in life. It is great to share another Chef’s journey to success or skills they have to share with the students. We all took different paths to get to where we are, and I think it’s important for students to hear that.
 
OHF: What are some ways industry members can get involved with ProStart? 
Loeffler: There are many ways industry professionals can contribute to the classroom as a mentor. Guest speakers are invited to the classroom to share knowledge on their subject area of expertise. Chefs and restaurant owners donate their valuable time and space to allow kitchen tours for students. Chefs that take the time to let students job shadow or do internships are invaluable. There is really no mentoring effort too small. Our students are excited and grateful to see, hear, and experience any knowledge industry professionals have to share.

ProStart® is a nationwide career technical education (CTE) program supported by the Oregon Hospitality Foundation that involves approximately 4,000 Oregon high school students from 40 schools around the state. Mentors provide overall support for ProStart students and help students make a real-world connection to their goals and the future. Visit OregonRLA.org/prostart for more information. | Courtney Smith, Oregon Hospitality Foundation, and Lori Little, ORLA

​Guest Blog | My Accounting Team

Have you ever wished for a magic tool that forecasts costs and profit—and predicts the future? Since time travel doesn’t exist, there is no instant fix. But restaurants do have an incredibly powerful tool for looking ahead that’s underused: Standard Costing.

You’re probably familiar with the importance of COGS (Cost of Goods Sold). Industry practice often says that this shouldn’t be more than a certain amount (the standard is around 30%). Certainly, COGS data is useful. But there’s another approach that can dramatically increase profits. One accounting tool that is invaluable to running a more successful business based on real figures is Standard Costing. 

Relying on Cost of Goods Sold without getting Standard Costing is like getting a grade on a test, but not being told what was right, and what was wrong. We all need feedback to improve. That’s where Standard Costing comes in. Think of it as a “highlighter pen for profitability.”

Accountants are used to seeing blank stares when we ask, “What are your most profitable menu items?” Few things are more central to profitability. And yet, this data is often neglected. Predicting future costs is not like rent (where you quickly see what the rent hike impact will be). Relying only on COGS percentages may tell you there’s a problem. But that info can’t tell you where to look, or how to fix that problem. This is exactly where Standard Costing shines for restaurant owners and managers. 

So, what is Standard Costing? It’s an accounting tool to plan a more accurate budget. Standard costing lets you increase efficiency, raise profits and look ahead. Standard costing gives you what you need: a detailed understanding of both cost and quantity that go into a menu item. 

For example, let’s say you have a popular dish that uses an 8-ounce portion of chicken. If chicken is $2.50 per pound, the standard cost per plate for that chicken dish would be $1.25. Add up all the components. Now you have the standard cost. Subtract the standard cost from the menu price. Now you have the profitability for that item—at least from a theoretical perspective. We can make standard cost more accurate by adding in additional factors: wastage, shrinkage during cooking, portion control, and theft. Now we have something valuable. We shift from the theoretical to the real cost.

This detail is golden. You can use standard cost to enhance your business model. You can more realistically price menu items. You can investigate wastage. You can also promote certain items based on profitability.

But wait—there’s more. Say you have a business model forecasting COGS will be 30% of revenue, but it’s actually 33%. After analyzing your standard costs, you find that most items are around 30%. But a couple of items are 40%. Now you know what is causing the problem. Now you can decide how to fix it. Perhaps it’s re-pricing. Perhaps it’s revised portions. Perhaps it’s a combination of multiple changes. This is the power of Standard Costing. It’s like a magnifying glass to find and address red flags and potential issues. 

One more problem that Standard Costing solves is the large gap between your POS and bookkeeping data. This is every restaurant owner’s nightmare. You calculate the theoretical COGS from the items in your POS. But what happens when the actual bills are much higher? Where is the disconnect? It could be inadequate portion control, wastage, or theft. 

To solve this problem, you need a starting point. The overly broad analysis that “COGS is too high” isn’t much help. Standard costing, though, provides the data points so you make a few changes and get significant results.

Most restaurateurs understand that menu placement has a significant impact on order frequency. Standard Costing tells you which items are the most profitable, so you and your staff know which items to push. The same logic applies to promotions. Without Standard Costing, you’re guessing. Standards save time. Standards increase profits. Standards find problems. And standards help achieve goals.

Unfortunately, Standard Costing isn’t a magic fix or a “one-and-done” analysis. Material prices fluctuate. Doing this kind of analysis takes time. Most restaurateurs go into the business because they love the business, food, and communities. If sheet pans are more your style than spreadsheets, it may not be your task to do planning and profit management with Standard Costing. But it could be someone else’s.

About:
Bruce Lange is the Chief Financial Officer of My Accounting Team (MAT). He has three decades of experience in Finance and Administration, having worked with organizations from small start-ups to multinational corporations like Oracle. MAT offers simple, secure, scalable cloud-based bookkeeping and accounting services. Contact Bruce and the team at MAT at [email protected] or 541.844.1484.

RRF Replenishment / OSHA Updates / H-2B Visas / US Labor Department Investments

We are seeing signs of sales getting close if not reaching pre-pandemic levels for some Oregon operators. Of course sales numbers don’t tell the whole story for our restaurants given the cost of goods and the ongoing impacts of a marketplace driven by historic leverage in the hands of employees. On the lodging side it continues to be a tale of two realities with operators seeming to do quite well in secondary markets with Portland still working to find its footing with the delay in corporate/conference travel. Spring/Summer live events and the return of the full fledged Rose Festival events for a month from late May through late June will certainly help Portland turn the page. 

RRF Replenishment Votes Possible in House, Senate
The U.S. House of Representatives is expected to vote on legislation to replenish the Restaurant Revitalization Fund as early as this Wednesday. Details on the size of the bill, and whether it is funded with new government spending or reallocating existing federal dollars remain unknown. Meanwhile, if the Senate is able to reach agreement on legislation to fund COVID treatment programs, Democrats are expected to offer an amendment to replenish the RRF. Senate Republicans have been clear in calling for any COVID spending to be fully offset by cuts in other government programs, and will vote against RRF replenishment if this condition is not met.

ORLA has been working with the National Restaurant Association on your behalf to urge that Congress not treat the 177,000 restaurants waiting for COVID grants as hostages to battles over government spending. The National Restaurant Association sent a letter to the Hill this morning in support of RRF votes and posted a press release urging support from Congress. We will keep you informed if a vote occurs and when the next grassroots activation will launch.

OSHA Update on Workforce Housing
One of the many unintended consequences of agency rules during Covid was the impact of workforce housing restrictions on our resort communities around the state. Oregon OSHA was focused on preventing the spread of Covid in agricultural worker housing specifically, but their rules also prevented resorts around Oregon from housing hospitality employees within residential vacation homes. The Covid rule limited the number of workers who can be housed in resort vacation homes–and those limits did not exist for vacation travelers from different households using those same homes. ORLA pointed out this inequity over the course of the past week and thankfully Oregon OSHA responded. OSHA just released a Workplace Advisory Memo on April 1, 2022, that removes these workforce housing limitations in our industry.

H-2B Visas
American Hotel & Lodging Association President & CEO Chip Rogers (who will be joining us in person at September’s ORLA Hospitality Conference in Eugene) shared the following good news this week on H-2B Visas. A number of ORLA members utilize Visas for seasonal employment needs and expanding capacity has been a priority for the industry.

The Department of Homeland Security (DHS) and Department of Labor (DOL) announced they would make available an additional 35,000 H-2B visas for the second half of fiscal year 2022 (FY22), which begins April 1. Of these, 23,500 visas will be available for returning workers, while 11,500 are reserved for nationals of Haiti, Honduras, Guatemala, and El Salvador. In December, for the first time ever the Departments released an additional 20,000 H-2B visas for the first half of the fiscal year. These additional visas will provide critical help to seasonal resorts as we enter the busy summer travel season, and they suggest that the Biden Administration recognizes the acute workforce shortage we are facing. AHLA will continue to push for legislation and policies that will help fill open jobs and keep us on the road to recovery.
 
US Labor Department Investments
This week the National Restaurant Association shared more details on President Biden’s federal budget proposal which includes an 18% increase in U.S. Department of Labor funding from 2022 levels ($2.2 billion more) with $400 million proposed to go towards the hiring of additional staff within the department’s workforce protection agencies. Here are the cliff notes from the administration's proposals that are more industry specific:
 
Labor & Workforce

• $2.2B in new funds for the U.S. Department of Labor, an 18% increase.
  • $397M more for worker protection agencies. Document says DOL worker protection agencies lost 14% of their staff from 2016 to 2020, limiting their ability to perform inspections and conduct investigations.
• $118M more to expand Registered Apprenticeship (RA) opportunities.
• $765M for U.S. Citizenship and Immigration Services (USCIS) to administer the immigration system.

 
Food Supply Chain and Competition

• $10M for USDA to protect individual producers against price manipulation by large food processing companies.
• $1.2B for the Food Safety and Inspection Service, with an increase of $134M to hire more food inspectors.
• $230M for the Port Infrastructure Development Program building maritime freight capacity.
• $1.7B in spending for the Harbor Maintenance Trust Fund to move goods through ports and waterways faster.
• $43M in new investments in food safety modernization. Building on the FDA Food Safety Modernization Act, this improves prevention-oriented food safety practices, strengthen data sharing and predictive analytics capabilities and enhance traceability to more quickly respond to outbreaks and recalls for human and animal food.
  • This funding could be used to implement the FDA’s proposed food safety traceability rule that will affect restaurants.

 
Technology and Competition

• $88M for the Antitrust Division of the Department of Justice (ATR) and $139 million for the Federal Trade Commission (FTC) to “promote marketplace competition through robust enforcement” of antitrust and unfair and deceptive trade practice laws.
  • These investments could spur future regulatory actions around anticompetitive business practices in areas like the electronic payment ecosystem.
  • The FTC would be responsible for creating and implementing standards for a national data privacy and security framework, if such a plan advances in Congress.

 
Access to Credit

• $9.5B increase for SBA’s flagship 7(a) loan guarantee program, the 504 loan program for fixed assets, Small Business Investment Companies, and the Secondary Market Guarantee program.
• $20M to help veteran and service-disabled veteran-owned small businesses to access business opportunities across the Federal Government.
• $50M for an EDA pilot program (via Commerce Department) to address structural prime-age employment gaps and boost competitiveness in persistently distressed communities through innovative, flexible, and locally-led grants.

 
Healthcare

• A new requirement that all private health plans must cover mental health benefits and ensure plans have an adequate network of behavioral health providers.
• Creates a new Vaccines for Adults (VFA) program, which would provide uninsured adults with free access to all recommended vaccines.

 
For more information:

• Biden Budget Proposal
• Treasury’s Explanations of Revenue Raising Proposals

We look forward to sharing more about workforce development efforts in future reports. There is a lot of work going into improving connections between industry operators and high school/community college classrooms. Give us a call at 503.682.4422 if you have any questions. | ORLA