Okaloosa County BOCC — May 23, 2016 — I. d. Proposed Budget — reading text

TOURIST DEVELOPMENT DEPARTMENT MEMORANDUM DATE: May 23, 2016 TO: Tourist Development Council FROM: Ed Schroeder, Tourist Development Department Director Charlotte Dunworth, Finance, Administration, & Compliance Manager SUBJECT: FY 2016-17 Proposed Budget STATEMENT OF ISSUE: Consideration and discussion of the proposed FY 2016-17 budget. BACKGROUND: A budget is a planning tool that identifies expenses by account classification. Some dollar amounts reflect known contractual values, while other dollar amounts are estimates. Not all anticipated amounts may be necessarily incurred, and some expenses may be incurred that are not currently identified because a need or opportunity arises during the year that was unanticipated. The attached document reflects the proposed FY 2016-17 Tourist Development Department budget that will be presented to the County Administrator. Total revenues equal total expenses for each percentage point, but more importantly, recurring revenues fund both recurring and non-recurring expenses to a large extent. Use of non-recurring revenues is limited to capital improvements and one-time marketing initiatives. STAFFING – The FY17 budget includes 41 FT positions compared to 37 FT positions in FY16. Two positions were added mid-year FY16 as part of the internalization of marketing functions (Digital Marketing Specialist, Sports & Events Sales Specialist) and two new positions are budgeted for FY17 (Client Services Coordinator to support group sales and Content Specialist to manage website content). MARKETING – The FY17 strategic marketing plan totals $6.55M compared to $4.49M in FY16. A detailed media and marketing plan for October – December 2016 will be brought forth at a future date. Activity FY16 FY17 Promotional Items & Collateral 140,000 152,400 Local Event Promotional Activities (e.g. Mardi Gras) 5,000 5,000 Trade Show Fees 59,225 53,605 Advertising Agency Services 565,000 0 Website Development & Maintenance 82,068 133,000 Public Relations (e.g. Familiarization Tours, Road Shows) 95,000 95,000 Media Campaign (e.g. print, digital, tv, radio) 2,513,270 3,470,000 Campaign Production 200,000 500,000 Local Event Marketing Funding Applications 219,850 475,528 Advertising (e.g. Welcome Centers, Publication Listings) 11,480 16,705 Promotional Reserves 100,000 300,000 Allegiant Air Paid Media Services 500,000 1,775,148 $4,490,893 $6,976,386  Seasonality FY16 FY17 Media Allocation FY16 FY17 Fall 601K 1.011M Print 515K 674K Christmas 100K 168K Online 965K 1.517M Snowbirds 133K 337K TV 444K 1.011M Spring 543K 1.011M Radio 63K 101K Summer 350K 337K Other 545K 67K Non-Seasonal/Niche 595K 268K $2.532M $3.470M Groups/Meetings 210K 337K $2.532M $3.470M PUBLIC SAFETY SERVICES – F.S. 125.0104 was recently amended to authorize that the County may use up to 10 percent of the tax revenue received from the first three pennies to reimburse expenses incurred in providing public safety services needed to address impacts related to increased tourism. The proposed budget reflects $500K to Okaloosa County Public Safety, $550K to Destin Fire Control District, and $125K to Okaloosa County Sheriff. It is important to the note that the Tourist Development Plan must be amended to include law enforcement as an authorized use before the FY17 budget is formally adopted by the Board in September. LOCAL EVENT MARKETING FUNDING – a revised program will be brought forth at a future date. Budget funds include applicants who have not yet attended training and provide for additional funding should any applicant qualify under the new guidelines if adopted. RESERVES – the proposed budget meets or exceeds all aspects of the reserve policy. Operations 35% of budgeted personnel & operating expenses, plus any debt service, for each percentage point. Beach Restoration (FY17 proposed budget totals $9.8M, including $500K budgeted increase) $14M total, funded in whole or part by the first, second, and/or third percentage point(s). To the extent beach restoration reserves do not total $14M, a minimum of $500K will be budgeted annually, in whole or part by the first, second, and/or third percentage point(s), to build reserves until $14M is reached. East Pass Dredging $2M total, funded in whole or part by the first, second, and/or third percentage point(s). Convention Center Insured Loss Deductible $1.5M total, for the fourth percentage point. Promotional Activities (FY17 proposed budget exceeds policy by $379K) 25% of budgeted promotional activities (expense accounts classified as 548xxx), funded in whole or part by the third and/or fifth percentage point(s). (Note: non-recurring Allegiant Air funding not included in reserve computation) CONTINGENCIES – the 1% of tourist development tax collections contingency for each penny discussed at the May 6 meeting will be revisited during the TDC meeting. The TDD Director will review the proposed budget with the County Administrator on June 9 and the Board on August 1. The Council will review the final Board-adopted budget at its September meeting. OPTIONS: Approve the proposed budget or recommend an alternative budget. RECOMMENDATION TO BCC: Approve the FY 2016-17 Tourist Development Department budget as presented.  FY 2015-16 FY 2016-17 FIRST PERCENTAGE Adopted TDC Proposed Tourist Development Tax 3,000,000 3,920,000 Service Charges 500 500 Interest & Other Income 17,500 60,000 subtotal - recurring revenues 3,018,000 3,980,500 Reserves (cash balance) 14,047,061 14,506,800 Total Revenues 17,065,061 18,487,300 Personnel 131,437 140,276 General Operations 300,184 770,701 Tax Collector Administrative Fee 90,000 117,600 County Cost Allocation Plan 978 963 subtotal - general recurring expenses 522,599 1,029,540 Beach Cleaning & Raking - Destin 212,877 290,205 Note: Beach Cleaning & Beach Parks Maintenance labor not tracked separately; breakout and allocation between Destin Beach Parks Maintenance - Destin 290,477 301,453 and Okaloosa Island are estimates Turtle Nesting Survey - Destin 31,333 32,667 Western Destin Beach Restoration Debt Svc 326,693 669,821 subtotal - Destin recurring expenses 861,380 1,294,146 Beach Cleaning & Raking - Ok Island 106,439 135,487 Beach Parks Maintenance - Ok Island 409,517 447,817 Beach Parks Bathroom Cleaning - Ok Island 138,549 142,707 Turtle Nesting Survey - Ok Island 15,667 16,333 subtotal - Ok Island recurring expenses 670,172 742,344 subtotal - recurring expenses 2,054,151 3,066,030 Beach Cleaning Equipment 95,000 20,043 Beach Parks Maintenance Equipment 112,030 75,432 Western Destin Beach Restoration Monitoring 124,746 84,373 Artificial Reef for Fishing Industry - Destin 152,365 150,000 Remotely Operated Underwater Vehicle - 3,409 Snorkling Reef Video Camera & Installation - 47,721 subtotal - Destin non-recurring expenses 484,141 380,977 Beach Cleaning Equipment 47,500 9,357 Beach Parks Maintenance Equipment 32,370 127,235 Beach Accessway Improvements - Ok Island 500,000 500,000 Living Shorelines - Ok Island 115,400 58,000 Remotely Operated Underwater Vehicle - 1,591 Snorkling Reef Video Camera & Installation - 22,279 subtotal - Ok Island non-recurring expenses 695,270 718,463 Landing Covered Performance Stage - FWB 100,000 100,000 subtotal - FWB non-recurring expenses 100,000 100,000 subtotal - non-recurring expenses 1,279,411 1,199,440 subtotal - recurring & non-recurring expenses 3,333,562 4,265,470 Reserve - Operations & Maintenance 927,003 1,508,494 Reserve - Beach Restoration 9,127,108 9,830,286 Reserve - East Pass Dredging 2,000,000 2,000,000 Reserve - Future Capital Improvements 1,677,388 883,050 subtotal - reserves 13,731,499 14,221,830 Total Expenses 17,065,061 18,487,300 5/18/2016 7:46 AM  FY 2015-16 FY 2016-17 SECOND PERCENTAGE Adopted TDC Proposed Tourist Development Tax 3,000,000 3,920,000 Interest & Other Income 11,000 11,000 subtotal - recurring revenues 3,011,000 3,931,000 Reserves (cash balance) 841,249 1,438,700 Total Revenues 3,852,249 5,369,700 Personnel 585,937 588,776 General Operations 344,873 454,698 Lifeguards - Destin 562,304 550,000 Lifeguards - Ok Island 562,304 500,000 Law Enforcement - Sheriff - 125,000 Tax Collector Administrative Fee 90,000 117,600 County Cost Allocation Plan 417,926 415,000 subtotal - recurring expenses 2,563,344 2,751,074 Interactive Map for Visitors Center 3,000