Okaloosa County BOCC — May 8, 2014

Okaloosa County Tourist Development Department 1540 Miracle Strip Parkway Ft. Walton Beach, FL 32548 Budget Meeting http://www.okaloosafl.com ~ Minutes ~ Thursday, May 8, 2014 9:00 AM Emerald Coast Convention Center Council Members & Staff Attendee Name Title Status Arrived Departed Chairman, Dale E. Peterson Present - - Dale E. Peterson Vacations Vice-Chairman, Present Thomas Rice - - Magnolia Grill Rachel Joyce Hampton Inn FWB Present - - Daniel Empson Harry T’s Restaurant Resigned - - Thom Gossom Best Gurl, Inc. Present - - Joe Guidry Ramada Plaza Resort Present - - Tuffy Dixon Destin Councilman Present - - Charles Rigdon FWB Councilman Present - - Kelly Windes Commissioner District 5 Present - - Ed Schroeder TDD Director Present - - Lynn Hoshihara TDD Attorney Present - - Chairman Dale Peterson called the meeting to order at 9:00 a.m. with the Pledge of Allegiance. Public Comments Related to Current Agenda Rebecca Sherry/Condo Alliance of Okaloosa Island (Ms. Sherry referred to a newspaper article from last year’s Northwest Florida Daily News poll, which expressed dissatisfaction with Okaloosa County over past TDC scandal.) Ms. Sherry thanked the TDC members for their service and thoughtful discussions in past meetings. Regarding today’s budget items, Ms. Sherry asked the TDC to consider ending the $20K historically given annually to the Greater Fort Walton Beach Chamber of Commerce and to the Destin Chamber of Commerce. She stated these private organizations promote businesses of their members and do not promote county businesses, in general, or the businesses that pay into the TDC tax. She added they receive public funds and are given a pass with compliance to Florida Sunshine Laws. Ms. Sherry stated she believes private organizations like the Chamber of Commerce should not be given public money. However, if they receive public money, she said they should be required to abide by the Florida Okaloosa County Tourist Development Department Page 1 of 10 May 8, 2014  Sunshine Law. Ms. Sherry questioned whether these private organizations deserve $20K each of public money. David Sherry/Condo Alliance of Okaloosa Island David Sherry addressed the Councilmembers with a concern as to why the Destin Fire Control District item is on the Agenda. Mr. Sherry commented on a Destin Law newspaper article from April stating the Destin Fire District requested $306K from Okaloosa County and the Destin Fire Board Chairman believed the TDC should pay some of the bill because of the services they provide for tourists. Mr. Sherry commented the tourist service arguments that apply to the Destin Fire District also apply to the Okaloosa Island Fire District, but also pointed out the Destin Fire District wants to raise their millage rate. Ed Schroeder/Director, Tourist Development Department Ed Schroeder addressed a concern mentioned by Mr. Sherry and said the Destin Fire Control District funding is for lifeguards for Destin beaches and has very little to do with fire control. Mr. Schroeder continued by acknowledging the importance of this budget meeting and stated the Council’s feedback will be used to do the final crafting on budget submission which will be entered into the County system on May 15. Once the budget goes to the County system, it is consolidated with all other departments and then each Director will meet individually with the County Administrator to defend their budget. Mr. Schroeder further explained the next step in the process is to review possible changes or additions from the County Administrator and then return to the County Administrator in June with the final budget. Mr. Schroeder expressed the possibility of reporting on the final look of the budget at the TDC meeting in May and stated it will go back to the County Administrator in July, and the Board of County Commissioners in August. I. FY15 Budget Meeting (Dale Peterson- Chairman) a. Horizons – Dr. Julie McNabb/CEO Horizons provides services for children and adults with intellectual, developmental and other disabilities throughout Okaloosa, Walton and Santa Rosa counties. Dr. Julie McNabb gave an overview of the services provided by Horizons (informational pamphlet and scope of work letter included in packet) and listed many benefits to the community, which includes cleaning the parks, rest areas and access ways. Dr. McNabb stated Horizons developed a contract with Okaloosa County in 1986 for $109K to find work for people with disabilities, but in 2009 the contract amount was reduced to $84K due to changes in the scope and responsibilities. In 2013, she requested an increase in the contract amount to clean parks seven days a week and clean other locations two times per week for $129K. Dr. McNabb stated the County met with Horizons to submit a new scope of work by October 1st and requested $138,549. Okaloosa County Tourist Development Department Page 2 of 10 May 8, 2014  Some members of the TDC asked how this rate was determined and Dr. McNabb stated it is based on direct labor charges, non-direct labor charges, supplies, equipment, labor management, payroll costs, proportional rate of health insurance, chemicals, paper products, and any supplies needed to maintain parks, contingency of 5% for general liabilities, as well as general administrative costs. Commissioner Windes asked about the use of revenue earned beyond the expenses and Dr. McNabb replied it is used in supporting Horizons’ mission and their not-for-profit programs. In response to a question asked regarding Horizons’ accountability and reconciliation, she stated the County is invoiced monthly for work performed. Dr. McNabb asked that if issues or problems occur, please report to Horizons with the date, time, and location for correcting these immediately. Mr. Rice asked Dr. McNabb whom she directly reports to and she replied John Hofstad or James Puckett at Public Works. b. Destin Chamber of Commerce – Shane Moody/President & CEO Shane Moody distributed copies of the Destin 2014 Visitor’s Guide & Membership Directory, a detailed report outlining the activities of the Destin Area Chamber, Contract Section 1-Scope of Services, statistic reports, and a copy of the Chamber’s Accounting Procedures (included in the packet). Mr. Moody explained how the Destin Chamber’s efforts promote tourism and gave an overview of their website and membership benefits. Rachel Joyce asked if anyone provided the Destin Chamber with a report of the direct bookings through the website. Mr. Moody stated no report is available, but he assured her the numbers are good due to accommodation members’ continued annual purchase of those banner ads. Mr. Rice asked Mr. Moody if the Destin Chamber did not receive the $20K, what would go away in the relationship with the TDD. Mr. Moody replied that probably the data share would go away, but it would not change the relationship. Mr. Rice asked about the average membership cost with the Destin Chamber and Mr. Moody stated the average membership cost is in the $260 range and he listed the costs of other memberships available. He added their membership budget is approximately $230K and the total budget, including the $20K from TDC, is approximately $590K. Mr. Rice asked if the Destin Chamber recommends non-members to those inquiring and Mr. Moody responded their policy is to recommend Destin Chamber members only. Ms. Joyce asked if events take place outside the local area and Mr. Moody stated all events are local but published electronically on several websites. c. Okaloosa County Public Safety – Dino Villani Mr. Schroeder reported the staff members from the Parks & Recreation and Public Safety Departments could not attend due to their prior commitment in dealing with last week’s storms. Okaloosa County Tourist Development Department Page 3 of 10 May 8, 2014  d. Film Commission – Gail Morgan Gail Morgan reported on the Film Commission budget for 2013 and 2014 (documentation is included in packet on Page 9, under 5th Cent, first item, Consulting) and further explained reasoning for requesting a budget increase from $66,500 to $146,400, which includes improving the Film Commission website, replenishing inventory, adding new collateral, professional memberships, travel to increase exposure (trade shows/film festivals), and advertising publications. Ms. Morgan stated the requested increase and the Film Commission budget would definitely result in an increase in the economic impact for Okaloosa County. Much discussion continued regarding the financial breakdown of the Film Commission budget amounts and categories. Mr. Peterson and Ms. Joyce asked if the Film Commission reports website hits (interests) and requested a description of the leads. Ms. Morgan stated this report had been forwarded to Mr. Schroeder and is included with the invoice, but she did not bring a report to the meeting. Ms. Morgan further listed some of the events advertised within the Film Commission and reported that the economic impact is a very positive benefit from supporting the Film Commission’s efforts. Thom Gossom commented the Film Commission is a growing market and supported an increase for Ms. Morgan’s efforts. Thomas Rice asked if there are any Film Commission group interns and Ms. Morgan explained why there are no interns and a limited staff. Commissioner Windes cautioned those going before the Board of County Commissioners to bring their best show to sell this program. Ms Morgan stated she has been working on a presentation for May 20th that will showcase the people affected by this. Mr. Schroeder asked if the TDC is open to approaching Escambia, Walton, and Santa Rosa counties to see if the title “Northwest Florida Film Commission” could apply to them, as well, and these counties share the cost and build a well-funded program that covers where the talent exists. Ms. Joyce, Commissioner Windes, Mr. Rice, and Mr. Peterson would consider Mr. Schroeder’s request. Ms. Morgan expressed concerns with presenting this to each County Commission in that it could be time-consuming for them, but stated it would be something to explore. Mr. Schroeder stated he would approach these counties with the idea of sharing the cost of this program under the Northwest Florida Film Commission title and would provide a report to the TDC. e. Greater Fort Walton Beach Chamber of Commerce – Ted Corcoran Ted Corcoran reported on the Fort Walton Beach Chamber of Commerce (FWBCC) background, mission, and efforts within the community. The Chamber began campaigning for the bed tax starting in 1980. Mr. Corcoran’s presentation included an article from 1996 – “Isle Plan Reactions Mixed” and demonstrated how local businesses are showcased. Mr. Corcoran explained how the FWBCC promotes the TDC with branding the Emerald Coast, Fort Walton Beach, Okaloosa Island and listed several projects and events the Chamber promotes to drive bed tax into the area. Mr. Corcoran Okaloosa County Tourist Development Department Page 4 of 10 May 8, 2014  explained the value the FWBCC provides to the TDD and presented an overview of what advertising and support costs the Chamber. Ms. Joyce asked if the Chamber reports online responses and Mr. Corcoran stated he could provide such a report upon request. Mr. Rice asked about cost of membership and Mr. Corcoran provided information on the costs of different memberships, stating the average cost is $295. Mr. Dixon commented that whatever amount Destin Chamber of Commerce is receiving, Fort Walton Beach Chamber of Commerce should receive the same amount. Mr. Rice asked Mr. Corcoran if the FWBCC did not receive any money, what would go away in the relationship with the TDD. Mr. Corcoran replied that it would not change the relationship and they would still promote the community. Mr. Rice asked how many members are in the FWBCC and Mr. Corcoran replied there are 1,031 paid members and 1,800 active members. Commissioner Windes commented that both Chamber presenters stated a very good case for continuing support from the TDC and he recommended an increase. Mr. Rice asked how the Sunshine Law relates to the Chambers receiving this money. Mr. Moody, President & CEO of the Destin Chamber, responded to Mr. Rice’s question and explained the process, provided detailed information of the “open records law,” and stated it is not incumbent upon the organizations that receive the funds. Motion to call the question to fund the Chambers at $30K each annually. RESULT: MOTION APPROVED [7-1] MOVER: Guidry SECONDER: Dixon AYES: Gossom, Rigdon, Windes, Peterson, Joyce NAYES: Rice Motion to Approve an Annual Budget Funding Increase to $30K each for the Greater Fort Walton Beach Chamber of Commerce and the Destin Chamber of Commerce. RESULT: MOTION APPROVED [7-1] MOVER: Guidry SECONDER: Dixon AYES: Gossom, Rigdon, Windes, Peterson, Joyce NAYES: Rice Okaloosa County Tourist Development Department Page 5 of 10 May 8, 2014  Mr. Rice was concerned the Chambers do not offer non-members any benefits and do not abide by the Sunshine Laws. We are paying them money for them to subsidize their organizations. They each stated there would be no change in their relationship to the TDC if they received no funding. He added we should hold the Chambers to the same standards as special event applicants. Further discussion included comments from Mr. Dixon and Ms. Joyce. Ms. Joyce was concerned if the investment would generate heads in beds, and needed more info on advertising special events. Mr. Peterson stated the Chambers support us. f. Budget Discussion – Charlotte Dunworth Charlotte Dunworth reviewed the budget financials and listed some areas requiring discussion: - current revenue amount for next year and operating expenses - three new positions and reclassification requests for existing positions - non-operating expenses - TDC reserve policy - 5-year capital expenses - 5-year capital improvements - strategic marketing plan First Penny – Mr. Dixon asked if health insurance increases are included in the budget and Ms. Dunworth responded this info will be reported in Gary Real’s report. Mr. Dixon asked if the TDC repays for beach cleaning and Lynn Hoshihara stated the TDD funds include beach cleaning. Second Penny – Ms. Dunworth explained the Second Penny is primarily for operation of research and the visitors center, and includes a three month operating reserve. Mr. Dixon asked if a contract amount is included for providing lifeguards and Ms. Hoshihara said it is included. Third Penny – Ms. Dunworth stated there are currently four divisions combined into two departments for ease of accounting, and highlighted funding for promotional activities. Mr. Guidry questioned why training and education figures dropped. Mr. Schroeder explained this is what was asked for and added it does not include further education for him. Fourth Penny – Ms. Dunworth commented the Fourth Penny is restricted to capital improvements and disaster related repairs and future capital improvement projects. Fifth Penny – This includes the Chambers of Commerce funding. Regarding promotional expenses, Mr. Peterson suggested listing the Film Commission and the TDC travel Okaloosa County Tourist Development Department Page 6 of 10 May 8, 2014  expenses separately. Commissioner Windes recommended listing the fisheries as habitat sustainability. There is a 900K operating reserve and $1M for promotional activities. The current Operating Reserve amount is $3.3M and Ms. Dunworth recommended an increase using a percentage of the annual marketing plan instead of a flat dollar amount. Mr. Schroeder suggested three or four months of operating funds would be adequate. Mr. Dixon recommended increasing Operating Reserves to 35% and to include the information in the Ordinance. Motion to Approve Increasing the Operating Reserves Budget from 25% to 35%. RESULT: MOTION APPROVED [UNANIMOUS] MOVER: Dixon SECONDER: Rigdon AYES: Gossom, Guidry, Windes, Peterson, Dixon, Joyce Mr. Peterson asked Jim Trifilio to lead a discussion on the budget for Beach Restoration reserves. Mr. Schroeder recommended spreading the cost to three pennies. Ms. Dunworth stated the TDC does not have a beach restoration reserves policy and could use the full cash balance in the first and third pennies for beach restoration reserves, approximately $10M. Ms. Hoshihara confirmed Florida Statutes do not say which penny the Beach Restoration reserves should come from. Mr. Trifilio added you can never have enough money for beach restoration. State and Federal funds may or may not become available following a hurricane. We would need to restore 3 miles of beach on Okaloosa Island and 6 miles in Destin. Mr. Schroeder said $500K spread across 3 pennies per year might be sufficient annually to build up to a level of $14M. Motion to Approve Budgeting $500K Per Year To Build Up Beach Restoration Reserves to a Level of $14M. RESULT: MOTION APPROVED [UNANIMOUS] MOVER: Dixon SECONDER: Rice AYES: Gossom, Guidry, Rigdon, Windes, Peterson, Joyce Commissioner Windes stated it is of the utmost importance to have East Pass dredging in the event of a catastrophic beach event and the East Pass is in dire need of help. The East Pass is right behind the beaches in our order of an economic engine and having the Pass operable. So, he added it is of the utmost importance to keep that reserve there, and it is at just about the right amount. The Army Corps of Engineers is going to help a little. The City could help and the County could help and that would mostly do it. Jim Trifilio agreed the amount needed would be about $2.5M. Commissioner Windes said in a catastrophic beach event you might need that money to go to a restoration project too. Okaloosa County Tourist Development Department Page 7 of 10 May 8, 2014  It’s really not just in one individual pot. He said we should keep that money, but with the lack of Federal assistance in recent years it may come down to where it is up to us. So, it is a big deal for the whole County because of the tax base it maintains and saves. Mr. Dixon agreed, stating the beaches are our economic engine. He added he would like to have some data of how many boats come in and out of the East Pass as it is very much utilized. Commissioner Windes said $2M in our coffers should be enough and that surely we could get other entities in a bad situation to help us out. He recommended we keep $2M in reserves for the East Pass dredging. Motion to Retain $2M in Reserves for the East Pass Dredging. RESULT: MOTION APPROVED [UNANIMOUS] MOVER: Windes SECONDER: Dixon AYES: Gossom, Guidry, Rigdon, Windes, Peterson, Joyce g. Risk Mgmt Cost Allocation – Gary Real Gary Real gave an overview of the different cost allocations for county insurance policies. Mr. Real distributed a copy of the breakdown of the allocations. The deductible on property insurance is generally $50K, so Mr. Peterson expressed his concern on including enough if a disaster occurs. Mr. Schroeder stated $2M is in reserves for the cost of insuring the Convention Center and Visitors Center buildings from damages. Motion to Decrease the Tourist Development Annual Insurance Reserves Amount to $1.5M. RESULT: MOTION APPROVED [UNANIMOUS] MOVER: Windes SECONDER: Rigdon AYES: Gossom, Guidry, Rice, Peterson, Joyce, Dixon h. Cost Allocation Plan – Gary Stanford Gary Stanford reported on the purpose of preparing the Okaloosa County Cost Allocation Plan (CAP), stating its primary purpose is to identify the appropriate division and department indirect costs incurred in a given Fiscal Year. Mr. Stanford identified several steps involved in preparing the CAP. He explained that the indirect costs are those costs incurred by County departments that benefit other County departments and listed several examples. i. Destin Fire Control District – Joe D’Agostino Mr. D’Agostino distributed a copy of his presentation and reported on the current coverage system, average statistics of beach activities, programs, and hiring. He stated the Destin Fire Control District needs the TDC’s support. Mr. D’Agostino requested the TDC include $597,320 in the 2014/2015 budget. Okaloosa County Tourist Development Department Page 8 of 10 May 8, 2014  Motion to Allocate $597,320 in the Budget for the Destin Fire Control District RESULT: MOTION APPROVED [UNANIMOUS] MOVER: Rice SECONDER: Dixon AYES: Gossom, Guidry, Peterson, Joyce, Windes, Rigdon j. Reserve Policy Discussion – Charlotte Dunworth Ms. Dunworth advised there is $150K in the 3rd penny and $1M in the 5th penny tentatively allocated to promotional reserve. Mr. Schroeder advised this is an adequate not to exceed amount. Motion to Approve 25% of the Promotional Budget for Reserves. RESULT: MOTION APPROVED [UNANIMOUS] MOVER: Rice SECONDER: Joyce AYES: Gossom, Peterson, Guidry, Rigdon, Dixon, Windes Other funding (museums, Sheriff) are not included in the budget at this time as those are not permissible uses. Mr. Schroeder advised the Sheriff’s request to the County will include $350K to augment the police force between spring break and summer. Ms. Hoshihara said the TDC cannot pay for general law enforcement services, but just those used for beach law enforcement services if approved by the TDC Council. The TDC Ordinance would first have to be amended to allow for the use of TDC funds for law enforcement services. II. Public Comment David Sherry commented that he is concerned whether or not the Chambers are on the list mentioned by Rachel. He had a hard time seeing how either Chamber can be approved for more than a $20K special event. As a private business, would you be willing to pay more than your membership costs you? It is easy to spend public money, it seems. If you look at it, you are going to give the Destin Chamber a $10K raise they didn’t even ask for. At that point, it goes from being a membership to a sponsorship. Okaloosa County Tourist Development Department Page 9 of 10 May 8, 2014  III. Adjourn Chairman Peterson adjourned the meeting at 1:32 p.m. APPROVED: APPROVED: By: By: Name: Dale E. Peterson Name: Ed Schroeder Title: Chairman Title: Director, Tourist Development Dept. Date: Date: Okaloosa County Tourist Development Department Page 10 of 10 May 8, 2014