Okaloosa County BOCC — February 27, 2014 — IV.c. Financial Update

31 Financial Update February 2014 FY 2013-14 AMENDED BUDGET: $36,713,969 Financial data as of 02/22/14 The adopted budget of $33,967,750 has been amended during the year to record BP grant funds for marketing, FDEP grant funds for Okaloosa Island dune walkovers, FDOT grant funds for seasonal transit service on Okaloosa Island and Destin, and general reserve carryforwards. The tourist development department has three recurring revenue sources – tourist development tax (5 percent), convention center fees (e.g. room & equipment rentals, ticket sales), and interest income on cash balances – along with two non-recurring revenue sources – grants & assessments (BP, FDOT, FDEP, MSBU) and reserves. Reserves are the largest component of budgeted revenues because the budget reflects anticipated revenues as well as current cash on hand. Reserves/cash on hand is a budget “placeholder” and represents the accumulation of unspent prior year bed tax dollars; it’s not an actual source of incoming revenues for the year. Tourist development taxes comprise the largest part of actual annual revenue collections. Each percentage is anticipated to generate $2.4M, for a total of $12M in bed taxes. Lodging establishments remit bed tax collections to the tax collector by the 20th of each month for the preceding month. The tax collector reconciles and remits the revenues to the County by the 10th of the following month. Due to the timing of this process, the $1.2M in actual revenue only represents collections through December 31st. February 24, 2014 Tourist Development Department, Okaloosa County, FL Financial Update – February 2014 32 The tourist development department has several recurring expenses – personnel, beaches & parks, visitor services & lifeguards, convention center, and tourism promotion – along with two non-recurring expenses – grants & assessments and reserves. Reserves are the largest component of budgeted expenses because budgeted expenses must equal budgeted revenues. The budgeted use/drawdown of reserves is reflected in the amount by which budgeted reserves expenses are less than budgeted reserves revenues: $21M reserve revenue – $15M reserve expenses = $6M use/drawdown for capital projects Each percentage of the bed tax is required to be spent in a certain way per County Ordinance. February 24, 2014 Tourist Development Department, Okaloosa County, FL 2 of 5 Financial Update – February 2014 33 FIRST PERCENTAGE (These permissible uses are intended to be representative, not all-inclusive)  beach park facilities or beach improvements  beach & waterway maintenance, renourishment, restoration, enhancement, access  tourist destination facilities SECOND PERCENTAGE (These permissible uses are intended to be representative, not all-inclusive)  visitor services, brochure distribution, communication and research  tourist bureau administration  lifeguard services and protection February 24, 2014 Tourist Development Department, Okaloosa County, FL 3 of 5 Financial Update – February 2014 34 THIRD PERCENTAGE (These permissible uses are intended to be representative, not all-inclusive)  operations, maintenance, improvement of Visitor Welcome or Information Centers, Convention Center, and Tourist Destination Facilities FOURTH PERCENTAGE (These permissible uses are intended to be representative, not all-inclusive)  expansion, renovation, reconstruction of the convention center and outdoor venues February 24, 2014 Tourist Development Department, Okaloosa County, FL 4 of 5 Financial Update – February 2014 35 FIFTH PERCENTAGE (These permissible uses are intended to be representative, not all-inclusive)  tourism promotion STRATEGIC MARKETING PLAN: $2,600,000 The FY 2014 Strategic Marketing Plan was approved by the Board of County Commissioners in November 2013. A task order is required for all promotional activities under the SMP, and is the mechanism for actually authorizing individual promotional expenses/activities. To date, task orders in the amount of $2.4M have been issued to the ad agency and $374K has been approved for payment. A revised ad agency marketing plan as well as an in-house marketing plan are being brought forth for TDC consideration and recommendation for BCC approval to ensure marketing/promotional opportunities reflect current needs to promote the area and increase lodging occupancy in the taxing district. BP SPEND PLAN: $957,471 The FY 2014 BP Spend Plan was approved by the Board of County Commissioners in November 2013. Task orders have been issued for all recovered funds and $51K has been approved for payment to date. Funding has been reallocated from brand television to brand photography as a result of the recent change in the Emerald Coast brand (e.g. style, color, fonts). All monies must be expended no later than March 31, 2014. February 24, 2014 Tourist Development Department, Okaloosa County, FL 5 of 5