Okaloosa County BOCC — May 8, 2015 — I.b. FY16 Budget Discussion

TOURIST DEVELOPMENT DEPARTMENT MEMORANDUM DATE: May 8, 2015 TO: Tourist Development Council FROM: Ed Schroeder, Tourist Development Department Director SUBJECT: FY16 Budget Discussion STATEMENT OF ISSUE: Consideration and discussion of the preliminary FY16 budget. BACKGROUND: Tax revenue allocation may be summarized as follows: (1) First Percentage • Provide and improve beach park facilities or beach improvements including access • Maintenance, renourishment, restoration and erosion control, including shoreline protection, enhancement, access, cleanup, or restoration of beaches, other waterways • Provide and improve tourist destination facilities… for which there is public access • Any other purpose authorized in F.S. 125.0104(5) (2) Second Percentage • Tourism services, including visitor services, brochure distribution, communication and research • Tourist bureau administration • Lifeguard services and protection • Any other purpose authorized in F.S. 125.0104(5) (3) Third Percentage • Provide and improve visitor welcome or information centers • Operations and maintenance of the convention center, visitor welcome or information centers, and other tourist destination facilities, including aquariums and museums • Promotion of the use of the convention center and other tourist destination facilities • Any other purpose authorized in F.S. 125.0104(5) (4) Fourth Percentage • Any future expansion, renovation or reconstruction of the convention center • Any other purpose authorized in F.S. 125.0104(3) (l) 2,3,4 (5) Fifth Percentage • Tourism promotion The reserve policies adopted last year may be summarized as follows: Operations (FY16 preliminary budget meets policy) 35% of budgeted personnel & operating expenses, plus any debt service, for each percentage point. Beach Restoration (FY16 preliminary budget totals $9.1M, 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 (FY16 preliminary budget meets policy) $2M total, funded in whole or part by the first, second, and/or third percentage point(s). Convention Center Insured Loss Deductible (FY16 preliminary budget meets policy) $1.5M total, for the fourth percentage point. Promotional Activities (FY16 preliminary budget exceeds policy by $517K) 25% of budgeted promotional activities (expense accounts classified as 548xxx), funded in whole or part by the third and/or fifth percentage point(s). FY16 funding requests have been compiled and preliminary budgets developed for each tourist development tax percentage. Budget figures are not yet available for personnel, County parks maintenance, beach cleaning & raking, or lifeguards. Funding requests exceed budget funds available for the 1st and 3rd percentages (FY 2015-16 Requested column on the attached summaries). Staff has tentatively balanced those budgets as noted (FY 2015-16 Preliminary column) and seeks direction on the TDC’s budget priorities. Budget funds are sufficient to cover funding requests in the 2nd, 4th, and 5th percentages. Expenses do not exceed recurring revenues in the 2nd or 5th percentages. TDC consideration of the use of $300K in reserves for a Chicago takeover is requested. Drawdown of non-recurring revenues is acceptable in the 4th percentage for convention center improvements. OPTIONS: N/A; staff is seeking budget direction from the TDC. RECOMMENDATION TO BCC: N/A, for staff budgetary direction purposes only.  FY 2015-16 FY 2015-16 FIRST PERCENTAGE Requeste