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

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 Requested Preliminary Tourist Development Tax 3,000,000 3,000,000 Service Charges 500 500 Interest & Other Income 13,250 13,250 subtotal - recurring revenues 3,013,750 ■ 3,013,750 Reserve-Trx 1st Penny Beach Restoration - - Reserves (cash balance) 14,047,061 14,047,061 Total Revenues 17,060,811 17,060,811 Personnel 141,611 141,611 General Operations 298,356 298,356 Tax Collector Administrative Fee 90,000 90,000 County Cost Allocation Plan 969 969 subtotal - general recurring expenses 530,936 530,936 Beach Cleaning & Raking - Destin 188,872 188,872 (1) Beach Parks Maintenance - Destin 290,477 290,477 Turtle Nesting Survey - Destin 31,333 31,333 Western Destin Beach Restoration Debt Svc(2) 326,874 326,874 subtotal - Destin recurring expenses 837,556 837,556 Beach Cleaning & Raking - Ok Island 94,436 94,436 Beach Parks Bathroom Cleaning - Ok Island 138,549 138,549 Beach Parks Maintenance - Ok Island 544,870 544,870 Fire Protection - Ok Island Fire District 1,328 1,328 Turtle Nesting Survey - Ok Island 15,667 15,667 subtotal - Ok Island recurring expenses 794,850 794,850 subtotal - recurring expenses 2,163,342 2,163,342 Western Destin Beach Restoration Monitoring 124,746 124,746 Artificial Reef for Fishing Industry - Destin 250,000 250,000 Beach Parks Improvements - Destin 112,030 112,030 subtotal - Destin non-recurring expenses 486,776 486,776 Beach Accessway Improvements - Ok Island 500,000 150,000 delay project start to late FY16 Living Shorelines - Ok Island 115,400 115,400 subtotal - Ok Island non-recurring expenses 615,400 265,400 Landing Covered Performance Stage - FWB 100,000 100,000 subtotal - FWB non-recurring expenses 100,000 100,000 subtotal - non-recurring expenses 1,202,176 852,176 subtotal - recurring & non-recurring expenses 3,365,518 ■ 3,015,518 Reserve - Operations & Maintenance 925,449 925,449 Reserve - Beach Restoration 9,128,816 9,128,816 Reserve - East Pass Dredging 2,000,000 2,000,000 Reserve - Future Capital Improvements 1,725,000 1,725,000 Total Expenses 17,144,783 16,794,783 Requested Proposed (1) New budget category per City of Destin Request Destin Ok Island Destin Ok Island (2) Amount will double in FY17 with MSBU sunset 837,556 794,850 837,556 794,850 486,776 615,400 486,776 265,400 1,324,332 1,410,250 1,324,332 1,060,250 2,000,000 0 2,000,000 0 3,324,332 1,410,250 3,324,332 1,060,250 \\tdcsv2\TDC File Share\Users\Charlotte Dunworth\Budget\FY 2015-16\Line Item Spreadsheets\FY16 Line Item Detail - 5-8 TDC.xlsx 5/5/2015 1:40 PM  FY 2015-16 SECOND PERCENTAGE Requested Tourist Development Tax 3,000,000 Interest & Other Income 3,200 subtotal - recurring revenues 3,003,200 ■ Reserves (cash balance) 841,249 Total Revenues 3,844,449 Personnel 553,077 General Operations 343,696 Lifeguards - Destin 519,157 Lifeguards - Ok Island 519,157 Fire Protection - Ok Island Fire District 1,177 Tax Collector Administrative Fee 90,000 County Cost Allocation Plan 417,926 subtotal - recurring expenses 2,444,190 Digital Map Table for Visitors Center 3,000 Replace Tan Ford Expedition 29,000 Marketing to Assist in Airline Recruitment 500,000 subtotal - non-recurring expenses 532,000 subtotal - recurring & non-recurring expenses 2,976,190 ■ Reserve - Operations & Maintenance 855,467 Reserve-Trx 1st Penny Beach Restoration - Total Expenses 3,831,657 \\tdcsv2\TDC File Share\Users\Charlotte Dunworth\Budget\FY 2015-16\Line Item Spreadsheets\FY16 Line Item Detail - 5-8 TDC.xlsx 5/5/2015 1:40 PM  FY 2015-16 FY 2015-16 THIRD PERCENTAGE Requested Preliminary Tourist Development Tax 3,000,000 3,000,000 Service Charges 810,250 810,250 Interest & Other Income 7,975 7,975 subtotal - recurring revenues 3,818,225 ■ 3,818,225 Reserves (cash balance) 2,024,695 2,024,695 Total Revenues 5,842,920 5,842,920 Personnel - Promotions 345,725 345,725 Personnel - Convention Center 1,067,587 1,067,587 General Operations - Promotions 119,962 100,768 16% reduction to balance General Operations - Convention Center 1,221,307 1,025,898 16% reduction to balance Strategic Marketing Plan 613,231 515,114 16% reduction to balance Fire Protection - Ok Island Fire District 14,214 14,214 Tax Collector Administrative Fee 90,000 90,000 County Cost