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Home My WebLink About1991-07-09; City Council; 11250; ESTABLISH 1991-92 FUNDING METHOD FOR THE CARLSBAD CONVENTION AND VISITOR'S BUREAUI 0 0 0 0 0 c\I e3 +I 0 m a e a. m u -d cdm rd MP C .r( a n a, Adopt Resolution No. 9 i"-a%S establishing the funding method for the Cs Convention and Visitor's Bureau (CCVB). I'IEM EXPLANATION: At the June 18, 1991 City Council meeting, several Council members indica interest in spending additional time discussing alternate funding methods for the next year. Council directed staff to return on July 9,1991 with an agenda bill I to CCVB funding. Staff has prepared a review of funding options as shown bc 1. Current Funding - Total allocation is $225,000, with $17 earmarked as the base, and $55,000 to be provided as matching Fixed Contribution - Provide a fixed amount to be used to pr tourism in Carlsbad, to be issued with minimal restriction. Variable Funding - Relate the amount of funds provided based up growth in Transient Occupancy Tax (TOT) Revenues. a: ac G5 +I 5+I M *rl .c Jzv 4E P card .u mc ma, Nrl NP ICU drl ; .5 "rl wu rd aJ0 2. a .ti rd oa a? TI 00 * 0 amount. 2: 3. zO GO um 3N de- Identify that a certain portion of funds will be provide( matching basis in addition to a base amount plus a g c a0 aJ TI uc, a *d oa a5 aa *I+ rd c) Cr6 =Iu b: Provide a base amount plus a growth amount. This option not provide for the use of matching funds. rlc 4. CCVB ProDosal - City funding for the CCVB equivalent to 7.2% total annual TOT revenues. FISCAL IMPACT: The 1991-92 budget currently contains $225,000 for the purpose of corn promotion. Any additional funds the Council may wish to allocate to the CCT be accomplished by a transfer from the General Fund Contingency Account. EXHIBITS: Memo dated June 25, 1991 from the Financial Management Director to th 8 '$ 4 1 a a \ r- .. 2 0 6 6 a z 3 0 0 Resolution No. 9 \ .Jk5 establishing the funding level for the Carlsbad Conv and Visitor's Bureau. 0 0 M 0 June 25, 1991 TO: CITY MANAGER FROM: Financial Management Director ', CCVB FUNDING ALTERNA'IWES Attached are two alternatives for CCVB funding that attempt to address the issue of provid fiscal incentive as part of the funding formula. ?'he formulas are basically the same except fc matching requirement. Option 1 includes a matching component similar to the existing for where option 2 does not require matching. The formulas are based on the following principals: I 0 The CCVB will receive a minimum level of funding which is based on the grez the funding level calculated under the formula or $225,000. This provides a net for the CCVB in the event of a serious down turn in the economy. Funding in any fiscal year will be based on the performance of the TOT in th fiscal year. contribution would go up. CCVB will receive a base funding level plus a 7.2% share in the IW groi TOT revenues. Real growth is defined as that increase in TOT revenues ( inflation or increased room occupancy. It does not include any one time inc in ?'o'I' revenue due to the addition of new rooms to the Carlsbad hotel mal If matching funds are required they will be on a basis similar to the existing cc with CCVB. This would be a dollar for dollar participation by the City. Normal inflation in TOT revenues due to general price increases will be cons part of real growth for purposes of this calculation. This is in recognition oft that the CCVB experiences increases in their operating costs as inflation ( There will be no other adjustment for inflation in this formula or in CCVB SI The decision to fund the CCVB is a Council budgetary/policy decision whic be considered each year by the existing City Council. The decision to I funding to the CCVB under this, or any other formula, is subject to annual by the City. 0 That is, if last year's revenues went up then this year's 0 0 0 0 1 hope this information is sufficient for tonight's discussion. We can prepare additional infor during the next few days if the Council wishes to consider other funding options. 0 e OPTION 1 LCVB Support - Proposed Formula Base Support Level Plus Share of Growth Assumes Matching Funds % ANNUAL REVENUE INCREASE OVER TOT BASE (1990-91 L GROWTH (INCREASE IN TOT 170,000 170,000 ATCHING FUNDS 30,000 55,000 ROWTH INCENTIVE TAL SUPPORT 200,000 225,000 INIMUM SUPPORT LEVEL 225,000 225,000 CVB SUPPORT - GREATER OF Based on increase over base year of 1990-91, adjusted for new rooms. For example in 1993-94 we have adjusted It10 real growth for the Four Seasons hotol by deductlng $1 8 million. in the following year growth In the room revenues does Include real growth on these new rooms. This formula recognizes that inflalionary increass in TOT revenues have been included In the computation of CCVB funding. THis is to allow for inflation related cost increases in the CCVB operating budget. CCVB will receive 7 2% of real growth in the room tax revenue. CCVB will receive the greater of a base level of support of $225,000 or the funding provided by the formula above Last year's TOT Revenue less any revenue generated by new rooms within that fiscal year The base year shall be 1990-91 TOT revenue adjusted upward for revenue generated by new rooms Example: Fiscal Year 1994-95 TOT revenue 1990-91 3,200,000 Revenue from New Roonis created between 91 and 93 Revenue from New Rooms created in 1993-94 1,800.000 New Base 5,000,000 %* 0 0 ' OPTION^ GGVB Support - Proposed Formula Base Support Level Plus Share of Growth Assumes No Matching Funds ANNUAL REVENUE INCREASE OVER TOT BASE (1990-gl ADJUSTMENT FOR NEW ROOMS REAL GROWTH (INCREASE IN TOT REVENUE OVER BASE YEAR) 170,000 170,000 MATCHING FUNDS 30,000 55,000 GROWTH INCENTIVE TOTAL SUPPORT 200,000 225,000 MINIMUM SUPPORT LEVEL CCVB SUPPORT - GRMTER OF Based on increase over base year of 1990-91, adjusted for new rooms For example in 1993-94 we have adjusted the real growth for the Four Seasons hotel by deducting $1 E milllori In the following year growth In the rooin revenues does Include real growth on these new rooms. This formula recognizes that inflationnry increases in TOT revenues have been Included In the computation of CCVB funding This is to allow for inflalion related cost increase8 in the CCVB operating budget CCVB will receive 7 2% of real growth in the room lax revenue. CCVB will receive the greater of a base level of support of $225.000 or the funding provided by the formula above Last year's TOT Revenue less any revenue generaled by new rooms within that fiscal year The base year shall be 1990-91 TOT revenue adjusted upward for revenue generated by new rooms Example: Fiscal Year 1994-95 -- TOT revenue 1990-91 3,200,000 Revenue from New Roonis created between 91 arid 93 Revenue from New Roonis created in 1993-94 1,800,000 New Base 5,000,000 1 1 2 3 4 5 6 7 8 9 10 11 12 13 ' 14' 15 16 e 0 RESOLUTION NO 91-225 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA ESTABLISHING CONVENTION AND VISITOR'S BUREAU THE 1991-92 FUNDING LEVEL FORTHE CARLSBAD WHEREAS, the City Council of the City of Carlsbad, California hz reviewed and conducted the Public Hearing for the 1991-92 Operating Budgei and WHEREAS, the Council desires to specify in the 1991 -92 Operating Budg the General Fund method of financial support for the Carlsbad Convention ar Visitois Bureau in the budget. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City Carlsbad, California, as follows: 1. That the above recitals are all true and correct. /// I-y 18 19 1 /// I /// ' ,I 24 21 22 23 24 25 26 27 28 /// I /// ~ /// 1 /// I I /// /// /// I' /// * 5. i 1 2 3 4 5 6 7 8 9 10 11 0 0 2. That 1991-92 funding for the Carlsbad Convention and Visitor' Bureau shall be $200,000 with an additional $25,000 available on a matchin fund basis. PASSED APPROVED AND ADOPTED at a regular meeting of the Cit Council of the City of Carlsbad, California, on the 9th day of July ~ 1991, by the following vote, to wit: AYES: Council Members Lewis, Kulchin, and Nygaard NOES: Council Members Eric ABSENT: None 12' l3 15 16 17 18 19 20 21 l*I ATTEST: i ALETHA L. RAUTENKRANZ, City Cler (SEAL) aA72'ccL. 2@-ik 1 /I 1 ~ I 23 24 25 26 27 28 '