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Home My WebLink AboutCOUNCIL - AGENDA ITEM - 05/04/2021 - SECOND READING OF ORDINANCE NO. 053, 2021, APPROPR Agenda Item 4 Item # 4 Page 1 AGENDA ITEM SUMMARY May 4, 2021 City Council STAFF Chris Martinez, Financial & Policy Analyst Amanda King, Communications/Public Involvement Director Jim McDonald, Cultural Services Director Ingrid Decker, Legal SUBJECT Second Reading of Ordinance No. 053, 2021, Appropriating Prior Year Reserves in the General Fund for Cultural Development and Programming Activities and Tourism Programming. EXECUTIVE SUMMARY This Ordinance, unanimously adopted on First Reading on April 20, 2021, appropriates $252,818, of which $199,364 is proposed for 2021 Cultural Development and Programming Activities (Fort Fund) and $53,454 is proposed for 2021 Tourism Programming (Fort Fund) from a combination of Lodging Tax and Prior Year Reserves (unspent appropriations) in the General Fund Lodging Tax Reserves. Lodging taxes are annually collected by the City for cultural development and tourism programming activities. Anticipated revenue is projected through each Budgeting for Outcomes (BFO) cycle and th en adjusted annually as needed based on final actual collections. Due to the 2020 pandemic, lodging tax revenues collected came in $595,613 below projected 2020 collections. STAFF RECOMMENDATION Staff recommends adoption of the Ordinance on Second Reading. ATTACHMENTS 1. First Reading Agenda Item Summary, April 20, 2021 (w/o attachments) (PDF) 2. Ordinance No. 053, 2021 (PDF) Agenda Item 12 Item # 12 Page 1 AGENDA ITEM SUMMARY April 20, 2021 City Council STAFF Chris Martinez, Financial & Policy Analyst Amanda King, Communications/Public Involvement Director Jim McDonald, Cultural Services Director Ingrid Decker, Legal SUBJECT First Reading of Ordinance No. 053, 2021, Appropriating Prior Year Reserves in the General Fund for Cultural Development and Programming Activities and Tourism Programming. EXECUTIVE SUMMARY The purpose of this item is to appropriate $252,818, of which $199,364 is proposed for 2021 Cultural Development and Programming Activities (Fort Fund) and $53,454 is proposed for 2021 Tourism Programming (Fort Fund) from a combination of Lodging Tax and Prior Year Reserves (unspent appropriations) in the General Fund Lodging Tax Reserves. Lodging taxes are annually collected by the City for cultural development and tourism programming activities. Anticipated revenue is projected through each Budgeting for Outcomes (BFO) cycle and then adjusted annually as needed based on final actual collections. Due to the 2020 pandemic, lodging tax revenues collected came in $595,613 below projected 2020 collections. STAFF RECOMMENDATION Staff recommends adoption of the Ordinance on First Reading. BACKGROUND / DISCUSSION Section 25-44 of the City Code requires that 75% of the total lodging tax receipts be used for the promotion of convention and visitor activities in the City and 25% of receipts be used for cultural development and programming activities in the City. Actual revenue collected is appropriated based on this allocation formula and any excess revenue and budget savings are reserved for these activities in the General Fund. Pursuant to a contract with the Fort Collins Convention and Visitors Bureau (FCCVB), the City has paid a portion of lodging tax receipts to the FCCVB since 2011 for delivery of convention and visitors programming services in furtherance of the City Code requirement. The amount due for convention and visitors programming is appropriated based on prior year receipts and paid annually to FCCVB after the close of the prior tax year. In the past, when actual lodging tax receipts exceed the anticipated amount appropriated for cultural development and programming activities, the City would appropriate additional funds and adjust the amount allocated for those activities in the year following the year in which the tax is collected. For 2021, given the shortfall of 2020 lodging tax receipts due to the COVID-19 pandemic, the City must reduce funding for these 2021 activities by the same percentage per City Code. Also, any appropriated lodging tax revenues remaining unspent at the end of the tax year lapse into the General Fund and may be appropriated the following year for the same purposes as they were originally appropriated. ATTACHMENT 1 Agenda Item 12 Item # 12 Page 2 The actual tax revenue collected during the 2020 tax year, as determined March 2021, was $595,613 less than the Lodging tax revenue anticipated and appropriated for expenditure in 2020. Accordingly, downward adjustments to the 2021 appropriations under Section 25-44 of the City Code are required. In addition, Budget staff has recommended unspent appropriations for convention and visitor activities and cultural development and programming activities that lapsed into the General Fund in 2020 be re-appropriated in 2021 for the same purposes as originally appropriated. These appropriation adjustments are described below. CITY FINANCIAL IMPACTS Section 25-44 of the City Code: 25% Promote Cultural Development & Programming 503200 503202 503201 Lodging Tax Convention & Visitors Bureau 70% Fort Fund (Tourism Programming) 5% Fort Fund (Cultural Development & Programming) 25% Total Unanticipated Lodging Tax Collection Shortfall (416,929)$ (29,781)$ (148,903)$ (595,613)$ Unspent Appropriations -$ 83,235$ 348,267$ 431,502$ Total of Unanticipated Lodging Tax and Unspent Appropriations Available for 2021 (416,929)$ 53,454$ 199,364$ (164,111)$ 2021 LODGING TAX CLARIFICATION 75% Promote Convention & Visitor Activities -1- ORDINANCE NO. 053, 2021 OF THE COUNCIL OF THE CITY OF FORT COLLINS APPROPRIATING PRIOR YEAR RESERVES IN THE GENERAL FUND FOR CULTURAL DEVELOPMENT AND PROGRAMMING ACTIVITIES AND TOURISM PROGRAMMING WHEREAS, Section 25-244 of the Code of the City of Fort Collins requires that Lodging Tax revenue is to be allocated as follows: 75% for the promotion of convention and visitor activities and 25% for cultural development and programming activities; and WHEREAS, Lodging Tax revenue was estimated at $1,620,000 for 2020 and appropriated; however, actual Lodging Tax receipts were less than projected due to the impact of the COVID- 19 pandemic on travel and tourism; and WHEREAS, at the end of 2020, a total of $1,024,387 in Lodging Tax revenues had been collected; and WHEREAS, unexpended 2020 appropriations of Lodging Tax revenue in the amount of $252,818 have lapsed and were returned to the General Fund, and are to be appropriated for Lodging Tax programs and activities based on the use specified when they were first appropriated, as follows: Cultural Development and Programming (Fort Fund) $199,364 Tourism Programming (Fort Fund) $53,454; and WHEREAS, these additional funds will help support a future Fort Fund grant process; and WHEREAS, this appropriation benefits public health, safety and welfare of the citizens of Fort Collins and serves the public purpose of promoting visitor activity and cultural development ang programming activities; and WHEREAS, Article V, Section 9, of the City Charter permits the City Council to make supplemental appropriations by ordinance at any time during the fiscal year, provided that the total amount of such supplemental appropriations, in combination with all previous appropriations for that fiscal year, does not exceed the current estimate of actual and anticipated revenues to be received during the fiscal year; and WHEREAS, the City Manager has recommended the appropriation described herein and determined that this appropriation is available and previously unappropriated from the General Fund and will not cause the total amount appropriated in the General Fund to exceed the current estimate of actual and anticipated revenues to be received in that fund during any fiscal year; and WHEREAS, Article V, Section 9 of the City Charter permits the City Council to appropriate by ordinance at any time during the fiscal year such funds for expenditure as may be available from reserves accumulated in prior years, notwithstanding that such reserves were not previously appropriated; and -2- WHEREAS, the City Manager has recommended the appropriation described herein and determined that this appropriation is available and previously unappropriated from the General Fund and will not cause the total amount appropriated in the General Fund to exceed the current estimate of actual and anticipated revenues to be received in that fund during any fiscal year; and WHEREAS, the City wishes to appropriate funds allocated for Cultural Development and Programming and Tourism Programming. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows: Section 1. That the City Council hereby makes and adopts the determinations and findings contained in the recitals set forth above. Section 2. That there is hereby appropriated for expenditure from prior year reserves in the General Fund the total sum of ONE HUNDRED NINETY-NINE THOUSAND THREE HUNDRED SIXTY-FOUR DOLLARS ($199,364) for Cultural Development and Programming activities. Section 3. That there is hereby appropriated for expenditure from prior year reserves in the General Fund the total sum of FIFTY-THREE THOUSAND FOUR HUNDRED FIFTY- FOUR DOLLARS ($53,454) for the Tourism Programming. Introduced, considered favorably on first reading, and ordered published this 20th day of April, A.D. 2021, and to be presented for final passage on the 4th day of May, A.D. 2021. __________________________________ Mayor ATTEST: _______________________________ City Clerk -3- Passed and adopted on final reading on the 4th day of May, A.D. 2021. __________________________________ Mayor ATTEST: _______________________________ City Clerk