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Home My WebLink AboutCOUNCIL - AGENDA ITEM - 05/03/2022 - SECOND READING OF ORDINANCE NO. 046, 2022, APPROPR Agenda Item 5 Item # 5 Page 1 AGENDA ITEM SUMMARY May 3, 2022 Communication & Public Involvement STAFF Amanda King, Communications/Public Involvement Director Jim McDonald, Cultural Services Director Chris Martinez, Financial & Policy Analyst Ingrid Decker, Legal SUBJECT Second Reading of Ordinance No. 046, 2022, Appropriating Prior Year Reserves in the General Fund for Cultural Development and Programming Activities, Tourism Programming, and Convention and Visitor Program Services. EXECUTIVE SUMMARY This Ordinance, unanimously adopted on First Reading on April 19, 2022, appropriates $292,114, of which $181,643 is proposed for Cultural Development and Programming Activities (Fort Fund) and $110,471 is proposed for Tourism Programming (Fort Fund) from a combin ation 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 continued recovery from the pandemic, Lodging Tax revenues collected for 2021 came in $38,516 below projected collections. STAFF RECOMMENDATION Staff recommends adoption of the Ordinance on Second Reading. ATTACHMENTS 1. First Reading Agenda Item Summary, April 19, 2022 (w/o attachments) (PDF) 2. Ordinance No. 046, 2022 (PDF) Agenda Item 13 Item # 13 Page 1 AGENDA ITEM SUMMARY April 19, 2022 Communication & Public Involvement STAFF Amanda King, Communications/Public Involvement Director Jim McDonald, Cultural Services Director Chris Martinez, Financial & Policy Analyst Ingrid Decker, Legal SUBJECT First Reading of Ordinance No. 046, 2022, Appropriating Prior Year Reserves in the General Fund for Cultural Development and Programming Activities, Tourism Programming, and Convention and Visitor Program Services. EXECUTIVE SUMMARY The purpose of this item is to appropriate $292,114, of which $181,643 is proposed for Cultural Development and Programming Activities (Fort Fund) and $110,471 is proposed for 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 continued recovery from the pandemic, Lodging Tax revenues collected for 2021 came in $38,516 below projected 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 City’s contract with the FCCVB does not guarantee the FCCVB a fixed dollar amount for its services. 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 2022, given the shortfall in 2021 lodging tax receipts, the City must reduce the funding for these 2022 activities from what was estimated in the 2021 Adopted Budget by the same prescriptive percentage. Also, any appropriated lodging tax ATTACHMENT 1 COPY Agenda Item 13 Item # 13 Page 2 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. The actual tax revenue collected during the 2021 tax year, as determined March 2022, was $38,516 less than the lodging tax revenue anticipated and appropriated for expenditure in 2021. Accordingly, downward adjustments to the 2022 appropriations under Section 25-44 of the City Code are required. In addition, budget staff has recommended unspent appropriations for convention and visitor activities and cultural development and programming activities that lapsed into the General Fund in 2021 be re-appropriated in 2022 for the same purposes as originally appropriated. These appropriation adjustments are described below. CITY FINANCIAL IMPACTS Section 25-44 of the City Code:25% Promote Cultural Development & Programming 503200 503202 503201 Lodging Tax Convention & Visitors Bureau 70% Fort Fund (Tourism Programming) 5% Fort Fund (Cultural Development & Programming) 25%Total Unanticipated Lodging Tax Collection Shortfall (26,961)$ (1,926)$ (9,629)$ (38,516)$ Unspent Appropriations -$ 112,397$ 191,272$ 303,669$ Total of Unanticipated Lodging Tax and Unspent Appropriations Available for 2022 (26,961)$ 110,471$ 181,643$ 265,153$ 2022 LODGING TAX CLARIFICATION 75% Promote Convention & Visitor Activities COPY -1- ORDINANCE NO. 046, 2022 OF THE COUNCIL OF THE CITY OF FORT COLLINS APPROPRIATING PRIOR YEAR RESERVES IN THE GENERAL FUND FOR CULTURAL DEVELOPMENT AND PROGRAMMING ACTIVITIES, TOURISM PROGRAMMING, AND CONVENTION AND VISITOR PROGRAM SERVICES WHEREAS, Section 25-244 of the Code of the City of Fort Collins requires that the City allocated 75% of Lodging Tax revenue for the promotion of convention and visitor activities and 25% for cultural development and programming activities; and WHEREAS, Lodging Tax revenue was estimated at $1,619,877 for 2021 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 2021, a total of $1,581,361 in Lodging Tax revenues had been collected; and WHEREAS, unexpended 2021 appropriations of Lodging Tax revenue in the amount of $292,114 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 $181,643 Tourism Programming $110,471; 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 and programming activities; and WHEREAS, Article V, Section 9 of the City Charter permits the City Council, upon the recommendation of the City Manager, to make supplemental appropriations 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 WHEREAS, the Interim 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 and all other funds to be received in this Fund during this fiscal year; and WHEREAS, the City wishes to appropriate funds allocated for Cultural Development and Programming and Tourism Programming. -2- 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 the City Council hereby appropriates for expenditure from prior year reserves in the General Fund the sum of ONE HUNDRED EIGHTY-ONE THOUSAND SIX HUNDRED FORTY-THREE DOLLARS ($181,643) to be expended in the General Fund for Cultural Development and Programming activities. Section 3. That the City Council hereby appropriates for expenditure from prior year reserves in the General Fund the sum of ONE HUNDRED TEN THOUSAND FOUR HUNDRED SEVENTY-ONE DOLLARS ($110,471) to be expended in the General Fund for Tourism Programming. Introduced, considered favorably on first reading, and ordered published this 19th day of April, A.D. 2022, and to be presented for final passage on the 3rd day of May, A.D. 2022. ____________________________________ Mayor ATTEST: _______________________________ City Clerk Passed and adopted on final reading on 3rd day of May, A.D. 2022. ____________________________________ Mayor ATTEST: _______________________________ City Clerk