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Home My WebLink AboutCOUNCIL - AGENDA ITEM - 04/05/2016 - FIRST READING OF ORDINANCE NO. 041, 2016, APPROPRIAgenda Item 12 Item # 12 Page 1 AGENDA ITEM SUMMARY April 5, 2016 City Council STAFF Wendy Bricher, Financial Coordinator Amanda King, Communications/Public Involvement Director Loren Scheu, Financial Coordinator SUBJECT First Reading of Ordinance No. 041, 2016, Appropriating Prior Year Reserves and Unanticipated Revenue 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 $378,605, of which $159,265 is proposed for 2016 Cultural Development and Programming Activities (Fort Fund), $19,868 is proposed for 2016 Tourism Programming (Fort Fund), and $199,472 is proposed for 2016 Convention and Visitors Program activities, from a combination of Unanticipated Revenue (Lodging Tax) and Prior Year Reserves (unspent appropriations) in the General Fund Lodging Tax Reserves. Lodging taxes are annually collected by the City of Fort Collins for Cultural Development and Tourism Programming activities. Between April 2011 and March 2016, based on the prior years’ actual collections, lodging tax revenues were paid to the Fort Collins Convention and Visitors Bureau (the “FCCVB”) under a contract for Cultural Development and Tourism Programming. Anticipated revenue has been projected through each Budgeting for Outcomes (BFO) cycle and then adjusted annually as needed based on actual collections. Lodging Tax revenues collected in 2015 equaled $1,450,960, which was $378,605 above 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 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. When actual lodging tax receipts exceed the anticipated amount appropriated, the City has appropriated additional funds and adjusted the amount due to FCCVB. The contract with FCCVB expired in March 2016, and the City is now reviewing proposals for a new service agreement. When actual lodging tax receipts exceed the anticipated amount appropriated for cultural development and programming activities, the City also appropriates additional funds and adjusted the amount allocated for those Agenda Item 12 Item # 12 Page 2 activities in the year following the year in which the tax is collected. 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. Lodging tax revenue anticipated and appropriated for expenditure in 2016 was $378,605 less than the actual tax revenue collected during the 2015 tax year, as determined in January 2016. Accordingly, upward adjustments to the 2016 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 2015 be re-appropriated in 2016 for the same purposes as originally appropriated. These appropriation adjustments are described below. CITY FINANCIAL IMPACTS -1- ORDINANCE NO. 041, 2016 OF THE COUNCIL OF THE CITY OF FORT COLLINS APPROPRIATING PRIOR YEAR RESERVES AND UNANTICIPATED REVENUE IN THE GENERAL FUND FOR CULTURAL DEVELOPMENT AND PROGRAMMING ACTIVITIES, TOURISM PROGRAMMING, AND CONVENTION AND VISITOR PROGRAM SERVICES WHEREAS, City Code Section 25-244 requires that City Lodging Tax revenue be allocated as follows: 75% to the promotion of convention and visitor activities and 25% to cultural development and programming activities; and WHEREAS, in 2011, the City entered into an agreement with the Fort Collins Convention and Visitors Bureau to provide convention and visitor program services, which agreement was subject to subsequent annual renewals through March 2016; and WHEREAS, the City is currently reviewing proposals for outside delivery of convention and visitor program services in anticipation of awarding a service contract in 2016; and WHEREAS, 2015 Lodging Tax revenue was estimated to be $1,215,000, and a total of $1,450,960 in Lodging Tax revenues was actually collected in 2015; and WHEREAS, staff has recommended that unanticipated 2015 Lodging Tax revenue in the amount of $235,960 held in the General Fund Reserves be appropriated in 2016 for Lodging Tax programs and activities as follows:  Cultural Development and Programming $ 58,990  Tourism Programming $ 11,798  Convention and Visitor Program services $ 165,172; and WHEREAS, a portion of collected and unspent Lodging Tax revenue appropriated in 2015 lapsed into the General Fund Reserves at the end of 2015; and WHEREAS, staff has recommended that unexpended 2015 appropriations of Lodging Tax revenue, which have lapsed and were returned to the General Fund, be re-appropriated for Lodging Tax programs and activates in 2016, based on the use specified when they were first appropriated, as follows:  Cultural Development and Programming $ 100,275  Tourism Programming $ 8,070  Convention and Visitor Program services $ 34,300; 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, 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, do not exceed the current estimate of actual and anticipated revenues to be received during the fiscal year; and WHEREAS, City staff has determined that the appropriation of the revenue as described herein 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 Council wishes to appropriate all lodging tax revenues to be allocated for Cultural Development and Programming, Tourism Programming consistent with the City Code, including funds to be paid to the Fort Collins Convention and Visitors Bureau or appropriate contracted service provider, and including unanticipated and lapsed lodging tax revenues from 2015. 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 FIFTY-NINE THOUSAND TWO HUNDRED SIXTY-FIVE DOLLARS ($159,265) 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 NINETEEN THOUSAND EIGHT HUNDRED SIXTY- EIGHT DOLLARS ($19,868) for the Tourism Programming. Section 4. That there is hereby appropriated for expenditure from prior year reserves in the General Fund the total sum of ONE HUNDRED NINETY-NINE THOUSAND FOUR HUNDRED SEVENTY-TWO DOLLARS ($199,472) for Convention and Visitors Program services. Introduced, considered favorably on first reading, and ordered published this 5th day of April, A.D. 2016, and to be presented for final passage on the 19th day of April, A.D. 2016. __________________________________ Mayor ATTEST: _______________________________ City Clerk -3- Passed and adopted on final reading on the 19th day of April, A.D. 2016. __________________________________ Mayor ATTEST: _______________________________ City Clerk