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Home My WebLink AboutCOUNCIL - AGENDA ITEM - 05/07/2019 - SECOND READING OF ORDINANCE NO. 059, 2019, APPROPRAgenda Item 2 Item # 2 Page 1 AGENDA ITEM SUMMARY May 7, 2019 City Council STAFF Chris Martinez, Financial & Policy Analyst Amanda King, Communications/Public Involvement Director Jim McDonald, Cultural Services Director Jody Hurst, Legal SUBJECT Second Reading of Ordinance No. 059, 2019, 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 This Ordinance, unanimously adopted on First Reading on April 16, 2019, appropriates $667,926, of which $240,792 is proposed for 2019 Cultural Development and Programming Activities (Fort Fund), $28,558 is proposed for 2019 Tourism Programming (Fort Fund), and $398,576 is proposed for 2019 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. Anticipated revenue is projected through each Budgeting for Outcomes (BFO) cycle and then adjusted annually as needed based on actual collections. Lodging tax revenue collected in 2018 was $569,394 above projected collections. STAFF RECOMMENDATION Staff recommends adoption of the Ordinance on Second Reading. ATTACHMENTS 1. First Reading Agenda Item Summary, April 16, 2019 (PDF) 2. Ordinance No. 059, 2019 (PDF) Agenda Item 11 Item # 11 Page 1 AGENDA ITEM SUMMARY April 16, 2019 City Council STAFF Chris Martinez, Financial & Policy Analyst Amanda King, Communications/Public Involvement Director Jim McDonald, Cultural Services Director Jody Hurst, Legal SUBJECT First Reading of Ordinance No. 059, 2019, 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 $667,926, of which $240,792 is proposed for 2019 Cultural Development and Programming Activities (Fort Fund), $28,558 is proposed for 2019 Tourism Programming (Fort Fund), and $398,576 is proposed for 2019 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. Anticipated revenue is projected through each Budgeting for Outcomes (BFO) cycle and then adjusted annually as needed based on actual collections. Lodging tax revenue collected in 2018 was $569,394 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 for cultural development and programming activities, the City also appropriates additional funds and adjusts the amount allocated for those 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. ATTACHMENT 1 Agenda Item 11 Item # 11 Page 2 The actual tax revenue collected during the 2018 tax year, as determined March 2019, was $569,394 more than the Lodging tax revenue anticipated and appropriated for expenditure in 2018. Accordingly, upward adjustments to the 2019 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 2018 be re-appropriated in 2019 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 398,576 28,470 142,348 569,394 Unspent Appropriations 0 88 98,444 98,532 Total of Unanticipated Lodging Tax and Unspent Appropriations Available for 2019 $ 398,576 $ 28,558 $ 240,792 $ 667,926 75% Promote Convention & Visitor Activities -1- ORDINANCE NO. 059, 2019 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, 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 $1,224,300 for 2018 and appropriated; and WHEREAS, at the end of 2018, a total of $1,793,694 in Lodging Tax revenues had been collected and the unspent portions lapsed into the General Fund Reserves for Lodging Tax programs and activities; and WHEREAS, unanticipated Lodging Tax revenue in the amount of $569,394 held in the General Fund Reserves is to be appropriated for each of the Lodging Tax programs and activities as follows:  Cultural Development and Programming $142,348  Tourism Programming $28,470  Fort Collins Convention and Visitors Bureau $398,576; and WHEREAS, unexpended 2018 appropriations of Lodging Tax revenue in the amount of $98,532 have lapsed and were returned to the General Fund, and are to be appropriated for Lodging Tax programs and activates based on the use specified when they were first appropriated, as follows:  Cultural Development and Programming $98,444  Tourism Programming $ 88; and WHEREAS, the total additional 2019 appropriations are $667,926 to make the full payment to the Fort Collins Convention and Visitors Bureau under its agreement with the City and the Fort Fund Cultural Development and Programming account; 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 -2- available from reserves accumulated in prior years, notwithstanding that such reserves were not previously appropriated; 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 as well as cultural development and programming activities; and WHEREAS, the City wishes to appropriate funds allocated for Cultural Development and Programming, Tourism Programming, and the Fort Collins Convention and Visitors Bureau. 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 TWO HUNDRED FORTY THOUSAND SEVEN HUNDRED NINETY-TWO DOLLARS ($240,792) 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 TWENTY-EIGHT THOUSAND FIVE HUNDRED FIFTY- EIGHT DOLLARS ($28,558) for Tourism Programming. Section 4. That there is hereby appropriated for expenditure from prior year reserves in the General Fund the total sum of THREE HUNDRED NINETY-EIGHT THOUSAND FIVE HUNDRED SEVENTY-SIX DOLLARS ($398,576) for the Fort Collins Convention and Visitors Bureau. Introduced, considered favorably on first reading, and ordered published this 16th day of April, A.D. 2019, and to be presented for final passage on the 7th day of May, A.D. 2019. __________________________________ Mayor ATTEST: _______________________________ City Clerk -3- Passed and adopted on final reading on the 7th day of May, A.D. 2019. __________________________________ Mayor ATTEST: _______________________________ City Clerk