Tourist Development Tax Update October 6, 2015 Orange County.
Tourist Development Tax June 9, 2009 Orange County.
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Transcript of Tourist Development Tax June 9, 2009 Orange County.
Tourist Development Tax
June 9, 2009
Orange County
Background Revenue Outlook TDT Expenditures Summary
Outline
Background Revenue Outlook TDT Expenditures Summary
Outline
TDT• Short-term lodging tax• State TDT law has
different uses for 1st to 4th cents, 5th cent, and 6th cent levies
Background
• Orange County levied TDT at 2% in 1979
• Currently TDT is at 6%• State Law governs uses• Not allowed for: roads, schools,
public safety, etc.• Added tourism levy for convention
centers, tourism promotion, sports, arts, and museum costs
Background
• First Four Cents - for priority tourism related expenses in the Tourist Development Plan prepared by the Tourist Development Council and approved by the BCC
• Fifth Cent for convention and sports debt
• Sixth Cent – Sports debt and Tourism promotion (approved July 2006)
Background
Historical Revenue Growth: 10.5% Avg Annual TDT Growth (1979-2008)
Background
Inception to date growth rate is 10.5%
15 year TDT growth rate is 5.7%
5 year TDT growth rate is 8.6%
Background
Background Revenue Outlook TDT Expenditures Summary
Outline
Collection Trends (in millions)
* Projected
Revenue Outlook
TDT collections were up by 3.1% in FY08
Fiscal year TDT collections are down by 15.8%
February & March 09 collections down by 28%; April collections down by 15%
Revenue Outlook
Hotel occupancy is down
Room rates are down Projections for FY09
now indicate an 18% decrease from FY08 actual collections
FY10 budget will be set at the same level as our FY09 projections
Revenue Outlook
Background Revenue Outlook TDT Expenditures Summary
Outline
First 5 Percent
TDT Expenditures
• TDT expenditures for the first 4 percent are authorized by County ordinance in the TDT plan
• These expenditures are based on a prioritized flow of funds
• The fifth percent is for debt service payments
First 5 Percent
TDT Expenditures
Debt Service
Debt Reserves
OCCC Operations
Transportation
O/OCCVB
Arts and Other
TDT Revenues
Priority Funding
Priority funding based on revenue availability and BCC approval
TDT Expenditures (1st-5th)
TDT Reserves
Projected Expenses (in millions):2009 2010Debt Service $ 73.2$ 73.2Convention Center Operations 10.0 10.0O/OCCVB Funding 19.6 19.6Convention Center Capital 10.0 10.0Arts 3.4 2.8History Center 2.8 2.8Hotel Surcharge Repayment 2.0 2.0Other .8 .7Contract TDT Payment for Venues 9.6 0.0 Total $131.4 $121.1
TDT Expenditures (1st-5th)
72.9
73.2
73.2
73.2
10.0 21.4
22.1
19.6
19.610.0
8.9
10.0
8.3
8.9
8.2
8.1
10.0
10.0
4.9
4.6
9.6
$0 $20 $40 $60 $80 $100 $120 $140
2007
2008
2009
2010
Debt Service OCCC OperationsO/OCCVB Arts & OtherOCCC CIP Contract TDT Payment
$140.1
$135.9
$115.0
$115.0
In Millions
Actual
Est.
Total Revenues
Est.
Actual
TDT Model Revenues vs. Expenses
TDT Expenditures (1st-5th)
Debt Service
Debt Reserves
OCCC Operations
Transportation
O/OCCVB
Arts and Other
TDT Revenues
Priority Funding
Priority funding based on revenue availability and BCC approval
TDT Expenditures (1st-5th)
TDT Reserves
OCCC Historical Operating Subsidy: Operations Subsidy is a direct TDT payment
Fiscal Year
Operating Revenue
Operating Expense
SubsidyNeeded
09-10* $41,800,000 $57,300,000 $15,500,000 08-09* $43,500,000 $59,600,000 $16,100,00007-08 $58,423,857 $67,321,035 $ 8,899,17806-07 $50,485,445 $60,859,947 $10,374,50205-06 $53,248,069 $58,596,836 $ 5,348,76704-05 $48,407,724 $57,524,114 $ 9,116,390
* Projected
TDT Expenditures (1st-5th)
Debt Service
Debt Reserves
OCCC Operations
Transportation
O/OCCVB
Arts and Other
TDT Revenues
Priority Funding
Priority funding based on revenue availability and BCC approval
TDT Expenditures (1st-5th)
TDT Reserves
Arts & Other Expenditures 2009:Tax Collection Expense $400,000 Central Florida Sports Commission $135,000 Florida Classic $137,500 Arts $3,360,000 NBC Action Sports Tour (X-Games) $75,000 Orange County Regional History Center $2,814,000 Repay Hotel Surcharge $2,000,000 Contract TDT Payments for Venues $9,604,300
TDT Expenditures (1st-5th)
Debt Service
Debt Reserves
OCCC Operations
Transportation
O/OCCVB
Arts and Other
TDT Revenues
Priority Funding
Priority funding based on revenue availability and BCC approval
TDT Expenditures (1st-5th)
TDT Reserves
$71mReserve for Debt Service
$56mReserve for OCCC
$127 million of TDT reserves as of April 30, 2009
TDT Reserves
Historical CIP: CIP is paid from available TDT reserves
Fiscal Year Actual CIP
08-09* $15,800,00007-08 $4,600,00006-07 $4,860,00005-06 $4,240,000
TDT Expenditures (1st-5th)
* Projected
Orange County Convention Center
• TDT collections are down due to the economic recession
• Reduced OCCC attendance due to business travel restrictions
• Additional Operations Subsidy Needed
2009 TDT Budget Challenges
TDT Expenditures (1st-5th)Orange County Convention Center
• Reduce positions - $3m reduction in wages & benefits
• Reduce discretionary expenditures
• Utilize CIP/reserve funding to increase operations subsidy
• Consider utilizing Arts capital allocation for convention center operations subsidy
2009 & 2010 TDT Budget Strategies
TDT Expenditures (1st-5th)Orange County Convention Center
• Continue to monitor revenues & TDT collections
• Continue to evaluate efficiencies & operational savings
• Evaluate operating subsidy and determine if future adjustment is needed
Long Term Strategies
TDT Expenditures (1st-5th)Orange County Convention Center
Potential TDT Refunding• Partial refunding of
1998 TDT bonds for savings
• Callable October 2009• Depends on volatile
municipal & credit markets
TDT Expenditures
Potential TDT Refunding• Minimum savings
threshold of 4%• $4.4m total net present
value savings• $470k annual savings
• Will be on BCC consent agenda June 23rd
• Briefings will offered
TDT Expenditures
First Five Percent• City planned to use
excess TDT payments from first five percent to:•Finance construction
of performing arts center (first priority)
•Finance renovation of Citrus Bowl (second priority)
Community Venues
• TDT reserves met the $130 million requirement in September 2008
• City receives all collections above “base amount”
• Base amount is $133.1 million in FY09
First 5 Percent
Community Venues
$135.8$130.5 $133.1
$0
$20
$40
$60
$80
$100
$120
$140
$160
2008 2009 2010
Base amount TDT 1st-5th Revenues
TDT Revenues vs. Base Amount (in millions)
Actual Projected Projected
Community Venues
$135.8$130.5 $133.1$140.1
$0
$20
$40
$60
$80
$100
$120
$140
$160
2008 2009 2010
Base amount TDT 1st-5th Revenues
TDT Revenues vs. Base Amount (in millions)
Actual Projected Projected
Community Venues
$135.8$130.5 $133.1$140.1
$115.0
$0
$20
$40
$60
$80
$100
$120
$140
$160
2008 2009 2010
Base amount TDT 1st-5th Revenues
TDT Revenues vs. Base Amount (in millions)
Actual Projected Projected
Community Venues
$135.8$130.5 $133.1$140.1
$115.0$115.0
$0
$20
$40
$60
$80
$100
$120
$140
$160
2008 2009 2010
Base amount TDT 1st-5th Revenues
TDT Revenues vs. Base Amount (in millions)
Actual Projected Projected
Community Venues
6th Percent
TDT Expenditures
County approved 6th percent in July 2006 ½ is for additional advertising
to promote tourism (front loaded for the first two years)
½ is for City to help finance the new arena for the City/Magic
TDT Expenditures
CVB received 100% collections for the first two years - $56.6 million
10 year payback City/Magic receive 50% of 6th
penny plus $2.8 million CVB receives 50% of 6th penny
minus $2.8 million After payback, CVB and
City/Magic will have received 50% each
TDT Expenditures
TDT ExpendituresContract 6th Cent Revenues & Debt Service:
Projected Contract 6th Cent Payment
Minimum Net Debt Service
Excess Revenue/Shortfall
2009
$14,328,065
$10,734,784 $3,593,281
2010
$14,328,065
$17,669,419
$(3,341,354)
2011
$15,584,709
$17,819,419
$(2,234,710)
2012
$16,841,353
$18,284,419
$(1,443,066)
2013
$18,221,778
$18,596,419 $(374,641)
2014
$19,738,208
$18,870,419
$867,789
Background Revenue Outlook TDT Expenditures Summary
Outline
TDT collections are down due to the recession
Attendance & operating revenues for the OCCC are down
Additional OCCC operations subsidy will be needed
Challenges for Community Venues
Summary
Tourist Development Tax
June 9, 2009
Orange County