Post on 18-Jan-2018
description
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