Presenter/Contact
Presenter
Mike Meek, Chamber of Commerce President and Jared Werner, Chief Financial Officer
Contact Info
(830) 221-4385 - jwerner@nbtexas.org
Subject Header
SUBJECT:
Title
Approval of an increase in amount of Hotel Occupancy Taxes provided to Greater New Braunfels Chamber of Commerce in FY 2020 pursuant to section 6.3 of the contract between the City of New Braunfels and the Chamber of Commerce
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BACKGROUND / RATIONALE:
As discussed during the August 17th budget workshop, local hotel occupancy taxes have been one of the most impacted revenue sources. The FY 2020 Convention and Visitors Bureau budget is $2,118,656. As soon as the pandemic began, the CVB started reducing commitments for the current fiscal year. Their projected expenditures for FY 2020 are $1,776,287.
Based on our current revenue projection for FY 2020 occupancy taxes, their projected expenditures represent approximately 73% of collections. Section 6.3 of the current contract (provided below) requires that City Council approve expenditures exceeding 50% of the local occupancy tax.
6.3 If, in any fiscal year, fifty percent (50%) of the local hotel occupancy tax revenue exceeded the CTF’s actual operating and maintenance expenditures, then the Chamber will submit to the City Council an amended budget that addresses the use of those funds. If, in any year, the CTF’s actual operating and maintenance expenditures are higher than the 50% of the local hotel occupancy tax, the Chamber of Commerce can request from City Council authorization to utilize their reserves. If City Council elects to not allow for the use of reserves, the CTF’s next year’s budget will need to be decreased to a level that ensures that the 50% cap is not exceeded across both fiscal years.
If approved by City Council, the maximum amount that could be contributed to the CVB for FY 2020 is $1,776,287.
ADDRESSES A NEED/ISSUE IN A CITY PLAN OR COUNCIL PRIORITY:
FISCAL IMPACT:
As presented at the budget workshop, The Hotel Occupancy Tax Funds has sufficient reserves to support the $1,776,287 payment for FY 2020 as well as all other current year commitments. For reference, the Proposed CVB budget for FY 2021 is equal to the contractual 50% of occupancy tax collections ($1,700,000).
Recommendation
COMMITTEE RECOMMENDATION:
N/A
STAFF RECOMMENDATION:
Approval of the increased use of FY 2020 Occupancy Tax Collections