2008-084 Visitors Bureau - Town of Chapel Hill Performance Agreement

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AGENDA #[##] MEMORANDUM TO: Mayor and Town Council FROM: Roger L. Stancil, Town Manager SUBJECT: Funding for Chapel Hill/Orange County Visitors Bureau DATE: June 25, 2008 PURPOSE The purpose of this memorandum is to propose an approach to increased funding for the Chapel Hill/Orange County Visitors Bureau (CVB). This proposal is in response to interests expressed by Council at a budget work session. The increased funding is consistent with the Council's interest in providing increased resources for economic development. BACKGROUND The CVB submitted a budget request to Council to increase the CVB's allocation from occupancy taxes to 13.7%, or $150,000 for FY 09. The CVB estimated revenues from the Town's occupancy tax at approximately $1,094,000. The Manager's Recommended Budget, as adopted by Council June 9, 2008, estimated occupancy tax revenues at $935,000 and an allocation to the CVB of 100,000, or 10.7%. Negotiations with the CVB director about the Town's allocation were still underway. I committed to the Council to complete those negotiations and report to the Council on June 25. DISCUSSION The focus of negotiations was a mutually acceptable approach to increasing the allocation to the CVB without decreasing funds available to the Town's operations in the FY 09 budget. The means to that approach was the difference in revenue projections for FY09. I propose the following, which Laurie Paolicelli deems workable: • Amend the FY09 adopted budget to increase the projected occupancy tax revenues to $1,000,000 and increase the budgeted payment to the CVB to $130,000, or 13%. • Beginning July 1, the Town will make payments to the CVB based on the $130,000 budget. • If the Town's actual revenues exceed $1,000,000, the Town's payments to the CVB will be one-half of the revenues over $1,000,000 until the additional $20,000 the CVB requested is paid. The Town will pay the CVB 13% of all revenues in excess of $1,040,000