Minutes 06-06-2024 - Budget Work Session

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9 Commissioner Richards asked if Commissioner Hamilton is saying other departments have the responsibility to promote tourism. Commissioner Hamilton said she was taking a general view of supporting tourism. She said that it is a revenue source based on the fact that people come and stay in hotels and short- term stays. She said that how the money is used is bound by the state, but they can take a wider view of what promotes tourism. Commissioner Fowler asked if the 15% fund balance is in the bylaws of the tourism board. She asked why that is and what it is used for. Laurie Paolicelli gave some background on occupancy tax and the tourism bureau. She said that it is a very confusing entity. She said that this October she will have been with the county for 19 years. She said that the state and local levels have had major changes in this tax. She said that the tourism sector was established as a formal program in Orange County because the state created authority for the county to set a 3% tax to be used to grow the industry. She said that she was charged with growing the industry and she is proud that they have grown it as much as they have. She said that she respects the House and Senate, and they believe that funds should be used for tourism dollars. She said that they are going through financial distress and in the past 10 years, they have $200-300,000 that has gone to the Arts. She asked if it brought it heads and beds and noted that the answer is likely not. She said that they are paying money back from the general fund and this year it is $134,000. She said they have been asked to vacate a county building and pay rent, utilities, and taxes as county employees. She said that the pandemic decimated tourism. She said that the industry has not fully recovered now, and they are still behind on conferences. She said that they are a bedroom county for the entire Triangle. She said that they do a terrific job and that the funds should be left for tourism. She mentioned Steve Rights, a music creator that moved from Belgium to Orange County and PBS is trying to make a story about this. Chair Bedford asked if the 15% is in the bylaws. Laurie Paolicelli said that when she was hired, she was told that 15% or three months of operating as a reserve balance. She said that she does not necessarily agree. She said they started a handbook and when they were created, they looked at others and they had to keep it at 15%. She said that former leaders have wanted them to keep a rainy-day fund, but she is not sure they have to. She said they have always had it, and they see opportunities such as the PBS item. Commissioner Fowler asked if it was used for advertising that comes up unexpectedly. She asked if there are also advertising funds built into the existing budget. Laurie Paolicelli said that she was unaware they had a $3 million budget and said that they only have $2.3 million plus reserves, but they could get further information from Travis. She said '/2 is used for salaries, 1/3 is used for marketing, and 1/6 is used for operating and administrative costs. She said it is a very lean budget. She said none of the new projects that come up at the end of the year were budgeted for. Commissioner McKee thanked Laurie Paolicelli for the information. He said that he feels the same about this amendment that he did about the last one. He said the Board should have a discussion about a fund balance policy for departments, but now is not the appropriate time. He said if they are talking about taxes, there is reducing taxes and generating as strongly as possible, and you cannot put a dollar figure on the amount of taxes they generate for the county. Chair Bedford said she does not think all the occupancy tax should go automatically to the Visitor's Bureau. She said that she does not want them to have fund balance. She said they should be budgeted for. She said that other funds helped keep the Visitors Bureau going. She said she does not believe in rainy day funds and the department should budget for unexpected circumstances. She petitioned staff to add this discussion to a future work session. Vice-Chair Greene said she appreciates the reduction to $69,000 but agrees this conversation about whether or not departments should have a fund balance needs to happen later.