Agenda - 03-18-2025; 7-b - Occupancy Tax Uses Discussion

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2 During the FY 2024-25 Budget adoption process, there was a proposed Commissioner amendment to redirect $69,000 of fund balance from the Visitors Bureau to fund General Fund expenses. That amendment failed by a vote of 3-4, with the majority of the Board preferring to revisit the issue in greater detail prior to the Board's FY 2025-26 Budget process. The following chart provides a summary on the recent revenues and expenditures in the Visitors Bureau Fund. Occupancy Tax has been very volatile in the last 10 years, due to the pandemic and the inflation that followed. There are a few items to identify in reviewing these trends. First, the revenues in the fund bounced back from the pandemic faster than anticipated, resulting in an accumulation of fund balance in FY 2022, FY 2023, and FY 2024. The intent of the FY 2025 budget is to spend down a significant portion of that accumulated fund balance. The department has needed to come back to the Board through budget amendments to recognize additional revenues during the last four (4) years and identify spending plans. The majority of the fund's expenditures fund the staff of the Visitors Bureau, the fixed costs of the visitor center, and the programmatic costs of the Visitors Bureau: advertising, market research, and publications. As Occupancy Tax revenues have rapidly decreased and then increased, the majority of the change in expenditures has occurred in the programmatic costs. Those were cut to as little as $260,000 during the pandemic and have grown to as much as $1.8 Million during the FY 2025 budget. The Arts Commission and some outside agencies are included in the fund's budget but are less than 10% of the FY 2025 budget. Allocation of Revenues and Expenditures in Visitors Bureau Fund $4,000,000 $3,500,000 $3,000,000 , $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 , $0 v v v v v ai v v v v v v v v v v v W v ai 7 7 7 3 7 7 7 7 7 7 N C Cr_ C C CW a) C C C CW (U C C0i (U C C C C C C C C > a- > CL > C- > CL > C- > C- > Q- > Q- > CL > CL a) X N X Q) X a1 X a! X QJ X a) X a) X a1 X a1 X Cr W W cc W W W W W cc W W W 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Rev Bud ■Occupancy Tax Revenue ■Town of CH Agreement ■Other VB revenue ■VB Personnel Costs ■VB Fixed Operating Costs ■VB Programmatic Operating Costs ■Payment Back to County ■Net Arts/Outside Agency For this discussion, County staff will present the recent budgets and actual expenditures in the Visitors Bureau Fund, and how those usages align with the Occupancy Tax guidelines and the County's strategic plan. Staff will then address three broad categories of options for the Board to discuss: