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

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3 1. Retain the current allocation and usage of Occupancy Tax between the Visitors Bureau and the Arts Commission. 2. Direct a portion of the Occupancy Tax funding to cover other existing County expenses that meet the Occupancy Tax guidelines. 3. Direct a portion of the Occupancy Tax funding to start new initiatives that meet the Occupancy Tax guidelines. Staff will also briefly discuss the Visitors Bureau Board's Fund Balance policy of fifteen percent (15%). This policy has not been recognized by the BOCC, but has often been followed by staff in practice. Staff will discuss how this policy could be codified by the BOCC, and how a fund balance policy for a restricted revenue fund would differ from a General Fund fund balance policy. The County maintains several programs in funds outside of the General Fund. The most discretionary of these funds are the Inspections Fund, Visitors Bureau Fund, Article 46 Fund, Sportsplex Fund and Solid Waste Fund. The County does not have formal fund balance policies for any of these funds, but weighs the following issues when reviewing the fund balance during the budget process — the current and upcoming obligations of the fund, the long-term debt and capital requirements, and the stability of the revenue source. The Visitors Bureau Fund does not fund any long-term capital or debt, and does not have any upcoming obligations, but has been highly variable over the last ten (10)years, and is more vulnerable to downturns during recessions. Therefore, the fund does not need to maintain a significant fund balance, but will either need to significantly reduce expenses or rely on County subsidy in the event of a recession or other major disruption. FINANCIAL IMPACT: There is no immediate impact of the discussion. Different scenarios will have impacts on the FY 2025-26 Manager's Recommended Budget. ALIGNMENT WITH STRATEGIC PLAN: This item supports: • GOAL 2: HEALTHY COMMUNITY OBJECTIVE 7. Invest in services and programs that improve the health and quality of life of the community (e.g., recreation and public open spaces, arts, etc.) • GOAL 6: DIVERSE AND VIBRANT ECONOMY OBJECTIVE 1. Provide family-oriented and inclusive programming or other cultural events for residents and visitors. RECOMMENDATION(S): The Manager recommends that the Board discuss how to utilize Occupancy Tax proceeds in future budgets and provide feedback to staff.