Agenda #4c | Budget Ordinance Amendment to Appropriate Additional Funding for the Visitor’s Bureau Performance Agreement

MEMORANDUM

TO:	Roger L. Stancil, Town Manager
FROM:	Kenneth C. Pennoyer, Business Management Director
SUBJECT:	Budget Ordinance Amendment to Appropriate Additional Funding for the Visitor’s Bureau Performance Agreement
DATE:	November 24, 2008

PURPOSE

The purpose of this memorandum is to recommend enactment of a budget ordinance amendment to appropriate additional funds for the amended Visitor’s Bureau performance agreement for FY2008-09.

BACKGROUND AND DISCUSSION

On June 25, 2008 the Council approved a resolution that increased the funding level for the Chapel Hill/Orange County Visitors Bureau and provided for additional payments based on the level of occupancy tax receipts. The specific provisions of the resolution are as follows:

Amend the Fiscal Year 2009 adopted budget to increase the projected occupancy tax revenues to $1,000,000 and increase the budgeted payment to the Visitors Bureau based on the $130,000 budget.
Beginning July 1, 2008, the Town will make payments to the Visitors Bureau based on the $130,000 budget.
If the Town’s actual revenues exceed $1,000,000, the Town’s payments to the Visitors Bureau will be one-half of the revenues over $1,000,000 until the additional $20,000 the Visitors Bureau requested is paid.
At the end of the third quarter (March 2009), the Town Manager and Visitors Bureau Director will review the status of occupancy tax receipts.

The performance agreement with the Visitor’s Bureau has been amended to reflect the changes authorized by the Council at their June 25, 2008 meeting. In order to fund the additional base level of the Visitors Bureau’s, a budget ordinance amendment increasing the appropriation from $100,000 to $130,000 must be approved. The additional funding, contingent on achieving occupancy tax revenues in excess of $1,000,000, will be requested when it is clear that the occupancy tax revenues will reach the $1,000,000 level.

FISCAL NOTE

Enacting the budget ordinance amendment will reduce the General Fund balance by $30,000. This will not materially impact the level of fund balance with respect to the town’s target of 12% general fund balance to appropriations. To the extent that the Town receives occupancy taxes in excess of the $935,000, the additional amount would increase the fund balance. If the occupancy tax receipts exceed $1 million, the first $40,000 of additional receipts will be split equally between the Town and the Visitor’s Bureau.

RECOMMENDATION

That the Council enact the attached budget ordinance amendment increasing the base level of funding for the Chapel Hill/Orange County Visitors Bureau from $100,000 to $130,000 in accordance with the resolution authorizing increases in the Visitor’s Bureau performance agreement adopted by the Council June 25, 2008.

ATTACHMENTS

Memorandum requesting an Increase in Funding for the Chapel Hill/Orange County Visitors Bureau (p. 4).