AGENDA #4h

 

MEMORANDUM

 

TO:                  Mayor and Town Council

 

FROM:            W. Calvin Horton, Town Manager

 

SUBJECT:       Recommendations for FY 2000-01 Hotel/Motel Grant Process

 

DATE:             March 27, 2000

 

The attached resolution would authorize the Council to determine allocation of the hotel/motel tax proceeds based on previous allocations.

 

BACKGROUND

 

The Town currently levies a room occupancy tax of 3% for transient lodging of less than 90 days. The enabling legislation that grants the Town the right to collect the tax requires that at least 10% of tax proceeds be used to support visitor information services and cultural events.

 

In 1995, the Council adopted a non-binding resolution expressing intent to provide $20,000 per year for ten (10) years for purchase of the ArtsCenter's building.

 

The Council has historically allocated 15% of all hotel/motel tax receipts to the Chapel Hill/Orange County Visitors Bureau. 

 

Last year the Council made four hotel/motel funding allocations, which totaled approximately 21% of the projected total of hotel/motel tax proceeds.  All remaining proceeds were allocated to municipal services in general.

 

In FY1999-00, the Council awarded Hotel/Motel Grants to 4 groups:

 

      The ArtsCenter                                                                   $ 20,000

      Chapel Hill/Orange County Visitors Bureau             $ 86,000

      Chapel Hill Public Arts Commission                                    $   7,000

      North Carolina High School Athletic Association     $ 10,000

     

                                                            Total awarded: $123,000        

     

On July 7, 1999, the Council authorized a one-time appropriation of $5,000 from the contingency fund to El Pueblo, Inc. for community outreach. This allocation could have appropriately been from the proceeds of the hotel/motel tax.

 

The projected total of hotel/motel tax proceeds for FY 2000-01 is $585,000.

 

 

DISCUSSION

 

 

We believe that budget development for FY 2000-01 will be even more difficult than it was last year. In mid-February, at the Council’s direction, we sent a letter to all non-profit agencies that had received funding from the Town in the past, advising them not to request any increase in funding for 2000-01, due to the expected budget situation. Considering this information, we recommend that the allocations be the same as last year, with the addition of $5000 to El Pueblo, Inc., and that no action be taken now to solicit applications from additional groups that provide visitor information services and cultural events.  The Council still would have the option later, as the budget process moves forward, of deciding to send out requests for proposals for the use of hotel/motel tax proceeds.

 

We believe at this point, as the Manager prepares his recommended budget, he should assume the following allocations of hotel/motel funding:

 

      The ArtsCenter                                                                   $ 20,000

      Chapel Hill/Orange County Visitors Bureau             $ 87,750                     

      Chapel Hill Public Arts Commission                                    $   7,000

      El Pueblo, Inc.                                                                    $   5,000

      North Carolina High School Athletic Association     $ 10,000

 

      Total    (21% of projected total of tax revenue)               $129,750

 

RECOMMENDATION

 

Manager's Recommendation: That the Council adopt the attached resolution advising the Town Manager to assume, for the purposes of planning the Manager’s recommended budget, that the allocation of the hotel/motel tax proceeds should include:

-         $20,000 to the ArtsCenter,

-         $7,000 to the Public Arts Commission,

-         $5,000 to El Pueblo, Inc.,

-         $10,000 to the North Carolina High School Athletic Association, and

-         15% of hotel/motel tax receipts to the Chapel Hill/Orange County Visitors Bureau for FY 2000-01, and that Council specify any other allocation it wishes to be made.

 

A RESOLUTION ADVISING THE TOWN MANAGER TO ASSUME AN ALLOCATION OF HOTEL/MOTEL TAX FUNDS, WITHOUT A SOLICITATION OF APPLICATIONS OF SUCH FUNDS (2000-03-27/R-8)

 

WHEREAS, as part of the budget process for FY 2000-01, the Council will approve a total amount to be allocated for visitor information services and cultural events; and

 

WHEREAS, the Council adopted a non-binding resolution in 1995 expressing intent to provide $20,000 per year for ten (10) years for purchase of the ArtsCenter's building; and

 

WHEREAS, the Council has followed a policy of allocating 15% of all hotel/motel tax revenues to the Chapel Hill/Orange County Visitors Bureau; and

 

WHEREAS, the Council allocated $7,000 to the Chapel Hill Public Arts Commission and $10,000 to the North Carolina High School Athletic Association last year; and

 

WHEREAS, the Council authorized a $5,000 appropriation last year to El Pueblo, Inc.;

 

NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that the Council is authorized to determine allocation of hotel/motel tax revenues without initiating an application process.

 

BE IT FURTHER RESOLVED that the Council advises the Town Manager to assume, for the purposes of planning the Manager’s recommended budget, that the allocation of the hotel/motel tax proceeds should include:

-         $20,000 to the ArtsCenter,

-         $7,000 to the Public Arts Commission,

-         $5,000 to El Pueblo, Inc.,

-         $10,000 to the North Carolina High School Athletic Association, and

-         15% of hotel/motel tax receipts to the Chapel Hill/Orange County Visitors Bureau for FY 2000-01, and that Council specify any other allocation it wishes to be made.

 

This the 27th day of March, 2000.