AGENDA #4e
MEMORANDUM
TO: Mayor and Town Council
FROM: W. Calvin Horton, Town Manager
SUBJECT:Recommendations for Use of Hotel/Motel Occupancy Tax Revenues in 2001-2002
DATE: February 26, 2001
The attached resolution would authorize the Council to include a specific allocation of the hotel/motel occupancy tax proceeds in the Manager’s Recommended Budget.
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 five hotel/motel funding allocations, which totaled approximately 22% of the projected total of hotel/motel tax proceeds. All remaining proceeds were allocated to municipal services in general.
In FY 2000-01 the Council awarded Hotel/Motel Grants to 5 groups, based on numbers of visitors generated by activities and community and visitors services provided:
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 awarded: $129,750
The projected total of hotel/motel tax proceeds for FY 2001-02 is $640,000.
DISCUSSION
We believe that budget development for FY 2001-02 will be even more difficult this year than it was last year. Knowing that, we recommend the allocations be the same as last year and that no action be taken now to solicit applications from other visitor information services or cultural events groups.
We recommend that the Council instruct the Manager to include the following allocations of hotel/motel funding in the Manager’s Proposed Budget for 2001-2002:
The ArtsCenter $ 20,000
Chapel Hill/Orange County Visitors Bureau $ 96,000
Chapel Hill Public Arts Commission $ 7,000
El Pueblo, Inc. $ 5,000
North Carolina High School Athletic Association $ 10,000
Total (21.5% of projected total of tax revenue) $138,000
Manager's Recommendation: That the Council adopt the attached resolution instructing the Manager to include hotel/motel funding allocations of $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 in the Manager’s Proposed Budget for 2001-2002.
A RESOLUTION INSTRUCTING THE MANAGER TO INCLUDE HOTEL/MOTEL FUNDING ALLOCATIONS OF $20,000 FOR 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 IN THE MANAGER’S PROPOSED BUDGET FOR 2001-2002 (2001-02-26/R-4)
WHEREAS, the Council will approve a total amount to be allocated for projects as part of the budget process for FY 2001-02; 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, $10,000 to the North Carolina High School Athletic Association last year, and $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 Manager is hereby instructed to include the following hotel/motel funding allocations in the Manager’s Recommended Budget for 2001-2002:
The ArtsCenter $ 20,000
Chapel Hill/Orange County Visitors Bureau $ 96,000
Chapel Hill Public Arts Commission $ 7,000
El Pueblo, Inc. $ 5,000
North Carolina High School Athletic Association $ 10,000
This the 26th day of February, 2001.