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HomeMy WebLinkAboutAgenda - 03-18-2025; 7-b - Occupancy Tax Uses Discussion 1 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: March 18, 2025 Action Agenda Item No. 7-b SUBJECT: Occupancy Tax Uses Discussion DEPARTMENT: County Manager, Economic Development ATTACHMENT(S): INFORMATION CONTACT: 1) Orange County Occupancy Tax Kirk Vaughn, (919) 245-2153 Authorization Laurie Paolicelli, (919) 245-4322 2) North Carolina Occupancy Tax Guidelines 3) PowerPoint Presentation PURPOSE: To discuss the potential usages of Occupancy Tax proceeds for future year budgeting. BACKGROUND: The County has collected Occupancy Tax for several decades through State authorization of Session 1991-392 (Attachment 1). This three percent (3%) levy on all room and lodging rentals is collected by the County and used to fund the Visitors Bureau division of the Economic Development Department, the Arts Commission division of the County Manager's Office, and some related Outside Agencies. This authorization provides broad flexibility to the County to utilize Occupancy Tax. However, the law applicable to Orange County predates the current State guidelines for Occupancy Tax statutes (Attachment 2). The current guidelines recommend that new authorizations restrict two-thirds (2/3) of Occupancy Tax proceeds to be used to promote tourism and travel, and one-third (1/3) to be used for tourism-related expenditures. The information below relies on this higher standard in its analysis, as the County's authorization is subject to change by the North Carolina General Assembly. In reviewing the prior year actual expenditures and current year budget for the Visitors Bureau Fund, the County easily exceeds the two-thirds (2/3) standard for Occupancy Tax. The Visitors Bureau also maintains a long-term contract with the Town of Chapel Hill that the Town provides a set amount of its Occupancy Tax funds to the County to support the County's Visitors Bureau. The funds have been used to increase advertising for summer events in Chapel Hill in FY 2025. In the table immediately below, the expenses in the Visitors Bureau Division exceed both the revenue generated by the Town contract and two-thirds (2/3) Occupancy Tax guideline by $234,740 in FY 2024, and is budgeted to exceed the guidelines by $801,423 in FY 2025. BudgetRevenue and Expenses OW"I flr_lww-_ FY 2025 Revised Town of Chapel Hill Contribution $ 457,439 $ 531,855 2/3rd of Occupancy Tax $ 1,482,399 $ 1,526,871 Guideline Revenues $ 1,939,838 $ 2,058,726 Visitors Bureau Division Expenses $ 2,174,578 $ 2,860,149 Expenses Above Guidelines $ 234,740 $ 801,423 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: 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. 4 GENERAL ASSEMBLY OF NORTH CAROLINA 1991 SESSION CHAPTER 392 SENATE BILL 622 AN ACT AUTHORIZING ORANGE COUNTY TO LEVY AN OCCUPANCY TAX AND CHAPEL HILL AND CARRBORO TO INCREASE THEIR MOTOR VEHICLE TAXES. The General Assembly of North Carolina enacts: Section 1. Occupancy Tax. (a) Authorization and scope. The Orange County Board of Commissioners may, by resolution, levy a room occupancy tax of up to three percent (3%) on the gross receipts derived from the rental of any room, lodging, or similar accommodation in the county subject to sales tax under G.S. 105-164.4(a)(3). This tax does not apply to accommodations furnished by nonprofit charitable, educational, benevolent, or religious organizations when furnished in furtherance of their nonprofit purpose. This tax is in addition to any State or local sales or occupancy tax. (b) Collection. Every operator of a business subject to the tax levied under this section shall, on and after the effective date of the levy of the tax, collect the tax. This tax shall be collected as part of the charge for furnishing a taxable accommodation. The tax shall be stated and charged separately on the sales records, and shall be paid by the purchaser to the operator of the business as trustee for and on account of the county. The tax shall be added to the sales price and shall be passed on to the purchaser instead of being borne by the operator of the business. The county shall design, print, and furnish to all appropriate businesses and persons in the county the necessary forms for filing returns and instructions to ensure the full collection of the tax. (c) Administration. The county shall administer a tax levied under this section. A tax levied under this section is due and payable to the county finance officer in monthly installments on or before the 15th day of the month following the month in which the tax accrues. Every person, firm, corporation, or association liable for the tax shall, on or before the 15th day of each month, prepare and render a return on a form prescribed by the county. The return shall state the total gross receipts derived in the preceding month from rentals upon which the tax is levied. (d) Penalties. A person, firm, corporation, or association who fails or refuses to file the return required by this section shall pay a penalty of ten dollars ($10.00) for each day's omission. In case of failure or refusal to file the return or pay the tax for a period of 30 days after the time required for filing the return or for paying the tax, there shall be an additional tax, as a penalty, of five percent (5%) of the tax due in addition to any other penalty, with an additional tax of five percent (5%) for each 5 additional month or fraction thereof until the tax is paid. The county may, for good cause shown, forgive the civil penalties provided in this subsection. Any person who willfully attempts in any manner to evade a tax imposed under this section or who willfully fails to pay the tax or make and file a return shall, in addition to all other penalties provided by law, be guilty of a misdemeanor and shall be punishable by a fine not to exceed one thousand dollars ($1,000) and imprisonment not to exceed 30 days. (e) Use and Distribution of Tax Revenue. The Orange County Board of Commissioners shall decide on the allocation of the revenues collected from this tax annually during its budgeting process. At least ten percent (10%) of the annual revenues shall be used to provide funding for visitor information services and to support cultural events. The county may contract with nonprofit organizations to undertake or carry out the activities and programs for which the revenue may be expended. All contracts entered into with nonprofit organizations shall require an annual financial audit of any funds expended and a performance audit of contractual obligations. (f) Repeal. A tax levied under this section may be repealed by resolution adopted by the Orange County Board of Commissioners. Repeal of a tax levied under this section shall become effective on the first day of a month and may not become effective until the end of the fiscal year in which the repeal resolution was adopted. Repeal of a tax levied under this section does not affect a liability for a tax that attached before the effective date of the repeal, nor does it affect a right to a refund of a tax that accrued before the effective date of the repeal. Sec. 2. Chapel Hill Motor Vehicle Tax. (a) G.S. 20-97(a) reads as rewritten: "(a) All taxes levied under the provisions of this Article are intended as compensatory taxes for the use and privileges of the public highways of this State, and shall be paid by the Commissioner to the State Treasurer, to be credited by him to the State Highway Fund; and no county or municipality shall levy any license or privilege tax upon any motor vehicle licensed by the State of North Carolina, except that cities and towns other than the City of Durham may levy not more than five. dofl- vs ($5.00) ten dollars ($10.00hper year upon any vehicle resident therein, and except that the City of Durham may levy not more than one dollar ($1.00) per year upon any vehicle resident therein. Provided, further, that cities and towns may levy, in addition to the amounts hereinabove provided for, a sum not to exceed fifteen dollars ($15.00) per year upon each vehicle operated in such city or town as a taxicab." (b) This section applies only to the Town of Chapel Hill. Sec. 3. Carrboro Motor Vehicle Tax. (a) G.S. 20-97(a) reads as rewritten: "(a) All taxes levied under the provisions of this Article are intended as compensatory taxes for the use and privileges of the public highways of this State, and shall be paid by the Commissioner to the State Treasurer, to be credited by him to the State Highway Fund; and no county or municipality shall levy any license or privilege tax upon any motor vehicle licensed by the State of North Carolina, except that cities and towns other than the City of Durham may levy not more than five dollars ($5.00) ten dollars ($10.00)_per year upon any vehicle resident therein, and except that the City Page 2 S.L. 1991-392 Senate Bill 622 6 of Durham may levy not more than one dollar ($1.00) per year upon any vehicle resident therein. Provided, further, that cities and towns may levy, in addition to the amounts hereinabove provided for, a sum not to exceed fifteen dollars ($15.00) per year upon each vehicle operated in such city or town as a taxicab." (b) This section applies only to the Town of Carrboro. Sec. 4. This act is effective upon ratification. In the General Assembly read three times and ratified this the 25th day of June, 1991. James C. Gardner President of the Senate Daniel Blue, Jr. Speaker of the House of Representatives Senate Bill 622 S.L. 1991-392 Page 3 7 GUIDELINES FOR OCCUPANCY TAX LEGISLATION Since 1983, the General Assembly has authorized many units of local government to levy a room occupancy tax. In several instances, the General Assembly has authorized both a county and a city within that county to impose an occupancy tax. The rate of tax, the use of the tax proceeds, the administration of the tax, and the body with the authority to determine how the tax proceeds will be spent vary considerably. Over the past several years, there has been a greater effort to make the occupancy taxes uniform. In 1997, the General Assembly enacted uniform municipal and county administrative provisions for occupancy tax legislation - G.S. 153A-155 and G.S. 160A-215. These provisions provide uniformity in the areas of levy, administration, collection, repeal, and penalties. The North Carolina Travel and Tourism Coalition (NCTTC) has a policy statement for legislation authorizing local occupancy taxes. Many of the principles contained in its statement are similar to the ones established by the House Finance Committee in 1993. Subsequently, the House Finance Committee established the Occupancy Tax Subcommittee, which regularly reviews occupancy tax legislation and looks for the inclusion of the following uniform provisions in the bills it considers: ♦ Rate - The county tax rate cannot exceed 6% and the city tax rate, when combined with the county rate, cannot exceed 6%. ♦ Use - At least two-thirds of the proceeds must be used to promote travel and tourism and the remainder must be used for tourism-related expenditures, which may include beach nourishment. However, local governments in coastal counties may allocate up to 50% of occupancy tax proceeds for beach nourishment, so long as all remaining proceeds are used for tourism promotion and provided that the use of occupancy tax proceeds for beach nourishment is limited by either a statutory cap or sunset provision.I ♦ Definitions The terms "net proceeds", "promote travel and tourism", "tourism- related expenditures", and "beach nourishment" are defined terms: ➢ Net proceeds - Gross proceeds less the costs to the city/county of administering and collecting the tax, as determined by the finance officer, not to exceed 3% of the first $500,000 of gross proceeds collected each year and 1% of the remaining gross receipts collected each year. ➢ Promote travel and tourism - To advertise or market an area or activity, publish and distribute pamphlets and other materials, conduct market research, or engage in similar promotional activities that attract tourists or business travelers to the area; the term includes administrative expenses incurred in engaging in these activities. ➢ Tourism-related expenditures - Expenditures that, in the judgment of the Tourism Development Authority, are designed to increase the use of lodging facilities, meeting facilities, and convention facilities in a city/county by 'In May 2013, the North Carolina Travel and Tourism Coalition passed a resolution supporting a modification to the Occupancy Tax Guidelines to allow local governments in coastal counties to allocate up to 50% of occupancy tax proceeds for Beach Nourishment, so long as all remaining proceeds are used for tourism promotion and provided that the use of occupancy tax proceeds for Beach Nourishment is limited by either a statutory cap or sunset provision. 8 attracting tourists or business travelers to the city/county. The term includes tourism-related capital expenditures. ➢ Beach Nourishment - The placement of sand, from other sand sources, on a beach or dune by mechanical means and other associated activities that are in conformity with the North Carolina Coastal Management Program along the North Carolina shorelines and connecting inlets for the purpose of widening the beach to benefit public recreational use and mitigating damage and erosion from storms to inland property. The term includes expenditures for the following: a. Costs directly associated with qualifying for projects either contracted through the U.S. Army Corps of Engineers or otherwise permitted by all appropriate federal and State agencies; b. The nonfederal share of the cost required to construct these projects; C. The costs associated with providing enhanced public beach access; and d. The costs of associated nonhardening activities such as the planting of vegetation, the building of dunes, and the placement of sand fences. ♦ Administration - The net revenues must be administered by a local tourism promotion agency, typically referred to as a "Tourism Development Authority," that has the authority to determine how the tax proceeds will be used, is created by a local ordinance, and at least 1/2 of the members must be currently active in the promotion of travel and tourism in the taxing district and 1/3 of the members must be affiliated with organizations that collect the tax.3 ♦ Costs of Collection -The taxing authority may retain from the revenues its actual costs of collection, not to exceed 3% of the first $500,000 collected each year plus 1% of the remainder collected each year. ♦ Conformity with Other Local Occupancy Taxes - In 2008, the NCTTC formally revised its policy position with regard to occupancy taxes to include a statement that if a city seeks to impose a new occupancy tax or increase its existing tax on lodging facilities in a county that also has an existing occupancy tax, the county occupancy tax must conform to the guidelines in order for the Coalition to support the proposed municipal tax. During the 2009 Regular Session, the House Finance Chairs4 considered the revised policy statement of the NCTTC but declined to amend the House Finance Committee's Guidelines for Occupancy Tax accordingly. Research Division NC General Assembly Revised 913113 2During the 2001 Regular Session, the Occupancy Tax Subcommittee of the House Finance Committee considered several bills authorizing the use occupancy tax proceeds for beach nourishment. Although "beach nourishment" was not among the uses contained in the uniform guidelines, the subcommittee nevertheless concluded that beach nourishment was an acceptable expansion of the occupancy tax use provisions. In doing so, the subcommittee drafted this uniform definition of beach nourishment for use in occupancy tax legislation. 3 In March 2005, the House Finance chairs decided to change the percentage of members that must be currently active in the promotion of travel and tourism from % to 1/2. The House Finance chairs in 2005- _ 06 were: Representatives Alexander, Gibson, Howard, Luebke, McComas, and Wainwright. 4 During the 2009-2010 Session, the House Finance chairs were: Representatives Luebke, Wainwright, Weiss, and Gibson. 9 OR- -A-NGE COUNTY NORTH CAR(3LINA Occupancy Tax Use Discussion March 18, 2025 BOCC Business Meeting OCCUPANCY TAX STATUTORY AUTHORITY • Orange County has authority to collect Occupancy Tax through 1991 law. — 10% of revenues used for visitor informational services and support cultural events. • Predates modern NCGA guidelines on Occupancy Tax, which places greater restrictions — 2/3rds for promoting tourism and travel — 1 /3rd for tourism-related expenditures • As the statutory authority is subject to change by NCGA and state courts, staff recommend aligning broadly with stricter guidelines in future allocations . �s ORANGE COUNTY NORTH CAROLINA VISITORS BUREAU FUND �1 • Occupancy Tax revenues are budgeted in a special revenue fund - the Visitors Bureau Fund • Other major revenue in the Fund - Town of Chapel Hill contribution . — Town provides a portion of its prior year's Occupancy Tax to the Visitors Bureau Division through long standing contract. Funds specified for visitor center activities • Majority of Visitor Bureau Fund supports the Visitors Bureau Division • Fund also supports the operations of the Arts Commission , and some related outside agencies . — Less than 10% of Fund's FY 25 Budget ORANGE COUNTY NORTH CAROLINA VISITORS BUREAU FUND REVENUES 12 $3,000,000 $2,500,000 38% Average 5.7% Average Annual Increase $2,000,000 Annual Increase 50% $1,500,000 Revenue Loss $1,000,000 $500,000 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Rev Bud ■ Occupancy Tax Revenue ■ Town of CH Agreement ■ Other VB revenue — Revenue has been quite volatile, but has grown much faster since Covid than Pre-Covid trend `. ORANGE COUNTY NORTH CAROLINA VISITORS BUREAU FUND USES 13 $4,000,000 $3,500,000 $3,000,000 $2,500,000 . $2,000,000 $1,857K $1,500,000 $1,248K $1,165K $1,149K $264K $878K $1,000,000 $940K $979K $858K $355K $500,000 bL 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Rev Bud ■VB Personnel Costs ■VB Fixed Operating Costs ■VB Programmatic Operating Costs ■Net Arts/Outside Agency ■ Payment Back to County — As revenues changed drastically, the county mostly reflected changes in Visitors Bureau's programmatic expenses = ORANGE COUNTY • Advertising, Market Research, Promotions NORTH CAROLINA PERFORMANCE MEASURES OF VISITORS BUkEAU • Visitors Bureau tracks how it supports Tourism & Travel for County — Visitor attraction at 25 key sites — Media coverage of county — Visitor and business inquiries — Tourism economic impact — Demand for hotels & meeting facilities — Publish visitor materials — Advertise small business and farms in county — Operate awalk-in visitor center — Business referrals �s ORANGE COUNTY NORTH CAROLINA PERFORMANCE MEASURES OF VISITORS BUREAU Performance Measures 2021-2022 2022-2023 2023-2024 2023-2024 2024-2025 Actual Actual Budget Projected Budget Service: Tourism Communications Outcome Measure: Increased media coverage, visitation, and interest in visiting Orange County. Strategic Plan Priority: 6. Diverse and Vibrant Economy Build attraction visitations —The Visitors Bureau tracks numbers of visitors visiting 25 major 1.78M 1.97M 2.1M 2.1M 2.5M select attractions throughout Orange County Media Stories on Orange County — The Visitors Bureau sends press releases and works with travel writers and digital influencers to write 247 276 250 250 260 stories about Orange County. Includes stories with and without Bureau assistance Fulfill inquiries of potential visitors and 31000 31500 41500 41725 business travelers Annual Tourism impact — Economic impact is measured by spending, employment, payroll $194M $236M $248M $248M $260M and tax revenues from the hospitality industry Service: Tourism Sales Outcome Measure: Increase number and variety of leads to hotel properties with meeting space. Strategic Plan Priority: 6. Diverse and Vibrant Economy Definite meeting bookings 25 31 30 34 36 Sales leads for hotels 98 154 100 125 135 FY 2025 Budget Document ORANGE COUNTY NORTH CAROLINA CURRENT COMPLIANCE WITH GUIDELINhS • Both in 2024 Actuals and 2025 Revised Budget, County easily exceeds stricter guidelines for Occupancy Tax usage . Revenue • Expenses FY 20241 Revised • • - Town of Chapel Hill Contribution $ 4571439 $ 531,855 2/3rd of Occupancy Tax $ 11482,399 $ 1,526,871 Guideline Revenues $ 1,939,838 $ 2,058,726 Visitors Bureau Division Expenses $ 211741578 $ 2,860,149 Expenses Above Guidelines $ 234,740 $ 801,423 • Board could redirect funds for Tourism-related Expenditures and maintain 2/3rds rule . • Visitors Bureau would still have $ 1 M programmatic expense budget in FY 24 and 25 ®RANGE COUNTY NORTH CAROLINA ALTERNATIVE USES FOR 1/3RD OCCUPANCY'�TAX Tourism-related Expenditures — Expenditures that are designed to increase the use of lodging facilities, meeting facilities, and convention facilities in the county by attracting tourists or business travelers. Can include capital expenditures. Related Strategic Plan Priorities - 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 �1 ORANGE COUNTY NORTH CAROLINA ALTERNATIVE USES FOR 1/3RD OCCUPANCY'$I'AX Tourism-related Expenditures — There are plenty of activities that a county funds that could be reasonably interpreted as being related to travel and tourism . • Operational costs and debt service related to regional parks & athletic facilities • Funding cultural events and art events • Public Safety support at special events • Parking Decks, Water & Sewer and other infrastructure investments in commercial areas �s ORANGE COUNTY NORTH CAROLINA OPTIONS FOR BOARD DISCUSSION 19 • Option 1 : Retain the current funding trends for Visitors Bureau , Arts Commission , and Outside Agencies. • Option 2 : Identify existing county investments that fit reasonable definition of tourism-related expenditures to charge to Visitors Bureau Fund , possibly decreasing General Fund tax burden . • Option 3: Plan new initiatives that fit reasonable definition of tourism-related expenditures to charge to Visitors Bureau Fund . ORANGE COUNTY NORTH CAROLINA VISITORS BUREAU FUND BALANCE POLI(!QY • Visitors Bureau Board 's Fund Balance Policy - 15% minimum unassigned fund balance • Not recognized by BoCC , but followed in practice • Due to revenue growth , $ 1 , 125 ,806 has accumulated in available fund balance. — FY 25 Budget plans some draw down of fund balance • No requirement to maintain minimum fund balance. General Fund backstops all other funds . ORANGE COUNTY NORTH CAROLINA VISITORS BUREAU FUND BALANCE POLI(!�Y • During Budget Process, staff review fund balance for various funds based on following criteria : — Current or Future Obligations — Long Term Capital or Debt — Volatility of Revenue • Visitors Bureau Fund does not have extensive obligations or capital expenditures but has shown significant volatility. — During future recession, fund will either cut expenses significantly, or receive county subsidy �s ORANGE COUNTY NORTH CAROLINA DISCUSSION/QUESTIONS 22 • Questions for staff? • No formal vote by Board required • Staff will incorporate Board direction into FY 2025-26 Manager's Recommended Operating Budget, Presented May 6 t ORANGE COUNTY NORTH CAROLINA