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HomeMy WebLinkAboutAgenda - 12/11/2008 - 4oORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: December 11, 2008 Action Agenda Item No. ~ - O SUBJECT: Performance Agreement with Town of Chapel Hill and Visitors Bureau DEPARTMENT: Chapel Hill/Orange County PUBLIC HEARING: (Y/N) No Visitors Bureau ATTACHMENT(S): History of Chapel Hill Grant Funding FY 2008-2009 Performance Agreement Between the Chapel Hill/Orange County Visitors Bureau for Annual Funding Memo from Chapel Hill Town Manager to Town Council Outlining Agreement INFORMATION CONTACT: Laurie Paolicelli 919- 968-2060 PURPOSE: To approve an FY 2008-2009 performance agreement between the Town of Chapel Hill and the Visitors Bureau. BACKGROUND: Senate Bill 622, Chapter 392, of the 1991 Session laws makes provisions for both the Orange County Board of Commissioners and Town of Chapel Hill, by resolution, to levy a room occupancy tax of up to three percent (3%) on any accommodation in the County. The bill states that at least ten (10%) of the annual revenues shall be used to provide funding for visitor information services and to support cultural events. Orange County has used this tax to fund a Visitors Bureau since 1992. In addition, the Visitors Bureau has received an annual grant allocation from the Town of Chapel Hill which has ranged from $67,000 to its current $130,000. The Town of Chapel Hill has allocated $130,000 to the Visitors Bureau for FY 2008- 09. In addition, the town will further grant $20,000 when occupancy tax revenues in Chapel Hill reach $1 million. Contract negotiations with the Visitors Bureau Board and the town of Chapel Hill recently concluded and this is now being brought forward for BOCC approval. FINANCIAL IMPACT: For FY 2008-09 the town of Chapel Hill has allocated $130,000 to the Visitors Bureau. An additional $20,000 will be granted when the town achieves $1 million in occupancy taxes, which the Bureau anticipates occurring in May 2009. RECOMMENDATION(S): The Manager recommends the Board approve this performance agreement between the Town of Chapel Hill and the Visitors Bureau Board and authorize the Manager to sign. a To: November 15, 2008 Re: Visitors Bureau Performance Agreement with the Town of Chapel Hill The Visitors Bureau was started in 1992 with support only from Orange County, using the occupancy tax--at first 1% and then raised to 2% in 1995 and 3% in 2008. The Orange County Occupancy Tax was passed in the 1991 session's law and specified that Orange County could levy a room occupancy tax of up to 3%. 1~tt~~:r~~~~~~~~~~.nc~r<~.statc.~~c.u, ~~~~~~,~n~ 1~~~~I~I3iII~~S~~ ~.:~.~ 11~1~'~11 iS(;`'~~~i.html The bill gives both Chapel Hill Town Council and the Orange County Board of Commissioners prerogative to 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. Since in its inception, the Visitors Bureau staff and programs of work have been funded by the Orange County Board of County Commissioners. In 1994/95, the town of Chapel Hill began giving the visitor's bureau a grant, which first equaled a flat $30,000 and then took the following course: - In 1995/96; 15% of the occupancy tax revenues or $71,000. - In 1996/97; 15% of the occupancy tax revenues or $80,000. - In 1997/98; 15% or $83,779. - In 1998/99; 15% or $83,751. - 1999/2000; 15% or $98,860. - 2000/2001; 15% or $94,545. - 2001/2002; 15% or $88,498. - 2003/2004; 15% or $84,116. - 2004/OS REVERTS TO 10% GRANT OR $67,000 - 2005/06 STAYS AT 10% GRANT OR $69,000 - 2006/07; inches up to $85,000 at VB request. - 2007/08; inches up to $100,000 at VB request. - 2008/09 inches up to its current $130,000 with $20,000 additional grant. 3 STATE OF NORTH CAROLINA COUNTY OF ORANGE PERFORMANCE AGREEMENT This Agreement, made and entered into by and between the Town of Chapel Hill, herein "Town", and Orange County by and for its Chapel HilUOrange County Visitors Bureau, 501 West Franklin Street, Suite 104, Chapel Hill, NC 27516, herein "County" for services hereinafter described for the Town of Chapel Hill. This Contract is between the Town of Chapel Hill and Orange County by and for its Chapel HilUOrange County Visitors Bureau for a comprehensive visitor services program targeted toward providing services to potential visitors to Chapel Hill and Orange County for FY 2008-09. WITNESSETH That for and in consideration of the mutual promises and conditions set forth below, the Town and County agree: 1. Duties of the County: The County shall operate a comprehensive visitor services program targeted toward providing services to potential visitors to Chapel Hill and Orange County. The County shall use Town funds for general operational support and to provide visitor services. 2. Duties of the Town: The Town has appropriated the sum of One Hundred Thirty Thousand Dollars ($130,000) to the County for the fiscal year 2008-2009. Additionally, if the Town's actual (hotel occupancy) revenues exceed $1,000,000, for the fiscal year ending June 30, 2009, the Town agrees to pay to the County one-half of the revenues over $1,000,000, up to an additional $20,000. Further, the Town will pay 13% of any hotel occupancy revenues in excess of $1,040,000 to the County.* 3. Fee Schedule and Maximum Sum: Payments of $32,500 each will be made on or after the following dates: July 1, 2008; October 1, 2008; January 1, 2009; and April 1, 2009 , and if it is determined that revenue for the fiscal year ending June 30, 2009 exceeds $1,000,000, an additional payment calculated as described in # 2 above, will be made within 30 days of the receipt of the final hotel occupancy payment from the State. 4. Performance Review: At the end of the third quarter the CVB Director and the Town Manager will review the status of and results of this agreement and report their to findings to the Council. 5. Billing and Pam The County shall bill and the Town shall pay the rates set forth Therein. Payment will be made by the Town within thirty (30) days of receipt of an accurate invoice, approved by the contact person or his/her designee. 6. Financial Records: The County agrees to allow the Town to inspect its financial books and records upon reasonable notice, during normal working hours. Revised 11/2008 Page 1 of 3 7. Termination for Cause: In the event that the County shall fail to render a satisfactory accounting as provided herein, then, and in that event, the Town may terminate this Agreement and the County, to the extent permitted by law, will return all payments already made to it by the Town, for services which have not been provided, or of which no satisfactory accounting has been rendered. In the event that the Town shall fail to make payments as provided herein, then, and in that event, the County may terminate this Agreement and the Town, to the extent permitted by law, will make all payments then due to County for services rendered. 8. Non-Discrimination: The County shall administer all functions without discrimination because of race, creed, sex, national origin, age, economic status, sexual orientation, gender. identity or gender expression. 9. Federal and State Legal Compliance: The County must be in full compliance with all federal and state laws, including those on immigration. 10. Amendment: This Agreement may be amended in writing by mutual agreement of the Town and County. 11. Term: This Agreement, unless amended as provided herein, shall be in effect until June 30, 2009. * Based on the July 25, 2008 Memorandum attached THE REMAINDER OF THIS PAGE WAS INTENTIONALLY LEFT BLANK Revised 11/2008 Page 2 of 3 5 This Contract is between the Town of Chapel Hill and Orange County by and for its Chapel HilUOrange County Visitors Bureau for a comprehensive visitor services program targeted toward providing services to potential visitors to Chapel Hill and Orange County for FY 2008- 09. IN WITNESS WHEREOF, the parties hereunto cause this agreement to be executed in their respective names. ORANGE COUNTY by and for its CHAPEL HILL/ORANGE COUNTY VISITOR'S BUREAU Laura Blackmon, County Manager Attest: Donna Baker, Clerk TOWN OF CHAPEL HILL ASSISTANT/DEPUTY/TOWN MANAGER ATTEST BY TOWN CLERK: TOWN CLERK TOWN SEAL Town Clerk attests date this the day of , 20 Approved as to Form and Authorization TOWN ATTORNEY This instrument has been pre-audited in the manner required by the Local Government Budget and Fiscal Control Act. FINANCE OFFICER PARKS AND RECREATION DIRECTOR Revised 11/2008 Page 3 of 3 MEMORANDUM TO: Mayor and Town Council FROM: Roger L. Stancil, Town Manager SUBJECT: Funding for Chapel Hill/Orange County Visitors Bureau DATE: June 25, 2008 PURPOSE The purpose of this memorandum is to propose an approach to increased funding for the Chapel Hill/Orange County Visitors Bureau (CVB). This proposal is in response to interests expressed by Council at a budget work session. The increased funding is consistent with the Council's interest in providing increased resources for economic development. BACKGROUND The CVB submitted a budget request to Council to increase the CVB's allocation from occupancy taxes to 13.7%, or $150,000 for FY 09. The CVB estimated revenues from the Town's occupancy tax at approximately $1,094,000. The Manager's Recommended Budget, as adopted by Council June 9, 2008, estimated occupancy tax revenues at $935,000 and an allocation to the CVB of 100,000, or 10.7%. Negotiations with the CVB director about the Town's allocation were still underway. I committed to the Council to complete those negotiations and report to the Council on June 25. DISCUSSION The focus of negotiations was a mutually acceptable approach to increasing the allocation to the CVB without decreasing funds available to the Town's operations in the FY 09 budget. The means to that approach was the difference in revenue projections for FY09. I propose the following, which Laurie Paolicelli deems workable: • Amend the FY09 adopted budget to increase the projected occupancy tax revenues to $1,000,000 and increase the budgeted payment to the CVB to $130,000, or 13%. • Beginning July 1, the Town will make payments to the CVB based on the $130,000 budget. • If the Town's actual revenues exceed $1,000,000, the Town's payments to the CVB will be one-half of the revenues over $1,000,000 until the additional $20,000 the CVB requested is paid. The Town will pay the CVB 13% of all. revenues in excess of $1,040,000 2 • At the end of the third quarter (March 2009), the Town Manager and CVB Director will review the status and results of this agreement and report to the Council . RECOMMENDATION I recommend that the Council take the following action: Authorize the manager to execute an agreement with the CVB that reflects the recommendations above; • Authorize the manager to present a budget amendment to the Council in September 2008 reflecting the terms of the agreement; • Authorize the manager to make any payments to the CVB before the budget amendment is approved at the rate reflected on the agreement.