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BCC Minutes 11/01/2010 W (w/TDC) November 1,2010 MINUTES OF THE COLLIER COUNTY BOARD OF COUNTY COMMISSIONERS/TOURIST DEVELOPMENT COUNCIL WORKSHOP Naples, Florida, November 1,2010 LET IT BE REMEMBERED, that the Collier County Board of County Commissioners and the Tourist Development Council in and for the County of Collier, having conducted business herein, met on this date at I :00 PM in a WORKSHOP SESSION in Building "F" of the Government Complex, Naples, Florida with the Following members present: Board of County Commissioners Chairman: Fred Coyle Vice Chairman: Jim Coletta (Excused) Donna Fiala Tom Henning Frank Halas Tourist Development Council Chairman: Fred Coyle Vice Chairman: Murray Hendel Susan Becker Jerry Gibson Clark Hill Rick Medwedeff Robert Miller Ed (Ski) Olesky John Sorey III ALSO PRESENT: Leo Ochs, County Manager Mark Isackson, Director of Corporate Financial Man. Jack Wert, Tourism Director Jeff Klatzkow, County Attorney Ian Mitchell, Executive Manager/BCC COLLIER COUNTY BOARD OF COUNTY COMMISSIONERS TOURIST DEVELOPMENT COUNCIL JOINT WORKSHOP AGENDA NOVEMBER 1, 2010 9:00 AM - 12:00 PM I. CALL TO ORDER II. PLEDGE OF ALLEGIANCE III. CHANGES/APPROVAL OF AGENDA IV. NEW BUSINESS 1. Funding for Year Round Destination Marketing - Jack Wert 2. Tourist Tax Ordinance Review - Mark Isackson 3. Stakeholder Meeting Recommendations Coastal Advisory Committee Collier County Sports Council 'Collier County Lodging and Tourism Alliance Everglades Chamber of Commerce 'Friends of the Collier County Museums *Marco Island Chamber of Commerce Marco Island City Council Naples Chamber of Commerce Naples City Council Non-County Owned Museums Parks & Recreation Advisory Board , Recommendations to be presented at Workshop 4. Beaches/Inlets Revenue vs. Expense Analysis - Gary McAlpin V. QUESTION & ANSWER PERIOD VI. BCC/TDC DISCUSSION VII. NEXT MEETING DATE/LOCATION 9:00 AM November 22, 2010 TDC Monthly Meeting, BCC Chambers VIII. ANNOUNCEMENTS IX. ADJOURNMENT November 1,2010 I. CALL TO ORDER Commissioner Coyle called the Workshop to Order at 9:00 a.m. The following Tourist Development Council members were present: Murray H. Hendel, Susan Becker, Jerry Gibson, Clark Hill, Rick MedwedefJ, Robert Miller, Ed (Ski) Olesky. and John Sorey Ill. II. PLEDGE OF ALLEGIANCE The Pledge of Allegiance was recited. III. CHANGES/APPROVAL OF AGENDA There were no changes to the Agenda. IV. NEW BUSINESS 1. Funding for Year-Round Destination Marketing - Jack Wert Mr. Wert presented the Executive Summary "Review funding options for year round destination marketing of Collier County and discuss input from Stakeholder Meetings." He presented a Slide Show "Tourism Promotion Discussion - The Needfor Funding Year-Round Destination Marketing & Promotion." He outlined the current Tourist Tax allocations: . First 2% . 50% to Category A (Beach Renourishment and Beach Park Fac.) . 23.26% to Category B (Tourism Admin-Emergency Ad Reserves) . 22% to Category C-I (County Museum Operations) . 4.764% to Category C-2 (Beach Renourishment /Beach Park Fac.) . 3rd % _ 100% to Category A (Beach Renourishment/Beach Park Fac.) . 4th% _ to Category B (Marketing & Promotion) He outlined the current funding per TDT (Tourist Development Tax) Category: (Bas cd on $12 Million Budget) . Cat. A - Beach & Park Facilitics $6,000,000 . Cat. B - Marketing and Promotion $4,400,000 . Advertising $2.0M, Contracts $1.0M . Admin. $900,000K, Emergency Ad Reserves - $500,000 . Cat. C-I - Museum Operations $1.3M . Cat. C-2 - Non-County Owned Museum Grants $300,000 He noted Collier County spends less percentage of its TDT revenue on advertising than its competitive markets (Miami/Dade, Fort Lauderdale, Fort Myers, St. Petersburg, Clearwater, Florida Keys, Palm Beach, etc.) and more on beach park facilities and beach maintenance than the competitive sets. Historically, advertising funds had been expended for promoting the "off season." Due to competition from competitive markets and the downturn in the economy, it 2 November I, 2010 is necessary to advertise on a year-round basis. The FY II budget for advertising is $3.2M. The direction from the BCC was for staff to investigate reallocating the TDT revenue within the existing categories (to provide a budget for year-round advertising without yearly requests for re-direction offunds). Staff has identified the following available options: . Category A . Reduce percentage or allocations to Beach Renourishment . Reduce percentage or allocations to Beach Park Facilities. . Category B . Continue all Interest to revenue to promotion . Surplus in operating fund to emergency advertising only. . Category C-I . Reduce Operating Funds Allocation over 3 years. . Category C-2 . Reduce Grant Funding . Work with Tax Collector to register and collect tourist tax from all short term rentals. . Collect actual TDT due on Internet hotel sales (Expedia, Travelocity, etc.) Mark Isackson Director of Corporate Financial Management presented 3 additional options for consideration: I. Lower the ceiling governing the first priority transfer from swept dollars from $1.5M to 1.0M in Disaster Recovery Fund (196) 2. Amend language within Ordinance 2005-43 calling for secondary sweep of dollars for Beach Renourishment and Beach Park Facilities and instead sweep these dollars for the benefit of promotion and advertising budgeted in Fund 184. 3. Transferring Interest earned on TDC funds to Advertising and Promotion funding. The 3 Options would provide an additional $850,000 (approximately) for marketing on an annual basis. Mr. Sorey, Chairman ofthe Coastal Advisory Committee and Tourist Development Council member noted the challenge for the BCC is how to fund year- round advertising within the existing budget constraints. Most agree the beaches are critical to marketing the region, and expressed concern in reducing funding in Beach Maintenance and Facilities. An optimal budget for year-round advertising is estimated at $5M. He recommends the BCC review the Options identified by Mr. Isackson and reallocate funds as indicated. In addition, review the Museum funding to ensure the funds provide an ample Return On Investment (ROI). Mr. Sorey left at 9:47am 3 November 1, 2010 Commissioner Hennig noted he is not convinced that increased funds expended for advertising provide an ample ROl. He expressed concern the current focus is for a long term solution to a short term economic crisis. Mr. Wert provided an overview on the history of Tourist Development Tax revenue and noted last years promotions provided for a $20.65 ROI for each promotional dollar spent. Discussion occurred on the following issues: . The feasibility of dedicating a Staff person to collect revenue on short term rentals. . The feasibility of area hotelier's partnering funds for promotions with the Convention and Visitors Bureau (CVB). Jack Wert noted the area hoteliers do partner with the CVB in Trade Show Visits, complimentary rooms for F AM's, etc. at a an annual value of approximately $302,500. They spend an additional $7.4M of their own funds for advertising. Tourist marketing does not only benefit hotels, but the entire economy of the region (money is spent on car rentals, restaurants, shopping, entertainment, etc) 2. Tourist Tax Ordinance Review - Mark Isackson See item IV.I 4. Stakeholder Meeting Recommendations Mr. Wert presented an overview of the stakeholder's recommendations (see Addendum A attached) with detailed input and resolutions provided in the meeting packet. Some of the stakeholders did recommend the Tourist Tax Rate be increased from 4% to 5%. Coastal Advisory Committee Collier County Sports Council *Collier County Lodging and Tourism Alliance Everglades Chamber of Commerce *Friends of the Collier County Museums *Marco Island Chamber of Commerce Marco Island City Council Naples Chamber of Commerce Naples City Council Non-County Owned Museums Parks & Recreation Advisory Board *Recommendations to be presented at Workshop Mr. Medwedeff expressed concern on the concept ofraising the Tourist Development Tax I %. He likened the concept to an automobile dealership in the County having an additional I % sales tax for the County creating a sales disadvantage with competitive markets. Group sales account for approximately 40 4 November I, 2010 percent of the Tourist Tax Revenue and the area already faces a competitive disadvantage in air fares to the region and airport transportation. An increase in the Tourist Development Tax (TDT) would have a negative impact on group sales business and overall revenue. Chairman Coyle noted the discussion ofraising the Tourist Tax Rate is not an issue under consideration today. He requested staff provide response to the options identified by Mr. Isackson and how it impacts the departments operations. Break-IO:3Iam Reconvened - IO:44am Mr. Sorey returned. Mark Isackson provided a detailed overview on the impact of the options he proposed. None of the funding categories would be adversely affected. 4. Beaches/Inlets Revenue vs. Expense Analysis - Gary McAlpin Gary McAlpin presented the Executive Summary "Provide information to the BCC/TDC regarding the Beaches/Inlets Revenue Vs. Expense Analysis along with additional supporting documentation relative to the reallocation ofTDC beach fundingfor future year-round tourism advertising" for informational purposes. The Department's projected funding is adequate through at least 2013-14. He expressed concern on the long term concept for reducing beach funding noting without future outside funding sources, (FEMA and Florida Department of Environmental Protection Grants, etc.) the department will not be able to meet the current level of service it provides for the beaches. The funding options identified by Mr. Isackson will not negatively affect Coastal Zone Management Operations. Ron Jamro, Director ofthe Collier County Museums noted the Options identified by Mr. Isackson's will not negatively affect museums operations. Staff has reviewed the concept of implementing user fees, and has determined they are not economically feasible. V. QUESTION & ANSWER PERIOD Speakers Larry Litt, Friends of the Museum supports TDT funding for the operation of County Museums as many of the users are tourists. Suzy Valentine, Friends of the Museum noted the organization has taken no position on raising the Tourist Tax Rate to 5%, as it would not benefit the Museums. She recommended the composition of the TDC be altered to provide for a member of the Friends of the Museum. Dottie Henderson, Marco Island Historical Society supports TDT funding for the operation of County Museums as many of the users are tourists. 5 November 1,2010 Joe Cox, Galisono Children's Museum of Naples/Non County Museums supports funding for Category C-2 as the funds are matched by the organization and utilized for marketing visitors from outside of Collier County. Patricia Huff, Friends of the Museum of the Everglades supports TDT funding for the operation of County Museums. She expressed concern on the concept of eliminating funding operations for the museum over a 3 year period as no alternate funding source is identified. Marc Vandam, President, Sports Council of Collier County supports additional TDT funding for year-round marketing as outlined in their adopted Resolution. He expressed concern the destination expends one of the lowest percentage of funds for marketing compared to the competitive sets. Jacob Winge, Baron Collier Historical Club supports TDT funding for the operation of County Museums as they provide cultural, historical and educational opportunities to the residents of the community and the tourists who visit. He recommended funding in the area be increased, not reduced. Jane Earle, Park Shore and Seagate Public Access opposes reallocation of Beach renourishment and Beach Facility funds to advertising and supports an increase in the Tourist Tax rate to 5 percent. Hans Gruenberg, Gulf Shore Property Owners Assoc. recognizes the need for advertising on a year-round basis but opposes the reallocation of Beach Renourishment and Beach Facility funds to advertising. The area is highly dependant on the resources. Margaret Winn, Friends of Barefoot Beach supports the work of the Parks and Recreation Department and Coastal Zone Management and opposes reallocation of Beach Renourishment and Beach Facility funds to advertising. Joe Moreland, Estuary Conservation Assoc., opposes reallocation of Beach Re- nourishment and Beach Facility funds to advertising. He provided detailed photos of areas of Barefoot Beach which are in disrepair due to high erosion. They support the resolutions of the Coastal Advisory Committee, City of Naples and the City of Marco Island. Mary Lou Smart, KOBA, (Keep Our Beaches Open) opposes reallocation of Beach renourishment and Beach Facility funds to advertising as the original intent of the Tourist Tax was for Beach renourishment and improvements. She recommended if the tax rate is increased, the funds be dedicated to beach maintenance and improvements. Emily Maggio expressed concern additional advertising provides no benefits to the tourists. Superior Beach Facilities enhances the visitor experience and assists in creating a positive experience for the tourist. Many persons who utilize the museum's are tourists. The primary use for the tax when the Ordinance was established was for beach renourishment and any associated alterations. If a change is proposed, it should be presented to the voters. Doug Finlay expressed concern reallocations will not lead to a long term solution to the issues under discussion. He supports increasing the Tourist Tax Rate to 5% as most of the competitive sets have a rate of5 or 6%. He recommended increasing the funding in the area of beach maintenance. 6 November 1,2010 Steve McIntyre, Collier County Lodging and Tourism Alliance, supports year- round advertising. They recommend redirecting $400,000 of Category A to advertising. In addition, redirecting $600,000 from Category C-I over the next 3 years ($100,000 from C-I for the first year, $200,000 for the second year and $300,000 for the third year.) The interest earned on funds should be allocated to marketing. $500,000 of the Emergency Fund should be utilized for promoting Group FAM's (Familiarization Trips) and Public Relations. Lance Mckee, S.W. Heritage, Inc. supports the use ofTDT funds for operations of County Museums. VI. BCC/TDC DISCUSSION Commissioner Hennig is opposed to raising the Tourist Tax rate and reallocating funds from beach renourishmentlprojects to advertising and promotions. He recommended the TDC review the options identified by Mr. Isackson and consideration be given to dedicating a Staff person for collection of revenue for short term single family rentals. Commissioner Fiala agreed consideration should be given to dedicating a Staff person for the purposes of collecting TDT revenue for short term, single family rental properties; opposes increasing the TDT rate to 5% and re-allocating/eliminating funding for the County Museums. Commissioner Halas recommended the ordinance remain as currently adopted in regards to the beaches, museums and inlet management. Chairman Coyle requested the options identified be reviewed at the November 22, 20 10 TDC meeting. TDC is to develop recommendations and forward them to the Board of County Commissioners for consideration. VII. NEXT MEETING DA TElLO CATION 9:00 AM, November 22, 2010, TDC Monthly Meeting, BCC Chambers ***** There being no further business for the good of the County, the Workshop was adjourned by order of the chair at 12:17 P.M. COLLIER COUNTY BOARD OF COUNTY COMMISSIONERS ~," '1uJ- W (,~ .:, ... ~ ~",~g;~'~~"d~'fut Board/Committee on I'l.l , <f-I to I 0 as presented or as amended 7 November 1,2010 Addendum A Recap of Stakeholder Group Suggestions: All stakeholder groups the staff met with support year-round destination marketing of Collier County to attract visitors Organizations Supporting Increase in Tourist Tax Coastal Advisory Council (CAC) 5% and no changes to any other allocations - 50% ofTDT for beach projects is sufficient. Everglades City Chamber 5% and consider taxing districts for beach renourishment to supplement funding Marco Island City Council 5% and no changes to any other allocations - 50% for beach projects is sufficient. Naples City Council 5% and reallocate the first 2% ofTDC to yield 60% for beach maintenance and beach Renourishment Parks & Recreations Advisory Board (PARAB) 5% and no changes to any other allocations - oppose any use of beach parking revenues to offset beach park facilities projects. 50% for beach projects is sufficient. Other Stakeholder Group Suggestions: Marco Island Chamber Y2% increase in TDT; $500 K each from Beach Renourishment & Beach Parks; $300 K from County Museum Operations Naples Chamber of Commerce Support for year-round marketing at $4.5 million to support jobs and advance economy. No suggestions for re-allocations. Non-County Owned Museums Continue current support or allocate more funds for these museums and add marketing dollars for arts. Appoint non-County Owned museum rep to TDC To Be Presented at Workshop bv Spokesperson from Group: Friends of the Collier County Museums, Collier Lodging & Tourism Alliance Sports Council of Collier County 8