Tourist Development Tax/ Convention Center Budget Worksession July 11, 2011 Orange County

Tourist Development Tax/ Convention Center

Budget WorksessionJuly 11, 2011

Orange County

• Background

• Revenue Outlook

• TDT Expenditures

• Convention Center Update

Presentation Outline

• Background

• Revenue Outlook

• TDT Expenditures

• Convention Center Update

Presentation Outline

TDT• Short-term lodging tax

• State TDT law has different uses for 1st to 4th cents, 5th cent, and 6th cent levies

Background

• Orange County levied TDT at 2% in 1979

• Currently TDT is at 6%

• State Law governs uses

• Not allowed for: roads, schools, public safety, etc.

• Added tourism levy for convention centers, tourism promotion, sports, arts, and museum costs

Background

Historical Revenue Growth: 9.5% Avg Annual TDT Growth (1979-2010)

Background

• Background

• Revenue Outlook

• TDT Expenditures

• Convention Center Update

Outline

FY Month1st-6th

Cent TDT Collections

MTM Growth

Annual Amount

Annual Growth

2008 Sep-08 168.2$ 3.1%2009 Sep-09 142.2$ -15.4%2010 Sep-10 147.8$ 3.9%2011 Oct-10 13.2 17.4%

Nov-10 13.2 16.8%Dec-10 14.3 15.4%J an-11 12.7 7.3%Feb-11 14.7 20.9%Mar-11 18.5 15.5%Apr-11 16.0 15.9%May-11 13.1 14.7% 115.8$ 16% YTD

Collection Trends (in millions)

Revenue Outlook

2011 YTD $15.9 mill over 2010 pace after 8 months

• FY 11 TDT collection budget amended upward by $20 million to $158 million on January 25, 2011

– $132M 1st-5th Cent

• FY 12 TDT collection budget is $162 million

– Possible upward amendment later

– $135M 1st-5th Cent

Revenue Outlook

• Background

• Revenue Outlook

• TDT Expenditures

• Convention Center Update

Presentation Outline

• First 5 Percent

TDT Expenditures

• TDT expenditures for the first 4 percent are authorized by County ordinance in the TDT plan

• These expenditures are based on a prioritized flow of funds

• The fifth percent is for debt service payments

First 5 Percent

TDT Expenditures

Debt Service

Debt Reserves

OCCC Operations

Transportation

Visit Orlando

Arts and Other

Priority Funding

Priority funding based on revenue availability and BCC approval

TDT Expenditures (1st-5th)

TDT Reserves

Venues Funds

Projected Expenses (in millions):

2011 2012

Debt Service $ 73.2 $ 72.1

Convention Center Operations 15.0 15.0

Visit Orlando (O/OCCVB) Funding 21.2 22.0

Convention Center Capital 10.0 11.9

Arts 1.5 3.3

History Center 2.6 2.6

Other 1.0 1.0

Contract TDT Payment for Venues 0.0 3.0

Total $124.5 $130.9

TDT Expenditures (1st-5th)

Debt Service

Debt Reserves

OCCC Operations

Transportation

Visit Orlando

Arts and Other

Priority Funding

Priority funding based on revenue availability and BCC approval

TDT Expenditures (1st-5th)

TDT Reserves

Venues Funds

Historical OCCC Operating Subsidy (millions)

Fiscal Year

Operating Revenue

Operating Expense

OperatingSubsidy

09-10 42.3 56.3 14.0

08-09 43.1 58.3 15.2

07-08 58.4 67.3 8.9

06-07 50.5 60.9 10.4

TDT Expenditures (1st-5th)

OCCC Operating Subsidy Needed From TDT and RR&R Account

FY 11-12 $15 mill

FY 10-11 $15 mill

TDT Expenditures (1st-5th)

*Budgeted operating subsidy available from TDT and TDT Reserves:$10 million, plus $3 mill transfers from CIP budget and $2 mill from RR&R acct

Debt Service

Debt Reserves

OCCC Operations

Transportation

Visit Orlando

Arts and Other

Priority Funding

Priority funding based on revenue availability and BCC approval

TDT Expenditures (1st-5th)

TDT Reserves

Venues Funds

Visit Orlando (O/OCCVB) TDT Payments (millions)

Fiscal Year

1st – 5th PctCVB Payment

6th PctCVB Payment

TotalCVB Payment

11-12* $21.6 $10.7 $32.3

10-11* 21.2 10.3 31.5

09-10 20.3 9.5 29.8

08-09 19.9 9.0 28.9

07-08 22.1 28.0 50.1

06-07 21.6 27.1 48.7

*Projected

TDT Expenditures (1st-5th)

Last 5-YR CVB payments (2007-11): $189 mill

Debt Service

Debt Reserves

OCCC Operations

Transportation

Visit Orlando

Arts and Other

Priority Funding

Priority funding based on revenue availability and BCC approval

TDT Expenditures (1st-5th)

TDT Reserves

Venues Funds

Arts & Other Expenditures 2011:

Tax Collection Expense $700,000

Central Florida Sports Commission $135,000

Florida Classic $137,500

Arts $1,500,000

Orange County Regional History Center $2,600,000

TDT Expenditures (1st-5th)

• Effective in 2002, the BCC approved using 3% of the first 4 cents of TDT for arts and cultural activities to extent allowed by law

• Arts and cultural funding is a spending priority in the TDT plan

• Funding is contingent upon TDT collection levels

Arts Funding

Arts Funding - History2002 $500,000 Fixed Amount

2003 $500,000 Fixed Amount

2004 $509,461 Fixed Amt Plus Growth

2005 $1,200,000 Fixed Amount

2006 $2,884,029 Formula

2007 $3,083,992 Formula

2008 $3,261,033 Formula

2009 $3,363,189 Formula

2010 $2,246,058 Formula less cut amount

2011 $1,500,000 Fixed Amount

Total $19,047,762

2012 funding formula basis: $3.3 million

Debt Service

Debt Reserves

OCCC Operations

Transportation

Visit Orlando

Arts and Other

Priority Funding

Priority funding based on revenue availability and BCC approval

TDT Expenditures (1st-5th)

TDT Reserves

Venues Funds

$140 million of TDT reserves as of

May 31, 2011

TDT Reserves

$73M

Reserve for Debt Service

$56M

Reserve for OCCC

$11MAmount Above Target

• Background

• Revenue Outlook

• TDT Expenditures

• Convention Center Update

Outline

• Organization Chart

• Proposed FY 2011-12 Budget

• Accomplishments

• Budget Challenges

• Summary

Presentation Outline

• Organization Chart

• Proposed FY 2011-12 Budget

• Accomplishments

• Budget Challenges

• Summary

Presentation Outline

Executive Director – Tom AckertGeneral Manager – Jessie Allen

Deputy General Manager – Kathie Canning

Executive Director – Tom AckertGeneral Manager – Jessie Allen

Deputy General Manager – Kathie Canning

Sales, Marketing andEvent Management

Yulita Osuba

Sales, Marketing andEvent Management

Yulita Osuba

BusinessJan Addison

BusinessJan Addison

Building Security Greg Forehand

Building Security Greg Forehand

Information ServicesMike Walker

Information ServicesMike Walker

Facility OperationsFred Baker

Facility OperationsFred Baker

Event OperationsMichaal Rossi

Event OperationsMichaal RossiHuman Resources

Betty Meeks

Human ResourcesBetty Meeks

Guest & Community RelationsLex Veech

Guest & Community RelationsLex Veech

Organization Chart

• Organization Chart

• Proposed FY 2011-12 Budget

• Accomplishments

• Budget Challenges

• Summary

Presentation Outline

Proposed FY 2011-12 Budget

CurrentFY 11 $ Change

ProposedFY 12

Personal Services $26.9M ($0.1M) $26.8M

Operating Budget* 34.3M 2.9M 37.2M

Total for Operation $61.2M $2.8M $64.0M

Budget Change 4.5%

Staffing 430 (1) 429

*Includes non operating expenses $0.8M FY 10-11 and $1.2M FY 11-12

CurrentFY 11 $ Change

ProposedFY 12

Capital Improvement Projects

$15.4M ($3.5M) $11.9M

Budget Change (22.5%)

Proposed FY 2011-12 Budget

• Organization Chart

• Proposed FY 2011-12 Budget

• Accomplishments

• Budget Challenges

• Summary

Presentation Outline

• 200 Total Events• 91 Convention/Tradeshows• 1.27 Million Total Attendees• 1.03 Million Convention/Tradeshow Delegates• $1.96 Billion Economic Impact

Accomplishments

FY 2010-11 Projected Business Activity

Accomplishments

FY 2011-12 Event Activity • 212 Projected Total Events• 102 Convention/Tradeshows• 1.21 Million Total Attendees• 0.93 Million Convention/Tradeshow Delegates• $1.76 Billion Economic Impact

NBA All-Star Games

• 753 Conventions and Tradeshows• 10.1 Million Convention/Tradeshow Delegates• $19.2 Billion Economic Impact

Accomplishments

Future Business Activity

• ISO 14001 Recertified• LEED Registered• Recycling • Renewable Energy• Community Donations

Accomplishments

Sustainability

• Prime Site Award 2011

• ConventionSouth Magazine 2010 Annual Reader’s Choice Award

• MeetingsNet “Inner Circle Award”

• FLPPR “Pollution Prevention Award”

Accomplishments

Awards

• Organization Chart

• Proposed FY 2011-12

Accomplishments

• Budget Challenges

• Summary

Presentation Outline

Budget Challenges

• Revenue Challenges

• Economy

• Competition/Destination

• Maintaining Facility

• Transportation

• Organization Chart

• Proposed FY 2011-12 Budget

• Accomplishments

• Budget Challenges

• Summary

Presentation Outline

• Although improved, economic issues continue to affect the convention and trade show industry.

• We continue to face challenges from competitors globally, nationally, and regionally.

• The convention center requires continued resources to maintain/upgrade the facility to remain competitive.

Summary

• The mission of the Orange County Convention Center is economic development.

• By hosting regional, national and international conventions, meetings, and trade shows, the Center infuses the local economy with new money and expanding business opportunities.

• The mission of our staff is to provide outstanding service to the clients and users of the Center, to stimulate their desire to return and to enhance the community’s reputation for excellence.

Convention CenterMission Statement

Orange County

Tourist Development Tax/ Convention Center

Budget WorksessionJuly 11, 2011

$135.8$130.5 $133.1

$140.1

$0

$20

$40

$60

$80

$100

$120

$140

$160

2008 2009 2010

Base amount TDT 1st-5th Revenues

TDT Revenues vs. Base Amount (in millions)

Community Venues

TDT Revenues vs. Base Amount (in millions)

Community Venues

$138.5$133.1 $135.8$118.5 $123.1

$0

$20

$40

$60

$80

$100

$120

$140

$160

2009 2010 2011

Base amount TDT 1st-5th RevenuesActual Actual Projected

Events Center Debt

Events Center Contract 6th Cent Revenues & Debt Service:

 Contract 6th Cent

PaymentMinimum Net Debt

Service Excess Revenue/Shortfall

2009 $14,672,396 $10,734,784 $3,937,612

2010 $15,140,101 $17,669,419 $(2,529,318)

2011 $17,819,419

2012 $18,284,419

2013 $18,596,419

2014 $18,870,419