EXECUTIVE SUMMARY

Recommendation to provide direction relative to reallocation of existing Tourist

Development Tax distributions to increase destination marketing efforts and the

annual accumulation of reserves for major beach renourishment.

OBJECTIVE: To obtain direction and authorization to initiate reallocations to the

existing tourist tax distributions and required Tourist Development Tax (TDT) Ordinance

amendments to increase funding for destination marketing and revise the Tourist

Development Tax Category “A” Funding Policy to increase accumulation of reserves for

major beach renourishment.

CONSIDERATIONS: Tourism is a major driver of Collier County’s economy

supporting 32,000 hospitality and tourism industry jobs and providing a $1.4 billion

annual economic impact. According to Research Data Services, the Convention and

Visitor Bureau’s (CVB) marketing consultant, each dollar invested in destination

advertising and promotion returned $40.79 in direct visitor spending. In addition many

County property and business owners were first introduced to Collier County through

visitation to our area as leisure or group meeting travelers.

A special subcommittee of the Tourist Development Council (TDC) was appointed in

March of 2011 to review the current tourist tax structure and make recommendations on

how the destination can benefit from a more robust year-round marketing and promotion

effort. The committee met ten times beginning April 1, 2011 and developed a list of

findings and conclusions on the current situation of the tourism industry in Collier

County. From those findings and conclusions, a set of recommendations was developed

for review and recommendation to the County Commission. Attachment 1 is an overview

of the TDC subcommittee recommendations that were supported and recommended by

the Tourist Development Council on March 16, 2012.

The TDC requested staff to take the eleven (11) recommendations to the various tourism

industry stakeholder groups for consideration and input. The result of that process is

shown on Attachment 2. A table summarizing the TDC recommendations is provided as

attachment 3.

The County Manager reviewed the TDC recommendations and the outcome of the

stakeholder input meetings and requested staff to prepare recommendations to accomplish

the goals of more destination marketing funding and more realistic reserve requirements

for future beach renourishment and beach park facilities.

The County Manager suggests a blended approach to tourist tax allocation changes

combining the TDC recommendations and the staff recommendations. Some of these

reallocations will require an amendment of Tourist Tax Ordinance No. 92-60, as

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amended, and some will require a change in the Category “A” Beach and Inlet Funding

Policy adopted by the BCC in October of 2005.

FISCAL IMPACT: The recommendations under consideration involve changing the

allocation of existing Tourist Development Tax revenues and redistributing interest

earnings. The proposals both increase the allocation for promotional activities and beach

renourishment through decreases to Beach Park Facilities and County Museum funding.

Staff’s proposal adds General Fund commitment to backstop potential Museum and

Beach Park Facility funding shortfalls. The following table compares the current TDT

allocation to staff’s and the TDC’s proposals.

The following table illustrates staff’s reallocation approach including interest and sweeps

of fund balances from designated funds as directed by ordinance:

In addition to the recommended changes detailed above which will result in annual

additional marketing and promotion dollars totaling $1,900,000, staff recommends that

the Board consider allocating one time dollars available within the disaster recovery

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advertising fund (196) in the amount of approximately $500,000 to supplement Category

A beach renourishment/pass maintenance projects and/or augment additional Category B

marketing and promotion. An ordinance amendment or policy change may be required

depending upon the use of these one time dollars. Lowering the ordinance mandated

minimum balance in the disaster advertising fund from $1,000,000 to $500,000 provides

the basis for this one time recommended distribution. Under this proposal, if the Disaster

Recovery Fund drops below $500,000 it will be backstopped by the General Fund.

GROWTH MANAGEMENT IMPACT: There is no growth management impact

associated with this Executive Summary.

LEGAL CONSIDERATIONS: Any amendment to the Tourist Development Tax

Ordinance No. 92-60, as amended, will require a super-majority vote. This item has been

reviewed by the County Attorney's Office, is legally sufficient for Board action and

requires a majority vote for approval. – CMG

RECOMMENDATION: To provide direction on the reallocation of current Tourist

Development Tax funding to increase destination marketing efforts and the annual

accumulation of reserves for major beach renourishment, and further, to solicit

recommendations from stakeholder groups prior to the Board’s consideration of

ordinance and/or policy changes.

Prepared by: Jack Wert, Tourism Director, Ed Finn, Senior Budget Analyst, OMB

Attachments:

1. TDC recommendations overview

2. Stakeholder meeting outcomes

3. Subcommittee recommendations table

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Attachment 1

Overview of the Tourist Development Council (TDC) Recommendations Process

The TDC Sub Committee of 5 members was appointed by Commissioner Hiller in March 2011

The group met 10 times over 12 months and made recommendations to the full TDC in

February 2012. TDC recommended 11 tactics for consideration by tourism industry

stakeholder groups

The overarching goal of the recommendations is to extend the reach of our destination

marketing efforts to attract more visitor spending to our communities

Final community supported recommendations will go back to TDC and then to BCC for

possible implementation

THE RECOMMENDATIONS:

1. Implement changes to the tourist tax allocations to increase the marketing and promotion

allocation from 25% of the total Tourist tax revenue (currently $ 2 million) to 45% generating a

budget of $4.0 million per year for destination marketing efforts

2. Reduce Beach Park Facilities annual allocation of Category A funds from 16.67% to 6%, or from

$2 million per year to $600,000 per year

3. Reduce Collier County Owned & Operated Museums Operating funding from tourist tax

funding after five years (FY 17) from 11% to 0%. Future funding (after 5 years) for museum

operations would revert to General Fund, supplemented by the following new revenue

sources:

a. Charge admission to non-residents

b. Apply for state, regional and national museum grants

c. Annual major fund raising efforts

d. Tourism Department would direct more TDC funds to heritage marketing

4. Increase allocation to Category A Beach renourishment funding from 33.33% to 34% annually

(Increase of $100 k)

5. Increase the allocation to tourism department administration from 11.60% to 12.60% (+$13 k)

6. Request County Commission (BCC) to recognize excess TDT revenue above current year

projections for immediate use in current fiscal year for destination marketing

7. Extend the allocation of interest earned on each TDT fund to Fund 184 for destination

marketing for an additional three years through FY 15

8. Aggressively pursue State and Federal cost share funding for our beach renourishment

projects through legislative lobbying and education

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Attachment 1

9. Increase the current budget ($100,000) for air service marketing funds by $50,000 per year to

attract more direct service and enhance and expand existing air service especially from U.S.

West Coast

10. Expand the CVB Community Relations efforts to encourage more local and regional media

coverage of the impact and importance of tourism to our community

11. Tourism Dept (CVB) should be included as an equal participant in economic development

planning for County

The projected results the first year of additional destination marketing funding:

a. 27,700 more Visitors

b. $15.6 million increase in direct visitor expenditures

c. $23.3 million increase in economic impact

d. $250,300 in additional TDT revenue

e. 500 new tourism industry jobs each year

f. Increased tax savings to Collier home owners

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STAKEHOLDER GROUPS POSITION ON TDC RECOMMENDATIONLODGING  CAC PARAB FRIENDS OF  NAPLES COC  MARCO COC EVERGLADES  COLLIER COMM SCORING CONSENSUSASSOC MUSEUMS COC ALLIANCE

Year Round Marketing‐ 25% to 45% Yes No Yes No Yes Yes Yes No 5 Yes/3 No Yes

Reduce Beach Park Fac. Allocation Yes No No No No Yes No Pos No 2 Yes/ 5 No/1 NP No

Reduce Museum Fund Allocation Yes Yes No Pos No Yes Yes No Yes to #195 5 Yes/2 No/1 NP YesMaintain #193

Increase Beach Renourishment Allocation Yes No Yes No Pos Yes No No Yes to 61% 4 Yes/3 No/1 NP Yes

Increase Tourism Admin Budget Yes No Pos Yes No Yes No Pos No Pos No 3 Yes/2No/2 NP Yes

BCC Recognize Excess TDT Revenue for Marketing  Yes No Pos Yes No Yes Yes  No Pos No Pos 4 Yes/1 No/3 NP Yes

Extend TDT Interest Earned for 3 Years for Marketing  Yes No Yes No Yes Yes No Pos No Pos 4 Yes/2 No/2 NP Yes

Pursue State & Fed Cost Share for Beach Renourishment Yes No Pos Yes No Yes Yes No Pos No Pos 4 Yes/1 No/3 NP Yes

Increase New Air Service Markeitng Funds Yes No Pos Yes No Pos Yes Yes No Pos No Pos 4 Yes/4 NP Yes

Expand CVB's Community Relations Efforts Yes No Pos Yes No Pos Yes Yes No Pos No Pos 4 Yes/4 NP Yes

Tourism Part of Economic Development Efforts Yes No Pos Yes No Pos Yes Yes No Pos No Pos 4 Yes/4 NP Yes

Increase Tourist Tax to 5 %*  No No Pos No No Pos No Pos No Pos Yes  No 1 Yes/3 No/4 NP No

* This was not a TDC recommendation, but was discussed by some groups

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Tourist Development Tax Reallocation  Attachment 3

TDC Subcommittee Recommendations

Goal: Increase Category B, Promotion, share of TDT from 36.6% to 57.6% ($3M) for year round destination marketing

RECOMMENDATIONS SYNOPSIS OF RECOMMENDATION REVENUE/COST STAKEHOLDER  ORDINANCE CHANGE/IMPACT CONCENSUS FUNDING POLICY CHANGE

 FROM TDC & SUBCOMMITTEE

1. Year Round Marketing Move from current 25% to 45% of tax revenue more paid advertising for 12 months vs 7 months

Goal: Add $2 million/year  to marketing to extend from current 5 months to 12 mos of destination marketing efforts

Yes Ordinance & Policy Change

2. Reduce Beach Park Fac. Allocation Current capital projects reserves of $8 million exceeds the average $600 K per year of planned. Reduce annual allocation from $2 mill to $600K

Addl $1.4 mill for dest marketing No Ordinance Change

3. Reduce Museum Fund Allocation In FY 17 reduce TDT allocation from $1.6 mill to $0.00 $1.6 million in addl destination marketing dollars after 5 years of new fund raising efforts by County Museums

Yes Ordinance Change

4. Increase Beach Renourishment Allocation 0.4% increase from Beach Park Facilities Capital projects to major Beach Renourishment 

Addl $500,000 to Fund 195 from 183 Yes Policy Change

5. Increase Tourism Admin Budget Additional staff in sales and sports Addl. $100k to Fund 194 Yes Ordinance Change

6. BCC Recognize Excess TDT Revenue for Marketing  TDT revenue over projections to use in the current FY for marketing

Addl. $500,000 per year on average Yes Ordinance Change

7. Extend TDT Interest Earned for 3 Years for Marketing  Treansfer interest earned on all TDT funds to Fund 184 for destination marketing

$200,000 per year for marketing Yes Policy Change

8. Pursue State & Fed Cost Share for Beach Renourishment Apply for all State & Federal cost sharing opportunities for beach renourishment

Reimbursements would vary every year but average $50% of County's annual outlay for beach sand projects

Yes Enact New Policy or Resolution

9. Increase New Air Service Markeitng Funds Add $50,000 per year to the budget for new or expanded direct air service to SW Florida

Annual cost increaes of $50,000 Yes No Changes Needed 

10. Expand CVB's Community Relations Efforts More local and regional coverage of tourism results, initiatives and impact to community

No additional cost associated with this initiative

Yes No changes needed 

11. Tourism Part of Economic Development Efforts Tourism involved with all efforts to attract new Business

No additioanl cost or revenue with this initiative

Yes No Changes needed 

FROM STAKEHOLDERSIncrease Tourist Tax to 5 %*  Move from 4% to 5%  with 100% dedicated to 

destinatin marketingBased on current TDT revenue this would generate $3.6 million for destination marketing

No Ordinance Change

* Not a TDC recommendation‐ only discussed by stakeholders

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