FRANKLIN COUNTY TRANSIENT GUEST TAX

FRANKLIN COUNTY TRANSIENT GUEST TAX


Presentation Topics• Overview of Tax

• Statutes• Tax Specifics• Objectives

• History of Transient Guest Tax in Franklin County• Timeline• Increases• Contractual Activities – Ottawa Chamber of Commerce• CVB Board Creation• CVB Board Evolution• Visitors Center Development and Construction

• Current Issues• VIC Ownership issue• Financial Analysis• Outlook• Observations


Overview of Tax• K.S.A. 1980 Supp. 12-1696 et seq

• Established the “Transient Guest Tax”• “Guest Tax”• “Bed Tax”• “Lodging Tax”

• Tax Specifics - KSA 12-1697• Who Levy’s?

• City or County - Authorized by ordinance or resolution• Who Pays?

• Consumer/User• Businesses Collect the tax

• What?• Gross receipts of the Accommodation Broker – i.e. Hotel

• 2% Increments• The entity levying the tax determines amount


Overview of Tax cont.• Objectives

• KSA 12-1697: Same; tax levy by city or county; basis of tax; payment and collection; requirements prior to levy.• (a) “provide revenues to promote tourism and conventions”

• KSA 12-1696: Promotions of Tourism and Conventions; definitions.• (e) "Convention and tourism promotion" means: (1) Activities to

attract visitors into the community through marketing efforts, including advertising, directed to at least one of the five basic convention and tourism market segments consisting of group tours, pleasure travelers, association meetings and conventions, trade shows and corporate meetings and travel; and (2) support of those activities and organizations which encourage increased lodging facility occupancy;


Tax:Generate Revenue

Expend: Use for

promotion of County

Increase tourism and

visitors to community

Increase occupancy

& other economic

activity


Tax:Generate Revenue

Expend: Use for

promotion of County

Increase tourism and

visitors to community

Increase occupancy

& other economic

activity

Resource

Utilize

Objective

Result


History• Timeline

• 1984 – 2% established• 1988 – 4% established


History• Timeline


Ottawa Chamber of Commerce

Contractual


History• Timeline


• 1996 – CVB Advisory Board Formed• Initial Board appointed by County Commissioners


Contractual


History• Timeline


• 1996 – CVB Advisory Board Formed• Initial Board appointed by County Commissioners

• 2002 – VIC constructed


Contractual


History• Timeline


• 1996 – CVB Advisory Board Formed • Initial Board appointed by County Commissioners

• 2002 – Visitors Center constructed• 2003 – 6% established


Contractual


History• Timeline


• 1996 – CVB Advisory Board Formed • Initial Board appointed by County Commissioners

• 2002 – Visitors Center constructed• 2003 – 6% established• 2009 – Franklin County Visitor Information Center, Inc. formed

• Internal Revenue Code 501(c)(3)



History• Timeline

• 1984 – 2% established• 1988 – 4% established• 1996 – CVB Advisory Board Formed

• Initial Board appointed by County Commissioners• 2002 – Visitors Center constructed – CVB moved in• 2003 – 6% established• 2009 – Franklin County Visitor Information Center, Inc. (VIC)

formed• Internal Revenue Code 501(c)(3)

• 2011 – Transition Plan implemented• Separate from the Ottawa Chamber of Commerce

• 2013 – VIC Reformed into IR Code 501(c)(6)


• Visitors Center – 2011 E Logan, Ottawa, KS• Constructed in 2002

• $700,000• Grant Funding

• $600,000 – TE- 21 (Transportation Enhancement) – 21 (KDOT Grant)

• Applied through the Chamber• $100,000 – Kansas Sampler Festival

• Small Fundraisers for furnishings• Bennett Property – sold in 2014 for approximately $70,000• Sewer issues – extension needed to City System

• Approx. $100,000• Other Issues

• 2nd Floor remains unfinished• Would like to finish this – no cost estimate at this time


Current Issues• Transient Guest Tax Agreement By and between the County of Franklin

County, Kansas and Franklin County Visitors Information Center, Inc.• March 2011- Agreement signed

• “Deeds and home/land “will remain affiliated with the Ottawa Chamber of Commerce for up to three years from date of this agreement.”

• Transfer of Deed requires the approval of the Franklin County Commission

• Termination of agreement/relationship – Property reverts to County or party designated by the County Commission.

• Term of agreement• Automatic annual renewal• 90 day written notice


Financial Analysis• Assets – As of Dec. 31, 2014

• $176,353 – cash, etc.• $ 376,516 – Fixed AssetsTotal: $552,869


Review of 2014 Expenditures and RevenuesFY 2014 Revenue: $173,500


Review of 2014 Expenditures and RevenuesFY 2014 Revenue: $173,500

Interest98.75 0% Duratron

2,393.37 2%

Misc4,787.42

3%

Rent4,095.00

2%

Taxes-Transient Guest153,847.29

88%

Visitor Guide8,900.00

5%


Review of 2014 Expenditures and RevenuesFY 2014 Expenditures: $161,044


FY 2014 Expenditures: $161,044Gift Shop Items Sold

621.11 0%

Advertising11,500.59

7%Commodities-Misc

283.56 0%

Commodities-Supplies3,997.35

2%Contractual

21,211.78 13%

Contractual-Duratron73.98 0%

Contractual-Promotions8,601.41

5%

Contractual-Repairs2,337.47

1%Contractual-Utilities

8,780.24 5%Insurance

1,945.00 1%

Personnel82,710.79

51%

Taxes18,980.78

12%


Program Expense vs. Administrative Expense

Program Expense - This measure reflects what percent of its total expenses a charity spends on the programs and services it exists to deliver. Dividing a charity's program expenses by its total functional expenses yields this percentage.

Administrative Expense - This measure reflects what percent of its total budget a charity spends on overhead, administrative staff and associated costs, and organizational meetings. Dividing a charity's administrative expenses by its total functional expenses yields this percentage.


Program Expenses16,992.60

11%

Administrative Expenses144,051.46

89%

Program Expenses

Administrative Expenses

Activity cost Break Down


Expense Break Down• Administrative Expenses

• Personnel Costs - $82,710 or 57%• Taxes - $17,235 or 12%• Increases:

• $2,000+↑ Auto, Travel and Conference – 72% Increase• $4,500↑ Legal and Accounting – 500% Increase• $1,485↑ Quilt Block Expense – 115% Increase• $2,400+↑ Employee Insurance – 53% Increase• $2,188↑ Payroll – 3% Increase• $8,740↑ Property Taxes – 103% Increase• $425↑ Educational Expenses – 354% Increase

• Overall”• $13,720 Increase – 9%


Expense Break Down• Administrative Expenses

• Decreases:• Volunteer Services 92%↓• Hospitality 56%↓• $3,542↓ Technology/Web – 78%↓• Insurance cost - facilities


Expense Break Down• Program Expenses

• FY 2014• Reduced by $4,331↓ – 20%↓• $1,539↓ Advertising – 16%↓• $769↓ Billboards – 39%↓• $100↓ Co-Sponsorships – 6%↓• $2,938↓ Visitors Guide Expense – 40%↓

• $561↑ Promotions – 275%↑• $482 Special Events – 72%↑

This expense area seems to be decreasing


Observations• January 2014 Meeting minutes note that 2013 VIC

count was the lowest on record at 3,515• 2014 – 3,073 Weekly Avg: 59 Daily Avg: 8.54 visitors• Comparisons with last years numbers month to month – all

were declining• Previous numbers?

• Murray – 10,000 first couple years• Jason – 5,000 to 7,000 annually

• Breakout;• Mon – Fri 9 am to 5 pm = 8 hrs.• Sat 9 am to 4 pm = 7 hrs.• Sun noon to 4 pm = 4 hrs.Total: 51 hrs. weekly Annually: 2,652 hrs. open

Average Visitor per Hour: 1.15


Observations• Richard Smalley

• Kansas Dept. of Wildlife, Parks and Tourism• Web is having the biggest impact• Facebook, tripadvisor

• VIC Virtual Numbers• “Social Media has increased exponentially in the last year”

• “40.1 have used social media for their travel planning”• VIC Facebook grew by 48%

• 191,513 impressions and re-posts for 2014• VIC Twitter increased by 21%• VIC Website – 70,000+ views


• Questions

Documents

FRANKLIN COUNTY TRANSIENT GUEST TAX