HomeMy WebLinkAboutResolution 5230-05-2020 A Resolution
NO. 5230-05-2020
APPROVING AN AMENDED BUDGET AND EIGHT-YEAR SERVICE PLAN FOR
FORT WORTH PUBLIC IMPROVEMENT DISTRICT NO. 18 (TOURISM PID)
FOR FISCAL YEAR 2019-2020
WHEREAS, pursuant to Resolution No. 4837-08-2017, the City Council established the Fort
Worth Public Improvement District No. 18 ("Tourism PID") on August 29, 2017;
WHEREAS, in accordance with Chapter 372 of the Texas Local Government Code, on
September 17, 2019, the City Council approved a budget for the 2019-2020 fiscal year and an eight-year
service plan for the Tourism PID pursuant to M&C 19-0152;
WHEREAS, pursuant to City Secretary Contract No. 50298, the City has contracted with the
Fort Worth Tourism Public Improvement District and Fort Worth Convention and Visitors Bureau
(collectively, "Contractors") to manage the day-to-day administration of the Tourism PID;
WHEREAS, in accordance with the Texas Local Government Code, the City has assigned to
Contractors the responsibility for preparing the annual budget and service plan for the Tourism PID;
WHEREAS, City staff annually conducts mid-year reviews of the Tourism PID budget to ensure
that actual Tourism PID expenditures correspond with budgeted expenses; and
WHEREAS, in consultation with the Contractors regarding actual Tourism PID expenditures
and necessary programs and services required to date, City staff recommends that the City Council
approve an amended budget for the Tourism PID for the 2019-2020 fiscal year and eight-year service
plan.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
FORT WORTH, TEXAS THAT:
1. The Fiscal Year 2019-2020 Budget and Eight-Year Service Plan for the Tourism PID is
hereby amended and approved in accordance with Exhibit "A", which is attached hereto.
2. This Resolution shall take effect immediately following its adoption.
Adopted this 5111 day of May 2020.
ATTEST.-,
-�of Fo/T
By: \ !Z
Mary J. Kayser, ij Se eta 6:'
�'�XAS
EXHIBIT A
Fort Worth Tourism Public Improvement District
Fiscal Year 2020 2021 2022 2023 2024 2025 2026 2027 8-Year
TPID Collections $ 2,860,483 $ 5,410,922 $ 5,678,718 $ 5,959,904 $ 6,255,149 $ 6,565,158 $ 6,890,665 $ 7,232,449 $ 46,853,448
Use of Fund Balance $ 953,469
Budget Revenues $ 3,713,951
PetitionCateKories Estimated Estimated Estimated Estimated Estimated Estimated Estimated Estimated Estimated
Incentives&Sales Efforts $ 1,642,358.00 $ 2,276,267 $ 2,390,080 $ 2,509,584 $ 2,635,064 $ 2,766,817 $ 2,905,158 $ 3,050,416 $ 20,175,744
Marketing and Research(Promotion/Advertising) $ 1,281,061.00 $ 1,874,573 $ 1,968,301 $ 2,066,717 $ 2,170,052 $ 2,278,555 $ 2,392,483 $ 2,512,107 $ 16,543,849
Site Visits&Familiarization Tours $ 206,438.00 $ 535,592 $ 562,372 $ 590,490 $ 620,015 $ 651,016 $ 683,566 $ 717,745 $ 4,567,234
Cultural Enhancements through Marketing and
promotion of the Arts $ 304,25D.00 $ 401,694 $ 421,779 $ 442,868 $ 465,011 $ 488,262 $ 512,675 $ 538,309 $ 3,574,848
Operations&Administration $ 224,844.00 $ 267,796 $ 281,186 $ 295,245 $ 310,007 $ 325,508 $ 341,783 $ 358,872 $ 2,405,241
City Administrative Fee $ 55,000.00 $ 55,000 $ 55,000 $ 55,000 $ 55,000 $ 55,000 $ 55,000 $ 55,000 $ 440,000
$ 3,713,951 $ 5,410,922 $ 5,678,718 $ 5,959,904 $ 6,255,149 $ 6,565,158 $ 6,890,665 $ 7,232,449 $ 47,706,916
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City of Fort Worth, Texas
Mayor and Council Communication
DATE: 05/05/20 M&C FILE NUMBER: M&C 20-0267
LOG NAME: 13HOT TPID DEFERRAL 2020
SUBJECT
Adopt Ordinance Temporarily Suspending Certain Provisions and Extending Deadlines for Remittance of Hotel Occupancy Taxes(HOT)and the
Payment of Tourism Public Improvement District Assessments(PID) and Eliminating Penalties, Interest, and Fees for Certain Tourism PID
Assessments and Freezing Such Amounts for Certain HOT Collections;Adopt a Resolution Amending the Tourism PID's Fiscal Year 2019-2020
Budget and Eight-Year Service Plan,and Adopt Appropriation Ordinance(ALL COUNCIL DISTRICTS)
RECOMMENDATION:
It is recommended that the City Council:
1. Adopt the attached ordinance suspending the following until September 1,2020:
a. The application of those portions of Section 2.6 of Resolution 4837-08-2017 and Section 4 of Ordinance No.23838-09-2019 that provide
for the collection of Tourism Public Improvement District Assessment, penalties, interest,and fees in the same manner as hotel occupancy taxes
and certain portions of Article ll, Chapter 32 of the City Code such that the following will apply:
(i) Tourism PID Assessments that would otherwise be due and payable in March,April,May,June,July,or August of 2020 pursuant to Article II,
Chapter 32 of the City Code are all now due and payable on September 1,2020;and
(ii) No penalty,interest,or fee will be imposed on Tourism PID Assessments that would ordinarily be due in March,April, May,June,July,or
August 2020 so long as the same are paid in full on or before September 1,2020.
b. The application of Article II,Chapter 32,Sections 32-18(c)(relating to penalty)and 32-18(d)(relating to interest)for hotel occupancy taxes
that came due in March or April 2020 such that any interest or penalty that was incurred prior to the adoption of this ordinance will remain payable
without any further penalty or interest applying so long as the hotel occupancy taxes that came due in March and April 2020 and all related amounts
are paid in full on or before September 1,2020;and
C. The application of Article II, Chapter 32, Section 32-18 relating to remittance, delinquency, penalty, and interest for hotel occupancy taxes
that would otherwise be due and payable in May,June,July,or August of 2020, such that no penalty or interest will apply with respect to such
amounts so long as the hotel occupancy taxes that would otherwise be due in May,June,July,and August are paid in full on or before September
1,2020.
2. Adopt the attached Resolution amending the Tourism PID's Fiscal Year 2019-2020 Budget and Eight-Year Service Plan, reducing
expenditures and total budget to reflect a reduction in projected revenues,a portion of which is proposed to be offset by use of fund balance;and
3. Adopt the attached appropriation ordinance increasing estimated receipts and appropriations in the Fort Worth Public Improvement
District 18—Tourism Fund in the amount of$853,468.00,from available, unreserved fund balance,to partially offset projected lost revenues of
$2,295,395.00.
DISCUSSION:
This Mayor and Council Communication (M&C) has two main purposes: (1)to provide a deferral period to hotels that delays the requirement for
them to make payment of hotel occupancy taxes(HOT)and Tourism Public Improvement District(Tourism PID)Assessments without most interest,
penalties,or other fees applying;and(2)to amend the corresponding Tourism PID's Fiscal Year(FY)2019-2020 budget and eight-year service
plan.
One of the industries hardest hit by the COVID-19 situation has been tourism and,specifically,the hotel industry. In Fort Worth,the hotel occupancy
rate has dropped from approximately 80%to single digits. In some cases, hotels have closed because they were losing too much money to stay
open without guests.
I. Deferral of HOT and Tourism PID Assessments
At this time,the biggest issue for hotels is the need for cash so that they have an opportunity to stay in business. A few weeks ago,the Hotel
Association of Tarrant County and the Texas Hotel and Lodging Association approached the City requesting this deferral as a means to help Fort
Worth hotels stay afloat during this unprecedented time.
Upon adoption of the attached ordinance,the HOT and Tourism PID Assessment payment deferrals for Fiscal Year 2020 will operate as follows:
A.HOT
Principal Principal Arnowit Penalties,
Amount Interest,and Penalties,Interest,
(Original Due (Deferral Due Fees and Fees (Deferral
Date) Date) Due Date)"
(Accrual Date)
Deferred to Sept. 1 -
Deferred to Sept. + ems that have
March 1 1 March 26 accrued from
delinquency date to
May 4,2020
Deferred to Sept. 1-
Deferred to Sept. April 26 Amounts that have
April 1 1 accrued from
delinquency date to
May 4,2020
May 1 Deferred to Sept. May 26 Def>iTed to Sept. 1
June 1 Deferred to Sept. June 26 Deferred to Sept. 1
July 1 Deferred to Sept. .iuty,26 Defcrred to Sept. 1
July 0 1
Augtist 1 Deferred to Sept. August 26 Deferred to Sept. 9
August.14Sept�flnbm 9 No deferral September 26 No deferral 'For any unpaid principal amounts attributable to
and owed for the months of February—July of
2020,fees,penalties,and interest will resume
October 1 No deferral October 26 No deferral September 1,2020
As a condition to receiving the deferral,the
hoteliers will be required to report their gross and net room revenue(gross room revenue subject to HOT less allowable exemptions)during the
deferral period so the City can record a receivable to track the amounts due and payable. This information will also provide valuable insight into
the pace of recovery of the travel and tourism industries.
The revenues from the local HOT were pledged to bonds the City issued for the construction of Dickies Arena. Staff analyzed the financial
situation and determined that granting a deferral as proposed would not interfere with the City's ability to make the debt service payments that will
become due during the brief period while the deferral is in effect. In addition,by allowing the hotels to defer payments in the short term,the City will
be aiding in their liquidity and assisting them in their efforts to survive the current situation,thereby enhancing HOT as a revenue source in the
longer term. Based on these factors and the fact that the full amount of HOT would be due and payable after the deferral ends,the City's Bond
Counsel determined that a deferral would be allowable under the terms of the Arena bonds.
B.Tourism PID Assessments
Principal Principal Amount Penalties,
Amount Interest,and Penalties,Interest,
(Original Due (Deferral Due Fees and Fees (Deferral
Date) Date) Due Date)*
(Accrual Date)
Febrwry March 1 Deferred to Sept. M7rc1)26 Not imposed so long
1 as paid by Sept. 1
Deferred to Sept. April 26 Not imposed so long
March �tpriJ 1 1 as paid by Sept. 1
May 1 Deferred to Sept. May 26 Deferred to Sept. 1
June 1 Deferred to Sept. June 26 Deferred to Sept. 1
Jul 1 Deferred to Sept. July 26 Deferrer:to Sept. 1
August 1 Deferred to Sept. August 26 Deferred to Sept. 1
August September 1 No deferral SeVe twie7 26 No deferral
q, *For any unpaid principal amounts attributable to
September 0 L:tob r 1 No deferral October 26 No deferral and owed for the months of February—July of
2020, fees, penalties, and interest will resume
September 1,2020
if. Tourism PID Mid-Year Adjustments
The Tourism PID is funded through a 2%assessment on the consideration received from occupancy of any sleeping room furnished by a hotel in
the Tourism PID. Due to the steep drop in hotel occupancy rates as a result of the COVID-19 situation,Tourism PID Assessment revenue is now
projected to be 45%less than originally budgeted.
Consequently,staff has proactively worked with the Fort Worth Tourism Public Improvement District Corporation(FWTPIDC)and the Fort Worth
Convention and Visitors Bureau(CVB),which are the contracted Tourism PID managers,to conduct a mid-year review of the Tourism PID's FY
2019-2020 budget.City staff,FWTPIDC,and CVB have identified the need to decrease the Tourism PID Assessment revenue by$2,295,395.00
to account for the 45%reduction in assessment revenue. FWTPIDC and CVB request the use of fund balance in the amount of$853,468.00 to
cover operational expenses for the remainder of the fiscal year.The budgeted expenses show a reduction in each category line item for the current
fiscal year service plan(see table below).
Revenue Adjustments:
Line Item to Previously Recommended Amended
be Adjusted Approved FY20 Mid Year FY20 Budget
Budget Item Adjustment Item
PID $5,155,878.00 $(2,295,395.00) $2,860,483.00
Assessments
Use of Fund _ $853,468.00 $853,468.00
Balance
Total
Budget $5,155,878.00 $(1,441,927.00) $3,713,951.00
Revenue
Expenditure Adjustments:
Previously Recommended Amended
Line Items to be Approved Mid-Year FY20 Budget
Adjusted FY20 Budget Adjustment Item
Item
Incentive&Sales $2,167,873.00 $(525,515.00)$1,642,358.00
Efforts
Previously Recommended Amended
Line Items to be Approved Mid-Year FY20 Budget
Adjusted FY20 Budget Adjustment Item
Item
Marketing and
Research $1,785,307.00 $(504,246.00)$1,281,061.00
(Promotion/Advertising)
Site Visit& $510,088.00 $(303,650.00) $206,438.00
Familiarization Tours
Cultural Enhancements
through Marketing and $382,566.00 $(78,316.00) $304,250.00
Promotion of the Arts
Operations&
Administration $255,044.00 $(30,200.00) $224,844.00
Totals $5,100,878.00 $(1,441,927.00)$3,658,951.00
Staff supports FWTPIDC's and CVB's recommended mid-year budget adjustments. Upon approval of the above recommendations,the total
budgeted expenses for FY 2019-2020 will be$3,658,951.00.This mid-year budget adjustment will decrease the unaudited, unassigned fund
balance by a total of$853,468.00.The revised Budget and 8-Year Service Plan will take effect upon approval by City Council.The proposed
changes to the Tourism PID's FY 2019-2020 budget complies with the City's reserve requirements
The Tourism PID is located in ALL COUNCIL DISTRICTS.
A Form 1295 is not required because this M&C does not request approval of a contract with a business entity,
A Form 1295 is not required because:This M&C does not request approval of a contract with a business entity.
FISCAL INFORMATION/CERTIFICATION:
The Director of Finance certifies that upon approval of the above recommendations and adoption of the attached appropriation ordinance,funds
will be available in the current operating budget,as appropriated of the FWPID#18-Tourism Fund. Prior to any expenditure being incurred,
the Financial Management Services Department has the responsibility to validate the availability of funds.
Submitted for City Manager's Office by: Jay Chapa 5804
Originating Business Unit Head: Reginald Zeno 8500
Additional Information Contact: John Samford 2318