1. Tourist Development Tax June 9, 2009 Orange County

2. l l Background l l Revenue Outlook l l TDT Expenditures l l Summary Outline

3. l l Background l l Revenue Outlook l l TDT Expenditures l l Summary Outline

4. TDT Short-term lodging tax State TDT law has different uses for 1 st to 4 th cents, 5 th cent, and 6 th cent levies Background

5. 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

6. First Four Cents - for priority tourism related expenses in the Tourist Development Plan prepared by the Tourist Development Council and approved by the BCC Fifth Cent for convention and sports debt Sixth Cent – Sports debt and Tourism promotion (approved July 2006) Background

7. Historical Revenue Growth: 10.5% Avg Annual TDT Growth (1979-2008) Background

8. Inception to date growth rate is 10.5% 15 year TDT growth rate is 5.7% 5 year TDT growth rate is 8.6% Background

9. l l Background l l Revenue Outlook l l TDT Expenditures l l Summary Outline

10. Collection Trends (in millions) * Projected Revenue Outlook

11. l TDT collections were up by 3.1% in FY08 l Fiscal year TDT collections are down by 15.8% l February & March 09 collections down by 28%; April collections down by 15% Revenue Outlook

12. l Hotel occupancy is down l Room rates are down l Projections for FY09 now indicate an 18% decrease from FY08 actual collections l FY10 budget will be set at the same level as our FY09 projections Revenue Outlook

13. l l Background l l Revenue Outlook l l TDT Expenditures l l Summary Outline

14. l l First 5 Percent TDT Expenditures

15. 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

16. Debt Service Debt Reserves OCCC Operations Transportation O/OCCVB Arts and Other TDT Revenues Priority Funding Priority funding based on revenue availability and BCC approval TDT Expenditures (1 st -5 th ) TDT Reserves

17. Projected Expenses (in millions): 20092010 Debt Service$ 73.2$ 73.2 Convention Center Operations 10.0 10.0 O/OCCVB Funding 19.6 19.6 Convention Center Capital 10.0 10.0 Arts 3.4 2.8 History Center 2.8 2.8 Hotel Surcharge Repayment 2.0 2.0 Other.8.7 Contract TDT Payment for Venues 9.6 0.0 Total $131.4 $121.1 TDT Expenditures (1 st -5 th )

18. In Millions Actual Est. Total Revenues Est. Actual TDT Model Revenues vs. Expenses TDT Expenditures (1 st -5 th )

19. Debt Service Debt Reserves OCCC Operations Transportation O/OCCVB Arts and Other TDT Revenues Priority Funding Priority funding based on revenue availability and BCC approval TDT Expenditures (1 st -5 th ) TDT Reserves

20. OCCC Historical Operating Subsidy: l l Operations Subsidy is a direct TDT payment Fiscal Year Operating Revenue Operating Expense Subsidy Needed 09-10*$41,800,000$57,300,000$15,500,000 08-09* $43,500,000 $59,600,000 $16,100,000 07-08 $58,423,857 $67,321,035 $ 8,899,178 06-07 $50,485,445 $60,859,947 $10,374,502 05-06 $53,248,069 $58,596,836 $ 5,348,767 04-05 $48,407,724 $57,524,114 $ 9,116,390 * Projected TDT Expenditures (1 st -5 th )

21. Debt Service Debt Reserves OCCC Operations Transportation O/OCCVB Arts and Other TDT Revenues Priority Funding Priority funding based on revenue availability and BCC approval TDT Expenditures (1 st -5 th ) TDT Reserves

22. Arts & Other Expenditures 2009: Tax Collection Expense$400,000 Central Florida Sports Commission$135,000 Florida Classic$137,500 Arts$3,360,000 NBC Action Sports Tour (X-Games)$75,000 Orange County Regional History Center$2,814,000 Repay Hotel Surcharge$2,000,000 Contract TDT Payments for Venues $9,604,300 TDT Expenditures (1 st -5 th )

23. Debt Service Debt Reserves OCCC Operations Transportation O/OCCVB Arts and Other TDT Revenues Priority Funding Priority funding based on revenue availability and BCC approval TDT Expenditures (1 st -5 th ) TDT Reserves

24. $71m Reserve for Debt Service $56m Reserve for OCCC $127 million of TDT reserves as of April 30, 2009 TDT Reserves

25. Historical CIP: l l CIP is paid from available TDT reserves Fiscal YearActual CIP 08-09*$15,800,000 07-08$4,600,000 06-07$4,860,000 05-06 $4,240,000 TDT Expenditures (1 st -5 th ) * Projected Orange County Convention Center

26. TDT collections are down due to the economic recession Reduced OCCC attendance due to business travel restrictions Additional Operations Subsidy Needed 2009 TDT Budget Challenges TDT Expenditures (1 st -5 th ) Orange County Convention Center

27. Reduce positions - $3m reduction in wages & benefits Reduce discretionary expenditures Utilize CIP/reserve funding to increase operations subsidy Consider utilizing Arts capital allocation for convention center operations subsidy 2009 & 2010 TDT Budget Strategies TDT Expenditures (1 st -5 th ) Orange County Convention Center

28. Continue to monitor revenues & TDT collections Continue to evaluate efficiencies & operational savings Evaluate operating subsidy and determine if future adjustment is needed Long Term Strategies TDT Expenditures (1 st -5 th ) Orange County Convention Center

29. Potential TDT Refunding Partial refunding of 1998 TDT bonds for savings Callable October 2009 Depends on volatile municipal & credit markets TDT Expenditures

30. Potential TDT Refunding Minimum savings threshold of 4% $4.4m total net present value savings $470k annual savings Will be on BCC consent agenda June 23 rd Briefings will offered TDT Expenditures

31. First Five Percent City planned to use excess TDT payments from first five percent to: Finance construction of performing arts center (first priority) Finance renovation of Citrus Bowl (second priority) Community Venues

32. TDT reserves met the $130 million requirement in September 2008 City receives all collections above “base amount” Base amount is $133.1 million in FY09 First 5 Percent Community Venues

33. TDT Revenues vs. Base Amount (in millions) ActualProjected Community Venues

34. TDT Revenues vs. Base Amount (in millions) ActualProjected Community Venues

35. TDT Revenues vs. Base Amount (in millions) ActualProjected Community Venues

36. TDT Revenues vs. Base Amount (in millions) ActualProjected Community Venues

37. l l 6th Percent TDT Expenditures

38. l County approved 6th percent in July 2006  ½ is for additional advertising to promote tourism (front loaded for the first two years) ½ is for City to help finance the new arena for the City/Magic TDT Expenditures

39. l CVB received 100% collections for the first two years - $56.6 million l 10 year payback City/Magic receive 50% of 6 th penny plus $2.8 million CVB receives 50% of 6 th penny minus $2.8 million l After payback, CVB and City/Magic will have received 50% each TDT Expenditures

40. Contract 6th Cent Revenues & Debt Service: Projected Contract 6th Cent Payment Minimum Net Debt Service Excess Revenue/Shortfall 2009 $14,328,065 $10,734,784 $3,593,281 2010 $14,328,065 $17,669,419 $(3,341,354) 2011 $15,584,709 $17,819,419 $(2,234,710) 2012 $16,841,353 $18,284,419 $(1,443,066) 2013 $18,221,778 $18,596,419 $(374,641) 2014 $19,738,208 $18,870,419 $867,789

41. l l Background l l Revenue Outlook l l TDT Expenditures l l Summary Outline

42. l TDT collections are down due to the recession l Attendance & operating revenues for the OCCC are down l Additional OCCC operations subsidy will be needed l Challenges for Community Venues Summary

43. Tourist Development Tax June 9, 2009 Orange County