O-2007-3024-F - Laserfiche WebLink

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~~1 ~MIt City of La Porte Interoffice Memorandum . FIDENTIAL To: Ron Bottoms, City Manager 15.>~ Lj. 1 :; , ;J J j. x G ;~ ' 25,) . oj, From: John Joerns, Assistant City (.^ .~. <.dJ bAA do .30 ) bD'D Date: November 14, 2007 Subject: Bay Area Convention & Visitors Bureau (BACVB) Background The City entered into an agreement in April of 2006. The agreement essentially states that the City would pay quarterly 15% of the Hotel/Motel Tax Revenues with a fmal reconciliation payment that would bring total payments to 15% of the actual annual Hotel/Motel Tax Revenues. I have learned that the City did not make the reconciliation payment for FY 05-06 and technically that amount due BACVB from-that period is $13,445. However, after meeting with BACVB, I confrrmed they are not pursuing that amount from FY 05-06. Last Budget Year 06-07, the City did not budget for the increases in HoteI/Motel Revenues that would affect payments to BACVB. · City Budgeted $30,000 for BACVB · Based on actual revenue - amount due per agreement $59,800 This amount due BACVB for the FY 06-07 - reconciliation payment over the budgeted amount is $29,800. For FY07-08: · The City again budgeted $30,000 for their services · Did not increase the budget amount to equal the projected 15% x projected Hotel/Motel revenue of $415,000 for a projected payment to BACVB of$62,250. Our agreement has a 60-day notification clause for termination. I met with BACVB and informed them that the City again only budgeted $30,000 for this FY and that this year the projected expenses for the Hotel/MoteI Fund exceed the revenues. I informed BACVB that I would soon notify them of a proposed termination (letter attached) by enacting the 60 day notification. During this 60 day period we can perhaps further negotiate the amounts due. The BACVB staff has visited with their board chairman regarding the potential to renegotiate the agreement. The main issue of$415,000 from BACVB's perspective will be that other members pay the 15%. At this time BACVB has offered "catch up" payments but desires to receive the full amount. The City could also determine that the services rendered by BACVB is worth the 15% (est. $62,250). We could then pay the full amount using approximately $32,250 in fund balance and appropriately $30,000 budgeted in FY08-09. I have asked staff to evaluate the services received from BACVB. JJ/ml c: Michael Dolby, Interim Director of Finance ~