Less money would be available for promoting Sarasota County to tourists
During their June budget workshops, the Sarasota County commissioners talked at length about the need for an in-depth discussion regarding allocations of the Tourist Development Tax (TDT) revenue the county receives.
The money generated by the 5% tax on lodging in the county is apportioned to a variety of purposes — from beach maintenance to grants for arts and cultural organizations to general promotions of the area. However, from time to time over the past several years, board members have broached the idea of amending the county’s TDT ordinance to divert more of the revenue into a fund for new attractions. That way, the county’s tourism industry would not be so reliant on the beaches, commissioners have said.
County Administrator Jonathan Lewis told the board members in June that he was scheduling time during their final budget workshop — set for Aug. 22 — for a detailed discussion of how the “bed tax” revenue should be used.
Just two months later, with red tide repelling tourists from the beaches — and with a new report detailing the need for repairs and renovations at Ed Smith Stadium that will total about $16.5 million over the next 10 years — the commissioners made only one decision about TDT revenue. They concurred with Lewis on adjustments to enable staff to undertake projects in the 2019 fiscal year at Ed Smith Stadium in Sarasota and the Buck O’Neil Baseball Complex at Twin Lakes Park, at a cost of $3,246,953.
Of that amount, $2.3 million will come out of the TDT revenue “pot” for Capital Projects and Events, while the remainder is available from the TDT fund set aside for sports stadiums, Carolyn Brown, director of the county’s Parks, Recreation and Natural Resources Department, explained to the board.
Lewis pointed out that the proposed county budget for FY19 reflects the extra spending for Ed Smith Stadium.
However, Brown continued, staff estimates a $1 million shortfall in the 2020 fiscal year, which represents about 4% of the annual TDT revenue. Therefore, staff has proposed a reduction in the “pot” of money that goes to Visit Sarasota County for promotions to bring visitors to the county.
Instead of keeping the promotions portion of the TDT revenue at the 30% mark, Brown said, Visit Sarasota County would get 25% of the bed tax revenue in FY20.
She and her staff have scheduled time for a discussion of that option with the County Commission during one of its regular meetings in October, she added.
“The 5% wiggle room equates to how many dollars?” Chair Nancy Detert asked.
Kim Radtke, director of the county’s Office of Financial Management, replied, “$1.2 million.”
Commissioner Paul Caragiulo asked whether state law requires that TDT revenue a county has collected be spent within a certain time frame.
Lewis replied that he was not aware of any such state regulation.
Under the terms of the agreement the county signed with the Baltimore Orioles to bring the team to Sarasota County for Spring Training, Brown explained, the county is “fiscally responsible” for any maintenance expenses for the stadium and the O’Neil complex that exceed the amount in the “CAPX” fund for the team. The county and the Orioles each contribute $150,000 per year to that Capital Expenditures fund, she added.
The team has been holding Spring Training at Ed Smith Stadium since 2010.
“We can’t forget about the Orioles and the repairs [at Ed Smith Stadium] just because we have the Braves,” Commissioner Alan Maio pointed out.
He was referring to the fact that the Atlanta Braves will relocate their Spring Training operations to a new stadium complex in the West Villages outside North Port. The team plans to play its final 2019 Spring Training game at the facilities, with the first full season scheduled in 2020.
“We love the Braves; we also love the Orioles,” Maio said.
“Lots of people show up for those games,” Chair Detert said of the Orioles’ Spring Training in Sarasota. “It adds a lot of vitality to the town and the county, and the Orioles have been great community partners.”
She pointed out that the team conducts “outreach to lots of kids. “It’s a real upper to have [the Orioles] here.”
“We’re very fortunate to have the relationship that we have with the Orioles,” Commissioner Caragiulo said.
Staff and the board do need to have “real transparency,” nonetheless, he added, so members of the public understand the situation.
The Mote funding question
During her Aug. 22 presentation, Brown also reminded the commissioners about the interest they expressed in June — underscored with a unanimous vote — for staff to work on a potential reallocation of TDT revenue to help pay for the new $130-million Mote Marine Aquarium.
Mote has proposed building it on county-owned property at Nathan Benderson Park, which is close to Interstate 75 and University Parkway.
In a May 17 letter to County Administrator Lewis, Michael P. Crosby, president and CEO of Mote, asked for $20 million in county funds to help pay for the project. During the June 12 County Commission meeting, Lewis said the only option for providing that money would be a reallocation of TDT revenue.
On Aug. 22, Brown also noted that the board had asked staff to obtain a peer review of Mote’s business plan for the project. That work will be finished within the next few weeks she said; then, it will be provided to the commissioners.
“We need to keep in mind,” she continued, that any funds for the aquarium would need to come out of the same TDT account for promotions that she earlier had mentioned in regard to funding the Ed Smith Stadium/Buck O’Neil projects.
Brown provided the commissioners a slide showing how the Promotions fund could be adjusted to cover the funding needs for the sports facilities and the aquarium.
She also showed the board a slide that noted the amount of debt service the county would be expected to pay if the board authorized staff to borrow money for the aquarium. For example, a $5-million borrow over 10 years would necessitate annual debt service of $600,000. If the county borrowed the full $20 million and paid off that loan over 30 years, the debt service would be about $1,240,000 per year, Brown said. The latter figure, she noted, represents about 5% of the total TDT revenue expected in the 2020 fiscal year.
“I can’t wait for the day, finally, when that big, giant iconic building is built,” Maio said of the aquarium. Contributors to Mote’s fundraising campaign will cover 90% of the expense of that project, he pointed out.
Now and the future
After Brown discussed the options regarding reallocation of part of the TDT money Visit Sarasota County uses to promote the community to visitors, Maio said, deadpan, “What a wonderful time to cut [the tourism office’s] budget, as red tide is the gift that keeps giving.”
County Administrator Lewis pointed out to the commissioners that TDT revenue has averaged an increase of 4.85% a year over the past 20 years, as illustrated in another staff slide. “That’s a pretty consistent number.”
A chart Office of Financial Management staff had prepared showed that, after the 5% levy went into effect in the county in 2011, the lowest year-over-year increase in the TDT revenue was 5.3%, from the 2015 fiscal year to the 2016 fiscal year. The largest was 14%, from FY13 to FY14.
The collections have set new records each year since 2012. The total for the 2017 fiscal year was $21,397,206.
The initial levy in Sarasota County was 2% in 1988, Brown noted. When the TDT revenue reaches $30 million a year, then the county becomes eligible to impose an additional 1% levy, for a total tax of 6%, she added.
That could happen as soon as 2024, Brown pointed out.
“I understand that there’s certain concern out there,” Commissioner Caragiulo said of the negative impact red tide could have on TDT collections for the remainder of the fiscal year, which will end on Sept. 30. “I’m in the hospitality industry.” (His family has an eponymous restaurant in downtown Sarasota.)
Red tide, Caragiulo pointed out, “is not something that happens every day, so I think we really need to focus on that.”
“I think there are years when you’re going to have to spend more money on advertising and promotion,” he said. The percentage of TDT funds allocated to Visit Sarasota County for those purposes, he continued, might need to change year-to-year, depending upon specific circumstances.
Still, he pointed out, spending TDT revenue on attractions “can make a huge difference for the people that actually live here, as well.”
Overall, Caragiulo said, “I think that what is required is some prudence with expenditures.” Being able to hold onto the money in an account until it is needed, he added, “is not a bad thing.”
“Sometimes you need to promote hotels/motels because you have dead fish on the beach, and you have to say we’re back in business,” Chair Detert added.
“I like the creativity that Carolyn and all of you have put into this budget,” Detert told County Administrator Lewis. “And I don’t think that anyone that we have funded in the past few years should feel insecure about it.”
Caragiulo indicated that he still believes a future, in-depth discussion of TDT allocations “is warranted, given the dollars that we’re talking about.”
It would be great if the county could reach the $30-million mark with TDT collections in 2024, Commissioner Charles Hines said. “We’re going to have an interesting few years in making decisions on [the allocations of that revenue].”
Ultimately, Caragiulo said, “This is a resource management exercise.”
1 thought on “Shift in county allocations of ‘bed tax’ revenue proposed to cover repairs at Ed Smith Stadium and to help pay for Mote Marine aquarium”
Photos of dead fish littering our beaches, stories about red tide killing manatees, dolphins, and sharks, and reports about the detrimental health effects of red tide are appearing in the media all over the world. Rather than spending money on marketing other attractions, the powers that be should be spending tourist tax dollars on cleaning up the beaches – Sarasota County’s #1 attraction. Tourists can find plenty of attractions to visit in other cities but the beaches can’t be replicated. Tourist tax dollars should have been allocated for cleanup from day one.
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