Board of Directors Regular Meeting Agenda


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Meeting Date: 11/19/2014  

SUBJECT MATTER:
Receive, consider and act upon renewal of the Service Agreement with The Woodland Convention & Visitors Bureau;
FISCAL IMPACT:
The attached Service Agreement reflects the funding methodology approved by the Board in the 2015 Budget for The Woodlands Convention & Visitors Bureau.
BACKGROUND:
Annually, The Woodlands Township and The Woodlands Convention & Visitors Bureau (the CVB) enter into a Service Agreement. The Agreement outlines the services to be provided by each party as well defines the Township’s funding requirements for the budget year.

For the years 2010 – 2014, the Township’s funding requirements have been tied directly to the CVB’s budget. Specifically, the Township was required to fund the difference between (1) CVB’s budgeted expenditures and (2) the sum of revenues generated by a 2% supplemental hotel occupancy tax, grant/fare/catering revenues associated with the Waterway Cruisers, sponsorships, and program and event sales. For example, the CVB’s budgeted expenditures for 2014 total $3.4 million. Assuming the revenue sources listed above generate $2.3 million during calendar year 2014, the Township’s funding requirements will total $1.1 million for the year. Funding provided by the Township has historically been allocated from sales tax revenues.

During the development of the 2015 budget, the Township Board discussed and approved changes to how the CVB will be funded for the upcoming calendar year. The first change is that the CVB will no longer receive FTA grant funding to help offset the costs of operating the Waterway Cruisers. The second change is that the CVB operations will be fully funded by hotel occupancy tax, with the exception of revenue earned from CVB sponsorships, program/event sales and Waterway Cruiser fares. Hotel tax revenues allocated to the CVB will be generated by (a) the 2% supplemental hotel tax, and (b) the base 7% hotel tax in excess of the amount required for debt service payments on the Township’s outstanding revenue bonds. While the CVB has historically received proceeds from the 2% supplemental tax, the receipt of a portion of the base 7% hotel tax is new for 2015.

Based on these budget discussions and decisions, legal counsel has drafted a 2015 Service Agreement between the Township and CVB. A black-lined copy of the Agreement is attached for review. The term of the Agreement is for calendar year 2015 only; funding for the CVB beyond calendar year 2015 will be determined next year during the 2016 budget process. Also attached are supplemental materials pertaining to the CVB that were specifically requested by a Director.
RECOMMENDATION:
Approve the Service Agreement between The Woodlands Township and The Woodlands Convention & Visitors Bureau for calendar year 2015.
Attachments
2015 CVB Service Agreement
2014 Approved CVB Service Agreement
CVB Bylaws


    

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