Board of Directors Regular Meeting Agenda


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Meeting Date: 07/16/2015  

SUBJECT MATTER:
Receive, consider and act upon possible realignment of sponsored events between The Woodlands Township and The Woodlands Convention and Visitors Bureau;
FISCAL IMPACT:
$1,420,750 is in the current 2015 CVB Budget for the expenses related to the special events the CVB produces.  These events generate $547,500 in revenue  from sponsorships and  tickets sales for a net cost of $873,250 (Attachment A).  

CVB staffing costs are not included in the above analysis/attachment.  

The realignment proposal would require the Township to add two special event employees as there is not enough staff resource capacity to add or absorb the additional special event responsibility.  The cost for additional Township staff is estimated to be $112,000 in 2016 including benefits. 

Funding for the CVB special events has been through sponsorships and ticket sales and the Hotel Occupancy Tax and is proposed to remain unchanged with the realignment. The Township would retain that portion of Hotel Occupancy Tax necessary to fund the production and public safety costs for the special events and collect the sponsorship and ticket sales revenue. The expenses related to the advertising and publicity of the events ($294,500) is proposed to remain the responsibility of the CVB and would remain funded from hotel tax revenues that flow through the Township. These costs also include CVB sponsorships of the Waterway Arts Festival and Ironman Texas.

The expense budget increase to the Township's Parks and Recreation 2016 Budget would be $1,238,250 ($1,030,750 for production, plus $95,500 for public safety and $112,000 for additional staff) and an offsetting revenue budget increase of $1,238,250 ($690,750  from hotel tax plus $547,500 from sponsorships and ticket sales).  The net expense cost to the Township would be $690,750 and funded from hotel tax.    The CVB budget would be decreased a corresponding expense budget of $1,126,250 ($1,030,750 for production plus $95,500 for public safety) and decreased sponsorship/ticket revenue of $547,500.  

 
BACKGROUND:
Since 2006, The Woodlands Convention and Visitors Bureau (CVB) has positioned The Woodlands as a regional, national, and international recognized tourist and visitor destination by developing quality marketing programs and events to attract visitors and stimulate economic development and growth. Beginning in 2015, with the shift from sales tax to hotel occupancy tax funding, CVB Board Chairman Gordy Bunch requested CVB staff to develop an events analysis report of the current CVB produced and supported events to determine their impact regarding hotel room nights and visitor impact. (Attachment A)

At the January 13, 2015 CVB Planning Session, CVB Board Members were presented with a comprehensive analysis utilizing financial, survey results and occupancy data provided by hotels in The Woodlands over specific event dates. The CVB Board agreed that 2015 would be  a status quo year for events but would like to utilize the first quarter of 2015 to reevaluate the budget process going forward to prioritize CVB initiatives.

Each year, The Woodlands CVB staff takes suggestions regarding the budget from the CVB Board and the CVB Marketing Committee to the Township Board of Directors for approval. Over the past several months, CVB staff has been listening to thoughts from various Board members that the CVB should operate in a similar fashion to a more traditional CVB. The CVB Chairman asked CVB staff to explore new areas in the 2016 Budget or enhance existing areas to accomplish the goal of increasing the focus on selling hotel rooms and creating awareness of The Woodlands as a destination for meetings and conferences.

CVB staff and Township staff met to discuss the transfer of events from the CVB to the Township. Several options were prepared (Attachment C) and a cost scenario developed for Option 1 - the production and public safety responsibility and related expenses and revenues of all CVB events to be transferred to the Township. The CVB would retain advertising responsibility for the events as this function seems appropriate for CVBs.  The consensus of the CVB Board was to proceed with Option 1, pending approval by The Woodlands Township Board of Directors. 

Chairman of the CVB Gordy Bunch reported to the Township Board of Directors on the CVB's realignment proposal.  At the request of Township Director Mike Bass, this matter was requested to be placed on the Township Board of Directors meeting for presentation.  This issue will also be a Budget Initiative presented for consideration during the Budget Workshops in August for the 2016 Budget.

Per the proposal, the  Township's Parks and Recreation Department would assume the responsibility of all special events.  This realignment is  compatible with department capabilities and functions as the department already produces many high quality special events such as the CB&I Tri The Woodlands, TWFG Muddy Trails Bash, Memorial Hermann Ten for Texas, Arts in the Park series and the Concert in the Park series, which is in its 20th year (Attachment B). Within the department, the Development Division which employs a Special Event Coordinator and a Special Event Specialist would be the lead group in the department with support from the Park Operations and Town Center Operations divisions, as well as the Township's Law Enforcement Department.  These departments and divisions already provide some support to the CVB produced events. 

However, it will be necessary for the Township to increase staffing in order to produce the CVB events.  Currently the CVB employs two personnel  for special events; the Township would need two new employees. 

Initial review of the proposal to reassign the CVB events to  Township  indicates that it would be an opportune and  prudent time to analyze all special events, their benefits, impacts, duplications and outsourcing opportunities.  Therefore, staff recommends to develop an events operational plan during the first year of the realignment and transition of events. This plan would address:
 
1. What is the role and goal of the Township producing special events in the community?
2. Who else produces events in the community and what is their target market?
3. When are these events and are there overlap with Township events?
4. What is the market place for these events?
5. How can The Township maximize the use of Townwide facilities such as the Waterway Square, Hughes Landing, Northshore Park, Town Green and the Lodge at Rob Fleming?
6. Are there events that are redundant between the CVB/Township and other producers that could be merged, refined or eliminated?
7. Are there methods in which to reduce the cost of events?
8. What is the best way to market and promote the events and is there synergy in cross promoting Township events and other events in the community.
9. What is the correct staff organizational paradigm to produce and manage all of the events?

 
The Parks and Recreation Department has had success with developing operational plans in the past which is evidenced by the Recreation, Aquatics, and Riva Row Boat House plans. If the realignment is approved, the Township's Parks and Recreation Department would produce the events in 2016 similar to what has been done by the CVB in 2015, and initiate review and operation plans for Township Board consideration during 2016 for 2017 budget considerations.
RECOMMENDATION:
Approve the realignment of special events from The Woodlands Convention and Visitors Bureau to The Woodlands Township; include the expenses  and revenues as  presented herein in the 2016 Budget process and direct staff to develop an events operational plan to be completed in the first half of  2016.
Attachments
Attachment A - CVB Cost Analysis
Attachment B - PARD Special Events
Attachment C - Special Events Options


    

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