Oh, I missed the countdown, I guess, as I'm on now.
Okay, welcome everybody to this meeting of the Hotel Occupancy Tax and Sponsorship Committee
of the City of Denton.
It is May the 18th, no, what's it, May 14th, sorry, my calendar on my phone's not working.
That's why I'm remote.
May 14th, it is 1.01 p.m. and I understand that Council Member Armitter will be joining
us here shortly.
So and I guess just as a clarification, the last meeting was in February, I believe, is
that correct?
Let's just go through the agenda and we'll come to the minutes and I can talk about it
in minutes.
So our first item on the agenda is the Hot 29 Consideration Approval of Minutes from
February 13th, 2020.
Are there any changes to the minutes?
All right.
Chair would entertain a motion for approval of the minutes.
I move we approve the minutes of February 13th, 2020.
And I will second it.
And I guess because the two of us have motioned and seconded, the minutes are approved.
One question I had, was there a, when do we have an agenda item for to elect a new board
chair?
Well, due to the situation, it's not on the agenda since you are still with us as chair.
So normally, it's wait until you actually roll off.
Okay, so the next opportunity would be June.
June.
Okay.
All right.
Okay.
Well, then, Councilmember Davis, I'll just chair the meeting this this time.
And then if we could, and I'll just mention in concluding items again, maybe put that on
on the agenda.
All right.
So then we'll go down through our next agenda item, which is Agenda Item 1B, Receive Report,
Build a Discussion, and Provide Recommendations Regarding an Event Name Change for the Habitat
for Humanity of Denton County, Inc.
Okay, this item is due to the sponsorship contract with the Habitat for Humanity.
Their application and their contract showed that they are doing an event called the Dream
Builders Luncheon that was to be held in April.
And they've had some changes in their organization and they wanted to move it to an evening or
weekend event to hopefully receive more fundraising.
And so their intentions are to move it to May, but they're probably going to have to
move it further out.
But the contract does articulate that it's Dream Builders Luncheon.
And they would like your permission to put it towards a party with a purpose to be held
by the end of the contract, which is September 30.
And it's just a formality, but we will have to amend the contract, which is able to be
signed by the city manager with your approval of the name change.
Council Member Davis?
I have no objection at all to those changes.
Do we need a formal motion or can we kind of just give direction and then staff and
the city manager can amend the contract since it's under city manager's ability to do that?
Yes, if you will give me a formal approval, then we will take it administratively and
complete the task.
Then I would like to this time move approval of the requested change to the contract with
Habitat for Humanity.
And I will second that for Agenda Item 1B.
Any more questions or comments?
Let's just go ahead and do a formal aye, Council Member Davis, just so that we'll have it.
So all in favor?
Council Member Davis?
Aye.
Mayor Watts is an aye.
Oh, is Council Member Armitage on?
Yes, sir.
She just joined.
All right.
I can only see four screens.
So Council Member Armitage, if you have a question, just be sure and kind of say something because
sometimes I'm not toggled onto that screen.
I would appreciate that.
Sure.
Thank you very much.
Aye.
All right.
So Council Member Armitage, Council Member Davis are an aye.
Mayor Watts is an aye.
The motion carries unanimously for Agenda Item 1B.
Agenda Item 1C is receive a report, hold a discussion, and provide recommendations regarding
hotel occupancy tax revenue and hotel and occupancy tax and sponsor expenditures for
FY 2019 and 20.
Good afternoon, Mayor and Council Members.
This is David Gaines, Director of Finance.
This presentation is really just intended to give an update of where we are right now
and with our projections for hot revenues.
Obviously in the midst of the COVID-19 pandemic, we anticipate them to be impacted significantly.
So wanted to bring an update of those forecasts to you and then talk through a couple of the
options that we may have moving forward with the Hot Fund.
Here's our objectives of the presentation.
We're going to have the next couple slides do a very high-level overview of the Hot Program.
I know you all are familiar with it.
Then take a look at that, our fund balance estimates and revenue impacts, and then talk
through some of the cost reduction strategies we could consider this fiscal year and then
get some direction on our next steps.
So program overview, this is just kind of set in the stage for our conversation.
Obviously each year applications are submitted that are reviewed by the subcommittee, and
then recommendations are made to the full council, and those applications are weighed
against what we anticipate for revenues each fiscal year and the fund balance reserves
that we have, and those conversations are obviously each year taken by the subcommittee
and then ultimately with the full council, the contracts that are approved with each
of the entities have an approved budget, have a specified use of funds, and then it specifies
how those payouts of each of the budgets are carried through in each year, and you'll have
a little more detail on that in a coming slide, and then what those reporting procedures look
like on a quarterly basis and how they submit their reports to the city each year.
David, I have a question.
And I'm sure I'll remember this, but so this program year, we financed these programs from
January 1 to December 31, which is on a county year, not the fiscal year that our budget
is.
Is that correct?
Yeah.
The contracts are on a program year that matches the calendar year, but obviously we always
have to kind of marry that up with the fiscal year itself.
Okay.
All right.
Thank you.
So we have 19 contracts, and we'll have these laid out, are administered through the calendar
year.
The majority of those, and this will come in as we talk about our options, are paid
on a quarterly basis, where 25% just goes out each quarter, but that's not true for
all of them.
Some of them could receive their funds earlier in the fiscal year, and usually that's related
to when their event is.
We do have three city departments that receive funds, the Public Art Committee, the Civic
Center, and the Water Works Park.
Those funds are essentially available from the beginning of the fiscal year, from October
1 on, not necessarily spent all at once, but they are budgets that are available for those
departments to spend.
So shifting gears to the 19-20 revenue impacts, I don't think it's a surprise to anyone that
we're anticipating the whole hotel industry to be dramatically impacted by COVID-19 and
the impacts on the economy.
Thus far through this fiscal year, just on a fiscal year basis, through the first two
quarters, we had received about $1.4 million of our total budget, of the $3.4 million budget.
Obviously, that didn't really have taken into account the impact of COVID-19.
But moving forward, we are projecting significant decreases in the hot revenues.
For quarter three, which would begin in April, we're anticipating an 85% reduction in revenues,
and in quarter four, a 75% reduction from the budget.
So that really leaves us with about $2 million that we're anticipating to bring in in revenue,
which is a million and a half less than our budget.
So David, and this is a good example to sort of help me understand or clarify.
So when we passed the budget last September, we were allocating funding for this January
of 2020 through December 31, 2020, correct?
Correct.
And I guess this has never come up because we've never had such a shortfall and things
such as that.
But when I see 85% reduction in quarter three, 75% reduction in quarter four, you're talking
about the fiscal year budget, those quarters.
Is that correct?
Yeah, I am.
So I'm talking strictly on fiscal year.
So that is where kind of the revenue and expenses aren't married necessarily because of that
program year versus fiscal year.
So just on the revenue portion, really wanted to focus on the revenues on a fiscal year
basis.
And then as we look at anything to do with the contracts, obviously there's just a little
more nuance that we have to think through when we look at how those expenses go out.
Right.
But that budget year, the budget year that we budgeted last September is through the
end of the year, December 31.
So all those revenues for that year would have had to have been collected through, I
guess, it's the first and second quarter of this budget year, which was back in a previous.
So there is that overlap.
So I just want to make sure that I understand it.
And if there was anybody else that had a thought or question, then maybe that will address
it.
So I appreciate that.
Thank you.
The fiscal year, the last quarter of our fiscal year, we pay out in our fourth quarter, but
it is for the recipients last calendar quarter, so we keep the revenue expended during our
fiscal year.
So September 30th, I already have those fourth quarter checks cut in our fiscal year, but
hand them out to the recipients in their calendar year.
So it all happens within our fiscal year.
Expenses match up.
Okay.
So yeah, so we closed the books out on this fiscal year in September for this fund, but
yet we're still distributing those funds through those next three months, October, November,
and December for those contracts.
Yes, they're distributed in that end of the calendar year, but the actual funds come from
our fiscal year end.
Yes.
Okay.
All right.
Thank you.
So based on those, the revenue projections we had on the previous slide, wanted to take
a look at what that would look like for the '19-'20 estimate.
So the first column you can see there, essentially here's how we started out the budget year
with a fund balance of about $2 million, expenses that are essentially in line with our revenue
through the fiscal year and not much change in fund balance.
We do show our year to date for the fiscal year there, and then our estimate with those
revised revenue projections, which would result in about a million dollar drawdown in our
fund balance that does, and just for this purpose does anticipate that we continue forward
with all of our expenses to recipients that we had budgeted.
And then we also put a preliminary 2021 budget to say if we move forward with the plan as
laid out and we do have that million dollar drawdown, go ahead anticipating a 35% reduction
from our budget next year, not anticipating that the hotels would necessarily get back
up to the regular business right away, especially as the fiscal year starts in October of this
year and going into next year, not planning to draw down any fund balance, our revenues
match our expenditures and keep that close to a million dollars in fund balance.
I think obviously going through the situation this year shows the value of having a fund
balance there so that there are options when situations like this happen.
Okay.
Definitely don't have to go through each one of these lines, but I think this is just kind
of give some color to the conversation earlier about how each entity is paid out slightly
a little bit differently based on their event dates, have a payout balance in the sense
that they haven't been paid their four quarters for this fiscal year and some have been paid
essentially all upfront.
So you can see a couple of those where the event's already complete, we sent their money
out prior and then those where we still have a number of payments left.
And we've also trying to include a very high level view of the event date or those that
are year-round or those that have events coming up and then to kind of give some expectations
on do we think these events may or may not happen this year.
Okay.
We'll probably come back to this slide specifically once we get into discussion.
Yeah, absolutely.
I think we can definitely go back to this slide or the fund summary, but that's essentially
it for the presentation itself other than just our options moving forward.
I think we can definitely just have no change, move forward and say we're comfortable with
drawing down the fund balance.
However, we need to with those anticipated revenue losses and moving forward with our
recipient contracts.
I do think there is some nuance to that in that each one of those contracts do have provisions
in them where if the event doesn't happen, through their reports, there is the obligation
to send some of those funds back to the city.
So that would be a continuing discussion.
So even continuing with the first option laid out there, we're not necessarily going to
expend all the funds that we anticipated as some of those funds could come back to us.
And I think part of that, part of the consideration with this option would be we kind of view
next year and the allocations that go out with FY20 in mind as you look at what kind
of distributions you approve out to the entities that apply.
Option number two would be to reduce the current budgets for this fiscal year to try to immediately
address the anticipated revenue shortfall and that could take place by reducing our
upcoming receipts and payments that Randy just mentioned in September.
And a sample would be to say with all of this quarter, we're going to reduce by 50% reduction.
You obviously could have a more tailored approach where you go event by event and think through
that, or you reduce all payments to organizations or request refunds from previous payments
is an option as well, or really it's up to the discretion of council if there's another
approach you'd like to take to reduce any of the current budgets.
Okay, all right.
Council member Davis.
So the slide that we saw before, I guess it was slide number six, the fund summary that
in fund balance preliminary, the last column next to last row, that's, am I correct in
reading that to mean that if we continued with all the payouts that we would anticipate
making in a normal, just as we've contracted with no changes, that that's the ending fund
balance.
That's the final draw down that you're talking about.
And we'd end up with just shy of a million dollars in the fund balance.
That's correct.
That would be if we paid out everything that we had in the contracts for this year.
Right.
And if I'm remembering correctly at our last couple of meetings, especially at the meeting
where we discussed the budget, the program budget for this year, before passing on to
council, I seem to remember having some significant conversations about that fund balance, you
know, that it was higher than necessary, except for a situation like this, obviously.
We are thinking about ways to draw that down or some creative projects that would qualify.
Am I remembering that correctly, that we were kind of talking about how to use that fund
balance?
Right.
Some of the perception was that we had a hefty fund balance, you know, across the board.
And we've worked towards that since 9/11 really was the last time we had to have this conversation
about a reduction.
So the fund balance would assist us in that.
And then we were also had built it up for any tourism projects that might come across
the way that we could use to draw down that rather than removing that from the recipients
contracts.
You know, the easy answer would be the, you know, across the board reduction and, you
know, the advantage there obviously would be it's clean, it's simple.
We're not picking and choosing favorites or events that, you know, we're not trying to
game the calendar and guess which events are likely to happen, which aren't.
But at the same time, I'm just not sure we can do that in a fair way either.
You know, we got a letter forwarded to us earlier today from the Storytelling Festival.
And that was a really good example of expenditures that are made kind of out of sync with payments
so that they're preparing for next year's event, which in normal times we would almost
certainly fund similar to the way that we funded this year's event.
So they're incurring expenditures legitimately, counting on and having budgeted on that quarterly
payment that we would normally make.
So I hate to say it, but it seems like we've got to take a more tailored approach to each
of these different expenditures.
And then on top of that, the other complicated thing is what David mentioned about return
of funds, so if an event doesn't happen and expenditures have been made and then our return
of funds request is because the event didn't happen, well, the organization or the agency
has already made the expenditures.
So I'd almost want to try to find a way to make those contract amendments as far in advance
as we possibly can so funds aren't going out the door, the organizations aren't, you know,
sending those funds and then having to try to find a way to send those back to the city
when their event doesn't happen because I would hate to see the fund balance drawn down
for events that just aren't happening, you know, to pay for advertising for something
that nobody's coming to to pay for, you know, supplies and things that are never fulfilled.
So it's a pickle.
Yeah.
So Jesse articulated really everything you just said is what I have been thinking about,
you know, including that letter from the storytelling association, which I was grateful for not
only because, as you mentioned, because of that specific case, but it's just kind of
an example, you know, of the way that each of these situations is different in ways that
what I would add to that is to say that in ways that we can only tell to a certain extent
just by looking at the applications and the dates, as much as I hate to say this, you
know, maybe I could be talked out of this, but I feel like I need the help of these organizations
at this point, not to completely redo the application necessary, but at least to touch
base with them and ask them, you know, has COVID affected, you know, does your application
stand as it is, do you want to leave it as it is, or has COVID affected, you know, your
plans?
Obviously, you know, there's that provision for events, you know, and I agree that it's
really unfortunate.
We want to try to do what we can to, you know, prevent that from happening to more organizations.
But I do prefer a more tailored approach, and that, unfortunately, I feel would involve
some level of, you know, going back to these organizations and asking them for feedback.
I feel like they would be grateful for it.
And if they want to say no, this doesn't change anything, then no.
Okay.
Thank you, Councilmember Archer.
A couple of, I don't think we have any other choice but to do a tailored approach.
I can say I'm not for paying down the fund balance by a million dollars, because we've
got a funding issue next year, as is example by the Storytellers Convention.
One other one was the fireworks display, the fireworks show.
I would be surprised if the fireworks show goes off as planned as it has in the past.
I mean, if it gets canceled, then what do we do with those funds?
I think this is going to take some creativity on the part of staff and this committee and
also just the whole council to say, okay.
And I think Councilmember Archer's suggestion is a good one, and that is, what do you guys
already expended?
What have you already expended?
In other words, we just need to get an accounting and an audit of the groups that have still
yet to receive their funding.
Unfortunately, some whose events occurred in the first part of the year and got full
funding, that's just sort of the sign of the times.
I mean, now that this is hit, we've got to figure out how do we adjust this?
And we also have to look at next year's funding as well, because the hotels are not going
to be back up to 100%.
I mean, they're just not.
So I think it's going to be very difficult to make a decision today about the actual
funding of the dollars.
I think what we need to do is figure out what kind of process do we want to employ to gather
data?
Because we're probably going to need to...
You said our next meeting's in June.
Is that correct?
Yes.
Okay.
So I think it's incumbent upon us to, if we can decide on what kind of information do
we need from the organizations and from staff to make the best decision possible with the
best set of data.
Because like I had got a call from someone on the fireworks display, well, let's say
they've received the money and they don't do the show.
Well, the question was, do we give it back or can we just keep it for next year and you
just don't budget us for next year?
And so I don't know the legalities of those kinds of things either.
And I'll be truthful with my colleagues.
I'm not even quite sure if this is a conversation that should be just limited to this subcommittee
because this is such a large issue that I would hate for us to come to some kind of
conclusion.
We're going to have to involve the rest of the council in this at some point, not just
the point where we've made our final decision about, well, this is how we're going to approach
it.
That's just sort of my thoughts on it.
That's the purpose of this committee, but given the circumstances that we're in now
and that we're looking at from drawing down the fund balance to basically nothing, I mean
$900,000 and you're right, Randy, the fund balance was primarily to offset these kinds
of contingencies, but I don't think anybody would have ever, ever thought it would be
one of these kinds of contingencies.
But it was primarily also for if we had some really cool kind of tourism projects that
were available through a public-private partnership that we would be able to have the funds outside
of general fund money or other kinds of funds such as CEOs and GOs to do that.
So that's where I am, I can say pretty much categorically I'm opposed to drawing down
the entire fund balance and just giving everybody the money without even assessing what their
need is, as council member Armitage said.
I think it's almost like, remember, I don't know how many of you saw, it's a wonderful
life and when they had the run of the bank and George said, "Hey, what do you need right
now?
Don't take out all your money, but what do you need right now?"
And I think that's a good place to start is to see what funds have been expended because
if some of these events don't occur, well, we need to know that.
I mean, or if they don't think they're going to occur.
And given even the ones in the fall that are attended by five or 10,000 people in an open
space, I'm not so sure how that's going to go anyway.
So those are my thoughts and I'm certainly open to, and I don't know if this is the agenda
item where we sort of parse through some of those things if we're going to look at some
way of assessing need, but those are my comments.
So I will also open it up for a response to council member Armitage or council member
Davis.
Go ahead.
I agree with what Chris just said.
I don't feel comfortable at all coming up with any kind of decision today, but I think
it's important to have the preliminary conversation.
I want to send it back to have council discuss it and in between that time for, as the mayor
said, for staff to be able to come up with some questions.
We can come up with questions, whatever we can come up with today, preliminary as preparation
for the time when we're deciding this.
I feel like we have a little padding of time.
I don't think anybody, including the storytelling festival, their events in March, they just
wanted, they were anxious about us, what kind of decision we'll make.
So I'd be surprised if anyone's in a rush and if they are, too bad, but I would also
be curious to know what other cities are doing with their HOT funds.
I can certainly reach out and ask.
I don't want to create necessarily more work for staff because the important thing is,
of course, what we're doing, what we're deciding to do, but I'd just be curious if any other
cities have some creative ideas or maybe they already sent out a questionnaire to their
applicants and we could look at it and borrow some of that.
Could someone, I'm sure I probably missed it, but the storytelling letter that you are
talking about, because I'm seeing that they've received some funding, I believe.
Have they received it?
Go ahead.
They've received two quarters of the four quarter contract.
And I'm looking on this current status, is that, does that mean they've received $28,540
so far?
Yes.
And now that event was canceled.
No, the last day, I think, was canceled.
Oh, okay.
Okay.
All right.
So if somebody could just briefly describe to me just the basic theme of the letter instead
of me having to go back and find it.
I think they were just trying to portray that they were in the beginning of the year where
their event was pretty much 99% complete.
And so they've expended all of their funds and some of their advertising partners know
that they are hot recipients and the local advertising groups do work with them and then
let them pay out their expenditures quarterly to match their receipts of the hot funds.
I got you.
Okay.
Yeah.
I get that.
Councilmember Davis?
Yeah, I really like your analogy with It's a Wonderful Life.
I had forgotten that scene or at least that response to the scene.
As usual, George Bailey's got the right idea.
If there's a way to communicate with the organizations, we could send out a letter that says, red
flags, sirens are blaring, we're going to have a budget shortfall, y'all got to give
us a full accounting right this minute because we're looking at who's money to yank.
On the other hand, we could send out something that's a lot more like what the mayor described,
you know, listen, we're all in this together, we anticipate there's going to be lower revenues
and we're looking at what the status of your event is.
Can you tell us about your year to date budget?
Can you tell us about any changes or updates to your program and what you expect to do
differently?
And it's a fair answer, of course, for them to say, well, we don't know yet, you know,
the fair, they don't know what a fair is going to look like in August yet.
There's just no way to know, but they have some pretty major expenditures that go into
that event.
So I think you're right that we just, we need more information and that fund balance is going
to be a blessing even if we don't draw it down all that significantly because it gives
us that buffer, you know, that kind of padding that Deb was talking about, a little bit more
time that if we have to start cutting checks for the next quarter before we make a council
decision then, you know, it's at least a little bit is there to play with.
I agree that the council has to be involved earlier than our normal decision process,
but I'd like, I still think I'd like for us to do at least, my preference would be for
us to do the heavy lifting, you know, to kind of come through those responses we get and
at least take them a good solid recommendation and then knowing that, you know, nobody's
feelings are going to be hurt if they don't take it, it's just too big a decision for
us to make by ourselves, but also giving them a starting place because right now we don't
have a starting place and it's going to be difficult.
I agree.
I agree with that.
Yeah, we can, we can do that.
And plus the fund balance, I mean, we don't know what it's going to look like next year.
So we want to make sure that we don't rob Peter to pay Paul, so to speak.
So I think, I think the first step will be to get out that letter as council member Davis
described of, you know, a very collaborative initiative, but yet we need what you've expended
to date and what you anticipate expending.
I mean, I know it's a forecast for them and they may not know, but we still need somebody
to give us some idea.
You just, you're not going to have an event in August and not be thinking right now, number
one, are you still going to have it and having a contingency plan.
So I think it's, it's, it's important that we know exactly where they are in their budget
now.
How much have they spent?
How much are we giving them?
What do they anticipate not spending?
And we'll just have to wait and see if people are really trying to be forthright on those
instead of saying, oh, wait, we need everything we've asked for, which if we get 19 of those,
well, we'll make the tough decisions.
I mean, that's not, that's not an issue.
And what I would like to do on that letter, if you could send that out, once y'all draft
that to each of the committee members here, and if the committee members want to provide
some comments, of course, don't respond all to where we all get each other's comments,
but in that way, then staff can compile, you know, that and send it out so that we all
sort of have an idea and some input into, into how that looks.
Is that, is that an okay plan moving forward, at least on that particular part of the process
with the other committee members?
Yes.
Okay.
Yes.
What about in the letter taking the form of or, or having attached to it an electronic
survey to make, you know, so that the questions would be, it could answer.
This is, this is really a more of a question for staff because I'm thinking in terms of
processing the data and that way we could see, you know, like, like how on Survey Monkey
or something like that, you could say, make a, make a pie chart so we can, we can see
how to have these different answers compare and might also make it easier as long as it's
a way, as long as people have a way of saving information so they don't, so everything doesn't
get lost, you know.
Council Member Armitage, I think what I'm hearing you say, and I don't know about the
form of a survey, but what I'm hearing you say is we need to have some type of template
where the questions are all the same, where attached to that letter is everyone gets the
same question and then they have the opportunity to fill that in and then we're able to compile
those and maybe put those in a spreadsheet, an Excel spreadsheet to do the analysis.
So I agree with you that there needs to be certainly a consistency with what each one
gets for the information that they provide us.
Yeah, exactly.
And that's, that's more important than the question.
I mean, I mentioned survey because just so, however, it would be easiest for staff to
be able to compare that information, all the data we get from that in many different ways.
Sure.
Okay.
All right.
Davis, are you okay with that?
I think that's great.
I think we've got to have uniform data, otherwise it's going to make our job even harder.
Yeah.
Okay.
All right.
Well, let me look at, let's see here on the agenda.
So this is agenda item 1C.
So it seems like we've got at least a path moving forward for the next meeting.
And so by the next meeting, then we will have, do you think staff, there's enough time to
get the draft letter to the committee members for us to get that back as expeditiously as
we can?
In other words, get that out and hope we try to have some of that data back by the June
meeting or if we needed to put the June, okay.
All right.
Good.
I think they're waiting on this information.
I did send all the hot recipients and the sponsorship recipients an email in March that,
you know, they haven't been forgotten.
You know, the budget for the overall city is important and theirs is being looked at
as well.
And so they knew something was coming, they, you know, and a lot of these have been involved
for years, knowing what the discussions that we would be having.
And some of them are anticipating the reduction and kind of holding back.
And a lot of them are just kind of in that flux of I'm in the middle of a year, what's
coming next?
I have a June, July event and I heard from Kiwanis as well on the fireworks, which is
a sponsorship.
And we've had internal discussions too with legal that, you know, whatever come, you know,
making the reduction happen or truing that up, there's still going to be a lot of intricacies
to the contracts.
Yeah.
And so we've already spoken with Mac and Mac can elaborate, but, you know, amending those
to include, you know, what they've already received and their canceled events could go
towards extending that to another program years for 2021.
You know, we've had a lot of those internal discussions because we can, we can figure
out how to, how to fund them, but then how to make the terms of the contract appeasable
to everyone and to collaborate to see how all that will work for postponed events, canceled
events, smaller events, you know, all those pieces of the pie we don't know about yet.
Great.
And I think it's going to be important in the letter to, because most of these events
that we sponsor or that we provide funding for if they're events, they're fundraising
events.
And so we have to communicate that we're not going to be able to make up a, a, a fundraising
shortfall.
This is for hard expenses and things such as that.
So we probably can find a way to communicate that in a very diplomatic way that, okay,
you know, you're everybody's suffering and that's, we just have to find a way to mitigate
that as much as possible in an equitable manner.
So it sounds like we have a roadmap for this agenda item for the next meeting.
Are there any other questions on this particular agenda item?
I have a comment.
Yes, go ahead.
It also includes the sponsorships and most of that conversation we've had in the presentation
for hot funds, so the sponsorship are more like for the events, but those funds are already
paid out.
Obviously we're not a shortfall.
They were in our budget.
They're a part of it.
So those have been paid out.
So the only concern there is my recipients are working very hard to try to have their
event within the terms of the contract and having it by September 30th.
So they're working towards doing that.
They perceive their phones in November, so there's no discussion about reducing those.
He's just working with them to get their event done in the manner that they wish to do before
the end of the contract.
So what happens if they don't do the event?
That's a discussion we'll have to have.
If the contract does say if they don't use the money, it is returned, but we also have
the availability to amend the contract.
If they know it's going to be later out in the calendar year, what have you, that we
could amend the contract to allow them to use it past that date.
Go ahead, Councilmember Davis.
You know, again, I don't want to create extra steps where we don't need them, but specifically
for sponsorships, might be useful for hot funds.
It might be helpful to get a cancellation report, a cancellation budget.
You know, if there's an event that is not able to make things happen, if they could
give us a narrative on, you know, here's why, you know, here's the impossibility of our
event and we've looked at all these different things and we couldn't possibly do it.
And then also, here are hard expenses that we couldn't get refunded.
I've been involved in a couple of different events that had to postpone or move, and some
of those things, some of those vendors, you can get your money back because they understand
you have an impossibility clause or a force majeure or something in there.
Others, it's pulling teeth because they have the same problems down their chain.
So if organizations could report back to us in some kind of uniform way, we canceled our
event, here's all the steps we took to not have to cancel, and here's the money that
we had to spend and we're not getting back, and we're trying to get back, but we can't
possibly return to you.
And then that also gives us a starting point for the next phase of the conversation, which
I think is probably, can we roll some of your funds over, do we amend the contract, do we
reduce your allocation next year because you've got something left in the kitty from this year?
Yes.
And that gives us more information to start with because otherwise it's going to be apples
and oranges all the way down the spreadsheet.
Yeah.
I completely agree, and so a couple of things to add to that, one, I would like to, it'll
be something where the way it's worded will really matter, as Mayor said, kind of diplomatically
and in a friendly way, so that it's clear that we're talking about, hey, we're working
with you, we're not ready to sue you or anything like that, but just to kind of let people
know, number one, to make sure to ask the, to ask the entities with whom they've already
made expenses, where they think that they're not going to get their money back to make
sure that they've asked.
Maybe that's not fair to kind of compel them to do that or to check off that they've done
it.
I just know that because this is such an unusual situation with COVID that there are situations
even with the city where the city has given refunds where, in circumstances where normally
it would not be a refundable thing, ultimately it's up to whoever is giving the refunds,
but I think that there might be some entities that have a general policy that say, yeah,
we don't do refunds in a case like this, whereas in the case of COVID, they're doing that.
So just to kind of remind people of that and encourage them to find out before they write
something off as just a sunk cost, and then also a way to just inform people, but in a
friendly sounding and really informative way, just to make sure that they know about the
legalities of, you know, if you have an event and it's canceled, that all the money has
to go back, they might not know that even though it's in, even though it's a clause
in the contract and they signed it.
So to make sure that they know that because they might be thinking, well, let's say, yes,
we're doing it, and if it doesn't happen, then we can use the money for X and people
need to be reminded, look, not only do you have to have a plan for cancellation, but
also it's really important that the funds be, for legal reasons, the funds be used for
exactly what you say they're going to be used for.
Okay.
All right.
And if we could get a schedule, and there may not be any, but are there any payments
due to recipients from this fund between now and the next time we meet?
I mean, I don't know the answer to that.
The next payout is July, end of July.
Okay.
So we'll meet before then.
Yep.
All right.
Okay.
Any other questions on this agenda item?
Fantastic.
Okay.
We'll move on to the next agenda item, which is agenda item 1D, receive report, hold a
discussion and provide recommendations regarding the hotel tax program year 2021 to FY 2021.
This item normally comes to you in April, which we had to cancel that meeting.
So all the agenda items today are from the April meeting that was canceled, and we usually
consider this a kickoff meeting for our next program year.
So this item and the next item are to prepare for that, the unknown, I guess.
But what this item is asking is for you to look at the red line guidelines and application
to see if there's any changes you like or would like to add of what we've already done.
Right now, the only changes we've made were based on the conversations we had in our February
meeting, which where we were no longer going to accept any applications after the posted
deadline, whether they were late or missed it or have a mid-year issue or a new event
that we were not going to look through those in the middle of the year.
And administratively, we just add some clarifications to reporting procedures, some things that we've
seen missing or having to go back for and ask every quarter.
So obviously, the instructions weren't clear.
And lastly, we've also added some language to the internal, which is our departmental
procedures to make sure their processes were trued up in writing as well.
So those were the main things on the hot guidelines that we changed.
Everything else is pretty much the same as the entire program.
Okay.
Any questions?
Yes, Council Member Davis.
So Randy, thank you for that summary.
Looking over those, my impression was exactly as what you just described, that they were
pretty minor changes, that they reflected conversations that we'd already had and basically
process improvements.
Am I missing anything?
Is there anything in there that you're really looking for direction on or you think we ought
to weigh in on?
Otherwise, I'm fine with the changes.
No, sir.
We certainly need every year just as a process to make sure that you have them in front of
you and you approve them every year before I send them out.
Any questions, Council Member Armitage?
Nope.
They look good to me.
Okay.
All right.
Do you need a formal action on this?
Please.
All right.
Okay.
Council Member Davis.
I guess Item D first, I move approval of the, I guess it's Exhibits 2 and 3, the guidelines
and application for HOP funds that have been provided by staff.
Okay.
I second.
All right.
So we'll take a voice vote.
Council Member, we have a motion for approval of Exhibit 2 and 3 of Agenda Item, I believe
1B.
So Council Member Davis, how say you?
Aye.
Council Member Armitage.
Aye.
Mayor Watz has an aye, so that motion carries unanimously.
We'll move on to the discussion of Agenda Item 1E, receive, report, hold a discussion
and provide recommendations regarding the sponsorship program for Fiscal Year 2020-2021.
This falls in the same procedural element as the last item that this is for the sponsorship
program specifically for the fiscal year.
We made the same change in the language so that we don't have any applications that will
be accepted during the program year, only during the time that the application is open.
And we also did some maybe just some administrative language for including some reporting language
to true it up so that it is mirror image of the contract so that some language was just
a little wonky, if you will, so I wanted to make sure those were trued up so the guidelines
and the application and the contract were all the same.
Okay.
One question or comment I have is on the sponsorship program guidelines on Item 3D, it's in the
red line portion, I think where it says report these to the city manager or his designee
by the end of the contract term, it has B, so it's just a typo, yeah.
And I just saw that as I was reading through it again, so I missed it the first time as
well.
Okay.
Any other comments or questions on these exhibits and for the sponsorship guidelines and application?
And if not, Chair would entertain action?
I move approval.
Okay.
Second.
All right.
So we have a motion and approval for Exhibits 3 and 4 of Agenda Item 1E.
Councilmember Armitage, I'll say you.
Aye.
Councilmember Davis.
Aye.
Mayor Watts is an aye, so the motion carries unanimously for Agenda Item 1E.
We'll move to Agenda Item 1F, receive a report, hold a discussion, and provide recommendations
regarding changing the name and duties of the Hotel Ecopsy Tax and Sponsorship Committee.
This item was from concluding items of the February meeting.
Councilmember Davis requested the committee to have a conversation in changing from the
Houghton sponsorship to a more open or all-encompassing name for what the activities that this committee
does because during that last meeting we also had an Agenda Item that resulted in this committee
overseeing the GDAC and the DCT contract as well in the auspices of the sponsorship program.
So that is the discussion that is before you today.
Okay.
Councilmember Davis, you want to give us sort of a summary of your discussion?
I wasn't present at that meeting, so that would be great.
Sure.
So my request in concluding items is kind of the classic example of the new guy asking
for something like five minutes after it's already been changed.
It had just become the Hot Funds and Sponsorship Committee.
That was also a meeting where, so we had taken on some additional responsibilities, and they're
right in the wheelhouse of this committee and the kind of things we talk about, but
we also had a conversation with some of our community partners that day that I think really
highlighted how much this committee, you know, where funding recommend, we make recommendations
to the council about funding, but that funding is really, it's the foundation of some really
important community events and community partnerships and, you know, call it semantics, but it just
made sense to me that if we had a name like Community Partnership Committee or something
along those lines, that it may be more aptly described everything we do because when those
funding questions almost invariably lead to kind of more, less tangible conversations
about, you know, what is the value of this in the community and what is the purpose of
that in the community and, so anyway, again, maybe it's semantics, but I thought it was
a more apt description to call us the Community Partnership Committee, especially since we're
taking on those additional roles.
Okay.
Councilmember Armitage, any questions, discussions?
Yeah, I love the idea, I love the name change.
Okay.
Where is it?
I'm looking at it at the resolution.
Oh, wait, I'm looking at the old one, renaming, I'm looking at the old one is the, do we have
the new one?
No, we have not been given direction to actually make the change.
Okay, and say the name one more time, Councilmember Davis.
The Community Partnership Committee.
I think maybe officially it would be like the Council Community Partnership Committee
or something, but my recommendation was just Community Partnership Committee.
And would the duties as sort of described in our current exhibit, which is the current
ordinance, would they be similar?
I guess I want to make sure that we don't provide any confusion, because some people
might think Community Partnership Committee, we're limiting it to hot fund sponsorship
and these other duties, is that correct?
Yeah, I would say probably the best course would be to, you know, copy and paste what's
already in the existing resolution that added the co-sponsorship stuff, but then also loop
in what we discussed, what we are taking on at our February meeting, either in a specific
way or maybe even generally, you know, if it's anything that involves, I don't know,
the best language, where we can loop in those kind of organizational partnerships and maybe
exclude out public-private partnerships of a different nature, you know, we're investing
in a property together in our local agreement or something, that wouldn't come to this committee,
but some language that would kind of describe anything that comes up in the future that
would naturally come to this committee.
Okay, so you're saying that this would expand the role of the committee beyond the administration
of the hotel-motel tax and sponsorship funds?
No, not on purpose.
So the additional duties that we picked up last time are directly related, they were,
I guess, oversight, directly related to the expenditure of money, and...
And they were recommended by staff, so we didn't...
Right.
Yeah, we didn't just come up with that.
No, I understand.
But I guess what I'm talking about with the kind of more general language, and I mean,
I don't have strong feelings about it, would just be, if there was something like more
of a catch-all out there that described what we look at and what we do on a regular basis,
that when something like that comes up, it kind of has a natural home on a council committee
to look at it and consider it before it goes forward.
If we don't want catch-all language, if we want the council to kind of more specifically
allocate roles, that's fine with me too.
Yeah, and I don't think I have really any concerns with it, except for just trying to
understand, because, and maybe I just misunderstood you, but when you said something about a public-private
partnership, that that might come to this committee.
So right now, the hotel and motel tax, our committee looks at funding, allocating funds
pursuant to the hotel and motel tax statute, and then administering the funds for the sponsorships,
which we used to not do, we used to not do that, but we brought them in.
So you're saying that there may be some other things out there similar to the sponsorship
committee that this committee could be looking at.
I'm okay with it, I just really need to see what exactly is spelled out for the duties,
because I just, when people look at our list of committees, I mean, hotel, motel tax taxes
are a large revenue source, and just want to make sure that they can understand where
that can be found, if they look at it quickly.
But if we're going to expand it, then yeah, we wouldn't want to limit it to that name,
if within the scope of that committee, there might be some things that we're doing besides
just making sure that we're allocating funds pursuant to the statute and allocating sponsorship
funds.
Does that make sense?
Yeah, no, that makes perfect sense.
What I was saying about public-private partnerships is there's a large category of those that
would not be this committee's wheelhouse.
There's all sorts of things that would be a "community partnership," but is really outside
the scope of what we do.
So what I was saying is that if we use kind of general catch-all language, we want to
be careful not to accidentally loop in all of those other things, some big facility investment
or something like that, that's not this committee.
But there could certainly be, when someone, an organization, this is maybe a bad example,
but we had an organization, right now a private entity that's interested in maybe some public-private
partnerships, but they gave us a presentation about a big arts venue that they want some
money for, including maybe some of the funds that this committee handles on a regular basis.
Right.
There may be some future project like that that is not that same scale, but needs looking
at in a deep dive, and this may or may not be the committee for that.
So if there's language out there that lets us have those kind of conversations, I don't
know, I don't think we're going to be all that limited, if the council wants to refer
something back down to a committee, it certainly can.
Sure.
No, no, I understand.
Yeah.
And I don't have any objection to it, I just need to see exactly, I certainly don't have
an objection to the name, I just need to see the substance of the resolution to understand
what exactly we're trying to include in that.
So no, I don't have an issue with that.
So do we need a recommendation, do you need a motion for the recommendation or?
I think so.
Okay.
We'll go ahead and redline it and come back to you.
Okay.
All right.
Okay.
Then we have, I believe that brings us to concluding items.
The concluding item that I mentioned early on was if we could put on the next meeting
agenda the election of a board chair.
Okay.
Anybody else?
Right now we have on the agenda, or the council approved tentative timeline for a June 18th
meeting and a June 25th, because in the new process we have to put our full year up there.
So those two dates are held for our next meetings.
Okay.
Any other comments or questions?
Yes, council member Davis.
This is a quick one, I think, but on that last item, you know, we have in our policies
and guidelines the current name of the committee, which is just fine.
I don't see a need necessarily to change that right now because there hasn't been any action,
right?
There's been no change to that.
But to kind of, I guess, keep the timeline moving, does this committee necessarily need
to see the red line resolution if we kind of have consensus, at least as the name goes?
Or can that go right to council as a work session item?
Or do we need to see that resolution before it goes to council and make a recommendation?
I mean, so I want to make sure I'm understanding, so you've made a proposal to simply change
the name, correct?
Correct.
And then, you know, if we have the opportunity while we're doing that to describe what we
took on in February, I think what we took on in February is within the description that
we already have, you just have to stretch your mind just a little bit.
But if we have the opportunity to add that easily into our enabling resolution, into
the code, then that's a good opportunity to do it.
Yeah.
I mean, I don't have any objection for the red line just coming back to council because
eventually the council is going to have to talk about the scope of the duties anyway.
And there's three of us and four others.
So it just, especially if we're going to expand potentially the scope and duty.
Yeah.
So I think it would just be more efficient.
Councilmember Davis, how soon would you like to see that come to fruition?
To me, if we're going to do it, it makes sense to do it expeditiously, but I'm not in any
particular rush.
There's plenty of other things going on today than, you know, changing the name and the
code.
All right, anybody else have concluding items councilmember Armitage?
No.
Okay.
Well, then we will adjourn this meeting of the Denton Hotel Motel Tax and Sponsorship
Committee at 2.02 on Thursday, May the 14th.
Thanks, everyone.
All right.
Good to see you all.
Bye.