Jul 20, 2020 Hotel Occupancy Tax and Sponsorship Committee on 2020-07-20 9:00 AM

Good morning and welcome to this meeting of the Hotel Occupancy Tax and Sponsorship Committee of the Denton City Council. We'll start off with our first item for consideration, hot 20-021. Consider approval of the minutes from our June 11, 2020 meeting. Do we have any changes or additions to the minutes from that meeting? If we don't, do we have a motion for approval? I move for approval. Okay, I saw Councilmember Armitter, but I heard Mayor Watts. So I'm going to say Mayor Watts moved approval and Councilmember Armitter, do you second? Yes. Okay, there's been a motion and a second. All those in favor say aye. Aye. Aye. Aye. With no one in opposition, the minutes are approved from our June 11 meeting that moves us to item hot-022, receive a report and hold a discussion regarding Discover Denton. Yes, sir. This second item is a direct reflection of Councilmember Armitter's request from our last meeting on June 11 and concluding items. She requested some information regarding just the hotel tourism in general for the City of Denton and what the city and the tourism community is doing to assist our own market in downtown and the immediate areas in that nature of what was the impact of COVID currently, what they had to do to make some changes, and then what the forecast is shortly coming up. Of course, we went to our resident expert, I'm calling them Discover Denton. I think we're rebranding a little bit now, Mike, if you will correct me on that. We've always called them the CVB, so we've tried to change our paperwork to Discover Denton as they move forward to that new name for themselves and branding. And so we have invited Mike, he's got a short presentation. And Mike Costano, you are on the line and present, you all can see him there in your right corner. And I will bring up your presentation. And if you just start whenever you want to start once I get it up, and then just tell me next slide, please, and I will do my best. Sounds good. Thank you. Thank you, committee. Appreciate the time this morning. Good morning to everybody. Yeah. So just wanted to follow up with from the last meeting and Councilmember Armitage had some questions and some of the committee did. So we just wanted to present real quickly here some of the things that we have been doing obviously since the quarantine had started. And so really, this is touching on things that came up last month in your meeting. The first thing was really just some specific activity due to the shelter actually go back Randy. Well, that's fine. I can't get it full screen yet. I don't know what it's doing. Okay. Give me one second. I'll see if I can do anything else. Billy and I just went over this and it worked. Do you have any suggestions, David? Just a little clicker down here won't do anything. Well I mean I can read it because I got it up on my right. So it's not doing it. If you just want to go to the next slide sharing the screen, let's try it one more time. All right. There we go. All right. There we go. Thank you, Randy. Yeah, just go to the next slide. So this is just a quick recap of some of the things. The team has been doing an incredible job obviously like every other business and organization we've had to adapt and pivot and see how we can best still do our jobs and try to drive hotel revenue and help our hospitality partners and community partners. One of the first things we did, and this is just across the board, I mean the whole state, any other CVB or DMO, we immediately paused all of our marketing and advertising efforts as a cost savings measure and then we evolved directly to become more community driven and focus on Denton focused marketing, talking about the community, support local, things like that because people just weren't traveling. We created a COVID-19 resources page on our website providing information and updates on government health and safety protocols, city of Denton announcements, what events were still taking place, what were closing, first responder and health workers, special rates that the hotels have provided. So it's kind of an all resources page, it's still up there on the website. First thing people see, we've received a lot of great feedback from that. We then produced our Distant Denton campaign which was really a creative video put together by Jake Laughlin and our Dentonradio.com team, people on our marketing team. It was a 30 second promotional video that talked about Denton, stay at home, be safe and Denton will be here when it's time and safe to come back. We have that, there's a link in the presentation so you guys can check out the video if you already have it, it's on our website. It's really great, we got a lot of great feedback from that. We also created a Discover Denton virtually web page so people can, you know, videos that had VR tours, Denton trivia game, Spotify playlist for our great Denton musicians, featured our mural tour. We even had downloadable Zoom backgrounds so that people can, you know, get their piece of Denton while they're home and zooming in their meetings. Our sales and services team has been assisting with meeting planners, rescheduling events. We're trying to get people to, you know, not just cancel but we want them to postpone, come back in the fall, come back early next year. We've been having some great success with that. Ongoing communication efforts with our hotel GMs and owners has been going on. Probably the communication now is better than it's ever been. We are, some of the things that have come up over the last couple months is with the hotels, you know, the occupancies are down, they're always have had some issues with let's say as problem guests or things like credit card fraud, it just goes on in the hotel business. We've openly now these hotels, they're all communicating back to us here at Discover Denton. We're sending that information out to the other hotels. There's basically a list of kind of a do not rent guests, which is standard in the industry. And they're sharing this information and actually cutting down a little bit on things like some activities that are going on in hotels that generally shouldn't be going on and they're doing a great job of communicating openly with everyone else. You know, it's camaraderie now, it's not a competition. Everyone's sharing information and you know, we're really the conduit of that and that's part of our goal. Some of the really great things we did and it's Wendy from our marketing team and Jessica, we created some real cool original content to support local restaurants and hotels and shops and entertainment venues. Hopefully you guys have all seen all this stuff before and apologize if it's redundant, but I just wanted to get in touch on these things. The ultimate Denton bracket, which was our March Madness Bracketology competition, where we pitted shops and restaurants, venues, and we had it go out on social media and people voted through Facebook and Instagram on what was their favorite Denton venue. And that was an incredible success, a lot of participation. I've got another slide coming right after this that will show some results for that. We created the Quarantune Songwriting Competition, which began with Denton tapping into the local music scene. We had a competition that went on for about a month and people submitted songs, original songs about Denton, and when we actually had 24 entries, we put together a compilation album that's now a Spotify playlist. The winners all were able to come into Denton Radio and record their recording live there. Safely, of course, if they wanted to, not everyone did come in, but that is an isolated booth, and Jake Laughlin did set that up where we had some of the artists come on in and record their song professionally, and we got, again, great feedback on that. We created social distancing guidelines, which, again, I have a slide on that I'll show you right behind this. And then DentonRadio.com, again, tapping into the local hotel community, did interviews and set up live interviews that they streamed with Denton Hotel leadership where they could talk about their properties and that, yes, they are still open, that they have enhanced cleaning standards, and that we're ready for people to come in and travel. Randy, next slide, please. And this is just a couple of, this was the Denton bracket, and you guys can see we had the nightlife, the restaurants, festivals, events region, and then the shopping region. And this was purely, it was a creation of Wendy from our marketing team. It was really great, creative. There was rankings for each business or organization that meant nothing. It was just kind of random. She put that all out there on the front end. And then people voted each week. And again, it was a good way to keep everyone engaged. It was a lot of great fun banter on the social channels about who's best and why. And as you can see from the, we reached about 149,000 people on Facebook. Twitter impressions were almost 65,000. So again, it was very successful in that, again, it was just keeping Denton present, fresh out there, top of mind for not only locals, but again, we were getting some push throughout other channels. Next slide, Brandy. This was our social distancing guide. And again, it was another creative marketing way that we could show what's six feet of Denton. All right, here's some laughs. Six feet of distance in Denton. So again, a lot of people had the standard, here's what six foot is. Well, we were, you know, again, putting this out on social media, on our website. We were sharing it with other businesses. So it was a good way again to incorporate some local businesses. You can see six feet is eight microphones from Dan Silverleaf or six record from Mad World Records, two guitars from Andy's Bar. So again, we got a great marketing team that's been very creative and putting these sort of things together. Again, it was just another fun way to keep it engaging and get people out there and get good feedback. Next slide, please. This, again, just tests back on the quarantine songwriting competition in that it had started in April, ended in May, and now we had the 24 songs submitted. Again, it was really fun competition. You can go right on Spotify or on our website and find the playlist. Some incredible songs were really submitted. It's unbelievable how talented the musicians are in this town and we're real proud to be able to showcase that and put a good focus on that during these times. And then again, those are just some clips of the videos of some of the interviews with hotel leadership. Zach Glenn from the Best Western and Bianca Phillips from the Hilton Garden Inn. Next slide. And then just a couple of quick things here on some other activity during the shelter at home from our sales teams. The groups did stop down. Convention business came to a halt, but our team has been actively involved, especially the last month and six weeks getting people rescheduled. We're still talking to meetings planners. We've actually, you can see from this chart, there's been 13 groups contracted since mid-March. So when we started the lockdown, 2,200 room nights over a $775,000 economic impact. So Ruben Perez and his team are still out there aggressively speaking to planners and trying to get people to book, working with all the hotel partners, working with the Denton Convention Center. We're continuing to have conversations with clients. Again, rebook. Don't cancel. Get you to rebook. And then another thing is we run the horse country tours that we always have, which is a very incredible program. Obviously, those ranches have been shut down and we're not having groups out there. So we've had to put that program on hold. We don't really see it coming back this year, but again, we're looking at new creative ways or how we do it. Maybe it's smaller groups or again, what can we do to get that program back going when it's safe again for people to come out and come onto the ranches. And then we have active leads going right now. We have 31 leads for over 12,000 room nights, which could be a $3.6 million economic impact. So again, the sales team has been very, very busy catching up, cleaning up our database, following up on traces. And again, they're out there trying to get, you know, we got to get people back here in these hotels and get the occupancies back up. And that's ultimately our goal. Next slide. And then, so the other thing was some of the activity, I think another question was we were following up on with CVV activity as the state opens back up and as we move towards the end of this year, program year. I just wanted to put this, this is really kind of a four-phase roadmap to recovery we had put together when this all started and this is actually working with state associations and national destination organizations, you know, is really where we're at. So we started in the wait mode, which is when everything was quarantined and social distancing orders were in place. Then we had the ready mode, reduction of distancing and assessing the impact set, going back in public and trip planning, and then go free to travel. And these were really the four quadrants. And we were in that wait mode. We moved into ready and that's really where we are now where we are entering the conversation and providing inspiration and relevant information and we're beginning incorporating calls to action in our messaging. So this is really some guidance again from national organizations as well on how we can go back and get travelers coming and conventioneers coming back to Den. You know, these times are unusual and again, unprecedented as we all know, I don't have to get into that. And we're, you know, just when you think things are going to open back up, it kind of, you know, things get a little, again, tighter. And so we're just kind of moving as we can and we're pivoting and we're just again trying to keep up on daily activities and trying to get the right time where we're going to start putting some messaging out there again and some marketing out to the broader range in the region about coming back to Den. You know, we don't want to be insensitive to people, but at the same time, we've got to support our hotels and our business here. So we're doing that dance between both. Next slide. Okay, this was just another question I know we had about budget and I think it was Mayor Watts or might have come up with, you know, we, this was what we have for this year. And you had asked us, the committee had asked everyone put together, what do you think we can save by the end of the year and give back? So we had initially had the numbers, this just has some more meat to it, give some more details exactly where our savings came up because we had a pretty nice savings. Really what I did is I lumped this all together. I know there's a lot of numbers there, but the important columns, the savings column, which was the 262 K and then I have detailed notes in there for everything. The bulk of that is at the bottom is about 150,000 is just in salary combined salary savings and a lot of that had to do with, we just had some positions that weren't filled this year. The first month we didn't have a director of sales. We didn't have our director of marketing position filled until June. We had a convention sales manager that at the end of April, she moved on to another opportunity as well as we had someone in our welcome center move on the manager there. So we've had some built in savings, which in this year it's been kind of very fortunate that we're able to have some of that salary savings and that we'll be able to pass that on. The other main thing we saved on is just paid marketing and advertising, general advertising where we're not doing any digital advertising. We've cut production of our Denton live magazine for the second half of the year, obviously with not knowing what's going on, there's all the events and festivals are canceling. That was a large expense in itself. So that's going to save us about $25,000 right there, as well as the distribution to that's probably another $6,000 or $7,000 just distributing that to different welcome centers and around the state to all the hotels. Again we've cut down on travel completely, no one's been doing any travel since March. So we've just had some savings that are able to lump back in there and obviously if things did open up tomorrow and the conventions were back and there were travels and associations we had to be at and we had to go on sales missions, we still want to do that. So again, that's why we're looking to, I'd love to spend that money if we could but obviously with the shortfall that's coming, we know it's impacted the hotels tremendously. We know things are going to be down 30%, 35% and we're trying to be obviously fiscally responsible because we get the biggest share of the hot funds. But again, on the flip side, we're the ones that are driving tourism for the whole destination and we want to keep our team out there. So we're doing everything this year that we can to get ahead of it. Like I said, the sales team hasn't stopped talking to meeting planners. We haven't stopped communicating. We haven't stopped trying to do things to get groups here. Everyone's working hard every single day to make the best of it as we move towards normalcy. And then the next slide, this is just the last slide that we have and there was a question on ongoing objectives and in our post COVID-19 plan, and these are really just some items that are taken out of our marketing plan for the coming year, the upcoming year. The main thing we're going to continue to operate as the Torum as an engine for the city of Denton. That's what Discover Denton is here to do. We're here to drive tourism. We're here to drive to meetings. We're here to drive conventions and try to get visitors to stay in these hotels. And right now with the occupancy is down, they're down. We just finished out June actually, I'm going to sidetrack real quick, but we just finished June at 48% occupancy for the hotels. That's normally not a great number, but it's a tremendous increase from the prior month where the hotels came in at 40% occupancy. And then in April, which was the worst month, we were at 28%. So there's been steady increase over the past three months. So that's again, an encouraging sign. 12 of the last 14 weeks occupancies have gone up across the board for the city of Denton. So again, we're trending in the right direction, but at the end of the day, until the big conventions start coming back and the corporate business starts coming back, we won't get back to our normal occupancies that are generally in the 70% range, 65, 70, 75% range depending on the month. A couple of the other things just to touch on that we're going to keep doing is make the travel planning process as easy as possible for visitors. We're developing a new website. It's actually a project we started in the beginning of the year before all this. So we keep tweaking and enhancing our current website, but we have a whole new platform coming online that's really going to make it much more user friendly, much more interactive and overall, it's going to connect to our internal CRM database. So we'll have one seamless software program now for leads generation, for RFPs and things that come right to our website directly into our systems here internally, which is great. We're going to really, as everyone knows, with everything going on now, we're trying to, the whole country, promote things outdoors and where there's larger space. So we're going to increase awareness about Denton's 300 plus acres of open space. We're going to build awareness more of our close proximity to Lake Ray Roberts and Lake Louisville. Again, we want people to stay here. You can go boat and go fishing and do those things up in those lakes, but let's stay in our hotels. Great things to do outdoors in this area. We're going to keep promoting Denton's historical sites and the public arts and music venues. We're going to continue to build strong relationships with select tourism, travel, meeting planners and event planners. We need a partner at Downtown Main Street Association and all of our other co-op partners. The Welcome Center, which I hadn't even touched on, but we're obviously still running that. We've had to use abbreviated hours with the Welcome Center. With everything that was going on, it was actually shut down for about 10 weeks, but it's back open and operating and we're now getting some really good, a decent amount of foot traffic through there. The volumes are obviously down at least 50%, but the people that are coming out, we've redid the floor. We've got all enhanced safety protocols, the sneeze guards, the hand sanitizer, everything that is required of every business, everyone wearing a mask. We're getting real positive feedback about it's a place to come and get a little shopping in. Again, we're helping to make that as another excuse for getting people downtown to help support everything that's around it. There's a few other things on there. I hope that addressed everything and obviously I'm here for questions or anything that you have. Yeah, that was the last slide. - Any questions for Mike, Council Member Armitage? - Yes. I have several questions. First I want to say about my laugh, I didn't realize that I didn't have the mute pressed, but now you know I generally thought that was just wonderful. You can see the big smile on my face at all of the virtual options and I was clicking around and looking at what you have up there. It was really inspiring to me. I continue to be inspired by how as terrible as this crisis is and I wish that it never happened this pandemic, it has brought out the creativity in everybody and we are such a creative town and it's not only our artists who are creative. I'm just really delighted and inspired by the creativity that I see in these changes that have come out of necessity, but I hope that we get better as soon as possible and I hope that the creativity stays with you all, stays with all of us and that it doesn't only come in emergencies, it's just really wonderful to see. I was wondering if Discover Denton had thought about putting, and this was something that I hadn't thought about with Discover Denton until just looking at this just now, with all the attention nationwide on promoting Black-owned businesses, maybe having a feature of Black-owned businesses in Denton with links. That's just a suggestion of mine and I take it or leave it, but I think it would be a great way both for you all to call attention to local Black-owned businesses, but also a great way for people who are out there looking for where can I find local Black-owned businesses to direct them to Discover Denton. I just see that as a win-win. I was wondering if you could talk about, for conventions, are there both at Embassy Suites, or our convention center rather, but also if there's some sort of standardization of convention practices for our hotels that might have smaller conventions, what is the current policy about refunds regarding COVID to people? If there has been a convention scheduled, or say somebody schedules a convention for next year, and we'll just pick the convention center, is there a guaranteed refund if there's still COVID going on, or if for COVID reasons? Yeah, that's a great question. Obviously, with the different brands and different hotel management companies, everyone has their own policies. We can't set their policies, but yes, Deb, they're being very forgiving, obviously. We've had to be flexible. They're encouraging people still, "Let's rebook." Let's say they are booked in October and everything's still happening and they can't have their event. They're looking to get people rescheduled. Most groups are very welcoming of that. They're fine with that. They still want to meet, but as far as giving individual refunds, I have heard stories, yes, for sure. They've been very flexible. It was a little tougher back in March and April, to be honest, because it was new to them too. Hotels are pretty rigid. They've got contracts just like everyone else. I spent 20 years working in the hotel industry. They get protective of their groups, but obviously, everyone's had to adapt and pivot, and they are being very flexible with their terms, much more loose than they used to be, whether it was a force majeure event or not. Now, the meeting planner is on the flip side too. They're getting savvier and they're asking to write clauses into their contracts that do protect them for those things. Yeah, I think it's both sides working together, like everything. We've all had to do things different, and at the end of the day, it's just the right thing to do. If a group can't come because there are attendees, there's a lockdown or whatever it might be, there's just enhanced protocols, the hotels are going to be as flexible as they can. But again, we can give guidance on that, but we've got so many big brands in town with Hilton and Marriott and Best Western, and they're all doing their own thing. But I guess the communication has been good, we've been working together, and they use us as the conduit for that so that everyone can share practices. Wonderful. Well, that is really great to hear, and that makes a lot of sense. I'm glad to hear that. And I wonder to what extent this, and it looks like you're already thinking this way from the rebooking campaign, to what extent can Denton's flexibility, at least as you say, it's not standardized because you've got these nationwide, including nationwide, not just local brands, but to what extent can Denton's flexibility be used, not only to encourage people who are already booked to rebook instead of canceling, but to encourage people who are thinking about booking a new convention, hey, come book with us because we're going to be, if something comes up, if that's what's preventing you, if something comes up, we're going to be flexible. We're going to help you, I'm not saying a guaranteed refund, but help you rebook. So I would just, you don't have to answer that. I would just say I would continue. I think it's a great idea to promote rebooking, and I think to use that as an actual marketing. It's a great thought, and one other thing that we're using are kind of the nimbleness of being a smaller town. We're not small, but groups are looking at, they're looking at a Dallas or they're looking at a Fort Worth. There's millions of people there, and we're using our advantage of being a little smaller destination that there's less crowds, there's less people. So those are some of the things that we're trying to do, and how do we strategize and use our effectively? If I may, I wanted to just report on a great example I have of that has actually just happened. I got word on it over the weekend. We were bidding for a convention, the city of Denton, in our convention center, for the Northeast County Judges and Commissioners Association Conference for 2022, and it's a conference we've been on twice before in previous years. We made it to 18 cities submitted proposals. What we did with, again, as the timing, we got more creative over the last month. We were able to put together a video of Denton and some of the protocols that are in place at the convention center and the embassy suites. We worked together with them because the group was looking at the convention center, put together a video, and we submitted that with our proposal. We made it to the final three, which was three cities were us, Grapevine, and Rockwall. So we were competing against the Gaylord Texan, much bigger hotel than any hotel around here, the Hilton Rockwall, and their CVB, and then it was the embassy suites and the convention center. Last week was the presentation, and Ruben Perez from our team and Josh Delgado from the embassy suites actually went to their 2020 convention, which was still taking place in Nacogdoches. We were the only group that actually went and presented in person, and we just got word the other day that we won the bid. So again, it was our efforts of working collaboration with the hotels. We actually took the time to go down there and make the presentation in person. Some of the feedback, I think, was that we were not that large hotel like the Texan, but ultimately it was that it was a combination of the proposal put together, the relationship of Discover Denton working with the convention center, and then the fact that our city and hotel took the time to actually go down there and present in person. And I'm proud to say we won the bid. It's for July of 2022, the group's going to be over 500 room nights, and it'll be over $100,000 in room revenue for the city. So we're real proud of that, and I'm sorry if I overstepped just telling that, but I wanted to. It was very exciting to know that we're still booking groups, and this one just literally got put in front of me the other day, so we're really excited about that one. Yeah. And thank you so much for that example. I know I, for one, love hearing that. That's a wonderful story. Thank you. I don't know if Jesse and Chris, I don't know if you want me to continue, I had several more questions, but if we should rotate, if others have questions, if I should ask my several others now. I don't have any specific questions from Mike Marruats. Do you have questions? I don't have any, no. If we could, if we could move just as quickly as possible, we still have a lot of numbers to talk about this morning. So if we could. I will just, I will limit it to two then, and I can follow up with Mike, maybe you and I can, we can have our Zoom meeting and talk. Anytime. Yep. No problem. So, but my next question is about, have y'all thought about discounts having, by y'all, I guess I should say the convention center, embassy suites, but also maybe if you've heard of other local hoteliers, thinking about how the impending need coming up with schools starting, whether or not there's going to be virtual only, I guess we'll find out soon, now they can do virtual school only, but if there is the online option, we're going to have some kids in the schools and there's also going to be parents who are looking, working parents who want to go online, who are looking for kind of safe spaces to do kind of smaller scale child care, you know, is that the kind of thing that a parent should consider using maybe embassy suites or hotels for, or is there some, is there some barrier to that, you know, that I might not know about, that is to say, you know, given that that hotel rooms or hotel suites are kind of clean, neutral spaces, maybe to get some help to get some daytime business for hotels, is that an option? Yeah, it actually is, and I know a few of the hotels, the embassy suites was one in best western premiere, they've had day rates available, really, they were the first to come out with it back back in March and April for some people that wanted to not go to the office, but they did want to have a safe space or, you know, they didn't have a home office, let's say, so but they had to go, they wanted to be away from their family and you know, if they were going to work, so they are offering daily day rates, which is something normally hotels don't do, where you can come in for like eight hours and they're offering a special rate. So there's a few doing that now, specifically for daycare and things. I hadn't heard of that, but I know, you know, just in general, the staycation has gotten very popular, anyone with a pool, that's what's helping the hotels right now and running their 50% occupancies is a lot of them are locals and are regional people coming with families and staying the night now, as school moves on, that could be something we could suggest to them, so I could certainly bring that to the table. Well, well, thank you so much and yes, so please send me an email and would love to set up, you know, maybe an hour, an hour or two, you know, when you have time and to just learn more about everything that's going on and, you know, how we can just what what you all are doing because I'm really inspired by the by the creativity and the flexibility that I'm seeing and I know it's been a real struggle for the hotel industry. So anyway, thank you for coming and speaking to us and thank you to, you know, Jesse and Chris for indulging me all my questions, but we continue the rest offline, but I'm glad also that, you know, the public is an opportunity to hear some of this too. No, I appreciate the time and we're always here to tell our story and, yeah, and again, at the end of this month, we're having our next advisory board meeting. So we'll be putting together really a whole compilation of the last quarter of information. So all that's being worked on right now. So again, I'm always available for any of you guys if you want to speak offline and we're here to help and serve. So we're here to get through this thing with everybody. So again, thank you for the time and if that's it, I'll disappear. Thank you for hopping on the call with us and for the information and thank you in advance too. Our next agenda item is looking at the budget requests. Appreciate your organization's forethought and attention to detail in that budget request. It's going to be very helpful in our decision making. Thank you. Thank you, Jesse. I appreciate it. Okay, anything else from council members on this agenda item and then we'll close this out and move on to item 1C hot 20 dash zero two three, receive a report, hold a discussion, provide recommendations regarding hotel occupancy tax funding levels and budget requests for program year 2021 and fiscal year 2020 to 2021. Okay. This has a very tiny presentation, so hopefully this will come up and work for us again. Let me get that up for us. Hey, just wants to work quickly for us. Okay. Everybody on board with that? Okay. All right. So basically this is a very short version of the presentation. You've seen the last couple of hot committee meetings that we've brought to you the past two months and we're just going to go over our hot assumptions, the fund balances, and then open it up for discussions on all the recipients' requests in their application and as well as their budget requests that are embedded in those applications. So first we have that the program year 20 revenue estimate is based on actuals less than 25% of the budget. So for actuals we have October through May currently, and then June through September is the 25% we're basing off of budget. So that's where we have received or have indicated what our 20 current estimate is. And our expenditures are reflective of our last meeting when we brought to you the mid-year budget updates from our recipients who showed around 469,000, I believe, impossible refunds for this year due to COVID, impacts of cancellations or postponements or delays, and so our current year estimates are already embedded in those numbers when we get to our fund balance sheets. And then for the 21 revenue estimate we're calculating a 35% less than current year budget, which is the same that we have shown in any other fund balance worksheet like this one that we have shown to you in the previous couple of meetings. So since our last meeting on June 11th we've only received one more month of revenue and that was May and it was around $90,000. So that's the only difference really you see here in the year to date and the estimated year is that one more month with all others and then also one more month with embassy so that that has changed a bit. So overall this is the snapshot you've seen before but as we go into discussions you'll see the main fund balance worksheet that we're going to look at that has every expenditure on there from every requested recipient. So we'll go into that in a minute but this is the snapshot we've kind of shown you over the last couple of months. And this is just kind of where we are we're projecting a 1.6 million in revenue for 2021 for all others you know and the embassy suites is always there but they're an in and out because we pay them 100% out what they put in so the projection is the 1.6. And really that's all I have for this before we get into the others. Other than saying any information on your AIS sheet does include that we have one recipient in the 2020 year the Denton Arts and Jazz Festival that is going to keep the $31,250 in their current year and we're going to amend that budget and contract so they're going to take the $31,000 forward with them so you might want to take that into consideration when you're looking at the 2021 requests. Other than that they are the only one that has rollover money to be spent for next year. Mayor Wallace did I see your hand yes Randy on the last let me get back to this on on the Hot Fund Summary slide because the one I see in the backup is a little bit different than this one. The one in the backup and I was looking to make sure I didn't miss the one in the backup adds back in the unspent funds and I think I'm looking at the right one. You want me to pull that up because that's what we'll be sharing on the screen most of the time. Oh the other one look at it yes let's go ahead and I'll pull that up yeah. Are we talking about this one no no it's it's the Hot Fund Summary it's the same slide that it had underneath if you go back to the Hot Fund Summary it's slide four of the presentation in this agenda item in the backup. It shows estimated unspent funds of 476,000 change in fund balance and it says revised change in fund balance is 199,000 for an updated fund balance of 2.231 and then when you carry that forward I think I'm looking at the right meeting let me make sure I think we took that out of this meeting that there was two extra lines on the previous meeting on this fun sheet from June looking at the right now I'm looking at the right I'm looking at the right meeting is for the 20th yeah the 20th today it's it's in it's on agenda item C and when I hit that and go to exhibit six which is the presentation and it's slide four it shows those other those other items so that that's mayor it's all it's the same I see the slide it's the same information that in the previous format it was just pointing out that it was $810,000 change in fund balance in the presentation rain to give it just didn't didn't have that additional information but if you look at the revenues and expenses they're the same on that well no the only question I have David is in the preliminary FY 2021 beginning fund balance it shows 1.754 million but that doesn't but down at the bottom on this slide I'm looking at it says updated fund balance based upon it is 2.231 million so it didn't go ahead that that's that two point that that's a calculation error I believe the 2.2 the one point that and that's probably why the presentation was updated on when Randy was presenting well they only okay and that and that may be so the only thing I'm looking at though is when you have the estimate because the slide that was in the presentation stopped those lines stopped at estimated unspent fund balance of 476,986 and so then it looks like what happened was the 199,217 is the difference between the 277 minus number that the negative number added with the 476 and then the 199 gets added to the 1.754 in fund balance right there this highlighted in but can we pull the slide up the the the hot fun summary that was in the presentation that's what I'm trying I'm trying to find I mean no I'm talking about the one that you that you did the one I just did yeah okay this one here correct no no no it's the it's the one pretty just the summary hot fun summary I guess I'm confused because my my the slide from the power point you showed us just now I think Randy I think you need to stop share of the yeah I'm looking at an Excel spreadsheet yeah okay yeah all right so we want just that hot fun summary that's a like a eight or nine line summary yeah right there yes okay that was okay stop share and reshare gotcha okay so so I see the estimated unspent funds let me let me see if I can't I can't really read those are the recipients numbers they gave us last meeting that's the amount the recipients expect not to spend this year so mayor I think I can clarify that that line on the S the row on estimated unspent funds is just telling you what you're seeing in the estimate if you look at the recipients budget versus your recipients estimate so that's just for reference the slide that was in the presentation just incorrectly that bottom row was kind of double counting that or just calculating incorrectly so the 1.75 is the accurate estimated fund balance assuming the estimates that were submitted by the recipients okay so are you looking at the slide I'm looking at that's got those lines broken out I am yeah okay so help me go through this so under the estimate the councilmember armature and councilmember Davis do they have that slide up as well it's page four of the summary yeah you're asking about the one from the backup yes yeah I've got that okay I just want to make sure everybody can follow me yeah so so when I see the estimate of the beginning fund balance at 2.032 million that's carried over from I guess I don't know where it's carried over from because it shows the end fund balance on the budget is 1.99 but we're going to go with the 2032 so then it says in fund balance is 175 4841 and the 277,000 is the delta between the two million and the 1.754 million well then what I'm seeing is the estimated unspent funds is four hundred thousand dollars which means that's money coming back into the hot funds and so when that money comes back into it it's saying all right we've got 1.754 million and now we're going to have another 476,000 coming in which adds up to that 2.231830 so I don't see anything really necessarily being double counted unless that 476 is somewhere up here in the revenue and expenditures it that's what that's what's happening at the force so the sliding the backup was just incorrect on those bottom those bottom lines of 476 is accounted for when you look at that if you look at the expenditures right look at the budget for recipients to 2.5 kind of take that forward to the estimate the two million that's where that difference is so that row is really just for reference but this in the backup it was counting for him fair enough okay thank you very much for helping me understand that absolutely I I read that line as here's what the fund balance is until we start spending this year I thought those those things added up correctly on that slide I read that line as 2.231 is what we have in the fund until we start drawing out for this year's requests and then if we did if we if we funded this year's requests then the fund balance as requested the fund balance would be the 944,000 the only problem the only thing Jesse is Mr. Chairs when you go up to the proposed fi 2021 beginning fund balance he doesn't show the 2.2 doesn't match got it so that's why there's he's he's saying that the estimated unspent funds that should just be something that's just somewhere else because apparently it's it's in this what when I wait to see well now hold on a second David on the on the on the recipients it shows 2.531984 for the budget and then it says the estimate is basically two million all right and you're saying that the 476,000 that that's the difference there is that correct correct all right and so that 476,989 shouldn't be anywhere close to another mathematical equation it's already been taken but but when they go to get back they've already they've already paid it well okay this is where it's meant this is so it has to be added back because we've expended 2.531984 that that's the amount that if we had the budget and now we're only saying that the 2049496 is what's actually going to be spent so you have these savings but the question becomes are those savings is it money that's already been paid out or is it money that's that that's just a line item budget kind of entry because if it's money that if we've paid out 2.531 million dollars but the expenditures are only 2 million 49 let's say we paid all the money out then we then that 476 thousand dollars is actual dollars coming back into the the hot funds correct so on on the fund balance worksheet not the one that's in the slideshow it'll show you it shows us our current budget as 2.5 which i'll bring up in a second and then the estimate for expenditures which is less everybody's expected unused money due to covid brings us down to the 2 million so when our estimate rolls up to the 175 it's already inclusive of the 400,000 if you will give or take let me this is what we this is what we usually play off once we get here is this in our presentation is this in the backup anywhere this right here was attached to the email notification because this is what i usually print out as your handout it's also labeled financials in your hot item okay let me let me look at that so i have access to this in the backup information for this meeting yes okay it's under your hot agenda item labels financials okay financials all right so we got well i've only got one of one which is the hotel occupancy tax july 20 2020 is that what we're talking about okay this is it all right um so the 2020 budget uh okay let me look up total total expenditures two five okay this is yeah this is where i'm this is where i'm getting uh confused because and somebody chime in if if they've got some ideas to help me understand this and i'm pretty good math but somehow this is this is throwing me because when i hear that we have money that's coming back in other words people who have not spent the money they have to pay it back which tells me that if we've got 2.5 million dollars that we that we've got as budgeted expenditures and let's say for this purpose of discussion all that money's been sent out it will be yes sir okay so now what we're hearing is so these people have have got 2.5 million dollars but they've only spent two million dollars right okay so so that means somebody's holding close to half a million dollars that they have to give back to us and so when they give that back to us that's an additional 400 in other words the total expenditures line um should still almost when you add back in the money the total expenditures line um should almost it's not when you add it back it's sort of you're adding back the expense but these we've expended 2.5 million but we i mean we we pay 2.5 million out but they've only yeah thank you but they've only spent two million four to 180,000 so now let's just stop right there for a second because the convention center the incentive expenditures those cancel out so i'm not even those that there's a line item for those in the revenues there's a line item so let's just stop right there so this is the picture now what we're saying is that the delta there is money that wasn't spent that is due back to us am i right on that correct it'll be due back to us in january 2021 okay so let's say it's one organization and so they write us a check back for 486,000 or 476 whatever it was where on this sheet would that show up it won't show up until we actually receive it under the 2020 estimate we already show the reductions here that's how we're getting to the two four two zero four nine because they've already projected that estimate right but the reductions the reductions are just reductions that doesn't that doesn't take into account the money that they're paying us back that's just what they've spent so some of these organizations are still holding cash that they have to give us back so that that that 476 has to be accounted for in some budget saying we're going to receive this money back uh so does it follow up in fund balance doesn't it follow up yeah the estimate column is not what they've spent today that's their estimate to spend throughout the remainder of the of the of the program year so the 470,000 is shown we're looking at it on from a fund balance perspective just in the estimate reductions on the expense side in actual terms right we're going to spend that 2.5 this fiscal year next fiscal year we're going to get it back just for the sake of kind of simplicity for having the conversation we've just shown the expense reductions here on that column but just to be clear that column is is based completely on those estimates that the that the entities gave is that does that help kind of show the way that we're walking forward it does but so then i've got another it does but i still think there's something i mean and i'm not an accountant but there's there's still something so let's just go to the and i just think this is important because it increases that fund balance next year if somehow it's added back so when i look at this i go okay we have paid out cash and i'm assuming this so just we've paid out 2.5 million dollars and so if they spent everything the way they were supposed to our fund balance would be 1.991284 right and again i'm using the i'm using the subtotal for the economic incentive expenditures for the for the convention center those cancel each other out so that's almost a zero so we're really it's it's as if those two columns are zero and we're just dealing with the normal sort of hot fund expenditures so let's say then for instance let's just use that column forget the expenditures forget the expenditure side so we got one point trying to read is that nine million 1.991 million okay so we got 1.991 million now of that 2.5 million those people are only spending two million dollars so forget the estimate on the expenditure side you know the the with the reduction so what we know is okay guys y'all didn't y'all didn't spend 2.5 million you've got to pay us back 476 000 all right we've already put out the 2.5 million so the 476 000 if we just deal with the first column would come in as an addition to the fund balance because they're paying it back so somehow we're double we're double subtracting it because you're saying it's taken into consideration under the expenditures but we're not taking it in consideration as a revenue stream because we've already paid it back and it's got to come back to us we're just sort of calculating it there because i don't know how the fund balance could only be 200 it's it's less um so i'm really confused reductions i think i think part of that too correct me if i'm wrong david but i think part of what's reducing that fund balance is how much less we're going to take in the assumptions that we're building into um into the the revenue for the rest of this year and next year so i i've read the drop as um i'm glad you caught this i'm glad you're bringing it up to make sure that additional almost half a million is built into the correctly built into the fund balance estimate but i read it as we're going to have a significant drop in the fund balance just due to spending the money that's not coming in yeah and that's up in that's up in the hotel revenue others the budget was 2.4 million and the estimate is 1.7 million um so that's a seven hundred thousand dollar drop that's what i thought accounted for the fund balance being so much lower even with the half a mil dropped back into it right right oh no no and i i agree and so i think i'm i think i'm slowly but what happened i just something just happened on this i can't see the bottom part of the so let's scroll down again randy thank you i just made okay i'm sitting here trying to scroll it i'm sorry so i just may help frame it just one more just to try to add a little bit of more clarity we're you have to we have to show the savings either in the expense or the revenue side we're we just chose to show on the expense side here what we what we could have done is said on our expenses for this for this fiscal year this program year had the whole 2.5 and then next year to show a revenue coming back to us of the 470 that would have been another way to show it but from a fund balance perspective it would have been the same thing either way right but and so now i understand because if you take into consideration the difference of the 1.7 million in the revised estimate and if you didn't change any of the sub recipient expenditures and it still stayed 2.5 well the fund balance is going to be about 1.2 million but then we're going to get that 476 so i'm looking at it from a cash flow perspective from hey here's here's how it's coming in so i do see now how it's it's built in uh to the expenses i think i think um in the future we might just i mean i got really confused with that yeah i i from a cash that is the way it's going to work i think i think the the reason that we wanted to show it this way was as you make your decisions we thought it would be good for you to see kind of where each entity started an estimate but um definitely take your point on that yeah i agree no okay and like when we actually have some unspent funds from previous years it will be shown up here in your revenue but we don't have it yet it's you know it's actual so next year when we come to you with this same fund balance worksheet under convention center hotel it'll be say prior year refunds because we will have some actual prior year refunds and you will see them itemized out here but we don't have that money yet so we didn't put it up in the revenue and account for it there okay so i think i thought i was clear and i think i'm still clear but i just want to make sure i'm getting this so on this spreadsheet that i'm looking at let's say next year in january we get the four hundred and seventy six thousand dollars in a check so if we had this same slide january 1 would there be an item under the physical fiscal year 2021 request for for the revenues would there be something another revenue that says refund yes another in between convention center revenue and hotel revenue there'll be a prior year refund okay i see the line there so that would have one hundred and seventy six thousand dollars in yes because we actually received it they did happen but okay but in that scenario our expenses for f for plant program year 20 would be 2.5 million dollars so it would no but that's what okay this is my point we're sort of we're sort of mixing kind of reporting kind of pathologies for for this purpose we've got a budget kind of presentation of okay we we we've got reduced so i i get that i get how that the two million dollars represents that that's the money that was saved um let me let me think through this okay yes because if we showed the revenue the prior year refunds you're right we would have to show instead of two million dollars under the expenses it'd be 2.531 and i'm going to be truthful i think that's how we should be showing it because if we're saying the 2020 estimate and we could maybe have another column that says this is the estimate of what the people are trying to say that they're going to spend but in reality we have expended all of that money under revenues and so the fund balance um right now the fund balance right now today uh my hunch is not 1.754 because we've we've got still that 400 something thousand dollars outstanding to the recipients who still have to pay it back so the budget part of this i mean i understand the numbers are correct now but it's it's to see how it flows it just that's anyway so would you like us to go that route right now and show it to you do what would you like us to go ahead and alter this well you'll have let me see um well i think this is a well i think if we're submitting an actual this is what we really think as far as how all the money's moving around i think this is more accurate in the sense of if you have 2.5 million dollars showing as expenses uh there could be an asterisk on that saying that and you still could use the two million dollars in another column to say hey this is what they're really spending it's just making sure that that savings is somewhere you know easy to find that hope here's the 478 we're talking about i probably made it too big of a deal out of it but i got really confused and then as we kept talking it it became a little more clear but i think it's because it's hard to it's it's hard to find it um and maybe because we knew how much it was then that made it to where i'm like oh wait a minute where is it in this in this slide if i didn't know about it then i mean i i would have known about it so um but yeah i just it helps me understand exactly what's happening because i think in more terms of probably cash flow than budget um and that's just my i mean that's my issue so it's not that it's not that it's right or wrong it's just it was different than than what i'm understanding how to process it does that make sense to my colleagues it does and mayor for me the the way i'm reconciling it is just kind of holding in my mind that delta in line 42 between cells d and f and line 42 and they're in the rest of it's kind of a where where it goes in and where it comes out is is kind of a wash for me because i'm watching those two those two cells and then the ending fund balance right um as long as it's square i don't really care how it gets there yeah um because i know we're we're gonna dig into that fund balance significantly in this conversation so right well i just wanted to make sure for me i understood that that 400 something thousand was already included in that 1.75 for uh fund balance because i was thinking it was going to be added to it and it wasn't carrying forward to the right amount but now i understand that it's just implicitly into reduction in the expenses so no i get it and i'm you know i'm i'm the same way i feel the same as jesse but um i i also you know i'm all for uh you know since there's just a few of us on the committee if there's um you know one column that needs to be added in the future to um uh you know make it so that we can see it from different perspectives if that would help you mayor i'm well well it doesn't matter to me except we have prior year refunds as a line item in the revenue but under this type of scenario that would never you couldn't put it in there with this slide presentation unless you changed the subtotal recipient expenditures to the 2.5 million because that prior year refund is representing money that's coming in and what i'm hearing is the way this is presented currently we can't put it in there unless we change something else like the expenditures i see yes so that would have to be a separate slide if it doesn't matter to me i don't need an extra i just i'm glad i understand now so okay okay got it yeah and can i ask a fund balance question and y'all tell me if this is this answer is forthcoming in the recommendations and discussion discussion but um since we're already talking about fund balance i think that kind of 50,000 foot issue is going to be really important to our conversation is uh if there's any guidance from staff on best practice or um last year we talked about a fund balance in anticipation of uh you know projects in the future and then projects that didn't come to fruition um is there going to be a recommendation from staff specifically on fund balance and where we you know where we ought to ought to land with a fund balance because we're going to draw it down regardless if we find if we fund dollar one this year we're going to draw down the fund balance sure you know we we don't we don't have a formal fund balance policy for this fund which is a priority over the next year to try to get a fund balance policy for each of these funds so we have a standard way to look at it i would say as we look into the next fiscal year knowing there's going to be more uncertainty than usual um that we probably want to keep a fund balance that's about 50 of those expenditures going into the next year so i would kind of look at the even the 2.5 from the budget year at least carrying over 50 of that or or whatever we end up with the recipients and have that be our benchmark so a little bit over a million dollars just knowing knowing what we're what we're headed into so like like 1.25 or something yeah that would that would be my recommendation obviously it's up to the committee and council's discretion but i think that would be appropriate just given the amount of uncertainty next year okay mr chair yeah go ahead yeah when i'm looking at this um i'm going to really struggle with um funding this much over the last year's i mean we're a little bit under last year's budget a little bit um but that that budget uh um is based upon full everything working fine so i i personally i'm going to be more comfortable with saying hey and when you look at some of these um like north texas state fair association they went up forty thousand or fifty thousand dollars fifty one five yeah just so for me i'm real comfortable with going okay we got two million dollars that everybody spent under this scenario under this sort of pandemic scenario and when we look at the potential potential revenue projections the hotel revenue is 1.7 million is what we're projecting and we're only projecting 1.6 next year so i don't mind funding some increases but i don't think that i'm not comfortable with pulling out of the fund balance to fully fund everyone's requests as if everything was the status quo prior to the pandemic when right now we're looking at a difference of an eight hundred thousand dollar drop from the budget prior to all these situations this pandemic so and i don't know what that number is i'm okay with how we figure that out but i'd be hard to accept the request line and this isn't about staff or the requesters it's just yeah if we funded everything that everybody requested we're down to we basically depleted our uh fund balance by almost half mayor i'll be honest with you i came into this meeting and i again i don't want to cut uh cut off staff's intended time for discussion recommendation um but i came into this meeting with with that thought in mind exactly that we don't have room to be funding increases some of those increases are salaries um additional salaries over last year's uh budget and requests so i wasn't comfortable either so far with with funding any of these major increases and then we have some entities that have significant decreases they're asking for less uh probably because we asked them to um and they they know what the picture is so i agree with you i think in principle that that funding some of these major increases is not not in the cards this year however we end up slicing it i thought an easy way to start would be um everybody's at last year's level except those who are asking for less and those who are asking for less or whatever their request is when mr chair when you say last year's level are you talking about the original request or the estimate of what they said they would need this revised kind of estimate last year's budget last year's budget because what i'm looking at is and there's room in that conversation i think for um those that are able to carry forward a balance for something or you know we talked about fireworks for instance that's a different different issue but somebody who who's able to carry forward something they paid for in this year and and realize it next year maybe they they put some ad space or something that's on hold or or whatever what i'm talking about is no increases over uh column d on our slide and decreases for those groups that are asking for less in column h than they got last year in column d okay let me look at my slide here so yeah so when i'm looking at my slide on the presentation in the backup uh column d on the the excel spreadsheet is the fy budget which is what their their full ask was when everything was was good everything was normal well that comes to 2.5 million dollars and if you look at the the request for 2021 and these are the requests that people are putting in it's even it's less than that it's 2.429 million and and i'm saying and so i yeah i would be hard prepped because if we if we use the 2.531 our fund balance is going to be less than what it what we're projecting under this py 2021 request i'm saying except for the except for the groups that are asking for less are not making a request at all so i'm saying if they're if they're delta between d and h is positive then they don't get that if their delta between d and h is negative then it's negative we give them what they asked for this year because they're asking for less i think we'd save about 80 if you look at that 2.429 million um if we funded uh if we funded the groups that are asking for more the same way we did last year we saved about 80 000 dollars right can i can i throw in my my two cents um so i think i think that uh and this will um probably won't surprise anyone and uh it's the minority of minority opinion but i do just kind of want to state it for the record um you know my my approach is somewhat different uh i uh i look at these requests and instead of thinking uh in in terms of categories of you know who's asking for more who's asking for less who's asking for the same i look at uh what you know each separately what their needs are uh and how their needs may have changed and if there's an increase i want to know how it's justified um but uh i i myself am open to funding an increase or not funding an increase just based on the on the uh the individual need for it as shown in the application and of course it being uh uh you know with with within the legal definition of of hot funds um so i'm not uh you know in in favor of that kind of across the board although i i understand it it's it's a nice way to um uh make it um clean uh you know i prefer to do it you know more look more on an individual basis and under under covet i'm also thinking about you know where the need is you know in terms of uh the current pandemic situation so for instance um under you know uh the uh let's see where is where's so embassy suites is under uh it's not under the discover or they're a category all to themselves your category all to themselves okay yeah so i want um but i'll i'll mention them as an example so they're not even they're not on the list okay um the no they are received the funds they receive uh are the funds that they bring in so they pay a hot tax bill every year and then we give it right back to them yeah that's the arrangement so they're not really they're not like a hot fund recipient because they're helping out yeah so um okay but i was just looking for them on the list okay so i got here council member armenter their convention center hotel 453 and then they come right back out at the bottom as an expense got it got it got it okay yeah so anyway so i'll just i won't dwell on it because i know it's the minority opinion you know but but but that's my approach just to state that for the public record sure you know and i i uh i have a lot of respect for that approach it's closer to what we did last year uh you know we went you know based on the merits of each individual application in each budget and we did a we've done that i know y'all have done that in prior years too kind of a deeper dive into the individual requests and in budgets you know well how are y'all spending this do you really need to do this this is a big priority for y'all how can we help make it happen um you know one that i'm struggling with for instance is the black chamber of commerce for the blues festival uh they've got uh they can absolutely justify every every bit of the what they're asking for and they they did last year they came in front of us and and gave us a really good explanation of why they are asking for a significant increase they did last year and again this year the problem for me with that this year is we're like orders of magnitude less money to deal with we're talking about at least 35 less money to deal with it's hard for me to say to any organization these guys got an increase even if it's legitimate and justified and a good thing to do these guys got an increase of x number of dollars we could barely fund what you're asking for uh because of the decrease so for me i think the only way that we and i don't have a problem with dipping into the fund balance to be honest with you that fund balance we've got to figure out what it's there for yeah right now uh you know it's it's sitting there we had ideas for it before that project fell through so now we've got a chunk of change sitting there that we've got to figure out what to do with for that reason because it's unprogrammed money i don't have a big problem with drawing down that fund some to make sure that these things are happening that these hot fund appropriate activities are happening and we just heard a great presentation about how that money goes out into the market and doubles itself you know or more than doubles itself bringing events in what i'm talking about is if we have such a significant drop in the amount of available cash the only way i can think of to be fair to everybody is to do something like a flat flat funding or the ones that were proactive and are giving us discovered it's another good example they're giving us a budget this year that's significantly lower a request this year that's significantly lower than their request and budget for last year i think we realize those savings where we can and then fund everybody else flat where they were last year it as a starting point i think that's the only way we can we can even begin to tackle the drop because otherwise we're going to have to end up if we're going to fund somebody an increase and not draw down the fund balance then that means we're going to not fund another organization there's just not going to be money there now they still they still are i'll just throw this out there they still are getting much more than um to name the example you just gave black chamber of commerce so we can look at in terms of increases or we can just look at it as total amounts you know in one uh synchronous slice of time right and compare the different amounts again it's just it's just a different way to look at it but that's just more how i see it sure i understand that the the difference there would be you know the chamber of commerce event uh is a is a long weekend and then discover dentin you know they're running an entire we basically pay them to run the marketing of the city we've got our our public affairs folks who do our internal marketing to our citizens but we pay discover dentin to sell the city to all these groups that come in and spend millions and millions and millions of dollars so kind of apples and oranges there to me but i think that's this is kind of a threshold issue of how we want to treat this fund balance and what our our fund balance goal is because there's no way we're funding these requests without getting into that fund balance in some form or fashion yeah and i don't i don't have an issue with the fund balance uh drawing down the fund balance i think that uh there needs to be a discussion at the council level on you know if we're looking at wanting to have certain type of event centers or something like that that we want to be able to do without dipping into general funds this is the fund that would primarily be the source of it but let's just say for instance we just we we've uh take out of the fund balance of what is it about 900 000 or or we we drop it to where the fund balance is a million dollars in other words we almost fully fund all the requests well we never thought we would have this situation and i don't know how long it's going to take for this situation to reoccur but you're talking you got two years left that somewhere down the line there's going to be have to be an adjustment if the money doesn't keep coming in or if the money doesn't recover after next year then you're looking at those requests are going to take the fund balance to zero yeah and that's so that becomes a policy question then as far as well is that what you want to do or you know everybody's had to take a hit during this this pandemic all of our businesses everybody's had to sort of you know experience something that they never thought they would have to experience and so we've just got to figure out as you said mr chair what is the purpose of the fund balance and because this is hopefully a very isolated incident in our in our history or certainly near-term history because otherwise that fund balance could be nothing and then of course we won't have any decisions to make i mean it'll be just like well we don't have any money so you're going to have to drop your your requests you know mayor i left in my estimate earlier of what we'd save by funding uh funding flat except for those who are asking for less i left out public art committee so we'd actually i said 80 000 i think we'd probably be closer to 110 120 savings over last year i think that might be helpful might be prescribed by ordinance or statute i don't it is that right uh mac um do we have to fund a certain percentage to the art there was something we have to fund a certain percentage of there's a 2.4 resolution in place but the pack committee voted to request less than that 2.4 percent this year because they have so many projects going on right now that they're trying to get their hands on and they want to use just this 35 000 to get the the one art project going so they're just a little bit behind and so they didn't want to dip into the funds if they couldn't use them okay all right thank you well it unless staff has a better recommendation and i'm very open to hearing um what the brain trust has to say because you know we're laypeople in this area but um i i think it may be helpful if we as a committee set a fund balance that we're comfortable with an estimate going forward if we were to say we're good with 900 we're good with a million we're good with 1.2 the number i came in this meeting with was 1.2 and and i'm very open to discussion about that but i think it would be helpful if we set a fund balance that we're comfortable with and then that tells us how much money in estimate that we have and then david mentioned 1.25 is about half the projected expenditures uh i think that would adequately cover what you're worried about mayor that you know we don't know if there's going to be another shutdown we don't know if there's going to be some additional we have no idea what the future holds in store so i'm comfortable anywhere in that that 1 million to 1.2 million range for a fund balance so can i ask of staff um is you know what would uh you know i guess david you know whoever wants to take this or maybe get multiple opinions what would you consider a quote healthy fund balance is you know 1 million or 1.2 million somewhere in that range i believe that's um an earlier question that we kind of propose is the 50 of your expenses and so that was the 1.25 or 1.2 and if the committee can come up with a directive a short-term directive to give us to take offline if you can give us the fund balance you want to get you want to advise us to try out the you know h or you said d less h to get that directive then we can go on a five or 10 minute recess work those in this j column and let you see what it looks like um so if y'all want to come up with some plan for us to calculate and put in this worksheet and get offline for a few minutes then come back and and show you what that looks like we can do that as well yeah mayor what do you think about that fund balance number oh i'm okay with that but i think you're i think your uh mr chair your process or your uh formula or algorithm that you originally stated which i'm going to repeat to make sure i understood that in the 2020 budget that if if they if they asked for less this year that we give them the less if they asked for more we give them what they had in the 2020 budget so i'm just looking at a couple of these and when i look at dent chamber of commerce discovery center they asked for 1.62 now they're only asking for 1.067 well there's a hundred thousand dollar savings right there because what will be included is the 1067 when you look at north texas state fair they're asking for 247 195 was the last year so we would give them the last year well that's another 50 that's the 50 000 savings so i think it's going to all come up to be the same but 1.2 i mean i'm comfortable with that given that we don't know what's going to happen i mean unless there's a vaccine that's developed that is you know safe and people are willing to use it and to and it becomes widely distributed we're going to be in this process for quite some time quite honestly and it's going to and it's going to move into so this time next year when we're having this same conversation do we think that the that the landscape is going to be a whole lot different than what it is right now and that's assuming that it's different in a good way and not different in that something's happened and it's pushed things further behind so i'm okay with that that kind of fun balance yes absolutely either one probably 1.2 would be what i'd like to see the number on see how that affects people's requests because we may have to the next council may have to have the same discussion and saying hey we don't have the money that we budgeted you guys have to tell us what you actually need and we go through this whole conversation uh next year yeah good deal well then uh randy and david if y'all don't mind let's um how many how much time do y'all need before we kind of gavel back in not very long i i've i've kind of i've done it very quickly here and so we just kind of assume that you would be yeah i will say just to kind of give you a heads up as we go um back it looks like that got us to about 2.2 million in in those recipient expenditures uh doing the the the route that you mentioned which would bring our fund balance down to about 1.1 but we'll go back and and confirm that and bring it back to you in a clean format and before we take the break a break can i make a a brief request uh that to um jesse and chris uh we would either of you feel okay with kind of temporarily removing for discussion the uh the denton county funding issue um since as you know you know i i don't believe we should be giving a hot fund to another taxing entity the county being its own taxing entity um i would prefer you know for us to deal with that on that issue separately but you know we're a committee so i'm curious how you feel about that i just wanted to bring that up before they go back and calculate everything if i could ask a point of privilege on that um so i think under our ethics code i'm allowed to vote on the whole the whole deal the whole enchilada um i don't think that i can be a part of a conversation that specifically deals with the county and their request um so if if you wouldn't mind that would be a conversation i think just between you and the the mayor um well and the whole city watching i suppose um but if you wouldn't mind holding on to that until after we kind of do this sure omnibus uh top down kind of thing and then uh similar to what we did last year y'all can take up the county as a separate a separate item with me that sounds good so um what do y'all think five minutes ten minutes oh go ahead mayor mr chair real quick on that last point um i don't think that so uh mac just chime in if i'm if somehow i'm stepping over something or stepping on something because i can share my thought on that right now on removing the county uh and so i don't know i mean mr chair if you don't deliberate if you don't say anything you're going to hear everything we say anyway even if you're my if you're if your screen is off so um i'm gonna i'm gonna stop my video until you're done talking okay you bet all right so yeah i just assumed the reason why i think that should be a council decision i don't i mean i don't feel comfortable with it coming out of this committee with that i mean the council can always make that revision at the council level uh haven't really delved into what all they're asking that for so it's not necessarily a an objection to that i just think that that decision is better suited for a full council than just two members of the council making that decision in hot front so it seems like council member armature uh that's something she may want to do and it's something that i'm not willing to do here at the committee level doesn't not making a statement as to what it would be at the council level so i don't know uh if you if you have differing opinions and you i mean there's no vote i mean it's it's one one i mean so yeah yeah so yeah and so is this and when is when is this um are recommendations going forward to council first week of august it would be part of the proposed budget presentation so on august 6 it would be in front of council okay yeah i mean i'm i'm fine with that because i mean like you say you know this is this is a recommendation within this committee anyway that's going going to council it would just be the two of us and and i appreciate the jesse's for keys i think that's good so um yeah i'm fine with that okay all right great i guess the chair will rejoin here shortly there he is so i'm back and um the time right now is i've got 10 32 um david orandy y'all want to tell us when we when we want to come back i think 10 45 probably already finished it i know right we just have to move it to the other computer i think 10 45 would be perfect all right let's do 10 45 that'll be just uh just a little while all right thank you a little bit thank you thank you then bye bye all right and we're back we took a little recess there for uh staff to update the excel spreadsheet we were looking at and how's it look guys did we uh can we shave what we needed to uh yeah i think i think so i think it's basically kind of the summary i gave right before um about 1.1 million in fund balance so i'll pull that up for us right now so obviously we could go through through these um line by line or open up for y'all's discussion but i went through and we did the proposed as either essentially the lesser of the request or the current year's budget and that got us to a um subtotal recipient expenditures of 2.2 million dollars and an ending fund balance of 1.1 million dollars i i do want to i did just because we had the discussion on it earlier i don't want to um drag us down too much and where you're headed with the discussion on the on the proposals but i did put this in the format that we discussed previously where you just to see it's going to have the same ending fund balance just to walk it forward in a different manner so if you if you follow this this would assume that we're obviously spending the entire 2.5 this fiscal year kind of walking that forward and ending with a fund balance of 1.2 million dollars and then that becomes our beginning fund balance next fiscal year and then showing our prior year refunds of that around 4.8 million dollars coming back in as revenues but then ultimately with the same proposals ending with the same fund balance so no obviously this is more on that cash flow perspective yeah no yeah you bet thank you great so i'll just go over the tab for conversation but obviously go back and forth if one of them works better so um what do my what do my colleagues think this is uh this is what i asked for prior to the break as a starting point for conversation um for myself i'll say i'm i'm honestly comfortable with this as a council recommendation um but i think we plenty of room for conversation here also so well no i'm fine i think it took basically i think it took your original um proposal when i look at this and it just seems like that's that's sort of how they got there they either did what their original request was i mean there's maybe a few variations but i'm okay with this as a recommendation and if there's something that changes between now and august in the economy or or things such as that or our projections we can always revisit that at the council level sure council member armenter do you have any other i know you mentioned earlier you kind of prefer to go yeah line yeah so i'm going to so respectfully i'm going to be uh voting no to this for that for that reason um but but uh but i you know but i appreciate the uh that that we've got something to bring forward to council but that's why you know for consistency's sake that's why i'm going to be voting no to this sure can completely understand um i i will say i think uh doing kind of a across the board like this it gives me a little bit more comfort too and i'm going to run into these guys in the community these are people we're going to see at the grocery store and at future council meetings and this is a uh this is a lot easier for me to explain as a fair and even-handed way of dealing with it then you got this and you got that and all that kind of deal so um if a member davis we just have one outlier there we have one new applicant so who's not in the picture there but the texas veterans hall of fame so if anyone would like to speak on that we can accept no new applicants or y'all can make another decision oh i see that they're not in they're not on column j i didn't make it all the way to the bottom i assume they'd be in column j well that's a new applicant that's up to y'all to accept it under the conditions at any time or make another decision they've asked for 12 000 you can give them less you can give them starter meat i mean it's all up to you let me while uh mayor do you have an opinion there i need to pull up their budget i had it up a second ago but i need to take a look at what they're asking for i think they're at the golden triangle mall they're asking for some rent some liability insurance and a part-time salary council member arminter sounded like you're going to say something yeah i mean as i said i'm i'm you know i i already said that i'm going to be voting no for the the uh to the over for the overall approach um but you know for what it's worth i think it's important that that we put uh their full request in there uh it's a it is also it's a small one um compared to the others obviously it doesn't uh factor into this you know increase decrease remain the same conversation um but uh you know it won't uh affect the i mean it can be be easily factored in to to the the fund balance that that that we're proposing so i i think we should put in the whole thing i give in how little it is how affordable it is mayor go ahead oh uh well i know that in the past when we've had new applicants i don't know if we've ever funded fully a new applicant um and that could be wrong because my memory is not that great sometimes i think that even if we only funded ten thousand dollars i i think any any amount of money would would certainly be appreciated because this is a new organization and certainly their their mission and what they bring to the potential for people coming to the city to look at that is important so i don't have a problem funding them i think just as a matter of if we just looked at the dollars of course i mean 12 million or 12 thousand dollars is not going to do anything even if you lowered it to 10 000 so i don't really know if i have any heartburn about that i just want to make sure that we deal with that evenly and consistently moving forward with new applicants um so yeah that's that's my thought on it i mean if if the consensus is to put in you know the full amount that's fine if not i mean rent and salaries i have to have to pull up the application really delve into it that much but sure so i'm looking at their uh kind of the the encapsulated version of their budget request it's a hundred dollars for internet advertising um forty hundred dollars for rent four hundred dollars for insurance and six thousand dollars for part-time salary um you know one of the things we did last year that i thought was helpful with a new a new group and then also an increase we said well both of these things look to be about the same how about we give them half of what they're asking for and they get to choose which how they're going to spend it you know it's going to be either the salary or the or the rent and insurance um i agree with you mayor i'm not quite comfortable with a full a new organization a new applicant funding their full request especially in a tight year where we're not increasing some other groups um so i'd be fine with you know six or ten thousand dollars somewhere in there whatever the the consensus is well i always put that and just say eight i'm fine i'm fine with that i mean i'll just without prolonging it too much i'll just say to me it feels kind of uh to me it feels like it could be seen as as arbitrary even though i understand it's not you're saying for consistency's sake because we have in the past have not tended to give the full amount to a new applicant uh but uh you know they've been around for uh i mean new is relative you know they've they've been doing their thing out of a little they did it out of the trailer now they're at the um at the golden triangle uh what they're asking for is so little in the grand scheme of things and i think that that small amount i mean it could really make a difference a negative difference in what they're what they're offering and what they can do uh so i you know i i would advocate still for giving them the full amount i'll just just again throwing that out throwing that out there uh well you're gonna vote against it anyway council member armature true true true true true i was just asking i'm good with the a and just bringing it to the council we've got four other people uh that they can can weigh in on that and they can make whatever changes they want to there i don't think this is the place to really have that that kind of discussion so i will i'll bring it up again there thank you thank you part of my thinking there too with new organizations i know it can feel arbitrary that we're just you know worker percentage or split the difference or something one of the things we never know what the new organization is are they going to end up needing all the money are they going to have uh is that part-time person gonna obviously they can find ways to spend all the money i'm sure any good organization could but is that part-time person gonna be there the whole year are they gonna have rent in the same spot the whole year as opposed to an arts and jazz or discover dentin where we know year over year what their budget typically looks like and we have some some history there so that's where i'm at on it um i think uh david and randy are there any other uh red flags you see or things that we need to discuss before we're ready for a motion yeah it's just the third yellow tab there sponsorship i'm sorry go ahead and ask that again that's fine anything else y'all that from staff that we need to discuss about what we're looking at here and hot funds specifically i know we've still got sponsorships but before we're ready for a motion on hot funds i don't think so i think i think we've covered it all i think it's it's a very generous um way to look at things i think the the recipients will be happy okay uh is there a motion on the floor then i'll move to uh recommend uh to council the uh proposed hot funds allocation as presented by staff modified after council discussion okay and um well i hesitate to ask for a second the chair can second so i suppose i will um there's been a motion a second for this recommendation basically column j that we're looking at on our screen um all those in favor please say aye aye all those opposed nay thank you uh the ayes have it and that closes out uh item c for us that moves us on to item d hot 20-024 hold a report excuse me receive a report hold a discussion provide recommendations regarding sponsorship funding levels and budget requests for fiscal year 2020-21 yes now we move on to the sponsorship fund which is a little bit smaller we have the eighty eight thousand dollars in a set budget each year to allocate to organizations that have applied as in the past um currently we have 11 requests we have three organizations in the current sponsorship year that we have allowed through the committee's approval in june 11th to roll over funds that they've already spent or earmarked for a council event this year that will go forward so the county master gardeners association has 378 dollars they're moving forward but they've also asked for some in the current year we have the denton festival foundation which is the arts and jazz festival at around 6 400 this year that they will be rolling forward to next year and have asked for no additional funds which you will see in the chart here and the last one is the kiwanis youth services which is the fourth of july fireworks they are rolling over 25 000 in pyrotechnics but they are also adding asking for 40 000 again this year to increase their pyrotechnics i think another ten thousand dollars but you will see that in the reflection of their budget so we have eighty eight thousand in budget and we have eighty eight thousand seven hundred and fifty dollars in requests and as discussed in the february meeting um y'all are going to oversee if you will the gdac and the dct contracts which are listed a little bit further at the bottom we are holding those to their their current numbers their current um contract this is the last year of their five-year contract for um 122 400 122 400 for those so we're going to move that forward for the next five years for a constant number for the next five-year contract for 2021 through 2025 and those are being redlined and legal right now and and they're just illustrated here because we wanted to show them in the sponsorship funds they don't come into play in the application process it's just a continuing partnership that this committee um is able to house these contracts under now in finance and have oversight of those so those are just illustrated at the bottom for transparency um but the eighty eight seven fifteen request are the ones that are on the table today for discussions okay so um a little bit different picture uh we're negative 750 on the balance there but you know when we last we talked about sponsorships we talked about setting deadlines and that we didn't expect to see rolling requests through the year is there um is there any budgetary reason why we would need to leave a balance obviously it's negative right now but a positive balance in this fund or is this it's this is one of our uh our balanced budgets i'll call it that this is a balanced budget this is internal money that a couple departments put in the pool so that we can have these funds to spend out of one pot and one oversight and so you are correct just like the hot funds the sponsorship fund also is a a drop dead deadline so july 3rd was that date so there'll be no more requests coming forward in either fund so if we spent this to zero uh we wouldn't be doing ourselves any any disservice in the future we wouldn't regret it later in the year mayor it doesn't carry a fund balance forward so it's a different conversation right yeah well and and i think if we applied though the same principles and i and i think the the principles that we applied to the hot funds uh we we put it in the context of the fund balance but i think also if that were a truly a balanced budget request my only concern here is that and it's concern might be too strong these these that are rolling over funds that they already have and then they're asking for basically the same request that they did last year it's it's hard to to ascertain from this that you know when i look at the request for 2020-21 and it comes to 88 750 it looks like oh everybody's just sort of receiving their level funding but they're really not um and so i i think that um i would be i would be more comfortable with those that are uh that have money left over that they're rolling forward that if that those 2021 requests reflect and let's just take the north the koan as you service fireworks and lord knows i'm i'm for the fireworks but so this is just an example that's real easy to do so they got twenty five thousand dollars left over from last year um now is that money that they have in their pocket is that money that they've spent like i think it was spent on fireworks and they're just they're getting the credit and they they they don't have to pay for the fireworks next year because they've already been paid for correct all of the current sponsorship recipients already have their contracted funds and the ones that are rolling over have already spent those so they've already paid the invoice to get a discount on those fireworks of course they're not holding the fireworks they've just paid the invoice for those to happen and the the other ones are just like deposits if you will the arts and jazz festival is a deposit so so what is the total amount of that money that's sort of not included in these 2021 requests like so in essence the budget for the koan as you services would be it's 40 000 but they've got 25 000 that they didn't have to spend last year that they're getting credit for in the next year so that's a really an increase of over 25 000 so in year 2021 they're receiving a value per se of 65 000 which is the 40 they're asking for and they're not having to spend that necessarily on the fireworks because they're getting it from last year so what is the total amount of these carryovers in this column it would be the 25 the 6425 and the 378 that are noted at the bottom so about 30 32 000 roughly about 32 000 right and the arts and jazz is the only one that's not asking for more money in the next year so this is just the 25 000 and the 378 dollars okay all right all right yeah so i think we got to think about something the 378 obviously the biggest one is the 25 000 uh and i think it should i think what i'm comfortable with is somehow showing in the request that they're requesting there they've got 15 000 plus the 25 gives them to their 40 that they're requesting this year but they're requesting an additional amount i just i want to make sure that this all flows well because just by looking at this you don't know that that 40 000 means they really have 65 000 in the following year uh and i'm not picking on them i just i want to make sure that when it comes before a discussion that we all understand that because some people may have some reservations about increasing that funding almost 50 over 50 so that's my only concern no that's legitimate i mean right we uh we we really don't want to see windfalls from this current situation from that's a good way to put it yeah i think i think that's a valid point i mean i would be fine with um kind of digging into that right now and and putting that forward in a proposal i actually hadn't realized that it was that in in the case of that one example that that was cumulative so then they had it uh that they that they had 65 we didn't want to skew the number in the proposed because that's you know or what they request but you can see in the in the red if you can under remarks or request details in addition to and in addition to so yeah they're on the right you will whatever number that is in addition to you would add for what they're actually going to get whatever you propose it's plus the 25 and plus the 378 what about what about this idea y'all this is a much smaller amount of money but it's still money that if i'm not mistaken it's general fund and here in about five minutes we got to start budgeting the general fund as a council so what if our recommendation to council was to fund the request less the rollover amount so less the $25,000 and less the 378 make council aware of it when this recommendation goes to them and you know the whole council is going to have to figure out where that $25,000 goes in general fund if it's not put into sponsorships it's going to go somewhere else so let council make the the final call on whether an organization gets a windfall from this situation or if we fund them basically the same put them back in the same position they would have been in i'm fine with that me too okay uh mayor is that a is that a motion that is a motion i make a motion to modify the request per uh the chair chairman's description of the funding mechanism and i second that i second that very good uh there's a motion and a second all those in favor say aye aye sounded unanimous to the chair so in the chair's opinion the ayes have it motion carries and that will be our recommendation to council and uh sure staff will be able to explain that to them just as well as they did to us so um that closes out that agenda item are there any concluding items from the body i have one sure council member so i had uh after our last meeting i had marked my calendar i was very excited i thought this would be the meeting where we would unveil our new name unfortunately that is still in legal review it might be in a legal name it might be already taken we might have to add just add another word on or an umlaut or something to make it ours but okay well i look forward to that i was gonna yeah go on i was gonna say i was gonna ask the same question um for the record we've got three lawyers staring at the camera right now so um would it would it be helpful to staff or to the process if uh if one of us put in a one minute pitch request or something like that did that help it get agenda placed with the council faster or is it just got to run through its process regardless it's i think it needs to run through the process right mack yeah i'll go through the process and i don't anticipate it going through a preliminary process it'll go straight to the agenda from council with you yeah good deal any other concluding items all right seeing none uh thanks thank you all that was uh more painless than it could have been i appreciate everybody's help today and especially the financial wizards walking us through it um and that concludes our agenda thank you thank you all i appreciate it