Glenwood tourism board: 30 percent decline in revenue possible
July 23, 2009
GLENWOOD SPRINGS – The Glenwood Springs Tourism Board wants the City Council to change a resolution to allow unspent funds from 2008 to be carried over to 2010, due to huge declines in 2009 revenues.
A letter to the council from Kevin Schneider of Glenwood Canyon Resort and the chairman of the tourism board suggests rolling over the $101,785 into the 2010 tourism marketing budget. The funds would be used for advertising and promotions, and to possibly pay for an additional print run of a vacation planner brochure. The letter stated that is costs approximately $30,000 for 65,000 vacation brochures.
With accommodations taxes being down 33 percent January through May 2009, compared to the same time for 2008, the tourism board felt it necessary to roll over the available funds.
“If the trend continues for the remainder of the year, our marketing funding and our ability to market the destination at the same level as recent years will be impacted significantly,” the letter reads.
“The unreserved fund balance will likely be essential to bolster a marketing budget that may decrease by as much as a third.”
The accommodations category of tax revenues yielded $815,517 in 2008, which was down only 2 percent over 2007. Through May 2009, accommodations tax revenues were at $193,727.
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The unallocated marketing funds for 2008 currently total $101,785. Council appropriated $50,000 of the $151,785 to the Glenwood Springs Chamber Resort Association in April, to go toward a summer promotional campaign.
The total amount of accommodations tax collected by the city in a year is split into two programs: 80 percent goes into development and implementation of a marketing plan promoting Glenwood Springs, related administrative expenses and operation of a visitors center. The other 20 percent is allocated for tourism promotion grants.
The current resolution also required 30 percent of a preceding year’s tax proceeds to be first set aside in a reserve account, which is meant to cover a shortage of revenue if it occurs.
The current resolution states that any money over the 30 percent reserve requirement must be spent within the same year.
Changing the resolution would allow any cash surpluses to roll over into the following year for the Tourism Promotion Grant Program and the Tourism Marketing Program.
The problem with that, according to a memo from city attorney Jeff Hecksel, is the excess funds are not realized until after tourism promotion grants are made, and a tourism marketing plan is adopted. Hecksel wrote that the requirement to spend the money puts each entity in the position of making required program adjustments to spend money otherwise not planned for.
“It does not make sense to spend money just to meet the requirements of the resolution,” Hecksel wrote in the memo to the council in June.
Council member Matthew Steckler said Thursday he was in favor of reallocating the funds.
“Obviously they foresee a shortfall in next year’s revenues, so I think they want to take some of the current cash and push it over until next year,” Steckler said. “From that perspective, I think it is a reasonable request.”
The council will address the issue at it’s Aug. 6 meeting.