The Flagler County Commission and the county’s Tourist Development Council today jointly agreed to reduce the revenue portion of the county’s tourism promotions—but not its budget—in order to shift $1.5 million toward beach restoration.
The two boards also agreed to take $500,000 out of the reserve pot that pays for capital improvements to tourism infrastructure, and shift that toward beach restoration as well, for a total of $2 million in beach restoration funds just this year. The money, compounded with subsequent years’ revenue, will enable the county borrow from $5.5 million to $7 million, and use that money to match state aid, and combine the lot with private contributions, thus totaling the needed $25 million to rebuild the county’s beaches in the wake of Hurricane Matthew.
County Administrator Craig Coffey, in a victory for Flagler Beach, also pledged that $2 million of the total would go to the city for its own beach reconstruction projects.
The outcome of today’s joint meeting—which the county commission is expected to ratify with a vote after yet another meeting this evening—was the result of one commissioner’s proposal to enhance beach-restoration revenue while temporarily decreasing revenue allocated to promoting county tourism. It was also the result of Flagler Beach raising some alarm at the possibility that its needs would be sidelined. It’s also the result of a broader proposal to raise the county’s 4 percent tourism tax to 5 percent, which in itself will generate an extra $500,000 a year.
The tourism tax is a surcharge on the sales tax. It is applied to hotel motel, RV and other short-term rental charges in the county, so it’s paid mostly by visitors. The 5 percent tax will generate a total of $2.5 million a year. It is currently split between three funds: promotions, beach restoration and capital projects, with promotions taking the larger share.
The county had proposed raising the tax and rearranging the funding formula so that promotions would get 60 percent of the total, increasing its share permanently to at least $1.5 million a year, eliminating funding for capital projects for a year, and devoting $1 million to beach restoration the first year, $750,000 million the second year, and $500,000 every year after that.
Commissioner Donald O’Brien proposed reducing promotions revenue for a year to $1 million, and shifting the extra $500,000 to beach restoration, for that $1.5 million total. Tourism Director Matt Dunn initially sought to resist the change, as his promotions fund was being pared back, but subsequently conceded, likely because of the intervention of County Administrator Craig Coffey, who is a better reader of political tea leaves. Coffey also proposed adding the extra sweetener of a $500,00, one-time raid of the capital improvements reserves to swell the money going toward beach restoration, thus resulting in the one-year total of $2 million for that fund.
There was concern from Palm Coast Mayor Milissa Holland, during today’s meeting, about the capital projects fund. The fund has twice helped Palm Coast—through a pair of $150,000 grants—pay for improvements and expansions at the Indian Trails Sports Complex, which has seen a substantial increase in bookings for soccer and lacrosse tournaments in the past three years (from just 16 tournaments in 2012 to 29 tournaments booked so far this year). Holland is seeking to increase the size of grants that may be drawn out of the tourism capital improvement funds. She was also concerned about entirely stopping revenue going to that fund for a year.
County Commission Chairman Nate McLaughlin, who also chairs the tourism council, did not let the discussion of the use of the fund go much further, but said that if sports fields have been so successful, then perhaps the county should be expanding its own fields at the County Fairgrounds or at Wadsworth Park, in Flagler Beach, to spread the benefits to the county.
“I’m a little confused, the city is in the county,” Holland said.
But that would be a discussion for another day, McLaughlin said.
Coffey explained the beach restoration needs at last calculation: those needs add up to $25 million. The county must match less than half, because two state parks are included in those needs, and the state is picking up those costs entirely. So the county’s match goes down to $11.5 million. When another $4 million in private contributions are figured in, the county’s match falls to $7.5 million. If the County Commission approves the increase in the sales tax this evening, as well as the O’Brien proposal and the $500,000 raid of the capital projects fund, it’ll mean that the county will have to borrow just $5.5 million to meet its match.
Though the joint meeting was to focus on beach restoration, Dunn, the tourism director, joined by two private business representatives who serve on the tourism council—Tom Grimes, the general manager of the Hilton garden Inn, and Kurt Allen, the general manager at Marineland Dolphin Adventure—spoke at length to defend the county’s promotions spending. That spending will not cease or decline even as revenue into the fund will decline. Rather, the fund’s reserves will fill in where revenue does not, but the budget will remain at around $1.6 million this year, and presumably a bit less next year.
“This is not a time to let our foot off the gas, we want to make sure we’re maintaining our current budget level,” Dunn said, conceding, however, that the county commission was looking to focus on beaches at the moment. “We heard the commission loud and clear,” he said, in reference to the March 6 meeting where O’Brien initially made his proposal. It was a radical turn-around for Dunn who, shortly after the March 6 meeting, had written TDC members, “today did not go well.”