ADMINISTRATIVE REPORT

Date: March 12, 1998

Author/Local:S. Kuzmick/7220

CC File No. 6008

TO:	Standing Committee on City Services and Budgets
FROM:	Director of Operations Support
SUBJECT:	Tourism Vancouver - 1998 Business Plan and Budget

RECOMMENDATION

THAT Council approve the portion the Greater Vancouver Convention and Visitors Bureau’s (Tourism Vancouver's) 1998 Business Plan funded by the 2% hotel tax, and that the 2% Hotel Tax payments received by the City for the 1998 fiscal year be forwarded to Tourism Vancouver as and when they are received by the City.

GENERAL MANAGER'S COMMENTS

The General Manager of Corporate Services RECOMMENDS approval of the foregoing recommendation.

COUNCIL POLICY

City Council must approve the business plan of the Tourism Vancouver, which details the allocation of the 2% Hotel Tax.

On November 20, 1997, Council approved a Statement of Intent which recognizes that: the 2% Hotel Tax was voluntarily initiated by the hotel and tourism industry; the proceeds of the tax are paid to Tourism Vancouver by the City for tourism promotion purposes; that the City will continue a policy of dedicating all of the 2% Hotel Tax to Tourism Vancouver; and, the payment process should be improved.

DISCUSSION

In accordance with Council policy, and legislative requirements, Tourism Vancouver has submitted its 1998 Business Plan for Council's consideration and approval. The Business Plan is attached as Appendix I to this report.

Council will note that the Business Plan contemplates the continued receipt and expenditure of the 2% Hotel Tax. As in prior years, Tourism Vancouver will conduct its business activities for the year in accordance with the approved plan and budget. Additionally, the Association will file its annual audited financial statements with the City for review by the Director of Finance in the normal manner.

An analysis of Tourism Vancouver's 1998 Budget for Hotel Tax indicates the following changes from 1997.

1997 1998 PERCENT

ACTUAL PLANNED CHANGE

$7,632,343 $7,944,950 4.1%

In order to recognize the three month lead time between the collection of the 2% Hotel Tax by the Province and its receipt by the City and Tourism Vancouver, the Association has based its business plan on the 2% tax revenues to be collected by the Province during the 12 month period of October 1, 1997 through to September 30, 1998. These payments will be received by the City and forwarded to Tourism Vancouver lagged by the delay in processing by the Province, which means that the payments to Tourism Vancouver will fall in a January to December 12 month period. This collection period treatment is consistent with business plans approved in the prior years.

Tourism Vancouver projects 2% Hotel Tax revenues to be $7,944,950 for 1998. Actual 2% Hotel Tax revenues collected and forwarded may exceed or fall short of this estimate. Tourism Vancouver will take appropriate steps to monitor Tax revenues and to adjust their business plan to reflect actual receipts, as has been the practice in prior years. The City will flow-through the payments to Tourism Vancouver as and when received over the period covered by the Council-approved business plan.

CONCLUSION

The 1998 Business Plan as submitted by Tourism Vancouver is consistent with Council Policy and with past operations. The payment process is simplified to a flow-through of payments for the approved budget year, eliminating time consuming year end procedures. Therefore, The Director of Operations Support recommends approval of the portion 1998 Tourism Vancouver Business Plan funded by the 2% Hotel Tax.

Representatives of Tourism Vancouver will be in attendance to answer any questions on their business plan.

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(c) 1998 City of Vancouver