ORANGE COUNTY, Fla. – Orange County’s comptroller has a big warning for if — and when — the county decides to spend hundreds of millions of dollars in Tourist Development Tax (TDT) revenue.
The Board of County Commissioners is scheduled to meet in a work session on Tuesday to provide more direction about how the funds will be spent.
Comptroller Phil Diamond said he’s urging the commission to make smart-yet-conservative financial decisions based on what he calls a “summer slowdown” in tourism.
“It is a lot of money to spend, and when you borrow the money, you ultimately have to pay it back,” Diamond said.
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He sent a memo to Orange County commissioners last week, saying they have up to about $900 million dollars to spend, but also wanted to remind them of the recent three back-to-back months of tourism tax revenue on the decline, including a 7.3% decrease in June compared to the same time last year.
“I’d recommend they be very careful,” said Diamond. “Be conservative in your funding commitments, in your commitments to take on debt.”
Mayor Jerry Demings is laying out his recommendations for the funding. He sent a memo to commissioners last week based in part on the comptroller’s analysis and several projects recommended by the TDT task force.
A large portion includes a partial expansion phase to the Orange County Convention Center, which he said would cut costs from around $900 million to $500 million, and also improvements to Camping World Stadium.
Demings added that some of the improvements and big projects will need to be scaled down or cut out for now
“By the mayor’s memo, he’s giving us his recommendation on what he wants us to do. And I feel like we just jumped a step that we didn’t get there yet,” Orange County Commissioner Mayra Uribe said.
Uribe said she simply wants more of an open dialogue on how the money should be spent, saying in a letter she sent out Monday to the mayor and fellow commissioners in part that based on the mayor’s plan, they’re essentially discarding other projects from funding consideration by the Board of County Commissioners.
“Let’s bring this conversation, be open and have the data to support the request that’s being made,” Uribe said.
She said she also has concerns about long-term interest amounts and the impact this has on future commissioners.
Orange County Commissioner Mike Scott weighed in, too.
“Just making sure that we have well thought out, well informed, well-reasoned decisions with as much information as possible, particularly with what our financial outlook looks like,” Scott said.
News 6 was told that the board will likely give direction on the next steps for the funding at Tuesday’s work session.
You can read for yourself the memos News 6 has from Mayor Demings, Commissioner Uribe, and Comptroller Diamond down below:
Mayor Jerry Demings Memo by Anthony Talcott on Scribd
Mayor Demings and Commissioners,
After reviewing the memo regarding the Tourist Development Tax Projects Funding Proposal, I have a number of questions and concerns that I wish to discuss at the August 22, 2023, Board Work Session.
First, the members of the Tourist Development Tax Citizen Advisory Task Force (TDT Task Force) participated in a very long process that included thorough discussions and deliberations during numerous meetings that took place throughout a five-month period between March and July. These members volunteered their valuable time to serve the residents of Orange County and provided the BCC with five recommended projects. These projects scored the highest based on the criteria that were provided to them at the outset of their meetings. The highest-ranked projects, in order, are the Orange County Convention Center (OCCC), Camping World Stadium, Amway Center, the Dr. Phillips Performing Arts Center (DPAC) expansion, and the UCF Sports Village. In the funding proposal, we are essentially discarding the latter two projects, DPAC and UCF, from funding consideration by the BCC, and, in doing so, it appears that we are undermining the work of the TDT Task Force that spent months evaluating these proposals. Furthermore, unlike the TDT Task Force, these projects were not given the opportunity to publicly present their proposals to the BCC. This prevented us, as Commissioners, from having the opportunity to address our concerns directly with the applicants in a public and transparent manner. We have also been denied the option to openly discuss these projects as a Board and make determinations on our own on whether the DPAC and UCF projects deserve any funding considerations at this time.
Also, the memo proposes extending the term of Orange County TDT debt to 30 years from the current 20 years; it refers to it as a "minor tweak." Yet, extending the term of our bonds would result in significantly higher borrowing costs, as the interest expense on borrowing $900 million over 30 years would result in $554 million in interest expense, while borrowing over 20 years, at the same rate, would result in $352 million in interest expense. The County would save over $200 million in interest by financing debt for 20 years rather than 30 years. In addition, this extended loan would also compromise and prevent future County Commissions from having the opportunity to make their own choices.
Per Comptroller Diamond’s informational release, he described a conservative estimate of available TDT bonding. Have we received the actual figures, including current interest rates, fees, and options for both 20- and 30-year bonds? I believe the BCC should be provided with this information so that we, as a collective legislative body, can discuss and make the decision with a majority vote.
Regarding the Orange County Convention Center project, at our previous TDT discussion during the BCC meeting, Commissioners requested the updated cost proposal. Has the County or Convention Center staff requested an updated cost estimate for the entire project (Phases 5A and 5B), and if so, could you provide an itemized budget that shows Phase 5A at $500 million? And the project estimate for 5B?
As far as the Camping World Stadium project is concerned, why is Orange County being asked to fund a City of Orlando venue? Are we slated to receive a return on our investment or other financial benefit? I don’t believe it serves our county well to be financially responsible for a municipal venue. What is the City of Orlando’s contribution towards the stadium renovation, or does the proposal require that the County be responsible for financing the entire debt?
Finally, and most importantly, a discussion is needed on the current TDT funding agreement between Orange County and Visit Orlando, which is now at 30%, an excessive amount, especially when you consider Orange County is spending more on marketing annually than on total debt service. See below:
2019- TDT Collections $283 million, and Visit Orlando received 22%, or $62 million.
2023- TDT Collections $360 million (estimated), and Visit Orlando will receive 30%, or $108 million.
Furthermore, regarding transparency, Visit Orlando is the only county-funded board that lacks a proposed and approved budget by the BCC, does not have a County Commissioner representative on the Executive Board, has no specific financial requirements, and does not return excess revenue back to the county (unlike every county department, County Commissioner, and Constitutional Office). Moreover, it is disturbing to see Visit Orlando provide funding to agencies from surplus revenues, including United Arts, Florida Citrus Sports, and the Greater Orlando Sports Commission. Under the County charter, funding these agencies requires BCC approval, and this practice undermines our legislative authority. Attached are the minutes from the Visit Orlando, June 8, 2023, Board of Directors meeting.
https://visitorlando.widen.net/s/vdmqknrrnf/vo-2023-q2-board-minutes (https://visitorlando.widen.net/s/vdmqknrrnf/vo-2023-q2-board-minutes)
A restructuring of this funding agreement with Visit Orlando would provide the BCC the opportunity to create a transparent, inclusive, and fair process, similar to that of other county-funded agencies, as well as provide additional funding to other TDT-eligible projects within our community.
Finally, the memo requested additional funding for Arts & Cultural Affairs and the Greater Orlando Sports Commission. While I see reason to support these endeavors, I believe that the BCC should be made aware of the current financial balances these organizations currently have and note the additional TDT funds they are receiving from Visit Orlando. We want to make sure we are precise and are not allowing double-dipping from TDT funds.
I look forward to our discussion on Tuesday.
Commissioner Mayra Uribe Memo
Comptroller Diamond Memo by Anthony Talcott on Scribd