Presentation to PTC Council December 6, 2012

Mr. Mayor and fellow Council members, I am very pleased to bring this agenda item before you this evening. What you see tonight is a group of dedicated citizens who are ready to work together to bring additional revenue to the city by using our recreational facilities as tournament locations. In the past, the city has hosted tournaments and reaped some economic benefit however, with your affirmative vote this evening we can formalize an alliance between, the hotels, the Convention and Visitors Bureau; the recreation and special events advisory board; and the citys recreation department. Over the course of the past year, there have been numerous meetings between all of these groups, resulting in the resolutions before you this evening. It occurred to me last year at this time that we could use our incredible recreational areas as a way to generate revenue for the city. In order to use our facilities as an economic development tool it is important for all of the groups mentioned to work together to make it happen. It took a year to reach a consensus on this and I am pleased to report that as a part of this partnership, the hotels, businesses in this community see the benefit to their bottom line and see the value of raising the Hotel Motel tax to 8 percent. What they are doing is investing in their businesses by agreeing to partner with the city in maintaining and providing the funds for an organizational structure that will secure quality tournaments that will fill their hotels with patrons who participate in these events and who pay this tax. We have been hosting tournaments for years. However, there has never really been active involvement by the city in the promotion of these events nor any measuring of their economic impact. In October, the CVB asked Don Schumacher of the National Association of Sports Commissions to come and give a workshop on tournaments; he and his organization help their members to recruit good tournaments to their communities. Mr. Schumacher toured our facilities and so did the Atlanta sports council and they all agree that our facilities are competitive and good enough to hold quality tournaments. Mr. Schumacher also recommended a sports council be formed and Nancy has begun that process. She has pulled in members from across the county to be a part of this new endeavor. Tournaments are a good business to be in. No matter how bad the economy may be parents will always want their children to compete in quality tournaments. We are committed to this path with the approval of these agenda items. Currently we are at 6% and this is the way the proceeds are divided among the various entities. Prior to this year we had no measurement of the success of tournaments that we held. One of the goals of this past year was to start that process. In order to be successful at this we needed to know what we were already

doing and find a way to quantify for the hotels what the benefit would be to them should we form this partnership. In June there was a lacrosse tournament held at both the BSC and Meade Field. It was a tournament that had been coming to Peachtree City for a few years and as a result, we knew that parking was an issue. In the end 72 teams participated in this event and the city provided a shuttle service for parking as well as continuous cleanup of the restroom facilities and trash. After this years tournament Jon Rorie did an economic analysis of this event. He estimated that weekend alone there was a benefit to the city of approximately $200,000. This is a no frills economic impact study, meaning, that he didnt use multipliers it is an estimate of new dollars into the community. Our recreation budget is 1.6 million dollars. If we use that $200,000 as a benchmark for the size tournament that we want to bring to the city then it is easy to see the impact of just 6 tournaments a year could mean. By formalizing this relationship it is important to note that we are not investing in any additional infrastructure, we are merely funding needed capital improvements and maintenance of certain recreational facilities. Bainbridge, Georgia spent millions of dollars on a recreational facility to get tourism dollars. WE do not have to do that; we need to maintain what we already have. I want to explain where we were at this time last year. The council took a vote on the Hotel Motel tax and the result was a true lack of consensus. Some wanted the new structure at 6 percent some wanted the new structure at 7 percent. My position was to keep it at 6 percent at the old structure; but if the new structure was approved, then the rate needed to go to 7 percent to help protect the funding to the airport which is a recipient of the H/M Tax. The hotel motel tax subsidy to the airport via the CVB was an arrangement that was made prior to this council, in my opinion this agreement was not the best situation for either group. One authority dependent upon the other for funding was not the optimum scenario. (Using Peachtree Citys Recreational Facilities as an Economic Development Tool) At the time the CVB was a new organization and I didnt think it was fair to change the rules on them after they had only been in existence for a few months. Plus the city and the CVB needed to gain credibility with the Hotels because of their past experiences with the defunct tourism association. We are not a destination city with that built-in draw or attraction for the hotels to capitalize upon and I didnt think it was fair to raise the tax percentage rate with the CVB just getting started as an organization. My position was and is: if the hotels wanted to have the rate raised they would have to come to council and say that is what they wanted. They would have to see the value in the raising of the rate which would mean that there needed to be some kind of tangible benefit to them that they could grab onto which would help their bottom line. Late last year the subject of the tax was brought up to me and it was pointed out that even if we raised the tax to 7 percent with the new structure the CVBs budget would be less which would also leave les s for the airport.

Again, the only way that I would go along with the increase was if the hotels saw the value in doing so. In June of 2011 this council reorganized the Leisure Services Department in the city. I want to let you know a little about what was found as a result of the reorganization. Recreation is a huge part of the quality of life here in Peachtree City. In 2011, prior to the reorganization there were 36 employees in the Leisure Services Division which includes employees at both the Kedron Aquatic Center and the Gathering Place. As of the fiscal 2013 budget there are now 24 employees in the Recreation Department which includes employees at the Aquatic Center. There are no city employees at the Gathering Place as that is part of the contract with Fayette Senior Services. As a part of the reorganization the maintenance of our recreational facilities now lies with the Public Works Department and the newly formed Building and Grounds Department; nine employees were transferred to those two departments and are no longer a part of the Recreation budget. In my opinion, the reorganization is still a work in progress. There is still more tweaking that needs to happen to make us more efficient and save us money. Last year we held meetings with the hotels to propose the idea of them becoming partners with the recreation department, but I stopped them because it was obvious that we, the City, could not offer any kind of benefit to the hotels. Here are some things that have been learned or have been fixed since the reorganization of the Leisure Services division in June of 2011: 1. On more than one occasion sports associations were told by the maintenance staff that the city didnt have money to do repairs so they had to either fund it through their fenced accounts or through their own accounts. The city abdicated a lot of its responsibilities in maintaining our facilities to the associations. The sports association contracts had provisions that were never enforced by the city including the collection of financial information and audits of the associations. When the city rented out facilities to tournament promoters very little, if any, oversight took place and no inspections of the facilities were ever done to assess condition. That an electrical box at the BSC was replaced by an association. (Now you wouldnt think that was such a big thing but when I heard that at a rec meeting I was very concerned about the liability to the city of associations taking on this kind of work even with a licensed contractor. That the code to turn on the lights at the Baseball Soccer Complex was pretty much known by everyone in Fayette County. When I went to the Georgia Municipal association convention this summer I ran across a company that makes a product that uses a debit or credit card to charge users of the fields for the power bill when it is swiped. I showed this material to Jon Rorie and he had Mr. Motter come here to Peachtree City to look at our facilities. The combined total electric bill for all of our Recreational Facilities is $157,000 annually. We have learned that the concession stands and restroom facilities are open year round despite only being used for half of the year. The electric bill for the Meade Field concession stand alone was $6100 last year or $512 a month. The machines in it have been running year round. Winterizing the sports facilities is being assessed at this point in time.

2. 3. 4.

5.

6.

7.

8.

9.

The tennis courts which were all resurfaced this year were in poor condition. One court at Blue Smoke was removed because the court was built upon a debris burial pit. The crater had been growing and the court had been closed over a year. The tennis courts at Braelinn Park had been padlocked due to the courts being a potential health hazard. Braelinn Park baseball fields: We were paying Tru-Green to fertilize fields that had no grass. Literally paying to fertilize dirt. We were initially told that the park didnt have an irrigation system, it was later determined that it did have a system and now the fields there are much better. Braelinn Park was by far in the overall worst condition of any of our facilities. When not in use for recreational programming, the Gathering Place had been approved to be a rental facility. There was virtually no oversight of the facility by the city staff. The building was very tired and run down looking due to the wear and tear of being a very inexpensive rental facility. The building was even used for childrens parties with one party using one of those large inflatable bouncing playgrounds inside the building!

10. Through the years no less than 32 keys were given out to people who would use the facility. When FSS began its contract with the city people began coming by to drop off keys. As with associations doing the electrical repairs the potential liability exposure to the city was enormous. 11. Keys to the Recreation Administration were also out in the public domain. 12. Huge misconception: that there were extensive renovations done to the Gathering Place for FSS. The bulk of the approximate $60,000 was spent on replacing the flooring; replacing worn out HVAC units and painting. All of these extensive renovations should have been done as part of regular maintenance, especially since the building was taking the added stress of being used as a rental facility. 13. Kedron- The insurance company estimated the fire damage at the Aquatic Center to be approximately $607,000 which included payments for repairs and replacement of contents 14. The tower at the BMX Track is not up to building code. 15. The contribution to the general fund by the associations was as follows: $5.00 for Peachtree City Residents $10.00 for the Rest of Fayette County Residents $15.00 for out of county Residents Which in 2010 equaled a $37,357 contribution to the general fund towards the recreation budget which stands at approximately $1.6 million. I tell you these things to illustrate just how far we have come in a year and why I am comfortable standing before you this evening to propose this idea. As I said earlier, last year I decided to not pursue this because we were not ready, we had nothing to offer but now I am pleased to say that we do. I have been looking at is how we do our special events. Hector Herrera and I have been working on how the use of sponsorships could help the city. In October I introduced him to our Recreation Staff and it was Mr. Herrera who brought together sponsors who helped defray the costs of putting on the Hometown Holiday this year. It was a wonderful event that was put together rather quickly but what I think we realized is that we could build on this years event to make next year even better. This year the crowd was e stimated at about 1000 people.

The next thing we would like to do is get sponsors to help show movies on the City Hall Plaza over the summer. Because we do not have a downtown I think it is important to establish the City Hall Plaza as a kind of meeting area where these kinds of activities can take place. So many good things have happened as a result of combined effort to use the occupancy tax as a way to fund our recreational facilities. I believe that the efforts to improve our existing facilities have already yielded dividends to our residents. All of the parks are looking much better today than they did a year ago. Even the skate board park is forming an association. My friends Pat and Chris Phillips have formed a non-profit and are working with the kids to help improve that facility. I also want to thank Jon Rorie, Mark Caspar and Nancy Price and all of the city employees who have worked so hard so that we are now at the point where we can move forward on this project. As a result of the idea to use our recreation facilities as an economic tool, we have momentum to go on and do even more things. With your approval tonight this will be just the beginning of a new chapter of positive growth for Peachtree City. Mr. Mayor I know that seeing all of these groups working together must make you smile. After all I know that you have been at this since 2007 and you have seen all of these entities on opposite sides on a lot of issues. This year I have worked very hard to build consensus and develop a plan to bring more revenue to the city at the least cost to the tax payers of PTC.