City of Austin Performance Report 2014-15

Convention Center All Funds Combined Ending Balance

Measure Description
The Austin Convention Center Department is a self-sufficient, revenue-generating department that does not receive any ad valorem taxes or funding from other City departments. Therefore, it is critical that an ending balance be maintained that allows for funding of current, as well as future needs. A strong ending balance also provides a financial resource to mitigate fluctuations in the volatile Hotel Occupancy Tax (HOT) revenue. This measure depicts the ending balance for the Convention Center Operating and Convention Center Tax Funds, which reflects the funds available for use for the Convention Center facility. It also includes balances of the Palmer Events Center (PEC) and Garage funds, the Venue Project Fund, and the PEC parkland development, repair and replacement, and operating reserves.
Calculation Method
The ending balance is calculated by summing the beginning balance and revenue less total requirements plus adjustments to GAAP.
FY 2014-15 Results
The Amended budgeted ending balance goal for the combined Convention Center funds was $28.3 million. The actual ending balance was $38.4 million, which exceeded the goal by $10.1 million.
Assessment of Results
The Convention Center all funds combined ending balance has remained strong in the past several years. The change in ending balance in FY 2014-15 as compared to the prior fiscal year is a $15.5 million decrease. Savings from FY 2013-14 that carried forward into FY 2014-15 was $20.4 million. Given that the ending balance is partially a result of netting revenue against requirements, evaluating each component is necessary to explain year-over-year changes. Total available funds increased by $11.8 million, mainly driven by an increase in HOT and vehicle rental tax collections. Total requirements, which offset/net against revenue to arrive at the ending balance, increased by $47.7 million. The primary factors were an increase in the Capital Improvement Program (CIP) transfers and increases in operating expenses.
A convention in the convention center.
Next Steps
Continuing a healthy ending balance in accordance with Austin Convention Center Department’s financial policies is critical in providing financial resources in the event of future revenue losses or other unforeseen circumstances. It will also allow for future building investments, including a contemplated expansion of the Convention Center, so that Austin can position itself strategically to keep up with growing customer demands and compete in larger convention markets. Consideration of Convention Center expansion options is underway to address its current and long-term needs.
Contact Information
For more information contact Carla Steffen, Assistant Director, at (512) 404-4014.