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Volusia County Tourist Development Council
Meeting Minutes
July 16, 2002

Meeting called to order at 9:10 am by Chairman Big John. Big John asked for a motion to approve the minutes of the June 5, 2002 meeting. The motion was moved, seconded and so carried.

Big John asked Mr. Gummey to go back to the legal side and review what is the TDC’s role in the game.

Frank Gummey: Some of us can remember back to about 20 years ago, when the TDC was formed, pursuant to the statute that authorized tourist development tax and that body pursued recommending to the County Council a referendum to adopt the 2 penny tax.

And that was passed and collected and TDC was involved in pursuing the development of this project. After it was completed, it kind of fell into a disuse. The County Council, a year and half ago, something like that, resurrected the tourist development council and pursuant the statute, maybe I should just read from code which essentially restates the purpose or the duties of the TDC. It says that from time to time the TDC shall make recommendations to the County Council for the effective operations of the special projects for the uses of tourist development tax revenue raised by the tax levy by this article and may perform such other duties or functions as hereafter may be prescribed by ordinance for resolution. I know no additional duties that have been prescribed by the County Council for this body. Further, it says that TDC shall continuously review all of its expenditures and revenues from the tourist development trust fund and shall receive at least quarterly its expenditure reports from the finance department. Its expenditures, which the TDC believes to be unauthorized, shall be reported to the County Council and the Florida Department of Revenue. County Council and the Florida Department of Revenue shall report the findings to the TDC and shall take appropriate administrative

action to insure compliance with the Florida statutes. The statute does not define special projects, by the way. So I guess it’s in the eye of the beholder. As you know, the tourist development tax is used for two things, 1) it is a gross pledge on bond issue, refunded from this facility that is, the first dollars that come in go to pay the debt service which is 2.3 million dollars, and 2) it is used to underwrite operation costs of this facility beyond the revenue raised by it. So, those are the uses of the funds, and those are the areas that you can recommend to the County Council for affective operation of these special projects, or this special project, you could say.

Big John: Thank you for the very enlightening report. Any questions for Mr. Gummey?

Darlene Yordon: Question on promotions: any of that money used for the Ocean Center promotions?

Frank Gummey: The Ocean Center has a promotions budget, so it is to be used if you assume that the revenues of the Ocean Center plus the tourist development tax appropriations stubble, part of promotional budget is paid by the tourist development tax.

Big John: Any more questions for Mr. Gummey? TDC elapsed in what year? The original one.

Frank. Gummey: In 1985

Big John: And the three musketeers came forward, that would be Mr. Fornari, Mr. Brown, (were is Mr. Brown? He couldn’t be with us today he had to tend the store) and Mr. Davis. They came forward and they put forward a plea that said we need the TDC to be reincarnated and the County Council did that. And so we oversee the tourist development tax money, which is 2% as being different from the convention development tax, which is 3% and that is our function. Other questions in that area?

Jim Bazemore: Who monitored all these expenditures during the period that there was no TDC?

Big John: As it was told to me and I wasn’t there but Mr. Bazemore and Mr. Stead were there, actually I was around, but didn’t know what was going on at the time. I was a rookie. You certified yourselves, didn’t you? Tom Kelly got you?

Tom Staed: The County was managing the money and most of it went to the bond issue. They just never called me.

Mr. Hamilton: We present our budget each year to the County Council for approval and every expenditure is authorized. The County then audits our books each year through and independent auditor and through an internal auditor. The State of Florida Department of Revenue has also been auditing the Ocean Center operations about every third year.

Big John: While Mr. Gummey is warmed up, I thought we’d get a brief report of where we are at because the County Council spent TDC money and I think it would be position of advisory board that we asked the County Council not to spend our money without letting us know about it. This was the bailout of the parking garage, where the County Council spent approximately $50,000, the price is not yet determined, but it was one month’s operating and legal fees to the News-Journal legal expert, Mr. Kaney. When we are actually paying who is on the other side of aisle, the Volusia Redevelopment Corporation. It is a very odd deal to be paying the person on the other side of the aisle. Mr. Gummey, would you like to explain that to this board?

Frank Gummey: Yes. The county had not paid the parking corporation’s attorney, but it is reasonably anticipated that the county will reimburse the parking corporation for the work that has been done by them. At the request by just about all the parties to attempt to mediate a solution to the sort term difficulties the parking garage finds itself in.

The parking corporation is a single asset, not for profit corporation that is their asset is the parking garage, and their only source funds are the revenues from the parking garage. It has been well spoken to in the media, the revenues are insufficient presently to meet debt service operation and operating expenses and one of the operating expenses is retaining legal counsel. So, the parking corporation’s attorneys have been trying to work with all the parties to find a solution. The county did expand $25,000 in tourist development taxes for underwriting operations of the garage in the calendar month of July.

Darlene Yordon: $25,000 or $50,000?

Frank Gummey: $25,000 to underwrite the operating expenses. The amount that the county will in all likelihood reimburse to the parking corporation for attorneys’ fees is undetermined.

Big John: You have a bill in your hand for $19,000 is that correct?

Frank Gummey: You are ahead of me. The last one I saw was $11,000.

Big John: $19,000 ended about June 19^th. And there has been some intense

legal garbling going on, so I expect that the bill will go above $25,000 and may go as high as $75,000. We just don’t know what that bill is. It is hard to determine. Can you give us an update, if there is one, of the status of the garage?

Frank Gummey: The parties are talking, I think that the staff will be prepared to report to the County Council on the 25^th whether there has been solution concluded or whether we need to pursue other avenues. Or whether the parking corporation needs to pursue other avenues.

Big John: Yes, I know that was contemplated. We didn’t gain a lot of information.

Frank Gummey: I do not think that it will be well to discuss alternatives that may or may not come to pass. And I believe I heard a local politician on the radio make essentially the same statement.

Big John: The local politician is in cohorts with your co-council Mr. Eckert, said, we are going to make the best damn bet, because its not going to be pretty whatever happens for hereon out. So, the name of the game is how do you stop bloodletting and the hemorrhaging.

Frank Gummey: I will venture one minor opinion. That is that despite all the discussion in the community, I think if the various parties in this area achieve their goals or come reasonably close to them, that the difficulties for the parking garage are short term difficulties, that I think that in the long run there is every reason to believe, that the parking garage will be a successful facility.

Big John: I absolutely agree with that statement. I wish we had all the parties at the table. And I am surprised that I don’t see Ocean Walk here today, I don’t see the Ocean Properties. They said they would be here today. I’d like both of them to come. I thought this was an important meeting for them. Other questions, John?

John Masiarczyk: Yes, would you elaborate. You mentioned twice now in the last few moments the short-term difficulties. What do you perceive as changing all that? They have had difficulties ever since they opened. So you are just hoping that there is a rosier future out there for the parking garage. Or do you have some actual knowledge that you can impart to us why it should change.

Frank. Gummey: I think just two things to say: 1) The Adam’s Mark expansion just came online in February. I think that by the time they ramp up to full utilization of their meeting facilities and the bridge is available to transport their patrons to and from the garage that that will have a significant positive impact. It already has a positive impact on utilization. And secondly, the Beach Village with its movie theaters and food and beverage should generate a large number of patrons for the facility. And its not falling that short now. When you say that you fall $2-300,000 short, that’s a lot of money in anybody’s budget, but in a scope of the project, its producing about 1.3 million in revenues now and you can get it up 2 -300,000 in additional patrons and you are there. The bridge plus the new generators should have a very positive effect.

Big John: There is another tower going up in Ocean Walk and the shops have no other place to park and I think that the mismanagement going on, my personal opinion, in the history of the garage, I think the Ocean Center is somewhat competent you take over the parking garage, the revenues would increase substantially. Stuart I’d like your opinion on that.

Stuart Arp: Absolutely, if they are doing $1.3 million now, I think they are leaving 25% minimum on the table now for it’s lack of. I can’t tell you how many times I have parked over there for free during special events. No one is manning it in the morning and you park and go on out of there. My employee’s park there and they don’t get bills at home. It’s just really poorly controlled.

Big John: How many people would you say have a full use of the garage?

Stuart Arp: Every day probably not that many, maybe 75, but during special events when we have to control our lot, almost all of them, several hundred a day.

Big John: And the deal right now is $16/month, is that right?

Stuart Arp: I think they raised it to $20, if I’m not mistaken.

Big John: And I think we could take it to $30 if we took it over. A dollar per day is not too much to ask of somebody.

Stuart Arp: The thing that we were trying to get done for a long time, but I gave up, was to try to use some kind of in-and-out system for our guests, so they don’t have to pay every time they leave, because they are not wanting to do that, so I just was never able to get that done. So there is money there that could be had, too, for our guests who want to park themselves to have a garage facility. They don’t mind paying, it’s just paying $5 every time they come and go. They don’t want to do that.

Big John: I resign myself to the fact that the Ocean Center will probably have to encumber, in one way or another, monies to bail this thing out in short term. I think in long term, there is good revenue in the parking garage. What is short term or long term? Maybe a year or two years short term.

Stuart Arp: The thing about the Ocean Walk shops, I mean that really is going to be the main generator, if that’s a hit like we all think it should be with the movie theaters and restaurants and getting not only local people in there, but other tourists that are not really in walking distance. That’s really the only place for them to park, so its going to be easy to get across A1A now, the walkway. I think its really going to be short term.

Big John: This in-and-out thing, as Stuart mentioned has plagued the Ocean Center. The Showbiz Talent Competition brings about 4500 kids in here in a week, and 8,000 Christian women for Charisma’s Women’s Conference. They come and go all day long for four days. So they go in and out all day long and the parking garage wants them to pay every time. This was the last time for Showbiz. They don’t want to come back to the Ocean Center because they are upset.

Rick Hamilton: We ended up recommending a monthly parking pass, which is much cheaper.

Big John: So that’s what we are fighting for, we are fighting a very unfriendly parking situation. Stuart is plagued by it. I don’t understand why the people in Ocean Walk and the City of Daytona are not. We have Rick Prioletti here representing City of Daytona. We are happy you came.

Gilly Aguiar: One thing as Stuart said, there is a lot of money left on the table. It’s mismanagement, not to be able to use a 24-hour pass, being able to bill the hotel, etc. But in the short term, as Mr. Gummey said, is basically the fact that the garage came on line before the need for it. So, in actuality, they are doing a poor job managing it because they had nothing to manage at first except an event here and there, and so, I am not opposed to the fact that it comes in-house or I think once everything is up and running and everything is on line, I see it as a money making process.

Stuart Arp: They are still going to have to run it properly.

Big John: Exactly. It’s not run properly. It’s not kept clean. The employees are not in uniform. It’s just a lousy operation.

Darlene Yordon: What can be done to expedite the shift in management to Rick?

Big John: I have done my best to let the world know that this parking garage is a nasty place and it’s mismanaged. Do you know how many nice women have told me that you smell urine going down the stairs. You don’t hear that very often in polite conversations.

Darlene Yordon: You can smell that walking on Main Street or any other large city street.

Big John: The parking garage is all we are interested in, Main Street is your problem. But I don’t think there should be urine. You don’t smell that at East Airways. This place immaculate and I think that if the parking garage was under Mr. Hamilton’s management it would be as immaculate as this place.

Darlene Yordon: My question is how do we expedite the shift in management to Rick? What can we do as a body, or as a city, or as a county to expedite, or as a group?

Big John: I would talk to the County Council members other than myself and make sure that they know that you all think that Rick Hamilton and the Ocean Center, and Chad Smith can run that place great.

Darlene Yordon: Is that something that this group can make a recommendation for?

Big John: Absolutely.

Darlene Yordon: Could we start the process in this committee?

Big John: Absolutely.

Darlene Yordon: So, when can we do that?

Big John: Right now.

Darlene Yordon: Well, let’s do it.

Big John: I need a motion.

Darlene Yordon: You got it.

Big John: OK. Motion set by Darlene, City Commissioner of Daytona Beach, seconded by Gilly Aguiar. Do we have questions on the motion? The motion is a notice to the County Council that the TDC is strongly in favor of the Ocean Center’s management of the parking garage. Is that correct? Comments?

Darlene Yordon: It would be basically the same amount of money to run it? It would just come in house instead of contracted?

Big John: No that’s an up in the air item. Good question though, because it would depend on staffing levels, so at times I think the Ocean Center would actually spend more money on the parking garage than the facilities to avoid the catastrophes we’ve had in the past.

Darlene Yordon: But what I think is that the council might want to see those figures before they are trying to make a decision.

Big John: Well, if you are out to do the job right, you might have to make that investment in it early on.

Darlene Yordon: I agree, but if it is not a big difference in money, it would be a no brainer, but if it is a big difference, maybe not.

Big John: It is very difficult to project that number because you don’t know exactly.

Darlene Yordon: I don’t want the exact number, I just want to ball park it at least.

Big John: Well, you don’t know exactly what you are going to be doing with service logs. I mean there are a lot of variables in it and something you have to take a look at. I mean you can do it figuratively.

Jim Bazemore: Couldn’t you put a top limit on it? Give us some kind of figure.

Big John: He already did that. He already did a $600K, which we told him was crazy.

Across the table discussion about figure being $300 or $600K. The electric bill in the garage is $66K/yr. Also discussion about various expenses, clerical staffing, etc.

John Masiarczyk: You have a motion on the floor. I would like to ask a question before we vote on this. Would it be appropriate to have some sort of an update. I’d like to see some numbers. Numbers of what you think it’s going to cost to operate it. I’d like to see some numbers on what they are currently spending. I’d like to see at least one sheet page before we write them down as a body to send to the County Council. County Council is liable to tell you, well, there is an easy way to get rid of that, dump it on TDC. Maybe this is the right way to go, I trust your opinion. And also I trust you, but I would like to see something in writing.

Big John: We will, except that, we are in a decision making month and quite frankly, I think that is a very legitimate request and I think that it should come to you, but it’s do or die right now. The garage could close on August 1^st. It was going to close on July 1^st except that the manager was going to steal general fund monies, in her best interest, I suggested that she’d steal this money. I think it would have been devastating for her to take general fund money for the use of the garage.

Discussion about "steal" vs. use of the money.

John Masiarczyk: But frankly speaking, however they got the money, somebody dropped the ball by letting them be this late. I’m not here to say whom, but I mean any vote rushed because of an August 1^st deadline is ridiculous.

Big John: These problems started three years ago with the actual structure of the garage and John, ever since then, we have been behind the eight ball. We didn’t know three years ago. If we knew what we know now, the Ocean Center would own the garage.

Tom Staed: It was opened prematurely. Until this second building came on, there was absolutely no reason to have, and really not till next February.

Big John: I am not against you (John Masiarcsyk), you have every right to know that. What are the feelings?

Gilly Aguiar: Rick can’t you give us a rundown? Have you done the rough work on this? And that’s really what we need to give the county. I too, feel that we should give them some idea. I mean even if we are off, we can’t be off more than what we are already sinking into that thing.

Rick Hamilton: I can provide the numbers as presented by Central. I don’t have them with me, but I have them. The county management staff asked me to put together a budget, which I did and it was almost exactly $600,000. That $600K included as Big concluded earlier, tremendously more operations staff than what Central is providing and what we know was necessary to establish the level of service for our patrons as well as the rest of the community. Other than that, Mr. Aguiar, I can’t remember the number off the top of my head.

Gilly Aguiar: Do you have a flash sheet of that?

Rick Hamilton: I can go over and see if I can pull up the last numbers.

Big John: Do you want to table this?

Jim Bazemore: Mr. Chair, let’s vote on this one way or the other. We have talked it to death.

Big John: Maybe we still could, for John’s sake. If I was sitting here as a stockholder, I sure would want to know those answers.

Darlene Yordon: Well, we can always amend the motion to explore the option of presenting it pending the financial figures, but I would like to see the motion made. I think Mr. Bazemore is right, let’s do something.

Big John: I’m very comfortable with that, I just think it’s a fair request that John will be brought up to speed on this. I know Dana probably doesn’t, I know Gilly, he feels it in his gut, because he doesn’t have any paperwork before him.

Rick Hamilton: Can we put the numbers as part of the minutes?

Big John: Well, he would like to know before he votes. You don’t want to gamble it now and see if Rick can get the numbers? No, you don’t want to do that.

Frank Gummey: Do you want to modify to say, if financially feasible? That way you are not endorsing numbers.

John Masiarczyk: What effect does it have overall on TDC’s goal, which is the Ocean Center? If this is a huge black hole we are going to through money into for a couple of years, what effect does it have on the other plans that we have that we have been talking about for a year and a half? I mean, you are assuming the best to save the parking garage or the Parking Concepts who ever that outfit was the brainchild of that’s having problems. You are assuming you are going to take on their problems for the betterment of this area, but what is the Ocean Center which is our prime goal, what is their net gain by taking over the parking garage? Are we a benevolent society that we are going to take on another problem?

Rick Hamilton: No. There again, I can’t guarantee…

John Masiarcsyk: I’m not trying to be difficult, but it’s going to reflect on you and there is going to be a time when the citizens out there are going to have a say so. What happened to the Ocean Center, why did you take this on, another white elephant when you’ve got a problem already?

Rick Hamilton: I believe what Mr. Gummey has said and what Big John said, I think it is a short-term issue and that it will become profitable afterwards. That short term, whatever that term may be. I think that we are going to see a dramatic change in November when the shops open and the walk across is done. Obviously, any money that we’d expend above the revenues coming in is going to decrease our financing capacity and that’s what you are asking for, the expansion. But I think in long term it will be much better and that the revenues will subside expenses and we will be getting some money back. Currently, as the board already knows too, the lease payments are being made to the Ocean Center on the garage, so, all of those things would be coming in to play as the revenues are there for us.

Jim Bazemore: Mr. Chairman, may I call the question, please?

Big John: I thought it was a legitimate request. Maybe Mr. Mills, little bit later, does he have those numbers?

Rick Hamilton: No

Darlene Yordon: Do you want to put a time line, deadline on it.

John Masiarczyk: Feel free to vote on it, I’ll just vote against it.

Darlene Yordon: It looks like its going to be more financially feasible within a year or within two years, would you feel, would everyone feel more comfortable putting in some sort of deadline on it, and at that point rethink the whole thing?

Big John: I like Darlene’s idea, if financially feasible, is that acceptable.

Darlene Yordon: Do you want the motion amended?

Big John: Yeah. Is that OK?

Darlene Yordon: I’ll amend.

Gilly Aguiar: The one thing that you have to take in consideration, too, is we are already throwing money at that. They are taking our money, so, when you balance this out, yes in short term through November and I say it will be more like February and into the spring before it would become profitable. Maybe even longer, but we are still throwing money at it and we are not getting any results. So, if he can produce a better quality of service and keep it clean and utilize his staff well to do it, I think that we are better off in that light, which this body really doesn’t have any capacity to do anything about this, other than just tell the County Council how we feel.

Big John: I just want to let you know that this month we spent $50,000. I’m saying $50,000, its more than $50,000, $50 to $70,000, I hope, and that is just absolutely giving money over to whomever. It has nothing to do with the operations or the other $600K.

John Masiarczyk. I guess I questioned and the request is to vote, and I don’t want you to delay this any longer for my sake, but this is a corporation here running a parking garage, and County Council, I don’t think, you should just arbitrarily take money out of TDC and pay a corporation’s problem as a quick fix. That’s just me personally. And they have done it, but this group here can also go back to County Council with a motion to say, hey, wait a minute, what gives you the authority to do it. Maybe they’ve got the authority? But according to what I read, or what I heard when Mr. Gummey read the statutes, that is a part of our responsibility, the financing of this Ocean Center through the TDC money. And I don’t remember it coming up, that they authorized the county to spend that money.

Frank Gummey: That’s a misunderstanding. The County Council has the sole authority to the TDC.

Big John: We are an advisory board to them. So, what I said earlier, was, that you may want to do a motion later on, whenever you are in the mood, to ask the County Council to funnel all the funding requests through this board to, advice the County Council like the Port Authority. We try not to spend their money ever, without going before them or the Beach Board before it goes before them. So, certainly the very reverend echo committee, we would not touch that money before it went before them, would we.

John Masiarczyk: So, you understand my thinking? I am here because of statutes that say TDC Ocean Center project. Now you are mixing the parking garage and other things, I’m uncomfortable until I know more about it. That’s why I will vote no, no matter what, so Mr. Bazemore’s request to call questions, is probably in order. I don’t think you are going to make a comfort level for me to vote for it.

Big John: I just want to let you know, the only reason to vote for this, is to bail out the Ocean Center. This has nothing to do with Ocean Walk or with the parking garage. The parking garage is killing the Ocean Center. People don’t want to come here. They don’t want to walk down the urine smelling stair cases, they don’t want to ride in the shabby elevators, they don’t want to park in a dirty, dimly lit, half the fixtures are not working, unsecured parking lots. People are afraid of that.

Darlene Yordon: John, this is the way that one company handled the contract, it is not to say that in the future if we decide that we can find another company. I mean there are parking garages across the country that are handled well.

Big John: Well, Mr. Hamilton, how many people in the Ocean Center work for the county ?

Rick Hamilton: 24.

Big John: How many people do you employ?

Rick Hamilton: Probably 160.

Big John: And that’s all privatized. So, we should clarify that this may mean that he will go out tomorrow and hire a company to do it, but they will be under his direct control. Is that clear?

Gilly Aguiar: One thing we have not addressed, is the money for capital. It is in arrears for $120 something for the year. So, that money would be gone.

Rick Hamilton: Which it’s going to be anyway.

Gilly Aguiar: Well, depending on whether or not you can get them up to snuff, but you have to take in consideration that we have got $375,000 that you can say good bye to.

Tom Staed: This has always been an area which is beyond our scope a and b, without really specific information. I know a lot more about the parking garage because of being in this community than the people that don’t live here and they are not. I don’t mind voting on and approving it, but its really, I don’t think that its in our scope of what we are here to do. And I certainly don’t think, that we have all the information to make that determination properly, but I understand your position now. I am going to vote for it because I do have a lot of information on it and what they have to do with the parking garage, is properly operate it. We have to believe that as the time marches on it will be an asset and we will actually have a return profit. The numbers I was looking at, in particularly the return profit is huge. As the Ocean Center puts in more events, they will bring a lot more people here.

Big John: As Mr. Staed said, let’s vote. All, but John Masiarczyk, in favor. By the way, I would expect that Rick will get us the operating figures from Central and the projections that he has made and give them to the top-secret county manager. And then we will see, not at the next meeting, but we will set it up very shortly. Rick will set it up as soon as he can. OK, then let’s move on to Charlene Weaver, The Chief Financial Officer. Mr. Bazemore mentioned earlier what we asked for: how the money flows. In other words it’s collected by the hotels, it’s paid to the county, the county chips off just a tiny bit and then passes all the rest onto Mr. Hamilton. Mr. Bazemore said he would like to look at that a little more closely and some of you mentioned that, Charlene has a problem, her current chief financial officer, his mother has been very ill and passed away late last night. He has not been at work too much lately, so we are going to put that one question off until next meeting.

Charlene Weaver: The chairman, Mr. Big John, asked me to put together all legal possible options that I could come up with for the expansion of the Ocean Center. And so, I’m going to put out some disclaimers out here, that these are legal options, legal scenarios, but they are not recommendations. And there are some things in here that would cause some significant financial issues for the County Council. (Passed handouts)

Big John: I didn’t say earlier that this is a public meeting, and unlike other public meetings, if you have comments, I hope that Mr. DeMarchi, came in, Mr. Levy is here now, John McCormick is here, the Mayor of North Peninsula is here.

Charlene Weaver: The first two scenarios you have seen before when the county financial advisor David Moore was here. He presented this information to you. The first scenario would generate up to $17 million without levying the additional penny. This is monies that can come for the current revenues that are available. Scenario II is the amount of money that would be generated if you did use the additional penny. So, between those two, if you did them over 30 years, you could get approximately $47 million. That is of course with interest rates as we now know them and that could change, depending on when you decided to move forward. Scenario III has to do with the sales tax dollars that we currently used fund operating and maintenance in the general fund and if the council were to decide to do this, it would create a hole in the operating budget that would have to be filled by either increasing revenues or decreasing expenditures for our general fund. It is, however, money that is available to do revenue bond should the council decide that’s the course of action they want to take. It’s $4.5 million currently and as you can see that could generate $55 million to $69 million depending upon whether you did a 20 year or 30 year revenue bond. Scenario IV is similar to three in that it is revenue that is currently being used for operating and maintenance in our budgets. About a million of that is used to pay off bonds that we did for our 800Mhz system. Those will be paid off in 2004. The balance of that is used in our regular operating and maintenance budget. Again, would create a hole that would have to be filled by either increasing other revenues or decreasing expenditures that the council would have to address. $2.2 million generates 28 to 34 million depending on if you did it over 20 or 30 years. All of those scenarios would not require a voter referendum. Once you get to the scenarios V, VI and VII, those require a referendum for approval. The first one is 1-cent sales tax, which generates 48 million annually. We split that between the cities and the counties, so our share is about 23 to 24 million. The general fund gets 15.5 million of that and the MSD or the Municipal Services District gets 8 million of that.

Big John: Just one second. A lot of these folks are not too familiar with MSD’s and things like that. The general fund is the same as the city, the MSD is the Municipal Services District and that is for the unincorporated county only. And I’ll explain, the jail is a 100% general fund. That means that every taxpayer in Volusia County pays for it. The sheriff’s department is partly general fund and partly MSD. The police department of the unincorporated area, is not paid from the general fund by all people in the county, but the cop that is at the court house, he or she, is paid by all the folks in the county. So that’s the difference between MSD and general fund.

Charlene Weaver: So, the general fund portion is 15.5 million, if you did .5 cent it would of course be half of that. And that money could be used for the expansion of the Ocean Center. Or it could be used for any number of capital projects as the Council chose.

Big John: And what you say is that the 23.5 becomes 55.8 million and that’s the .5 cent we get now?

Charlene Weaver: No that would be a whole penny.

John Masiarczyk: Charlene, the 1 cent sales tax you are talking about, if we were to pass 1 cent sales tax, the county would take one half that, and half could be used to fund the Ocean Center.

Charlene Weaver: I’m saying that the general fund proportion could be used to fund the Ocean Center. Half would go to the city.

John Masiarczyk: One half would, we split with the city, and the other half goes to the county. So, you are saying 15.5 in general fund portion. Could be used here?

Charlene Weaver: Right.

Larry Fornari: What about bonding that money? What would that do? We could bond half of it out like all the other alternatives.

Charlene Weaver: You can see, that about 2 million generates somewhere around 30 million, so if you had 7 million, you’d be looking at 90 million or so if all of that was dedicated to the Ocean Center.

Larry Fornari: So, in one year, .5cent sales tax could be bonded out to approximately 90 million.

Charlene Weaver: Something like that. (some discussion about length of time) We would have a shorter window with sales tax.

Gilly Aguiar: What he is saying that if we took one penny for one year, and put all that money in a bond, it would generate 90 million dollars.

Charlene Weaver: Well, it might actually generate less. We can only do 15 years on sales tax. Scenario VI is if the County Council decided to do an ad valorem tax levy, which again would require voter referendum. .22 of the mill, would generate 50 million, and .45 would generate 100 million.

John Masiarczyk: We had an ad valorem tax at one time and it was replaced with what we have right now. To go back, you are going backwards.

Charlene Weaver: Frank, did we ever determine whether that was possible or not possible?

Frank Gummey: We have not looked at that. The issue is, what effect did that switch have. There is still the opportunity to go back if we wanted to.

Big John: Number 6 is doubtful at best. Number 3 and number 4, I wouldn’t bet my life on them.

Charlene Weaver: OK, and then there is Number 7, which the Chairman, Big John, asked me to do.

Big John: This was Mr. Gummey’s plan and he talked about it. The MSD district, right?

Frank Gummey: Just that I was asked to, it wasn’t my plan.

Big John: So Charlene, actually there are three pages that you look at together.

Charlene Weaver: The last page is a map that shows the geographic boundaries of the districts as was given to by the Chairman, Big John. And then we developed, got the taxable values from the property appraiser which is the next to the last page, and you can see that it is broken down by both residential and commercial, so that you know how many partials and the value by residential and by commercial. In the scenario what we did was looked at 100 million or 50 million bond issue to see what tax millage would be required and we did it just for Daytona, and we did it for the combination of Daytona, Ormond and Daytona Beach Shores. As you can see, Daytona alone is rather substantial and even the three combined, is rather substantial. Again, I want to put my disclaimer out there, that these are not recommendations. This is information.

Big John: Well, I think this is wonderful information, at least it tells us where we are not going. And I’m fairly sure, and we did the same things, we went back and said, well Gilly wants to either tear the whole place down, or remodel the whole place, so we looked at that and decided that wasn’t for us. Which that was a good thing to do, and here again, we had these ideas are what we might do. And Mrs. Weaver brings forward this information which is really accurate and lets us know, at least in my opinion, that only one or two are viable. Now, I want you all to tell me, if you think there is any other viable thing you want us to do.

Charlene Weaver: One other piece of information, if I could just provide this thing that was asked for, was how much an additional penny would generate in southeast and west Volusia. Southeast generates about 309,000 and west Volusia generates 117,000. So the additional penny was done countywide vs. just being done in our district. That’s the additional revenue that would be generated.

Big John: And those figures were not included in number 2. That’s the additional revenues that both areas of the county expressed some interest in.

Gilly Aguiar: In number 5, that Larry just brought up, what if we were to try .5 penny for two years, and then be taking that money to sunset and strictly to the Ocean Center.

Charlene Weaver: That would only get you 15 million.

Darlene Yordon: What cost are we looking at on this expansion?

Big John: We are going to talk about that in generalities because we didn’t actually go to Wachtel for the day.

Gilly Aguiar: If you got the 15 million in the sunset and then bonded the 15, what would that do?

Rick Hamilton: 15 million.

Charlene Weaver: You don’t get any more. You also have the remaining revenues for the Ocean Center right now?

Big John: Which is Number 1. If you refinanced right now, you could pick over 13 years 17 mortgages. So now you have 33.3 million, half of which would be bonded. Bonding is expensive, very expensive. I would tell you that the only way number 3 would work, would be in conjunction with other projects cities and the county might find to be useful. And the first one that pops up in my mind is replacing the five-cent gas tax with an .5 cent sales tax. I think that the people would find that much more acceptable. And I think that you could do it that way . And then you put the Ocean Center with that. And I don’t know if there would be anything else.

Gilly Aguiar: That could get pretty intricate, though. Try to spread that money around.

Big John: But the .5 cent sales tax is real money. Comments? Well, Charlene, you just stumped everybody.

Charlene Weaver: I’m sorry I couldn’t provide all the information requested today, but I will come back when it’s available.

What’s the current debt?

Charlene Weaver: 23 million and it’s about 2.6 mill a year. OK, I’m on my way to commuter rail. I’m going to talk about a 400 million project, 100 million dollars they want from four counties.

Big John: Which we are very much in favor of. OK, so now you’ve got the numbers in front of you, and we will move on to Stuart’s very exciting report.

Stuart Arp: I have two handouts here. On the Adam’s Mark letterhead, we met the people on the sub-committee list a couple of weeks ago. Darlene wasn’t there, she was unable to make it. Tom was there, but he wasn’t on the committee. We talked about different ideas and options that if we couldn’t do full build-out, what that could be. A full build-up, we all pretty much agreed on after the focus groups and feasibility studies, what have you. We needed 100,000-sq. ft. of exhibit space, 40,000-sq. ft. of meeting space, 30,000-sq. ft. of ballroom space. That does not include service areas, kitchens, pre-function, what have you, which Rick estimated to be about 35 % on to those numbers. So, in my report we did Option A, B and C. This is in three Phases: exhibit space, meeting space and the ballroom. Pretty much in terms of looking at Option C, that is the priority of what we think we need in terms of getting this facility to a competitive level of other cities we compete with. And we pretty much decided that phasing the exhibit space wasn’t possible, that we needed to go for the full amount right off the bat. The meeting place being the second priority, and the ballroom being the third priority. And so, again, based on our financing and numbers figuring out how we are going to do it. Now, Rick’s plan, I call mine Option A,B,C, he calls his Option I,II,III and there is a difference in Option II. We didn’t communicate very well and did it slightly differently. Never the less, you can still take the individual components and put it into what I did to come up with the total cost by different options. The total cost, no matter how you do it, total builddown cost $44 million and that does not include parking, sidewalk, water retention, permits, utilities, road, or architectural engineering. These are just cost per sq. ft. (based on John’s report) which are on the high side what I remember. So, hopefully this could be a worst case scenario. In Rick’s numbers, he added in the cost of service, pre-function and what have you, so this is total cost estimated at this point. We also talked about possibly when we do the ballroom piece, instead of doing the whole ballroom, adding out to the current ballroom we have now, east towards A1A and the savings to do that is about $805,000. The total cost, if we build out of the existing ballroom, instead of building brand new one.

Rick Hamilton: Which is an alternate on your last page with the kitchen space.

Big John: I’m sorry, where were we going to build out from?

Stuart Arp: From the current ballroom we have here out towards A1A, instead of building a new one on back. That saves about $800,000. Questions on this?

Big John: I think it’s excellent. And obviously much more affordable than we once thought.

Rick Hamilton: (after some cross talk about the total cost) This is not the top cost. These are actually just the construction costs to build the thing. This does not include all other county requirements, improving the parking spaces, road changes. This is just the construction cost.

Darlene Yordon: So, what is an approximate total cost? Because one of these said 35% of the total.

Big John: Stuart has 18,000-sq. ft. of a ballroom, 86,000 in the other. If we decide not to do a ballroom, it might not begin to work.

Dana Li: The figures that were given out in November, these figures are talking about the building space only. So, the previous number was $50 million, now it’s $45 million. So you are still close to a $130 million after the whole project, right?

Stuart Arp: No, this $44 million includes kitchen and pre-function and all that in Rick’s numbers. In my number, I just want to keep it simple, and not confuse the phasing aspect. He detailed it out.

Rick Hamilton: What I did was take the committee’s recommendation and used the square footage cost that was in the Johnson report and put in the recommendation. So, it is different that in the Johnson report. I just used the square footage costs that were in the original report. (Question about 35%). It’s in there. I put in the pre-function space at 35% on each portion. You have got the exhibit hall, pre-functions space, that’s 35% on the total.

Gilly Aguiar: Rick, these are all base costs?

Rick Hamilton: What I did again, I used the Johnson report which was very inflated, and then I went back and compared that to accounting which was done in Orlando. Their costs were substantially less per square foot, so, yes, I think we are still in the market. If Phase II doesn’t happen for a number of years, or if Phase III doesn’t happen for a number of years, we are going to have an escalator in there for the increased construction costs, which is not in there, but it is correct. That’s based on today’s numbers.

How many folks can eat in a 30,000 sq.ft. ballroom?

Rick Hamilton: 3,000, but you are really cramming them in.

Stuart Arp: We can do 1,600 in 18,000 sq. ft., so you are talking about 4,000 people in one sitting. No, about 3,000 maybe 2,500 comfortably.

Dana Li: Ultimately we still have to find financing for $130 million?

Big John: Let’s not get there yet, let’s just do what we are doing here. Because that’s what we did, we jumped into this $130 million and then we got a mind-set.

Dana Li: I am confused as to how many actual dollars we need?

Stuart Arp: If we are going to do the Option III, which is just the exhibit hall, first, that’s $22 million, not including side work and all the other stuff. Building cost would be $22 million to build a 100,000 sq. ft. exhibit space, and 35,000 pre-function and storage, restrooms and that type of thing. That’s the cheapest Option I that we have. And that would give us a 100,000 sq. ft. more exhibit space.

What’s the estimated cost on all the other stuff?

Rick Hamilton: I can’t tell you, because I don’t know. Let’s say half again, maybe.

Stuart Arp: I don’t know, we are going west, that’s clear space, and we are not buying property. Utilities should not be a big deal. We are not tearing things down, I don’t think.

Again, I don’t know the number, but it should not be that complicated.

Big John: You want to jump in. He was not planning on speaking today, but everyone wants to know, we have a figure of 100,000 sq. ft. of exhibit space. We have a figure of $23 million for the exhibit space. How much could we add? I don’t think, that he has assessed the fact, that we are owning all this parking over here already. I don’t know how many parking spaces would the city require. Those consequences would have to be worked out and also the side work and that kind of stuff.

Jim Wachtel: I don’t think you are in the 50% ballpark. I think $3 or $4 million out of $25 million would be a goal, but you could shoot for. Like you said, we do own the property, which we could transfer service parking over to the south side. And I know, that is something that the city would like to see also. We are just dealing with service parking, so I don’t think it would be a significant amount of additional money.

Gilly Aguiar: He’s been talking about everything, architectural drawings.

Jim Wachtel: You know this is between $20 and $25 million. Again, you are looking at $30 million. About 25% to 30%.

Gilly Aguiar: We are not going to hold you to it.

Jim Wachtel: Some people try to. Again, this is just a goal, that’s the range that you are working in. This is certainly a do-able number.

Big John: Other questions for Stuart?

Gilly Aguiar: I guess the Option III would be, with the focus groups we did, meeting rooms, and something that is needed, if we went in and put in a 100,000 sq. ft. exhibit hall, we would be lacking in one of the criteria that was on the top of the list, and we go to Option I, and put 100,000 in the meeting rooms, and then wait for the ballroom and that part of it later, because as you said, without the ballroom, we can still use the old arena here to do the functions here. And the ballroom functions could be at night across the street. So, at that point we would not be sacrificing meeting rooms, because I think, the exhibit space is going to be very contiguous, and counting on the exhibits hall space also.

Big John: See, somewhere I agree with Stuart, Rick. I don’t see the 100,000 plus 20,000. Because I suspect, we will be moving to that direction, and we might have enough money to do it.

Stuart Arp: I think, obviously what we want is the full buildup. If we can’t afford that, what’s the best way to do it? If we can’t get full build out, my recommendation would be Option A, obviously. Exhibit space and all the meeting space involved later on. If we can’t afford to do that, I would go to Option B, which is all the exhibit space and a little bit of meeting space. If we can’t afford that, we’ll go to Option C. If we can’t afford Option C, I don’t know what the heck to do. Because whatever we do would not be what we need to do.

Big John: So, Rick, let’s say we’ll have the 100,000 plus 20,000. If you build 100,000 sq. ft. in exhibit space and 20,000 in meeting rooms, but then in order to do that we would have to retrofit this building a little bit to accommodate escalators over here, too. So, $30 million would be the number. I don’t know if it is right or wrong, but close enough for now. So, at that point, I think we need to get a little more specific with these numbers. We were about to do that last time. Are we far enough now, that we can say, Wachtel, get us a little bit closer to were we want to be.

Gary Libby: Have you looked at what street closures will have to happen on each one of these different phases and what the traffic impact is going to be around the expanded Ocean Center?

Jim Wachtel: I think the only street closure we are talking about is Wild Olive over here and the next one Oleander.

Big John: You know, it would be interesting if we expanded the ballroom to the east in another phase. Have you looked at it?

Jim Wachtel: No. But if I can intervene, Mr. Chairman, Rick and his boss Peter, offered some.

Big John: We are going to get to that, because, we certainly want all the freebies we can get in this deal.

Rick Hamilton: Well, they were in our committee meeting and offered some assistance.

Big John: Right.

Rick Prioletti: Part of what you need to do with this process, is some master planning which means looking at these parking facilities and how to access them through a future road network. A little bit larger picture of this whole entertainment district needs to be looked at in putting these pieces together. There is some planning that needs to be done.

Big John: Little offered us this service, is that correct?

Rick Prioletti: Well, we got on retainer with parking consultants. We got a small piece of that we are working on right now.

Big John: How long would it take us to get a sketchy idea of what you guys think would be appropriate?

Rick Prioletti: Well, we passed the business consultant a periscope of work to do just that. And we’ll get some numbers back. We are talking about a reasonable facility here.

Big John: See, I am not sure, if Wachtel can make this thing fit on one block or not. But if he could make the new thing fit on one block, then we would not only save on street building, but we would save on a whole bunch of improvements.

Rick Prioletti: Another thing you guys could do, I can look for options on parking delivery system. How to manage this whole thing.

Jim Wachtel: Six months ago, when we came with the full build out and the ideas of what the concepts would be for the expanded Ocean Center, one of the exhibits in that was an overall master plan of what the final product was going to be and how it relates to Main Street, A1A and the river. I think that has to be done at this point with Rick and Peter’s departments as well as the specific how much of exhibit space you would put in there and where it would go, and how it would grow at this point. The city is an intricate part of this whole thing because it is going to be a tremendous impact on the whole city. They have a parking consultant whose looking at Main Street right now and that needs to be a part of it. This expansion needs to be part of his review.

Big John: Certainly, the two blocks that are fronted by the laundry mat area and goes two blocks back and Nick George Plaza, and that connection to the Main Street, should be a key element in the whole development.

Gilly Aguiar: That’s the way you had designed with key dropping areas when we were closing Wild Olive. That’s were the traffic flow is. I like that part of it.

John McCormick: My problem is, that I haven’t been here before, but when building in phases, we have to be careful, that we don’t get into position, where we can’t park at the thing, because we don’t have all the facilities.

Big John: Yeah, we had Evelyn Fine and Sharon Mock and Sally Gardner. We have come down to a number of focus groups and their input, and we agreed that 100,000 sq. ft exhibit space was our first goal, 40,000 meeting space, and 30,000 ballroom. But then, when we had to phase, we agreed it would be 100,000 sq. ft. no matter what, is that correct.

Gilly Aguiar: My question is, if we build a 100,000 sq. ft. building, you can increase the usage with that and you don’t need the additional ballroom features and anything else.

Big John: We think that we would like to have them, but if we have to sacrifice, the ballroom’s got to go.

Rick Hamilton: The usage increases with the exhibit hall, but the usage increases more with addition of meeting rooms.

Big John: We can get away with 20,000 in meeting, because we have 20,000 in meeting here in this room. It’s not very well accessible, the other side is totally not accessible. We would have to rework the second floor meeting rooms And of course, the front of this building is meeting rooms as well, and downstairs and we need to re-think how people get to here.

Gilly Aguiar: That may become just as costly as doing Option I. Like Rick, I wish I could see it today, but if you had 100,000 and only 20,000 in meeting space, there is going to be a percentage of conventions and conferences we can get. What is that percentage?

Big John: There is stuff we can’t do.

Gilly Aguiar: Right, but I mean as far as this tier two, the Option I is not that more expensive than waiting for the ballroom where you get enough meeting space to do it. Because you can use the floor space here, we got the kitchen to do the afternoon luncheon type things, and then push the ballroom things in the evening across the street.

Rick Hamilton: Option one, Mr. Aguiar, was everyone’s obvious number one choice.

Gilly Aguiar: Was it. That’s 34 vs. 22, that would be with no more meeting room, and that 22 is going to be closer to 30 when you start putting escalators in here and try to tie it and do the functionality of that entrance area, we are talking about. So, I think the difference in the cost is going to be somewhere around $4 million. $4 or $5 million. I’m not sure if I am right, but I know if you go 100,000, then you compromise on 20 and start to retrofit this as another 20, you might spend as much as doing that. Because the ballroom we can live without, I think.

Big John: Are you comfortable with asking Wachtel. First of all I would like to see it squished off a little more. But I don’t think it will be a big deal at City Hall. And then as Key and & Consultant. How long would this take, Rick.?

Rick Prioletti. I would think in a couple of weeks we should get something back.

Jim Wachtel: When originally the plan was out, we looked at this thing somewhere in the 8 to 12 weeks actual work to come up with the plan for this space.

Lori Campbell-Baker: The first option is what Evelyn would recommend for us as far as getting the business and attracting the people?

Big John: Yes.

If we had to phase it, Option A would be it. 140 and then 30, yes.

Lori Campbell-Baker: What’s your opinion?

If we had to phase it, Option A would be the way to go.

Big John: Other comments?

Is this the time, while this planning is going on, to get serious about incorporating Peabody Auditorium into this plan?

Big John: Well, there is no doubt, that I think that Peabody would be a part of this.

Richard has told me that he is taking it back onto his desk. So, I think it is extremely

important to have Peabody be a part of the process.

Gilly Aguiar: I think, where we are at with that, and maybe somebody else will remember better, but where we are at with that, was that at this point the money was better spent with adding on than trying to retrofit and bring that in. It is a good overflow at this point for different functions and speeches and so forth going on with conventions, but where we were at with Peabody, that it would actually be a part of the overall picture.

Big John: It’s not the same scope as building a new building, and certainly until the contract with the city is finalized we don’t know the answer to that question. However, I think it would be a win-win for the city and the county if the county ran it especially if city would cut down revenue loss they have, and probably be maximizing on that usage.

Gary Libby: I would strongly suggest, that this board determine what priority having Peabody would break and then approach it based on that priority, because right now there is only one person. I think the agreement is deader than dirt water, right now. I looked at the agreement and I don’t think it’s going to fly at all. I think that it’s predicated on some misconceptions, so if in fact, this facility for $3 million could be brought up to the state of the art facility, that might even include a sky bridge over here, how important is that. Based on it’s importance, I we need to build a lease agreement with the city. Just picking it up as a semi-vacant piece of property in decline.

Darlene Yordon: It may appear to be deader than a door nail, but there are some of us who are doing some pushing. We have a little bit on our plate, and we are pushing to get this restarted. And I don’t know Frank, it they could talk to you. I will follow through on that again, Gary, because I know that some of us really want to see Rick take over and include it into it. And I think that it is essential that we do that.

Gary Libby: Have you seen the latest incarnation of the agreement?

Darlene Yordon: I haven’t seen anything.

Gary Libby: Well, you look inside it. No business person would sign that term.

Big John: Let’s not work it here. Is there anybody here that would be imposed to Peabody being part of the Ocean Center?

Gary Libby: I think that this is a huge opportunity for this group to get proactive with this possible arrangement.

Big John: How about if I look into it?

Darlene Yordon: We may have to restart. I will look into it at my end.

Big John: Mr. Libby indicates, that possibly Mr. Gummey made a difficult deal for the city. I can’t believe that Mr. Gummey would do that, but it’s possible.

Frank Gummey: Mr. Hamilton and I reached an agreement in January with the city staff.

Big John: How do you want to put up the agenda for next meeting? Is that good? I want to go back to Charlene’s idea here and I want to go back to those taxing districts on the second page for a second. And as we look at Daytona, Ormond, let’s just say, Paulie left, but he was involved in this. He wanted to look at taxing district just for the beach side in Daytona, I think. Darlene are you familiar with that?

Darlene Yordon: There was talk about a business investment district, but it was bounding, I think, like ISP up to Seabreeze, river to ocean. And it was a business investment district.

Rick Hamilton: The purpose of which I understood was for sanitizing purposes, clean up, policing, landscaping, that type of thing.

Big John: Much smaller numbers, but we see that if you go just Daytona Beach alone, the entire peninsula, it is just huge numbers. That’s why we thought we might do some traffic calming stuff, this district by the way is 80% residential. And so, because of that, we thought the residents should get something in return for their taxes. And I have dismissed this, do you all agree? This just has nowhere to go, right?

A few "rights" were heard.

Larry Fornari: What happened to the possibility of restaurant or bar/lounge tax?

Big John: Mr. Gummey has spoken to us about that once, I think. Can you do it again?

Frank Gummey: That requires a general law passed by the Florida legislature apropos throughout the state.

Bob Davis: How’s Miami doing it? Dade County has a special district for restaurants and bars, 2%, I got the law here.

Big John: Should we review that? It’s a statute, Bob, is it not? I’m pretty sure, it’s a statute.

Four years old, passed a long time ago.

Big John: We will put Peabody on the agenda along with the proposed contract and maybe we will invite Richard to come over. Should we invite Richard?

Darlene Yordon: I’m not sure if you want to put him on the spot. Let’s see if we can get the contract and negotiate it. What about parking garage?

Big John: The parking garage we will certainly put on the agenda for the next meeting.

Darlene Yordon: And Charlene, will she be able to do the presentation at that time?

Big John: Absolutely. We will have a presentation from Charlene on where the tourist development tax, from the point of collection, what the county does. How much it takes off. We also want it noted in there the collection procedures, like audits. What do they do to collect the money and make sure gets back properly. And enforcement also. Including fines and interest. We want to understand that process. Also, for next meeting

Rick Prioletti and JimWachtel will come back with scope of works.

Jim Bazemore: How does the county take bed tax money to pay for the parking garage when it is designated for the convention center. I don’t understand that, so perhaps somebody can get me a clear picture. John asked, that question. What does the state statute say, that allows them to take that money.

Frank Gummey: The Ocean Center patrons park in the parking garage. It’s like buying tires for a car. The parking garage is obviously needed to operate this facility, the technicalities of the money gets fuzzier than that.

Big John: We will now go to the quarterly report by Mr. Mills.

Discussion on putting forth a motion to ask the County Council to consult us, be mindful of our existence, and the fact that we are very serious of due diligence on taking care of Ocean Center monies and helping Mr. Appleton, and that they please not spend the funds before they will give us a shot at, you know, helping them, so we could look at the entire picture.

Big John: Gummey is that close enough?

Frank Gummey: I guess.

Big John: Any other questions? Motion carries.

Robert Mills: At this point in time you have before you the Quarterly Report, actually what you have before you is results of operations for the first nine months of fiscal year ending September 30. So, this actually extends to nine months ago to June 30. The biggest item in there, and I have broken this down to keep it as simple as possible without a lot of detail in it. The biggest item is the very first item, which is the resort tax. And that is the net of the mortgage payment, basically. In my note there: Current Year based on projections. The resort tax is only posted once or twice a year to the accounts. It comes in throughout the year, and then they have to build up reserves in their account to pay off the mortgage in different times, but basically it only hits the general ledger, probably two times a year. I noticed, when I got the June financial, they credited me with about 1.2 million dollars, and I think that’s money that was collected maybe through March. It’s hard to tell. But my projections are based on mathematical projections, which are based on historical trends of percentages received each month for a long period of time. I think, I based this on about six year period. According to my projections, we have actually beat our budget. Our budget for a net of little over $2 million in the resort tax collections for the year. Last year we were at $1.424 million and we are ahead of that this year already, in my projections. The rest of that is actual real figures as we go down to the rents. The rents are the monies that we receive for the conventions that are held here and the meetings and the concerts that they have here. Volume Services is really a nice number this year. Volume Services is a sub-contractor for food and beverage and the percentage once we have certain amount of sales, varies in the percentage. We have already passed that threshold this year. And so, we should have a real good year, also. Others are the monies that we receive from the different events here for utilities, telephone, etc. So, our total revenues are actually, my projection is about $2.7 million in this nine month period, which beats last year by about $300,000 and it beats the budget also by a couple hundred thousand dollars. We are in really good shape there. Expenses, as you can see, are pretty well under control. Personnel costs, Overhead and Debt Service Interest, now the Debt Service Interest is going away after this year, so, that will not be a line item in the future. So, we are in a budget, which is a good thing here, because your expenses are lower than anticipated. Capital expenditures, in our budget this year, we have a lot of money in there, and we probably will not have the opportunity to spend all that money. Some of the money for land acquisition and construction probably will not be spent. We’ll hold that over in reserve in the fund balance until the end of year. Basically this year, one of the things that we did accomplish, is that we put in a high-speed internet project in. It’s already proved itself valuable when we had one conference here and were able to use it. The people who used it were extremely pleased and it’s a very good revenue source also. The marquee out front is a big maintenance problem. It’s old technology, 16 years old, you can’t buy replacement parts any more, so we just received bits on replacing that with LADs. That’s a project going forward that we are really concentrating on, because just the replacement of those incandescent bulb technologies which we now use, is going to save us a thousand dollar a month just in electricity and maintenance problems also. So, we really haven’t spent all the dollars that we have in the budget for capital improvements. To this point, this year, we have an excess of revenues of expenditures of $454,000 and a carryover balance from last year of little over $2.5 million, so, right now we are looking about $2.9 million.

Lori Campbell- Baker: Bob, this is on top of the $2.3 million that we get from the bed tax, right?

Bob Mills: This includes it. It’s included in the very first line. This is net.

Lori Campbell- Baker: Why is it that it hits our account only twice a year? Because the HAA Board gets their money monthly?

Bob Mills: I get a report every single month from the county as to what the collections are and I have to do an extrapolation as to how much of that goes to debt service and how much we get to use. It just does not hit the general ledger every month.

Rick Hamilton: What they essentially do is, they pay the debt service first and then they send us the remainder. It’s due to our bonding documents, is that a fair statement Frank, when those things are due.

Bob Mills: For our internal planning purposes, I try to smooth out the process for our own internal financial statements, so I can see how much we can anticipate each month and through this quarter.

Jim Bazemore: You see them month by month, I saw them last week. That to me is the great untold story, that if you look from September 11, as to what the collections have been, we see Orlando falling 30% short. In the Fall, we were down a little, and since the first of January, we are right there. Adam’s Mark, Ocean Walk Properties, property at the airport, Days Inn on the International Speedway Boulevard, and one other property. It’s nice we are not taking the business that is already in here and spreading it out. Well there is one blessing, if you want to call it that, over 96% of our people come by car. When it hit, it did not effect us like some other people, like Orlando depending on air transportation.

Bob Mills: One thing you have to remember is, the government budget is set, six to eight months before the actual beginning of the fiscal year. We have already submitted our budget for the next coming fiscal year. And so, the budget we are operating on right now, was basically determined six months before September 11^th happened. And we are actually beating those projections.

Tom Staed: I think, the other thing, post September 11^th is, we have additional properties, and yes we do have a strong dry market, but we still had pretty solid numbers on the events that have driven the economy. People came, they came in good numbers and that sustained us.

What was your percentage before September 11? About the same, up or down, or can you say?

Tom Staed: We were up for the Pepsi 400 weekend, just slightly.

Stuart Arp: We were way up for Pepsi 400, and I think it’s because people stayed over night, because the holiday was on Thursday vs. last year it was on Wednesday. They stayed the three nights.

Big John: This $3 million, fund balance, that you show, is that in any of Charlene’s numbers?

Bob Mills: No.

Big John: I have seen Charlene’s numbers, she hasn’t figured increased operating expenses.

Bob Mills: Also, this fund balance, isn’t just play money to sit there, either, we do have some capital needs that are coming up in the future. The HVA system is now 16 years old. We just signed some engineers on to give us a complete scope of work as to what needs to be replaced and when, and how much the cost will be, and what my energy savings are.

Big John: Any other questions to Bob?

Jim Bazemore: I have one question, this $1.5 million in revenue, from resort tax, net of the fund payment, how do we figure in the additional penny. Is it gross or net? Is it the whole penny?

Mr. Gummey: Yes, the whole penny, less 2% for collections.

John Masiarczyk: The bond payment has been paid, then this is what you have left, is that correct?

Frank Gummey: Yes, John. Our bonding capacity, see we have a 1.4 coverage, you take two pennies county wide and 1/3 penny when you look at bonding capacity, you are going to have to generate resort tax equal to 140% of your debt service. And in that 40% is most likely the operating subsidy for the Ocean Center.

Jim Bazemore: We need to figure that, to see how many dollars we really have out of 1/3 penny, or the 3^rd half penny, and we also need to see a budget based on that 3^rd penny in the new operation.

Big John: It’s kind of hard to figure your budget, until you know what you got.

John Masiarczyk: I know, but sooner or later, you will know your bill scenario, you got to do your numbers, including the debt service, and whatever is left over.

Can you operate the building for the same cost?

Rick Hamilton: No.

Big John: OK, other questions? Is there any old business? Any new business? Anyone want to say anything of anything? Shall we call the next meeting?

After some discussion, it was decided to have the next meeting Wednesday, August 28, 2002 at 9:00 a.m..

The meeting was adjourned at 11:03 a.m.

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