INTER-OFFICE MEMORANDUM June 10, 2020
TO: Pat Davis, President, City Council
FROM: Timothy M. Keller, Mayor
SUBJECT: title
Visit Albuquerque Eighth Supplemental Agreement
body
The City of Albuquerque entered into a contract with Visit Albuquerque for destination marketing and group sales and services following a Request for Proposals (RFP) process in 2016. The original agreement allowed for the contract to be extended through 2021.
Given the reduced Lodgers’ Tax revenue, diminished prospects for an RFP on the normal timeline, disruption in the business travel and tourism industries, and the economic uncertainty created by the COVID-19 health pandemic, the City has determined that the following substantive changes are necessary in this Eighth Supplemental Agreement:
Adjust Total Contract Amount to Reflect Revenue Uncertainty
The Eighth Supplemental Agreement decreases the total amount available for FY21 to 75% of FY20’s Total Available Amount to reflect decreasing Lodgers’ Tax revenue. However, it also adds language that allows for the total amount available to increase if revenue exceeds projections. The following table shows the appropriation for FY20 as well as the fiscal years included in the Eighth Supplemental Agreement:
|
Fiscal Year |
Estimated Growth Rate |
Lodgers’ Tax |
Hospitality Fee |
Base Contract Amount |
Incentive Funding |
Total Amount Available |
|
2020 |
- |
$4,622,000 |
$924,000 |
$5,546,000 |
$292,000 |
$5,838,000 |
|
2021 |
- |
$3,467,000 |
$693,000 |
$4,160,000 |
$219,000 |
$4,379,000 |
|
2022 |
TBD |
Extend Term for Two Years
Rather than extending the term of the Agreement for one year (through June 30, 2021), the City has determined it is necessary to extend the term for two years (through June 30, 2022). The intent is to conduct an RFP in 2022 when the destination marketing and group sales industry is more certain.
Create a Task Force to Adjust Key Performance Indicators Throughout the Term
The Original Agreement with Visit Albuquerque makes available incentive pay of 5% if the targets established for each Key Performance Indicator are met. However, the COVID-19 health pandemic has made it difficult to establish reasonable targets in advance. Therefore, the Eighth Supplemental Agreement introduces a seven-member Task Force (made up of two members from the Visit Albuquerque Board, two members from the Lodgers’ Tax Advisory Board, two members from the Greater Albuquerque Hotel & Lodging Association, and one member designated by the Mayor). This Task Force will work in collaboration with Visit Albuquerque to set targets for each Key Performance Indicator.
Staff is available to review this material with you at your convenience.
TITLE/SUBJECT: Visit Albuquerque Eighth Supplemental Agreement
Approved: Approved as to Legal Form:
___________________________ _______________________________
Sarita Nair Date Esteban A. Aguilar, Jr. Date
Chief Administrative Officer City Attorney
Recommended:
___________________________
Synthia Jaramillo Date
Economic Development Director