By Emily Le Coz and Carlie Kollath Wells/NEMS Daily Journal
TUPELO – A plan eyed by the Tupelo Convention & Visitors Bureau will divert better-than-expected tourism revenues into a fund benefiting projects like the city’s new aquatic center.
Tourism officials still are working out the details but hope to have the plan implemented by next fiscal year, said CVB Executive Director Neal McCoy.
“If we exceed our budget projection, then the overflow will roll into a product development fund,” McCoy said. “We’d invest it in facilities to attract visitors but also something that could be utilized by citizens. … It’s not for putting up street lights that will make the community prettier for visitors. It’s about creating actual product to bring the visitors to Tupelo.”
For example, the fund could provide seed money or matching grant money to jump-start the downtown entertainment district, he said.
The plan will be presented at the CVB’s September board meeting.
The idea comes after Tupelo Mayor Jack Reed Jr. asked McCoy and CVB board members to reconsider the agency’s current $1 million capital project contribution to the city, which funds debt repayments on the BancorpSouth Arena.
The current amount represents 29 percent of the CVB’s total tourism tax revenues – a decline from 50 percent over the past two decades.
“I just asked them to look at the funding level and reconsider whether it’s still in line with the needs,” Reed said.
He noted that in the years since the funding level declined, Tupelo has added numerous tourism-related facilities like the baseball complex and upcoming aquatic center. Municipal bond money funded a majority of the baseball complex and will fund most of the aquatic center, but the CVB did contribute to the complex and on Tuesday proposed a budget to commit $100,000 annually for the next three years to the swim facility.
Tupelo’s tourism tax, which was passed by local and private legislation, began in 1986 with a 2 percent levy on hotel and motel rooms. The legislation was amended four years later to include a 2 percent tax on all restaurant meals in the city.
In the first full fiscal year after the new tax was levied, the CVB earned $1.2 million from restaurant and hotel sales taxes combined, according to city records. Last fiscal year it earned $3.4 million. It’s projected to end this fiscal year at $3.5 million.
All those funds go to the CVB, whose board of directors has sole authority to spend it on developing Tupelo’s tourism product. The board in previous years has funded the “bubble” cover at the city pool, youth sports events, the Elvis Presley Birthplace expansion and various other projects, meetings and conventions designed to attract visitors to the city.
None of the money can go to the municipality’s general fund budget. But the CVB can designate money for tourism-related city projects, such as the coliseum or the aquatic center.
At the time the restaurant tax took effect, the CVB board agreed to allocate 50 percent of its total revenues toward the coliseum and its debt payments. Its first allocation amounted to roughly $600,000.
As tourism tax revenues grew, so did the CVB’s coliseum contribution. It eventually rose to $1 million, where it has remained since 1996, even though the amount now represents 29 percent of the CVB’s total budget. The city pays roughly $615,000 annually on bond payments used to fund the coliseum’s construction.
If the project development fund goes into effect, McCoy said a committee will be established to set spending recommendations. The recommendations then must be approved by the CVB board.
McCoy said the details haven’t been worked out, but he expects the committee will be comprised of himself, the mayor and representatives from the CVB board and the Community Development Foundation.
The development fund is based on a model used in Asheville, N.C. McCoy said he and other Tupelo representatives will visit the city soon to see how its fund works.